In his first State of the Union speech in 2010, President Barack Obama carefully chose his words in calling for a new jobs bill to stimulate real organic economic growth. Historically, politicians have garnered widespread public support for bills that otherwise would have been despised through the use of deceptive labeling. For example, past US Presidents labeled bills that ultimately weakened pollution regulations as “Clean Air Acts”, and so on. In response to this newly proposed jobs bill, US Congressman Brad Sherman (D-CA) relayed that he, along with other colleagues, were specifically instructed not to refer to this jobs bill as a stimulus bill in the media:
“The other thing I’ll point out is we now have…we are working on a…we’re told not to call it another stimulus bill. We’re calling it a jobs bill.”
However, politicians have always been extremely deft about making speeches that present a united front with the people against corruption, while often hammering out legislation behind closed doors that ensures no real change will ever occur. To determine if the wool is being pulled over our eyes once again, let’s turn to the actual text of President Obama’s State of the Union speech.
President Obama: “But the devastation remains. One in ten Americans still cannot find work. Many businesses have shuttered. Home values have declined. Small towns and rural communities have been hit especially hard. For those who had already known poverty, life has become that much harder. This recession has also compounded the burdens that America’s families have been dealing with for decades – the burden of working harder and longer for less; of being unable to save enough to retire or help kids with college.”
Reality: The real rate of unemployment, if you include long-term discouraged workers, who are truly unemployed, is presently more than twice the figure President Obama quoted, at 22%. The reality is more than 1 out of 5 American workers are unemployed and this figure is likely to top out at more than 30% to 35% before this monetary crisis starts to recede. Though the residential housing market has yet to bottom in the US, a second more serious phase of the US real estate crisis will commence, just as it has in Spain, once large US banks stop lying about the true value of their commercial real estate portfolios. It’s good that President Obama addressed the burden of families that have to work harder for less money but his transparency in addressing this issue rates a zero on a scale of 1 to 10 as he does not mention that it is the Central Bankers’ institution of a corrupt and fraudulent monetary system that has given rise to this tremendous burden for American families.
President Obama: “Our most urgent task upon taking office was to shore up the same banks that helped cause this crisis. It was not easy to do. And if there’s one thing that has unified Democrats and Republicans, it’s that we all hated the bank bailout. I hated it. You hated it. It was about as popular as a root canal. But when I ran for President, I promised I wouldn’t just do what was popular – I would do what was necessary. And if we had allowed the meltdown of the financial system, unemployment might be double what it is today. More businesses would certainly have closed. More homes would have surely been lost. So I supported the last administration’s efforts to create the financial rescue program. And when we took the program over, we made it more transparent and accountable. As a result, the markets are now stabilized, and we have recovered most of the money we spent on the banks.”
Reality:The real unemployment is double the fake figure the President has told the country. Again, words are easily spoken but only actions reveal the true nature of politicians. The President’s words that he hated the bailout rings hollow when every single key economic advisor he appointed was a key architect of this crisis. It is impossible to invite criminals that robbed your house to change all the locks to your house after it has been robbed and improve the security of your house. One of President Obama’s key economic strongman, Larry Summers, a former US Treasury Secretary and World Bank Chief Economist, was instrumental in silencing CFTC Chairman Brooksley Born more than a decade ago when she attempted to warn Americans of the disaster looming in the derivatives markets. Born was the last courageous American to work for any US financial regulatory agency in more than a decade, and for her integrity, she was unceremoniously forced out of the CFTC.
President Obama: “Let me repeat: we cut taxes. We cut taxes for 95% of working families. We cut taxes for small businesses. We cut taxes for first-time homebuyers. We cut taxes for parents trying to care for their children. We cut taxes for 8 million Americans paying for college. As a result, millions of Americans had more to spend on gas, and food, and other necessities, all of which helped businesses keep more workers. And we haven’t raised income taxes by a single dime on a single person. Not a single dime.”
Reality: Inflation is one of the biggest taxes that the US Federal Reserve levies every year on all Americans. When the Obama administration offered zero resistance to the Federal Reserve’s reckless expansion of the monetary base by trillions, an act that eventually will expand the monetary supply exponentially, they silently stood by as one of the most reckless, immoral monetary policies in American history was executed. The Federal Reserve’s actions in 2008 and 2009 will create one of the largest taxes upon, and thefts of, American wealth in the future. If Americans truly understand what is going on, the “Not a single dime” phrase should come back to haunt President Obama as much as the now infamous senior Bush 1998 statement of “Read my lips. No new taxes”.
President Obama: “And after two years of recession, the economy is growing again. Retirement funds have started to gain back some of their value. Businesses are beginning to invest again, and slowly some are starting to hire again. But I realize that for every success story, there are other stories, of men and women who wake up with the anguish of not knowing where their next paycheck will come from; who send out resumes week after week and hear nothing in response. That is why jobs must be our number one focus in 2010, and that is why I am calling for a new jobs bill tonight. Now, the true engine of job creation in this country will always be America’s businesses. But government can create the conditions necessary for businesses to expand and hire more workers.”
Reality: Retirement funds gained very little value last year if one subtracts the devaluation of the US dollar that bankers engineered last year. If a retirement portfolio now has a greater absolute amount of dollars, but that absolute amount can barely purchase more goods and services than the prior year due to currency devaluation, then the greater absolute amount of dollars is of marginal utility. Loose monetary policy and near-free credit create reckless expansions of distortions in capital markets, not recovery. Governments can never create the conditions necessary for business to expand and hire more workers. Only free markets can achieve this, and as long as governments and Central Banks collude to implement unsound monetary policies, free markets will never rein.
President Obama: “So tonight, I’m proposing that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat. I am also proposing a new small business tax credit – one that will go to over one million small businesses who hire new workers or raise wages. While we’re at it, let’s also eliminate all capital gains taxes on small business investment; and provide a tax incentive for all businesses, large and small, to invest in new plants and equipment.”
Reality: The $30 billion that Wall Street banks have repaid is our tax money that was forcibly taken from us and given to the bankers. It is true that support should be given to community banks and small businesses. In fact, visit Move Your Money and Sound Money Now! to discover how you can be part of a movement to forcibly remove power from Wall Street and return it to Main Street. However, as long as these things are done within the confines of an unsound monetary system, they will never be effective long-term in preventing corruption from rearing its ugly head again and from preventing the boom-bust cycles that Central Banks so deftly engineer for the benefit of the financial oligarchy.
President Obama: “One place to start is serious financial reform. Look, I am not interested in punishing banks, I’m interested in protecting our economy. A strong, healthy financial market makes it possible for businesses to access credit and create new jobs. It channels the savings of families into investments that raise incomes. But that can only happen if we guard against the same recklessness that nearly brought down our entire economy. We need to make sure consumers and middle-class families have the information they need to make financial decisions. We can’t allow financial institutions, including those that take your deposits, to take risks that threaten the whole economy. The House has already passed financial reform with many of these changes. And the lobbyists are already trying to kill it. Well, we cannot let them win this fight. And if the bill that ends up on my desk does not meet the test of real reform, I will send it back.”
Reality: The statement “Look, I am not interested in punishing banks, I’m interested in protecting our economy” is an oxymoron. Bankers created this crisis, so if the President was sincere in his interest to protect the US economy, by definition, he would have to rid the system of the corrupt banks that engineered this crisis. That means, goodbye Goldman Sachs, JP Morgan, Bank of America, Wells Fargo and Citigroup. But of course, this will never happen. If consumers and middle-class families are truly to have the “information they need to make financial decisions” then we must begin with education about how our monetary system truly works, not the propaganda about 10% reserve ratio requirements (RRR) and other nonsense that is disseminated via our academic system at every level.
Remember that just one week prior, President Obama delivered a speech on January 21, 2010 in which he stated:
“Banks will no longer be allowed to own, invest, or sponsor hedge funds, private equity funds, or proprietary trading operations for their own profit, unrelated to serving their customers. If financial firms want to trade for profit, that’s something they’re free to do. Indeed, doing so — responsibly — is a good thing for the markets and the economy. But these firms should not be allowed to run these hedge funds and private equities funds while running a bank backed by the American people.”
By now we all know that AIG failed because of its executives, in their pursuit of huge profits, transformed the company from an insurance company into a giant hedge fund riddled with enormous risk. Goldman Sachs, JP Morgan, Wells Fargo, Citigroup and Bank of America have all transformed themselves into massive hedge funds as well. So if President Obama was sincere in his statement above that “Banks will no longer be allowed to own, invest or sponsor hedge funds”, he would immediately begin the process of shuttering every one of these institutions to restore integrity to the US financial sector.
I have no allegiances to any political party or any man. I have only allegiances to a higher power above, truth, and the Constitutional ideals of the Republic of America. It is my sincere hope that those that formulate their opinions within the extremely narrow and limited framework of political allegiances re-think their perspective and start to formulate their opinions within the framework of justice and morality only. This is the framework by which all men and women should make their decisions. As Socrates stated, “I cannot teach anybody anything. I can only make them think.”
About the author: JS Kim is the Managing Director and Chief Investment Strategist of maalamalama, LLC, a fiercely independent investment education and consulting firm that seeks to provide strategies to help investors preserve their wealth against banking fraud and to create wealth during this developing monetary crisis.