How Washington Really Works, Part 2

In my previous message, I promised to give you some details on how things really work in Washington. The illustration you see above is just the beginning. Three more are yet to come, and even that is the tip of the iceberg--or rather, the first whiff of the sewer.
You may have noticed that there's no place for the taxpaying voters in the illustration. That's because the taxpaying voters are not in Washington. Most don't contact their congressmen at all. This doesn't mean that your opinions don't mean anything to him. Election Day means a great deal to him. It's just that--well, maybe you've heard the old song, "When I'm not near the girl I love, I love the girl I'm near." The illustration you see here reflects whom our congressmen are near.
Our nation's Founding Fathers designed a system of checks and balances among three branches of government: legislative, judicial, and executive. They never authorized the erection of a fourth branch of government: the regulatory agencies.
Instead of taking the time and trouble of writing and passing laws that are clearly understood, Congress passes laws that can best be described as Chinese fire drills or soup sandwiches. If a congressional committee were in charge of creating new animals, they would create something like the platypus. Then the executive branch has to do its job of enforcing flexible and sometimes vaguely worded or contradictory laws.
The executive branch doesn’t want to create reasonable laws either; and, besides, that’s not their job. They kick the can down the street by creating what they call regulatory agencies. Basically, the job of regulatory agencies is to transform Chinese fire drills into Chinese puzzles. On any given day, they create puzzles that the inventor of Rubric’s cube would envy.
Though these puzzles hamstring and often destroy small- and medium-sized businesses, the CEO’s of giant corporations love them. They can afford to hire people to work out these puzzles. Besides, their people create those puzzles in the first place.
Here’s how it works:
Congress appoints the regulators from the business community; that almost always means the giant corporations. The top regulators are changed from one presidential administration to another, so where do they work when they leave government “service”? They go where they’re most qualified to work: a company in the industry that they’ve been regulating. How’s that for a sweetheart deal?
It gets worse. If you see a congressman’s name on a bill, it doesn’t mean that the congressman wrote it. It means only that he introduced it. It may have been written by an official for a regulated business, by members of a regulatory agency, or both. There’s nothing wrong with that practice, because those people have more expertise in that area than the average congressman does.
It does, however, create a potential conflict of interest. Imagine yourself accepting campaign contributions from someone who has handed you a bill to introduce—a bill that, for all you know, may benefit that person at the expense of everyone else. It’s a potentially corrupting system, and it behooves the congressman to study it more carefully and seek other expertise.
Congress is advised by experts who work only for the Congress, but where do they get them? Usually, the same places they get the regulators.
You can see how the system can be used to benefit the few at the expense of the many. In tomorrow’s blog, I’ll describe an iron triangle of potential conflicts of interest among congressmen, news reporters, and corporate CEO’s.
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How Washington Really Works: Part 3

In part 2, I described the iron triangle among Congress, the regulatory agencies, and the businesses being regulated. In part 3, you see another iron triangle: the one among Congress, the news media, and the big banks and corporations. As you saw in part 2, we're talking about a mutual back-scratching society.
Money has been described as “the mother's milk of politics.” Big banks such as Citibank and Goldman Sachs have a ton of it. So do giant corporations such as Monsanto and Baxter International. According to federal law, banks and corporations are forbidden to directly contribute to political campaigns. CEO's, however, are allowed to set up political action groups (PAC's) and shake down their employees for contributions.
Nobody really believes that these political contributions aren't tied to the kind of service they expect to get from congressmen. If you've ever contributed to a political campaign, you probably did so because you expected certain behavior from the candidate. In your case and mine, there wouldn't be any quid pro quo (That's Latin for, “You scratch my back, and I'll scratch yours.") After all, most candidates have no reason to remember our measly little contributions. On the other hand, candidates can't help but remember receiving thousands of dollars from one CEO. Do I hear a back being scratched?

Congressmen also are in need of publicity. As long as the name is spelled correctly, any publicity is good publicity. That's because voters tend to remember names better than news. The information media, which is charitably called the news media, is a rich source of free publicity.
What can congressmen give the—er—news media in return? They can give them status, credibility, and (for what it may be worth) news. You've heard the adage, “Names make the news.” People in government have the names that count the most. Me? I'm nobody. Putting my name in their rag wouldn't give them any status or credibility at all.
Here's an example: During the Jimmy Carter administration, White House muck-a-muck Hamilton Jordan peeked down the bodice of an Egyptian ambassador's bodice and said, “I've always wanted to see the pyramids.” It got more space in the Washington Post than a presidential address Carter gave at the time.
If some unknown person did something like that to a vegetable seller, who'd know about it?
Then there's the sweetheart arrangement between the “news” media and the big banks and corporations. Of course, the giant banks and corporation CEO's want favorable publicity; but, more significantly, they want unfavorable publicity to be as muted as possible. If you get all your news from the big six communications companies that dominate the flow of news, you probably didn't hear that Baxter shipped “vaccines” containing live (A) H1N1 flu virus to 18 countries. When the “vaccine” was tried on ferrets, every one of them died.
What do the banksters and corporate parasites have to offer the—um—“news” media? One thing they have is effective control. Most votes are won or lost within a range of 3%; a switch of 1.5% is usually enough to change the outcome of the vote. For that reason, 5% ownership of a company is considered “controlling interest.” Giant banks and corporations are heavily invested in the big six communications companies, and they enjoy the advantage of interlocking directorates. That is, they have people sitting on each others' boards of directors.
Big banks and corporations also heavily advertise in the big six communications companies. You may have heard that the “news” media compete with one another for news. Actually, the news is incidental to a news outlet's profitability. The main pursuit of a news outlet is advertising, not news.
People who buy newspapers and news magazines buy it for the news, but the piddling amount they pay for them is nothing compared to advertising profits. The price of a newspaper is just earnest money to make sure that somebody's actually reading that rag. The broadcast media doesn’t charge the viewer anything, and they make higher profits than the oil companies.
If you're paying less than a dollar for a newspaper, and somebody else regularly places $2,000 advertisements in that same paper, who's going to have more influence on the news and editorial content of the paper? Especially if the advertiser has a henchman on the paper’s board of directors?
In the next article, I'll share with you how an iron triangle among the Congress, the banking cartel, and the military-industrial complex makes war more likely, even when it's against America's national interest.
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How Washington Really Works, Part 4

Of three iron triangles of power I describe in this five-part series, this one is the most complicated. That's because not one person in a thousand knows how the Federal Reserve System (Fed) works. For that reason, this installment is mainly about the Federal Reserve System.
Each of the twelve branches of the Fed is called a Federal Reserve Bank. That’s a misnomer, because the Fed is not federal in the sense of being part of the federal government; it has no reserves, and the Fed isn't really a bank. The U.S. Constitution grants Congress the power to “coin money,” but, in 1913, Congress presumed to pass that legal power to a banking cartel and called it the Federal Reserve System.
The Fed has the power to create paper currency out of thin air (not backed by anything of value) and lend it to the U.S. Treasury. This paper currency is, in fact, certificates of debt (promissory notes), with the promise that the American taxpayer will repay the debt.
If paper currency is not backed by anything of value, from where does it get its value? It gets it from the value of paper currency already in circulation. Let's say you have $100 in your wallet out of, say, $10 trillion in circulation; and the Fed prints another $10 trillion and puts it into circulation. Because there is twice as much paper currency to pay for the same amount of goods and services, the $100 in your wallet is now worth only half what it was worth before.
You lose money twice: once when Congress borrows the money for you to repay; and a second time, when the value of the currency in your wallet drops. It's as though a thief has taken $50 out of your wallet and left you with an IOU stating that you—not the thief—will have to “repay” the debt “owed” to the thief. (Think about that the next time you think about the $multi-trillion bailouts.)
Look at the left side of the triangle above. The taxpayer pays interest for borrowing something that had no value at the time the Fed loaned it to the U.S. government.
During the War Between the States, Abraham Lincoln refused to finance the war on borrowed money. There was no Fed at the time, of course, but Lincoln recognized that fractional lending and the use of promissory notes as “paper money” amounted to the kind of double taxation I've just described.
Instead, the federal government rather than the bankers issued its own paper currency. This inflation of the currency was a form of invisible tax, in that it raised money by reducing the value of currency already in circulation. Nonetheless, there was no debt for the taxpayers to repay. Here's how Lincoln described his policy:
“The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity.”
- Abraham Lincoln
The following are from two other Lincoln quotes: "I have two great enemies, the southern army in front of me and the financial institutions, in the rear. Of the two, the one in the rear is the greatest enemy..... I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands, and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war.” Abraham Lincoln- In a letter written to William Elkin
As strange as it seems, the Federal Reserve has never been audited in its entire 97-year history. Establishment shills have consistently beaten back attempts to make the Fed accountable to the American people, but this may soon change. On a bi-partisan 43-26 vote, the House Finance Committee approved HR1207—a bill to audit the Fed. The House passed HR1207 (known as S604 in the Senate) by an overwhelming margin.
Did your congressman vote to make the Fed accountable to the American people? Or is he beholden to powerful special interests? Click here and find out.

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How Washington Really Works: Part 5

(This is the last of a five-part series)
The diagram you see above is just a sketch of how power and influence are exchanged in Washington. The exchanges are explained in parts 2-4 in this series, in which iron triangles of power are illustrated. This diagram shows only bilateral relationships that indirectly add up to a power establishment.
The diagram doesn’t show interlocking directorates among businesses and banks or the blurring of distinctions between commercial banks and investment banks. It doesn’t show the investments that individual congressmen or individuals elsewhere on the diagram have in others in the diagram.
As a precaution against tendencies toward monopoly, federal law prohibits banks in the same city from having interlocking directorates. That law was passed in the days of green eye shades and paper ledgers. In the age of Internet and Excel, all banks are virtually in the same city.
In 1933, Congress wisely passed the Glass-Seagall Act, separating commercial banks, investment banks, and insurance companies. For the next 66 years, the Glass-Seagall Act served as a deterrent to some of the worst abuses that had led to the Great Depression. Insurance company representatives could proudly claim that no insurance company in American history ever went bankrupt.
Then, on November 12, 1999, the curtain rang down on sanity and then came Act Two. The ironically titled Financial Services Modernization Act of 1999, also known as the Gramm-Leach-Bliley Act (or more formally, (Pub.L. 106-102, 113 Stat. 1338) was passed. Phil Gramm now holds the dubious distinction of being the Father of the Current Financial Crisis.
None of these three perps are still at the scene of the crime. Leach and Bliley dropped out of sight, and Phil Gramm became a lobbyist for malefactors of great wealth. Astonishingly, Gramm was 2008 presidential candidate John McCain’s chief economics adviser. McCain admitted that he didn’t know much about economics, but that was ridiculous. It’s like admitting that you don’t know much about surgery and asking Jack the Ripper to perform an operation on you.
Phil Gramm also holds the dubious distinction of ending insurance company bragging rights about never having experienced bankruptcy. Courtesy of the Gramm-Leach-Bliley Act, American International Group (AIG) became heavily involved in credit default swaps and collateralized debt obligations. (Don’t feel embarrassed for not understanding those terms. Fed Chairman Allan Greenspan admitted that he didn’t understand them either but that they must be good for the economy. In 2008, Greenspan was the one who ended up feeling stupid. When McCain picked Gramm to advise him, McCain really was stupid.) Courtesy of Phil Gramm and his unindicted co-conspirators, AIG became the first insurance company in American history to be nationalized to save it from going bankrupt.
You may be wondering if the wheeler dealers in Washington are at least as sophisticated as the average teenage Facebook user. That is, do they, like their pimpled counterparts in cyberspace, do networking or participate in meet-up groups? Well, yes, they have several of them. That’s another phenomenon that the diagrams in this series don’t show; and that will be the subject of a future article.
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