Rune Soup: Talking Conspiracy with Greg Carlwood

Two shows to watch, via Rune Soup

"This week we are speaking to my good friend and the internet’s master of conspiramonies, Greg Carlwood. As you are no doubt aware, Greg is the prolific and thoughtful host of The Higherside Chats. In a thematic follow up to last week’s show on Gnosticism, it seems useful to explore how we map and respond to the known and unknown in our world.

And so that’s what we are going to do. Download the episode directly here or listen along on YouTube below. Enjoy."

Everything is a Rich Man's Trick

A primer for surface worlders.

Astroturf and manipulation of media messages

via The Arcane Front

In this eye-opening talk, veteran investigative journalist Sharyl Attkisson shows how astroturf, or fake grassroots movements funded by political, corporate, or other special interests very effectively manipulate and distort media messages.

Sharyl Attkisson is an investigative journalist based in Washington D.C. She is currently writing a book entitled Stonewalled (Harper Collins), which addresses the unseen influences of corporations and special interests on the information and images the public receives every day in the news and elsewhere. For twenty years (through March 2014), Attkisson was a correspondent for CBS News. In 2013, she received an Emmy Award for Outstanding Investigative Journalism for her reporting on “The Business of Congress,” which included an undercover investigation into fundraising by Republican freshmen. She also received Emmy nominations in 2013 for Benghazi: Dying for Security and Green Energy Going Red. Additionally, Attkisson received a 2013 Daytime Emmy Award as part of the CBS Sunday Morning team’s entry for Outstanding Morning Program for her report: “Washington Lobbying: K-Street Behind Closed Doors.” In September 2012, Attkisson also received an Emmy for Oustanding Investigative Journalism for the “Gunwalker: Fast and Furious” story. She received the RTNDA Edward R. Murrow Award for Excellence in Investigative Reporting for the same story. Attkisson received an Investigative Emmy Award in 2009 for her exclusive investigations into TARP and the bank bailout. She received an Investigative Emmy Award in 2002 for her series of exclusive reports about mismanagement at the Red Cross.

“Hallmarks of astroturf include use of inflammatory language such as ‘crank’, ‘quack’, ‘nutty’, ‘lies’, ‘paranoid’, ‘pseudo-‘, and ‘conspiracy’. Astroturfers often claim to ‘debunk myths’ that aren’t myths at all. Use of the charged language tests well. People hear something’s a myth — maybe they find it on Snopes — and they instantly declare themselves too smart to fall for it. But what if the whole notion of the myth is itself a myth and you and Snopes fell for that? [Snopes ‘attempts’ to give accurate information about rumors and urban legends on a variety of topics, though its own credibility and reliability have and should be questioned.]”

The Joy of Conspiracy Denial

by Carol Cleveland

Recently I read another stinging rebuke of the 9-11 conspiracy theorists for their frightful mishandling of evidence, their will to believe only what gives them psychological comfort, and their general state of delusion. It was not the first I had read, nor will it be the last. The writer held unwaveringly to the party line: all those who seek to discredit the official, announced version of the events of 9-11 are "conspiracy theorists"- and should not be listened to. That this position constitutes an attempt at prior censorship does not seem to bother the deniers, nor the fact that the central tenets of conspiracy denial are an ad hominem attack. We are told that conspiracy theorists are crazy, or at least cowardly clingers to delusions that they find comforting.

It occurred to me that I haven't seen anyone examine the mental comforts of conspiracy denial, using the handy tools of amateur psychology. It's my guess that there's considerable comfort to be had, especially for men, from an acceptance of the official explanation for 9-11. This is not to say that many women aren't happy with the Arab hijacker theory, but for men, the provision of a clear enemy to fight is always especially gratifying.

To accept the official announcements of the story of 9-11 is instantly satisfying in several ways. Commercial airliners, hijacked by suicide terrorists, flew into buildings at the behest of a really smart master-terrorist named Osama Bin Laden. This is an immediately credible scenario""many of us had heard the name Bin Laden, and "knew" he was a terrorist who lived on the other side of the world. Indeed, the WTC had been attacked once before. And terrorism itself certainly exists--both sides of the 9-11 controversy can agree on that. So, to accept the official announcements that followed the attacks enabled you quickly to locate all the blame for the attacks in a tiny evil army of foreigners, all out of immediate reach, but accessible to the U.S. Army, you bet. The hijackers themselves were all dead, and their leader was extremely hard to find, but American forces could find and punish them. No need, really, to conduct any investigations or solve any mysteries--an evil super-hero with a small army of mentally enslaved unfortunates was able to penetrate the defenses of the finest air force in the world to murder 3000 Americans. A fluke, but in life and in sports, stuff like that happens.

The fact that this reads like a comic book plot doesn't seem to be a source of embarrassment for the anti-truther movement. In fact, an evil mastermind who, through mindless suicidal drones, wreaks havoc on good and decent people is the major plot driver of The Lord of the Rings, and many other fantasy and science fiction epics. Mythically speaking, it's golden.

And under the broad strokes of the main story, there's also a layer of historically accurate information that supports the main plot line. Joe and Jane Six-Pack would accept the unadorned story eagerly, but there's something to satisfy the more thoughtful as well. The back story is that American foreign policy for the last 30 years could easily result in some very unhappy Arabs. CIA meddling in the politics of Iran and Iraq, and above all, our support for Israel, have been highly unpopular on the Arab street. Well-read people could find the anti-American sentiments of the terrorists quite credible, if regrettable.

So the psychological comforts of the official story are several and real: you get a clearly defined enemy, a simple solution to a complex foreign policy problem, you get to feel morally superior to your enemy because you're more civilized and don't kill civilians, and finally, if you know something of the history of American policy in the Near East, you get to feel superior to those who don't.

It's entirely understandable that any American should believe the official 9-11 story. And, of course, to consider seriously for an instant that there could be something seriously wrong with that story, to imagine that as possible, really does change everything, just like 9-11 itself. If there's a chance that Americans colluded in those horrors, then the entire mental structure of our sanity, which we've lived in all our lives, has a serious crack, a San Andreas Fault, right down the middle. If we think it possible that "We have met the enemy, and he is us," then everything previously unthinkable is thinkable.

In fairness to their enemies among the truthers, the conspiracy deniers should admit that there is much psychological comfort in their own position, and that conspiracy theorists do not have a monopoly on convenient but deluded assumptions. 9-11 is, after all, a heap of facts, and it is open to human inquiry. Whether the heap was created by our enemies' hatred or something worse has yet to be decided.

Everything is Rigged: The Biggest Price-Fixxing Scandal Ever

via Rolling Stone, April 25, 2013

The Illuminati were amateurs. The second huge financial scandal of the year reveals the real international conspiracy: There's no price the big banks can't fix. Conspiracy theorists of the world, believers in the hidden hands of the Rothschilds and the Masons and the Illuminati, we skeptics owe you an apology. You were right. The players may be a little different, but your basic premise is correct: The world is a rigged game. We found this out in recent months, when a series of related corruption stories spilled out of the financial sector, suggesting the world’s largest banks may be fixing the prices of, well, just about everything.

You may have heard of the Libor scandal, in which at least three – and perhaps as many as 16 – of the name-brand too-big-to-fail banks have been manipulating global interest rates, in the process messing around with the prices of upward of $500 trillion (that’s trillion, with a “t”) worth of financial instruments. When that sprawling con burst into public view last year, it was easily the biggest financial scandal in history – MIT professor Andrew Lo even said it “dwarfs by orders of magnitude any financial scam in the history of markets.” That was bad enough, but now Libor may have a twin brother. Word has leaked out that the London-based firm ICAP, the world’s largest broker of interest-rate swaps, is being investigated by American authorities for behavior that sounds eerily reminiscent of the Libor mess. Regulators are looking into whether or not a small group of brokers at ICAP may have worked with up to 15 of the world’s largest banks to manipulate ISDAfix, a benchmark number used around the world to calculate the prices of interest-rate swaps. Interest-rate swaps are a tool used by big cities, major corporations and sovereign governments to manage their debt, and the scale of their use is almost unimaginably massive. It's about a $379 trillion market, meaning that any manipulation would affect a pile of assets about 100 times the size of the United States federal budget.

 It should surprise no one that among the players implicated in this scheme to fix the prices of interest-rate swaps are the same megabanks – including Barclays, UBS, Bank of America, JPMorgan Chase and the Royal Bank of Scotland – that serve on the Libor panel that sets global interest rates. In fact, in recent years many of these banks have already paid multimillion-dollar settlements for anti-competitive manipulation of one form or another (in addition to Libor, some were caught up in an anti-competitive scheme, detailed in Rolling Stone last year, to rig municipal-debt service auctions). Though the jumble of financial acronyms sounds like gibberish to the layperson, the fact that there may now be price-fixing scandals involving both Libor and ISDAfix suggests a single, giant mushrooming conspiracy of collusion and price-fixing hovering under the ostensibly competitive veneer of Wall Street culture.

Why? Because Libor already affects the prices of interest-rate swaps, making this a manipulation-on-manipulation situation. If the allegations prove to be right, that will mean that swap customers have been paying for two different layers of price-fixing corruption. If you can imagine paying 20 bucks for a crappy PB&J because some evil cabal of agribusiness companies colluded to fix the prices of both peanuts and peanut butter, you come close to grasping the lunacy of financial markets where both interest rates and interest-rate swaps are being manipulated at the same time, often by the same banks.

"It's a double conspiracy," says an amazed Michael Greenberger, a former director of the trading and markets division at the Commodity Futures Trading Commission and now a professor at the University of Maryland. "It's the height of criminality."

The bad news didn't stop with swaps and interest rates. In March, it also came out that two regulators – the CFTC here in the U.S. and the Madrid-based International Organization of Securities Commissions – were spurred by the Libor revelations to investigate the possibility of collusive manipulation of gold and silver prices. "Given the clubby manipulation efforts we saw in Libor benchmarks, I assume other benchmarks – many other benchmarks – are legit areas of inquiry," CFTC Commissioner Bart Chilton said.

But the biggest shock came out of a federal courtroom at the end of March – though if you follow these matters closely, it may not have been so shocking at all – when a landmark class-action civil lawsuit against the banks for Libor-related offenses was dismissed. In that case, a federal judge accepted the banker-defendants' incredible argument: If cities and towns and other investors lost money because of Libor manipulation, that was their own fault for ever thinking the banks were competing in the first place.

"A farce," was one antitrust lawyer's response to the eyebrow-raising dismissal.

"Incredible," says Sylvia Sokol, an attorney for Constantine Cannon, a firm that specializes in antitrust cases.

All of these stories collectively pointed to the same thing: These banks, which already possess enormous power just by virtue of their financial holdings – in the United States, the top six banks, many of them the same names you see on the Libor and ISDAfix panels, own assets equivalent to 60 percent of the nation's GDP – are beginning to realize the awesome possibilities for increased profit and political might that would come with colluding instead of competing. Moreover, it's increasingly clear that both the criminal justice system and the civil courts may be impotent to stop them, even when they do get caught working together to game the system.

If true, that would leave us living in an era of undisguised, real-world conspiracy, in which the prices of currencies, commodities like gold and silver, even interest rates and the value of money itself, can be and may already have been dictated from above. And those who are doing it can get away with it. Forget the Illuminati – this is the real thing, and it's no secret. You can stare right at it, anytime you want.

The banks found a loophole, a basic flaw in the machine. Across the financial system, there are places where prices or official indices are set based upon unverified data sent in by private banks and financial companies. In other words, we gave the players with incentives to game the system institutional roles in the economic infrastructure.

Libor, which measures the prices banks charge one another to borrow money, is a perfect example, not only of this basic flaw in the price-setting system but of the weakness in the regulatory framework supposedly policing it. Couple a voluntary reporting scheme with too-big-to-fail status and a revolving-door legal system, and what you get is unstoppable corruption.

Every morning, 18 of the world's biggest banks submit data to an office in London about how much they believe they would have to pay to borrow from other banks. The 18 banks together are called the "Libor panel," and when all of these data from all 18 panelist banks are collected, the numbers are averaged out. What emerges, every morning at 11:30 London time, are the daily Libor figures.

Banks submit numbers about borrowing in 10 different currencies across 15 different time periods, e.g., loans as short as one day and as long as one year. This mountain of bank-submitted data is used every day to create benchmark rates that affect the prices of everything from credit cards to mortgages to currencies to commercial loans (both short- and long-term) to swaps.

Dating back perhaps as far as the early Nineties, traders and others inside these banks were sometimes calling up the company geeks responsible for submitting the daily Libor numbers (the "Libor submitters") and asking them to fudge the numbers. Usually, the gimmick was the trader had made a bet on something – a swap, currencies, something – and he wanted the Libor submitter to make the numbers look lower (or, occasionally, higher) to help his bet pay off.

Famously, one Barclays trader monkeyed with Libor submissions in exchange for a bottle of Bollinger champagne, but in some cases, it was even lamer than that. This is from an exchange between a trader and a Libor submitter at the Royal Bank of Scotland:

    SWISS FRANC TRADER: can u put 6m swiss libor in low pls?...
    PRIMARY SUBMITTER: Whats it worth
    SWSISS FRANC TRADER: ive got some sushi rolls from yesterday?...
    PRIMARY SUBMITTER: ok low 6m, just for u
    SWISS FRANC TRADER: wooooooohooooooo. . . thatd be awesome

Screwing around with world interest rates that affect billions of people in exchange for day-old sushi – it's hard to imagine an image that better captures the moral insanity of the modern financial-services sector.

Hundreds of similar exchanges were uncovered when regulators like Britain's Financial Services Authority and the U.S. Justice Department started burrowing into the befouled entrails of Libor. The documentary evidence of anti-competitive manipulation they found was so overwhelming that, to read it, one almost becomes embarrassed for the banks. "It's just amazing how Libor fixing can make you that much money," chirped one yen trader. "Pure manipulation going on," wrote another.

Yet despite so many instances of at least attempted manipulation, the banks mostly skated. Barclays got off with a relatively minor fine in the $450 million range, UBS was stuck with $1.5 billion in penalties, and RBS was forced to give up $615 million. Apart from a few low-level flunkies overseas, no individual involved in this scam that impacted nearly everyone in the industrialized world was even threatened with criminal prosecution.

Two of America's top law-enforcement officials, Attorney General Eric Holder and former Justice Department Criminal Division chief Lanny Breuer, confessed that it's dangerous to prosecute offending banks because they are simply too big. Making arrests, they say, might lead to "collateral consequences" in the economy.

The relatively small sums of money extracted in these settlements did not go toward reparations for the cities, towns and other victims who lost money due to Libor manipulation. Instead, it flowed mindlessly into government coffers. So it was left to towns and cities like Baltimore (which lost money due to fluctuations in their municipal investments caused by Libor movements), pensions like the New Britain, Connecticut, Firefighters' and Police Benefit Fund, and other foundations – and even individuals (billionaire real-estate developer Sheldon Solow, who filed his own suit in February, claims that his company lost $450 million because of Libor manipulation) – to sue the banks for damages.

One of the biggest Libor suits was proceeding on schedule when, early in March, an army of superstar lawyers working on behalf of the banks descended upon federal judge Naomi Buchwald in the Southern District of New York to argue an extraordinary motion to dismiss. The banks' legal dream team drew from heavyweight Beltway-connected firms like Boies Schiller (you remember David Boies represented Al Gore), Davis Polk (home of top ex-regulators like former SEC enforcement chief Linda Thomsen) and Covington & Burling, the onetime private-practice home of both Holder and Breuer.

The presence of Covington & Burling in the suit – representing, of all companies, Citigroup, the former employer of current Treasury Secretary Jack Lew – was particularly galling. Right as the Libor case was being dismissed, the firm had hired none other than Lanny Breuer, the same Lanny Breuer who, just a few months before, was the assistant attorney general who had balked at criminally prosecuting UBS over Libor because, he said, "Our goal here is not to destroy a major financial institution."

In any case, this all-star squad of white-shoe lawyers came before Buchwald and made the mother of all audacious arguments. Robert Wise of Davis Polk, representing Bank of America, told Buchwald that the banks could not possibly be guilty of anti- competitive collusion because nobody ever said that the creation of Libor was competitive. "It is essential to our argument that this is not a competitive process," he said. "The banks do not compete with one another in the submission of Libor."

If you squint incredibly hard and look at the issue through a mirror, maybe while standing on your head, you can sort of see what Wise is saying. In a very theoretical, technical sense, the actual process by which banks submit Libor data – 18 geeks sending numbers to the British Bankers' Association offices in London once every morning – is not competitive per se.

But these numbers are supposed to reflect interbank-loan prices derived in a real, competitive market. Saying the Libor submission process is not competitive is sort of like pointing out that bank robbers obeyed the speed limit on the way to the heist. It's the silliest kind of legal sophistry.

But Wise eventually outdid even that argument, essentially saying that while the banks may have lied to or cheated their customers, they weren't guilty of the particular crime of antitrust collusion. This is like the old joke about the lawyer who gets up in court and claims his client had to be innocent, because his client was committing a crime in a different state at the time of the offense.

"The plaintiffs, I believe, are confusing a claim of being perhaps deceived," he said, "with a claim for harm to competition."

Judge Buchwald swallowed this lunatic argument whole and dismissed most of the case. Libor, she said, was a "cooperative endeavor" that was "never intended to be competitive." Her decision "does not reflect the reality of this business, where all of these banks were acting as competitors throughout the process," said the antitrust lawyer Sokol. Buchwald made this ruling despite the fact that both the U.S. and British governments had already settled with three banks for billions of dollars for improper manipulation, manipulation that these companies admitted to in their settlements.

Michael Hausfeld of Hausfeld LLP, one of the lead lawyers for the plaintiffs in this Libor suit, declined to comment specifically on the dismissal. But he did talk about the significance of the Libor case and other manipulation cases now in the pipeline.

"It's now evident that there is a ubiquitous culture among the banks to collude and cheat their customers as many times as they can in as many forms as they can conceive," he said. "And that's not just surmising. This is just based upon what they've been caught at."

Greenberger says the lack of serious consequences for the Libor scandal has only made other kinds of manipulation more inevitable. "There's no therapy like sending those who are used to wearing Gucci shoes to jail," he says. "But when the attorney general says, 'I don't want to indict people,' it's the Wild West. There's no law."

The problem is, a number of markets feature the same infrastructural weakness that failed in the Libor mess. In the case of interest-rate swaps and the ISDAfix benchmark, the system is very similar to Libor, although the investigation into these markets reportedly focuses on some different types of improprieties.

Though interest-rate swaps are not widely understood outside the finance world, the root concept actually isn't that hard. If you can imagine taking out a variable-rate mortgage and then paying a bank to make your loan payments fixed, you've got the basic idea of an interest-rate swap.

In practice, it might be a country like Greece or a regional government like Jefferson County, Alabama, that borrows money at a variable rate of interest, then later goes to a bank to "swap" that loan to a more predictable fixed rate. In its simplest form, the customer in a swap deal is usually paying a premium for the safety and security of fixed interest rates, while the firm selling the swap is usually betting that it knows more about future movements in interest rates than its customers.

Prices for interest-rate swaps are often based on ISDAfix, which, like Libor, is yet another of these privately calculated benchmarks. ISDAfix's U.S. dollar rates are published every day, at 11:30 a.m. and 3:30 p.m., after a gang of the same usual-suspect megabanks (Bank of America, RBS, Deutsche, JPMorgan Chase, Barclays, etc.) submits information about bids and offers for swaps.

And here's what we know so far: The CFTC has sent subpoenas to ICAP and to as many as 15 of those member banks, and plans to interview about a dozen ICAP employees from the company's office in Jersey City, New Jersey. Moreover, the International Swaps and Derivatives Association, or ISDA, which works together with ICAP (for U.S. dollar transactions) and Thomson Reuters to compute the ISDAfix benchmark, has hired the consulting firm Oliver Wyman to review the process by which ISDAfix is calculated. Oliver Wyman is the same company that the British Bankers' Association hired to review the Libor submission process after that scandal broke last year. The upshot of all of this is that it looks very much like ISDAfix could be Libor all over again.

"It's obviously reminiscent of the Libor manipulation issue," Darrell Duffie, a finance professor at Stanford University, told reporters. "People may have been naive that simply reporting these rates was enough to avoid manipulation."

And just like in Libor, the potential losers in an interest-rate-swap manipulation scandal would be the same sad-sack collection of cities, towns, companies and other nonbank entities that have no way of knowing if they're paying the real price for swaps or a price being manipulated by bank insiders for profit. Moreover, ISDAfix is not only used to calculate prices for interest-rate swaps, it's also used to set values for about $550 billion worth of bonds tied to commercial real estate, and also affects the payouts on some state-pension annuities.

So although it's not quite as widespread as Libor, ISDAfix is sufficiently power-jammed into the world financial infrastructure that any manipulation of the rate would be catastrophic – and a huge class of victims that could include everyone from state pensioners to big cities to wealthy investors in structured notes would have no idea they were being robbed.

"How is some municipality in Cleveland or wherever going to know if it's getting ripped off?" asks Michael Masters of Masters Capital Management, a fund manager who has long been an advocate of greater transparency in the derivatives world. "The answer is, they won't know."

Worse still, the CFTC investigation apparently isn't limited to possible manipulation of swap prices by monkeying around with ISDAfix. According to reports, the commission is also looking at whether or not employees at ICAP may have intentionally delayed publication of swap prices, which in theory could give someone (bankers, cough, cough) a chance to trade ahead of the information.

Swap prices are published when ICAP employees manually enter the data on a computer screen called "19901." Some 6,000 customers subscribe to a service that allows them to access the data appearing on the 19901 screen.

The key here is that unlike a more transparent, regulated market like the New York Stock Exchange, where the results of stock trades are computed more or less instantly and everyone in theory can immediately see the impact of trading on the prices of stocks, in the swap market the whole world is dependent upon a handful of brokers quickly and honestly entering data about trades by hand into a computer terminal.

Any delay in entering price data would provide the banks involved in the transactions with a rare opportunity to trade ahead of the information. One way to imagine it would be to picture a racetrack where a giant curtain is pulled over the track as the horses come down the stretch – and the gallery is only told two minutes later which horse actually won. Anyone on the right side of the curtain could make a lot of smart bets before the audience saw the results of the race.

At ICAP, the interest-rate swap desk, and the 19901 screen, were reportedly controlled by a small group of 20 or so brokers, some of whom were making millions of dollars. These brokers made so much money for themselves the unit was nicknamed "Treasure Island."

Already, there are some reports that brokers of Treasure Island did create such intentional delays. Bloomberg interviewed a former broker who claims that he watched ICAP brokers delay the reporting of swap prices. "That allows dealers to tell the brokers to delay putting trades into the system instead of in real time," Bloomberg wrote, noting the former broker had "witnessed such activity firsthand." An ICAP spokesman has no comment on the story, though the company has released a statement saying that it is "cooperating" with the CFTC's inquiry and that it "maintains policies that prohibit" the improper behavior alleged in news reports.

The idea that prices in a $379 trillion market could be dependent on a desk of about 20 guys in New Jersey should tell you a lot about the absurdity of our financial infrastructure. The whole thing, in fact, has a darkly comic element to it. "It's almost hilarious in the irony," says David Frenk, director of research for Better Markets, a financial-reform advocacy group, "that they called it ISDAfix."

After scandals involving libor and, perhaps, ISDAfix, the question that should have everyone freaked out is this: What other markets out there carry the same potential for manipulation? The answer to that question is far from reassuring, because the potential is almost everywhere. From gold to gas to swaps to interest rates, prices all over the world are dependent upon little private cabals of cigar-chomping insiders we're forced to trust.

"In all the over-the-counter markets, you don't really have pricing except by a bunch of guys getting together," Masters notes glumly.

That includes the markets for gold (where prices are set by five banks in a Libor-ish teleconferencing process that, ironically, was created in part by N M Rothschild & Sons) and silver (whose price is set by just three banks), as well as benchmark rates in numerous other commodities – jet fuel, diesel, electric power, coal, you name it. The problem in each of these markets is the same: We all have to rely upon the honesty of companies like Barclays (already caught and fined $453 million for rigging Libor) or JPMorgan Chase (paid a $228 million settlement for rigging municipal-bond auctions) or UBS (fined a collective $1.66 billion for both muni-bond rigging and Libor manipulation) to faithfully report the real prices of things like interest rates, swaps, currencies and commodities.

All of these benchmarks based on voluntary reporting are now being looked at by regulators around the world, and God knows what they'll find. The European Federation of Financial Services Users wrote in an official EU survey last summer that all of these systems are ripe targets for manipulation. "In general," it wrote, "those markets which are based on non-attested, voluntary submission of data from agents whose benefits depend on such benchmarks are especially vulnerable of market abuse and distortion."

Translation: When prices are set by companies that can profit by manipulating them, we're fucked.

"You name it," says Frenk. "Any of these benchmarks is a possibility for corruption."

The only reason this problem has not received the attention it deserves is because the scale of it is so enormous that ordinary people simply cannot see it. It's not just stealing by reaching a hand into your pocket and taking out money, but stealing in which banks can hit a few keystrokes and magically make whatever's in your pocket worth less. This is corruption at the molecular level of the economy, Space Age stealing – and it's only just coming into view.

The Tao of politics

“Since I entered politics, I have chiefly had men's views confided to me privately. Some of the biggest men in the United States, in the field of commerce and manufacture, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they better not speak above their breath when they speak in condemnation of it.”

Woodrow Wilson, The New Freedom

“The real truth of the matter is, as you and I know, that a financial element in the larger centers has owned the Government ever since the days of Andrew Jackson.”

Franklin D. Roosevelt, letter to Col. House, November 21, l933

“The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole.”

Carroll Quigley, Tragedy and Hope: A History of the World in Our Time, 1966

“From the days of Spartacus-Weishaupt to those of Karl Marx, to those of Trotsky, Bela Kun, Rosa Luxembourg, and Emma Goldman, this world wide conspiracy for the overthrow of civilization and for the reconstitution of society on the basis of arrested development, of envious malevolence and impossible equality, has been steadily growing. It played a definitely recognizable role in the tragedy of the French Revolution. It has been the mainspring of every subversive movement during the nineteenth century, and now at last this band of extraordinary personalities from the underworld of the great cities of Europe and America have gripped the Russian people by the hair of their heads, and have become practically the undisputed masters of that enormous empire.”

Winston Churchill, 1922

“The Council on Foreign Relations (CFR) is dedicated to one-world government, financed by a number of the largest tax exempt foundation (i.e. Rockefeller), and wielding such power and influence over our lives in the areas of finance, business, labor, military, education, and mass communication media, that it should be familiar to every American concerned with good government and with preserving and defending the US Constitution and our free-enterprise system. Yet, the nation’s right-to-know machinery, the news media; usually so aggressive in exposures to inform our people, remain silent when it comes to the CFR, its members and their activities. The CFR is the establishment. Not only does it have influence and power in key decision-making positions at the highest levels of government to apply pressure from above, but it also finances and uses individuals and groups to bring pressure from below, to justify the high level decisions for converting the US from a sovereign Republic into a servile member of a one-world dictatorship.”

 Rep. John R. Rarick (D-LA)

“The one aim of these financiers is world control by the creation of inextinguishable debts.”

Henry Ford

“Some even believe we are a part of a secret cabal working against the best interests of the United States, characterizing my family and me as ‘internationalists’ and of conspiring with others around the world to build a more integrated global political and economic structure – one world, if you will. If that’s the charge, I stand guilty and I am proud of it.”

David Rockefeller, Memoirs

 “The interests behind the Bush administration, such as the CFR, the Trilateral Commission – founded by Brzezinski for David Rockefeller – and the Bilderberg Group have prepared for and are now moving to implement open world dictatorship within the next five years.”

Dr. Johannes Koeppl, Former German Ministry for Defence official and advisor to NATO

 “The real menace of our republic is this invisible government which like a giant octopus sprawls its slimy length over city, state and nation. Like the octopus of real life, it operates under cover of a self created screen….At the head of this octopus are the Rockefeller Standard Oil interests and a small group of powerful banking houses generally referred to as international bankers. The little coterie of powerful international bankers virtually run the United States government for their own selfish purposes. They practically control both political parties.”

John F. Hylan, NYC Mayor, 1922

 “The governments of the present day have to deal not merely with other governments, with emperors, kings and ministers, but also with the secret societies which have everywhere their unscrupulous agents, and can at the last moment upset all the governments’ plans. “

 “The world is governed by very different personages from what is imagined by those who are not behind the scenes.”

Benjamin Disraeli, first Prime Minister of England, Coningsby, the New Generation

“The real rulers in Washington are invisible, and exercise power from behind the scenes.”

Felix Frankfurter, Supreme Court Justice, 1952

“The government of the Western nations, whether monarchical or republican, had passed into the invisible hands of a plutocracy, international in power and grasp. It was, I venture to suggest, this semioccult power which… pushed the mass of the American people into the cauldron of World War I.”

MajorGeneral J.F.C. Fuller, British military historian, l941

“Fifty men have run America, and that’s a high figure.”

Joseph Kennedy, The New York Times, July 26th, l936

“It bends governments to its will sometimes by promises, sometimes by threats. It has found its way into every class of Society, and forms an invisible and irresponsible power, an independent government, as it were, within the body corporate of the lawful state.”

Pope Leo XIII, 1902

“Three hundred men, all of-whom know one another, direct the economic destiny of Europe and choose their successors from among themselves.”

Walter Rathenau, head of German General Electric, 1909. Rathenau was Prime Minister of Germany until he was assassinated in 1922.

“There does exist, and has existed for a generation, an international Anglophile network which operates, to some extent, in the way the radical Right believes the Communists act. In fact, this network, which we may identify as the Round Table Groups, has no aversion to cooperating with the Communists, or any other groups, and frequently does so. I know of the operations of this network because I have studied it for twenty years and was permitted for two years, in the early 1960’s, to examine its papers and secret records. I have no aversion to it or to most of its aims and have, for much of my life, been close to it and to many of its  instruments…my chief difference of opinion is that it wishes to remain unknown, and I believe its role in history is significant enough to be known…because the American branch of this organisation (sometimes called the “Eastern Establishment”) has played a very significant role in the history of the United States in the last generation.”

Dr. Carroll Quigley, a professor of history at the Foreign Service School of Georgetown University. Dr. Quigley was Bill Clinton’s mentor while he was at Georgetown University.

Finally! Some Climate Crisis Honesty

by Dave Lindorff


A tectonic shift is occurring suddenly in the debate over climate change.

Only a year ago, at least in the US corporate media, there was always a rough equivalence accorded to those experts who were warning about a looming climate disaster facing mankind, and those who called the whole thing a “conspiracy” by corrupt scientists and politicians (albeit without ever explaining a motive).

Suddenly, though, that rough equivalence in the coverage is gone. The climate deniers are now exposed as charlatans in the pay of energy companies, and the coverage has shifted to talking about climate disaster being closer than we had been being told. If there is a “conspiracy,” we are now learning, it may be that climate scientists, afraid of creating a sense of hopeless and doom among the public, have been soft-pedaling their warnings, stressing the need to quickly cut back on the use of greenhouse-gas-producing fuels in order to try and keep global warming below 2 degrees centigrade (roughly 4 degrees fahrenheit), when they all really know that a 4-degree centigrade rise is already “baked into” the earth’s near-term climate future, perhaps by as early as 2100.

This shift has yet to make its way into the public’s consciousness in the US (and much of the rest of the world too), but it is clearly going to happen. The question then will be: how will governments, and more importantly, the people of the world, respond to the new much grimmer reality?

Clearly, the capitalist system, fully corrupted at this point because of the size to which global corporations have grown, and the power they have gained to buy governments, cannot and will not rescue humanity from itself. Just look at the latest news from the Shell Oil Company, where internal documents just released show that company scientists have assured top executives that global warming in the far north means Shell can aggressively lease tracts of the formerly ice-bound Arctic Ocean and move floating platforms up there to extract even more oil and gas from the newly ice-free seafloor. These documents flatly declare that a 2˚C temperature rise is passé and that a 4˚C rise is already in the cards, moving towards a staggering 6˚C rise (note for US readers: that is an almost 11˚F temperature rise globally!).

The notion that corporations and a capitalist politico-economic system could ever take the necessary steps to halt climate disaster, for example by adopting energy conservation and becoming “green” companies, was always a pipedream. Just “going green,” while still producing unneeded junk and continuing to try and grow would never reduce total carbon emissions. It would require massively scaling back the production of useless or polluting goods and services, and shutting down many operations. And while the current US Supreme Court majority may think, or pretend to think, that corporations are people, they actually are institutions that are by their very nature and structure devoid of conscience, devoid of morality, and even devoid of any sense of long-term self-preservation.

A person who made his living trapping sea otters, might, upon learning that the animal was in danger of going extinct, voluntarily stop hunting them, but a corporation, informed that it us overfishing and will wipe out an entire fish species or fishing ground, will not, unless forced to do so, and will predictably fight and bribe politicians and regulators to allow it to keep fishing until there are no more fish.

The fundamental point of corporate law is to limit the liability of actual owners of a firm – to insulate them, that is, from responsibility for their own wretched and self-serving actions. This means that the actions of a corporation, however noxious or criminal, do not generally get blamed on its officers and managers. A good example of this is the felony penalties being assessed today against five of the world’s biggest banks by the US Justice Department for manipulating global currencies. Not a single executive of any of those banks, as I wrote earlier this week, is being indicted for this crime, though the banks themselves are now felons. Aside from some $6 billion in fines that will hardly be noticed by investors, the banks get away scott-free.

We have also seen, during the recent global fiscal crisis, how the big banks all gambled recklessly with their and investors’ assets, ultimately losing so much money that they had to be either bailed out by national governments and taxpayers, or allowed to go bust. The managers simply didn’t care either way. They had already become among the world’s richest people, rewarded year after year by themselves and their boards of directors and shareholders for their epic corruption and mismanagement. Even if they had been ordered to leave their jobs as a part of the rescues (they weren’t), they would have walked away billionaires.

The same is true of all the giant corporations of the world. There is no penalty for failure or even criminality in the corporate world, only for a failure to keep pushing growth each year to impossible heights until eventual collapse.

Given this dysfunctional model, how could anyone expect the commanding heights of the US or the global economy to take the kinds of steps needed to slow or halt climate change?

A this point, if we want to try and hold global warming to the 2˚C limit that scientists say is the maximum increase in temperature that would offer any hope of preventing runaway heating and the resulting chaos of mass extinctions, huge human die-offs and the likely collapse of civilization, we will have to halt the production of internal combustion engines, shut down most corporate farming, close down all coal-fired power plants, massively convert to on-site solar and wind power generation, and most importantly, stop pumping and digging carbon-based fuels out of the ground.

Huge companies like Shell, ExxonMobil, BP and the like would have to be shut down, or massively downsized and broken up.

We’re talking here in other words about a revolution — a total shift away from an economic model that elevates “growth” to godlike status to one that focuses on human needs (as opposed to wants), and away from a philosophy that sees humans as destined to conquer and exploit nature to one that sees humans as simply one integral part of nature — a philosophy that requires us to figure out how to fit in with and preserve the natural world.

In such a new world, there can be no rich, because the rich – even the ones who may pose in their dotage as do-gooders — are dangerous and self-centered parasites. Neither can there can be poor because where there are poor, there will be inevitable demands for more — demands that, while understandable, will lead to destruction of the natural world. Only if all humanity shares to ensure a decent secure life for all can there be any hope of long-term human survival on this limited planet.

That’s admittedly a tall order, but at least we are reaching a point — perhaps too late, but we’ll see — where the enormity of what humanity faces can no longer be avoided. The methane is already boiling or even exploding up out of the Arctic permafrost and, even worse, out of the seafloor of the coastal continental shelf above Siberia and North America, and over the short term, methane is about 180 time as potent a greenhouse gas as is carbon dioxide. All over the perimeter of Antarctica, which we were earlier told was not showing significant warming, we are seeing the ice melting now, while the Arctic Ocean, solidly frozen year round for the last 2.6 million years, will be ice-free in summer, possibly this year, but assuredly in the next couple of years. Greenland, meanwhile, once a huge sheet of white ice a mile thick, should now be called Greyland, as the rapidly melting ice sheet has now exposed so much of the pollution dumped there over several centuries of Industrial-Era snowfalls, that its surface in summer looks like the remnant snow in New York City three days after a snowstorm: more soot than ice.

Expect corporate America and the bought politicians in Washington to start pushing for “technical fixes,” as a New York Times opinion-page writer did yesterday. But this kind of “Hail Mary” effort to avoid the necessary revolution in our economic system and in our whole way of viewing the human experiment will not work. Tinkering with the amount of sunlight that strikes the earth by increasing cloud cover or injecting sulphur dioxide into the upper atmosphere, or trying to continue burning coal and oil while “sequestering” the resulting carbon are all actions beyond any conceivable technological development because of the scale required, and would, if they could be done, have such enormous negative consequences (many unpredictable), that they simply cannot happen, or be allowed to happen.

For now, the best that can be said is that we are leaving behind the period of denial and the false hopes. As with addiction, the first step is acknowledging one’s sickness, and we are now beginning to acknowledge the real sickness of our capitalist world.

Foundation of a Weaponized Term

“Conspiracy theory” is a term that at once strikes fear and anxiety in the hearts of most every public figure, particularly journalists and academics. Since the 1960s the label has become a disciplinary device that has been overwhelmingly effective in defining certain events off limits to inquiry or debate. Especially in the United States raising legitimate questions about dubious official narratives destined to inform public opinion (and thereby public policy) is a major thought crime that must be cauterized from the public psyche at all costs.

Conspiracy theory’s acutely negative connotations may be traced to liberal historian Richard Hofstadter’s well-known fusillades against the “New Right.” Yet it was the Central Intelligence Agency that likely played the greatest role in effectively “weaponizing” the term. In the groundswell of public skepticism toward the Warren Commission’s findings on the assassination of President John F. Kennedy, the CIA sent a detailed directive to all of its bureaus. Titled “Countering Criticism of the Warren Commission Report,” the dispatch played a definitive role in making the “conspiracy theory” term a weapon to be wielded against almost any individual or group calling the government’s increasingly clandestine programs and activities into question.

This important memorandum and its broad implications for American politics and public discourse are detailed in a forthcoming book by Florida State University political scientist Lance deHaven-Smith, Conspiracy Theory in America. Dr. deHaven-Smith devised the state crimes against democracy concept to interpret and explain potential government complicity in events such as the Gulf of Tonkin incident, the major political assassinations of the 1960s, and 9/11.

CIA Document 1035-960 was released in response to a 1976 FOIA request by the New York Times. The directive is especially significant because it outlines the CIA’s concern regarding “the whole reputation of the American government” vis-à-vis the Warren Commission Report. The agency was especially interested in maintaining its own image and role as it “contributed information to the [Warren] investigation.”

The memorandum lays out a detailed series of actions and techniques for “countering and discrediting the claims of the conspiracy theorists, so as to inhibit the circulation of such claims in other countries.” For example, approaching “friendly elite contacts (especially politicians and editors)” to remind them of the Warren Commission’s integrity and soundness should be prioritized. “[T]he charges of the critics are without serious foundation,” the document reads, and “further speculative discussion only plays in to the hands of the [Communist] opposition.”

The agency also directed its members “[t]o employ propaganda assets to [negate] and refute the attacks of the critics. Book reviews and feature articles are particularly appropriate for this purpose.”

1035-960 further delineates specific techniques for countering “conspiratorial” arguments centering on the Warren Commission’s findings. Such responses and their coupling with the pejorative label have been routinely wheeled out in various guises by corporate media outlets, commentators and political leaders to this day against those demanding truth and accountability about momentous public events.

    *No significant new evidence has emerged which the [Warren] Commission did not consider.

    *Critics usually overvalue particular items and ignore others.

    *Conspiracy on the large scale often suggested would be impossible to conceal in the United States.

    *Critics have often been enticed by a form of intellectual pride: they light on some theory and fall in love with it.

    *Oswald would not have been any sensible person’s choice for a co-conspirator.

    *Such vague accusations as that “more than ten people have died mysteriously” [during the Warren Commission’s inquiry] can always be explained in some natural way e.g.: the individuals concerned have for the most part died of natural causes.

Today more so than ever news media personalities and commentators occupy powerful positions for initiating propaganda activities closely resembling those set out in 1035-960 against anyone who might question state-sanctioned narratives of controversial and poorly understood occurrences. Indeed, as the motives and methods encompassed in the document have become fully internalized by intellectual workers and operationalized through such media, the almost uniform public acceptance of official accounts concerning unresolved events such as the Oklahoma City Murrah Federal Building bombing, 9/11, and most recently the Sandy Hook Elementary School massacre, is largely guaranteed.

The effect on academic and journalistic inquiry into ambiguous and unexplained events that may in turn mobilize public inquiry, debate and action has been dramatic and far-reaching. One need only look to the rising police state and evisceration of civil liberties and constitutional protections as evidence of how this set of subtle and deceptive intimidation tactics has profoundly encumbered the potential for future independent self-determination and civic empowerment.

read more: http://memoryholeblog.com/2013/01/20/cia-document-1035-960-foundation-of-a-weaponized-term/#more-2077