S 510, the Food Safety Modernization Act, may be the most dangerous bill in the history of the US.

Bloggers Note: I added the billboard above to visually underscore what this post is all about. While I completely reproduce the original article below (including the snake photo), I highly recommend that those of you interested in toxin-free foods tour the originating site "Food Freedom."

S 510 is hissing in the grass

Posted on April 24, 2010 by Rady

By Steve Green

S 510, the Food Safety Modernization Act,  may be the most dangerous bill in the history of the US.  It is to our food what the bailout was to our economy, only we can live without money.

“If accepted [S 510] would preclude the public’s right to grow, own, trade, transport, share, feed and eat each and every food that nature makes.  It will become the most offensive authority against the cultivation, trade and consumption of food and agricultural products of one’s choice. It will be unconstitutional and contrary to natural law or, if you like, the will of God.”  ~Dr. Shiv Chopra, Canada Health whistleblower

It is similar to what India faced with imposition of the salt tax during British rule, only S 510 extends control over all food in the US, violating the fundamental human right to food.

Monsanto says it has no interest in the bill and would not benefit from it, but Monsanto’s Michael Taylor who gave us rBGH and unregulated genetically modified (GM) organisms, appears to have designed it and is waiting as an appointed Food Czar to the FDA (a position unapproved by Congress) to administer the agency it would create — without judicial review — if it passes.  S 510 would give Monsanto unlimited power over all US seed, food supplements, food and farming.

History

In the 1990s, Bill Clinton introduced HACCP (Hazardous Analysis Critical Control Points) purportedly to deal with contamination in the meat industry.  Clinton’s HACCP delighted the offending corporate (World Trade Organization “WTO”) meat packers since it allowed them to inspect themselves, eliminated thousands of local food processors (with no history of contamination), and centralized meat into their control.  Monsanto promoted HACCP.

In 2008, Hillary Clinton, urged a powerful centralized food safety agency as part of her campaign for president.  Her advisor was Mark Penn, CEO of Burson Marsteller*, a giant PR firm representing Monsanto.  Clinton lost, but Clinton friends such as Rosa DeLauro, whose husband’s firm lists Monsanto as a progressive client and globalization as an area of expertise, introduced early versions of S 510.

S 510 fails on moral, social, economic, political, constitutional, and human survival grounds.

1.  It puts all US food and all US farms under Homeland Security and the Department of Defense, in the event of contamination or an ill-defined emergency.  It resembles the Kissinger Plan.

2.  It would end US sovereignty over its own food supply by insisting on compliance with the WTO, thus threatening national security.  It would end the Uruguay Round Agreement Act of 1994, which put US sovereignty and US law under perfect protection.  Instead, S 510 says:

COMPLIANCE WITH INTERNATIONAL AGREEMENTS.

Nothing in this Act (or an amendment made by this Act) shall be construed in a manner inconsistent with the agreement establishing the World Trade Organization or any other treaty or international agreement to which the United States is a party.

3.  It would allow the government, under Maritime Law, to define the introduction of any food into commerce (even direct sales between individuals) as smuggling into “the United States.”  Since under that law, the US is a corporate entity and not a location, “entry of food into the US” covers food produced anywhere within the land mass of this country and “entering into” it by virtue of being produced.

4.  It imposes Codex Alimentarius on the US, a global system of control over food.  It allows the United Nations (UN), World Health Organization (WHO), UN Food and Agriculture Organization (FAO), and the WTO to take control of every food on earth and remove access to natural food supplements.  Its bizarre history and its expected impact in limiting access to adequate nutrition (while mandating GM food, GM animals, pesticides, hormones, irradiation of food, etc.) threatens all safe and organic food and health itself, since the world knows now it needs vitamins to survive, not just to treat illnesses.

5.  It would remove the right to clean, store and thus own seed in the US, putting control of seeds in the hands of Monsanto and other multinationals, threatening US security. See Seeds – How to criminalize them, for more details.

6.  It includes NAIS, an animal traceability program that threatens all small farmers and ranchers raising animals.  The UN is participating through the WHO, FAO, WTO, and World Organisation for Animal Health (OIE) in allowing mass slaughter of even heritage breeds of animals and without proof of disease.  Biodiversity in farm animals is being wiped out to substitute genetically engineered animals on which corporations hold patents.  Animal diseases can be falsely declared.  S 510 includes the Centers for Disease Control (CDC), despite its corrupt involvement in the H1N1 scandal, which is now said to have been concocted by the corporations.

7.  It extends a failed and destructive HACCP to all food, thus threatening to do to all local food production and farming what HACCP did to meat production – put it in corporate hands and worsen food safety. 

8.  It deconstructs what is left of the American economy.  It takes agriculture and food, which are the cornerstone of all economies, out of the hands of the citizenry, and puts them under the total control of multinational corporations influencing the UN, WHO, FAO and WTO, with HHS, and CDC, acting as agents, with Homeland Security as the enforcer.  The chance to rebuild the economy based on farming, ranching, gardens, food production, natural health, and all the jobs, tools and connected occupations would be eliminated.

9.  It would allow the government to mandate antibiotics, hormones, slaughterhouse waste, pesticides and GMOs.  This would industrialize every farm in the US, eliminate local organic farming, greatly increase global warming from increased use of oil-based products and long-distance delivery of foods, and make food even more unsafe.  The five items listed — the Five Pillars of Food Safety — are precisely the items in the food supply which are the primary source of its danger.

10. It uses food crimes as the entry into police state power and control.  The bill postpones defining all the regulations to be imposed; postpones defining crimes to be punished, postpones defining penalties to be applied.  It removes fundamental constitutional protections from all citizens in the country, making them subject to a corporate tribunal with unlimited power and penalties, and without judicial review.  It is (similar to C-6 in Canada) the end of Rule of Law in the US.

For further information, watch these videos:

Food Laws – Forcing people to globalize
http://www.youtube.com/watch?v=Ia-P4rL2IWc

State Imposed Violence … to snatch resources of ordinary people
http://www.youtube.com/watch?v=onw_PkVvpts&feature=related

Corporate Rule
http://www.youtube.com/watch?v=6PwqUQ_HIlg&feature=related

Reclaiming Economies
http://www.youtube.com/watch?v=hXoJHG-er7A&feature=related

Oak snake image at Alfred B. Maclay Gardens State Park, Florida
http://snipurl.com/vrg6p

Ed. Note: Also see this piece by lawyers: Food Safety: The Worst of Both Bills (HR 2749 and S 510).

Alan Simpson, co-chair of Obama's committee on reducing federal deficits, shoulders the heavy burden of objectively deciding whether or not people's Social Security really must be cut. Part 2

Alan Simpson (left)

Alan Simpson, Senator Guttermouth, Spews Again

William Greider
August 26, 2010 

Retired Wyoming Senator Alan Simpson, who inherited a soft-cushion career in politics from his father, is a garrulous old crank who at 79 seems desperate for attention. Simpson likes to pop off provocatively. He cannot resist mocking lesser mortals like Social Security recipients with mean-spirited ridicule. Simpson is an always quotable darling of Washington reporters, who mistake his nastiness for straight talk, who are too lazy to check out his ugly distortions.

Simpson should have been turned out to pasture years ago, but instead he was give a teaching post at Harvard and Barack Obama made him co-chair of the President's bipartisan commission on reducing the federal deficits. Every savvy player in the Capital knows what the president has in mind--whack Social Security benefits to lure Republicans into a grand deal on raising taxes. As I have written more than once, when Washington talks up bipartisan compromise it usually means the people are about to get screwed.

That train is rolling down the tracks now, but don't expect major media coverage to alert the populace. The prestige newspapers are on board for this deal and Obama's commission won't reveal its recommendations until right after the election. Too late for folks to make a stink.

Senator Trash Mouth keeps messing up the plan, however, by provoking outrage with his tasteless zingers. Most recently, Simpson compared Social Security--the federal government's most beloved program--to "a milk cow with 310 million tits." Instead of yuks, the senator got angry blowback--congressional demands that he resign or be fired by the president. Important liberal groups like the AFL-CIO joined the chorus of complaints. Simpson apologized, the Prez stood by him. Personally, I hope Simpson stays on the commission and continues to speak out. He's doing more harm than good for Obama's sleight-of-hand politics.

Anyway, Alan Simpson is not nearly as bad as some political reporters at the New York Times and other leading newspapers who dutifully repeat the establishment's falsehoods and distortions about Social Security. Some reporters probably know better but lack the nerve to write dissenting versions. Many reporters are simply ignorant but loyal to their sources. Social Security, as Nation writers have explained many times, does not contribute a penny to federal deficits and it never will, according to the terms of the law. The opposite is the case.

On the same page the Times reported Simpson's latest gaffe, political reporter Matt Bai contributed a far more outrageous falsehood of his own. In condescending style, he dismissed opponents to Social Security cuts (dimwits like me) as stuck-in-the -past liberals, trying to defend big government against harsh reality. Bai celebrated the courage of Rep. Earl Blumenauer of Oregon, a Democrat who evidently embraces the same view. Bai did not mention the people and public opinion overwhelmingly opposed to benefit cuts (check the polls if you doubt this). Someone should ask Congressman Blumenauer's constituents how they feel about his brave stance.

Bai's great falsification was to insinuate that the Social Security's trust fund is bogus--that the massive surpluses collected from working people to pay for their future retirements are meaningless. Social Security, he acknowledged, has amassed a pile of Treasury bonds--IOU's from the government--but he says as a practical matter that money can't be paid back because taxes would have to be raised or more funds borrowed elsewhere. "This is sort of like saying that you're rich because your friend has promised to give you 10 million bucks just as soon as he wins the lottery," Bai explains.

His comparison is a clever but consequential lie, consistent with the elite propaganda. Bai makes it sound like the government is going to give this money to retirees. In fact, it's the other way around. Social Security collected this money from workers as their involuntary savings, better known as FICA deductions. Then the federal government borrowed the money from us and spent it on other things. Congress raised the FICA deductions 25 years ago on all working people to pay for the baby boom generation's copming retirements. The Social Security trust fund has since built up massive surpluses--$2.5 tillion now and growing to $4.2 trillion in 2023--and set it aside for the future. But, starting with Ronald Reagan, the federal government ran massive deficits on its own budgets and borrowed the savings from Social Security to pay for wars and military build-ups, regressive tax cuts for the wealthy and corporations, among other things.

This vast wealth belongs to the working people who paid it--not to the federal government or Congress. Naturally, many politicians would like to get out of paying it back, but that constitutes a massive bait-and-switch swindle of working people. Bai and many other reporters of the mainstream media have been assured by their sources it is impossible to pay back that money, but that is a political choice, not a fiscal requirement. It would make working people pay for Republican gravy that went to someone else.

Another way to understand the swindle is to think of working Americans as the US government's largest creditor, even larger than China. The IOUs belittled by Bai represent the "full, faith and credit" of the US government as surely as the Treasury bonds held by China and other foreign creditors. What Obama's deficit commission is talking about is arranging a sly partial default with the hope the people won't figure it out.

Someone should write a letter of complaint to the Times ombudsman (better still, a thousand letters). Given the facts, why has the Times never reported the full story of Social Security's trillions and its true relationship to the federal deficits? For that matter, why not assign an unbiased reporter to examine what the public thinks? The public opinion polls are shockingly one-sided on this matter.

Meanwhile, if people want to get nasty in return, they might direct some tart reform suggestions to Sen. Simpson and his commission colleagues. In the interest of fairness, for instance, why not cut Simpson's government pension benefits as much or more than they intend to cut Social Security benefits. After all, he can afford it. And Simpson likes to talk about his new knee--recently replaced with a $70,000 operation. Did he pay for his new knee or did the taxpayers? It would be fun to find out.

William Greider
National Affairs Correspondent

William Greider, a prominent political journalist and author, has been a reporter for more than 35 years for newspapers, magazines and television. Over the past two decades, he has persistently challenged mainstream thinking on economics.

For 17 years Greider was the National Affairs Editor at Rolling Stone magazine, where his investigation of the defense establishment began. He is a former assistant managing editor at the Washington Post, where he worked for fifteen years as a national correspondent, editor and columnist. While at the Post, he broke the story of how David Stockman, Ronald Reagan's budget director, grew disillusioned with supply-side economics and the budget deficits that policy caused, which still burden the American economy.

He is the author of the national bestsellers One World, Ready or Not, Secrets of the Temple and Who Will Tell The People. In the award-winning Secrets of the Temple, he offered a critique of the Federal Reserve system. Greider has also served as a correspondent for six Frontline documentaries on PBS, including "Return to Beirut," which won an Emmy in 1985.

Greider's most recent book is The Soul of Capitalism: Opening Paths to A Moral Economy. In it, he untangles the systemic mysteries of American capitalism, details its destructive collisions with society and demonstrates how people can achieve decisive influence to reform the system's structure and operating values.

Raised in Wyoming, Ohio, a suburb of Cincinnati, he graduated from Princeton University in 1958. He currently lives in Washington, DC.

Alan Simpson, co-chair of Obama's committee on reducing federal deficits, shoulders the heavy burden of objectively deciding whether or not people's Social Security really must be cut. Part 1

Some slides from a presentation prepared for the deficit commission by Social Security's chief actuary

Senator Simpson: He's Not Just Offensive, He's Ignorant

by Dean Baker
Posted: August 25, 2010 05:56 PM

Former Wyoming Senator Alan Simpson, the co-chairman of President Obama's deficit commission, has sparked calls for his resignation after sending an offensive and sexist note to Ashley Carson, the executive director of the Older Women's League. While such calls are reasonable -- Simpson's comments were certainly more offensive than remarks that led to the resignation of other people from the Obama administration -- the Senator's determined ignorance about the basic facts on Social Security is an even more important reason for him to leave his position.

I was also a recipient of one of Simpson's tirades. As was the case with the note he sent to Carson, Simpson attached a presentation prepared for the commission by Social Security's chief actuary. Simpson implied that this presentation had some especially eye-opening information that would lead Carson and me to give up our wrong-headed views on Social Security.

While I opened the presentation with great expectations, I quickly discovered there was nothing in the presentation that would not already be known to anyone familiar with the annual Social Security trustees' report. The presentation showed a program that is currently in solid financial shape, but somewhere in the next three decades will face a shortfall due to an upward redistribution of wage income, increasing life expectancy, and slow growth in the size of the workforce. The projected shortfall is not larger than what the program has faced at prior points in its history, most notably in 1982 when the Greenspan Commission was established to restore the program's solvency.

It was disturbing to see that Simpson seemed surprised by what should have been old hat to anyone familiar with the policy debate on Social Security. After all, he had been a leading participant in these debates in his years in the Senate.

Simpson's public remarks also seem to show very little knowledge of the financial situation of the elderly or near elderly. He has repeatedly made references to retirees driving up to their gated communities in their Lexuses. While this description may apply to Simpson's friends, it applies to very few other retirees, the vast majority of whom rely on Social Security for the bulk of their income. Cutting the benefits of the small group of genuinely affluent elderly would make almost no difference in the finances of the program.

Furthermore, the baby-boom generation that is nearing retirement has seen most of its savings destroyed by the collapse of the housing bubble that both wiped out their housing equity and took a big chunk of the limited money they were able to put aside in their 401(k)s. Simpson shows no understanding of this fact as he prepares to cut benefits for near retirees.

He also doesn't seem to have a clue as to the type of work that most older people are doing. While it is possible for senators to continue in their jobs late in life, nearly half of older workers have jobs that are either physically demanding or require they work in difficult conditions. Simpson seems totally clueless on this point when he considers proposals to raise the retirement age.

The key facts on Social Security are not hard to understand. The shortfall is relatively minor and distant. Most retirees have little income other than their Social Security, and most workers would find it quite difficult to stay at their jobs in their late 60s or even 70. We might have hoped that Senator Simpson understood these facts at the time when he was appointed to the commission, but we should at least expect that he would learn them on the job.

His determined ignorance in the face of the facts is the most important reason why he is not qualified to serve on President Obama's commission. Someone who is co-chairman of such an important group should be able to critically evaluate information, not just insult and demean his critics.

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, DC.
 
He previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University. His blog, Beat the Press, features commentary on economic reporting.

He received his Ph.D in economics from the University of Michigan.

He has written numerous books and articles, including The United States Since 1980, Cambridge University Press, March 2007; The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer, Center for Economic and Policy Research, 2006; Social Security: The Phony Crisis (with Mark Weisbrot), University of Chicago Press, 1999; "Asset Returns and Economic Growth," (with Brad DeLong and Paul Krugman), Brookings Papers on Economic Activity (2005); "Financing Drug Research: What Are the Issues," Center for Economic and Policy Research, 2004; "Medicare Choice Plus: The Solution to the Long-Term Deficit Problem," Center for Economic and Policy Research, 2004; The Benefits of Full Employment (with Jared Bernstein), Economic Policy Institute, 2004; "Professional Protectionists: The Gains From Free Trade in Highly Paid Professional Services," Center for Economic and Policy Research, 2003; "The Run-Up in Home Prices: Is It Real or Is It Another Bubble," Center for Economic and Policy Research, 2002. His book Getting Prices Right: The Battle Over the Consumer Price Index (M.E. Sharpe, 1997) was a winner of a Choice Book Award as one of the outstanding academic books of the year. He was also the author of the weekly online commentary on economic reporting, the Economic Reporting Review (ERR), from 1996 - 2006.

He has worked as a consultant for the World Bank, the Joint Economic Committee of the U.S. Congress, and the OECD's Trade Union Advisory Council.

His columns have appeared in many major media outlets including the Atlantic Monthly, the Washington Post, and the London Financial Times. He is frequently cited in economics reporting in major media outlets, including the New York Times, Washington Post, CNBC and National Public Radio. 

Paul Craig Roberts received his Ph.D. from U. Virginia after doing his dissertation at Oxford on the theory of economic planning under the distinguished physical chemist and philosopher, Michael Polanyi. This background, coupled with his role as Assistant Secretary of Economic Policy under Reagan and his long stint as a columnist for Business Week and the WSJ, more than qualifies Roberts to project the end-game of the neocon/banksters' "chess match" with the rest of the world to determine what will be the solutions to and/or consequences of the U.S. budget and trade deficits now having become untenably large...

Paul Craig Roberts Archive
Paul Craig Robert's appeal on behalf of VDARE.COM

August 16, 2010

“Without A Revolution, Americans Are History.”

By Paul Craig Roberts

The United States is running out of time to get its budget and trade deficits under control.  Despite the urgency of the situation, 2010 has been wasted in hype about a non-existent recovery.  As recently as August 2 Treasury Secretary Timothy F. Geithner penned a New York Times Column, Welcome to the Recovery.

As John Williams (shadowstats.com) has made clear on many occasions, an appearance of recovery was created by over-counting employment and undercounting inflation. Warnings by Williams, Gerald Celente, and myself have gone unheeded, but our warnings recently had echoes from Boston University professor Laurence Kotlikoff and from David Stockman, who excoriated the Republican Party for becoming big-spending Democrats.

It is encouraging to see a bit of realization that, this time, Washington cannot spend the economy out of recession. The deficits are already too large for the dollar to survive as reserve currency, and deficit spending cannot put Americans back to work in jobs that have been moved offshore. 

However, the solutions offered by those who are beginning to recognize that there is a problem are discouraging. Kotlikoff thinks the solution is massive Social Security and Medicare cuts or massive tax increases or hyperinflation to destroy the massive debts. 

Perhaps economists lack imagination, or perhaps they don’t want to be cut off from Wall Street and corporate subsidies, but Social Security and Medicare are insufficient at their present levels, especially considering the erosion of private pensions by the dot com, derivative and real estate bubbles. Cuts in Social Security and Medicare, for which people have paid 15% of their earnings all their life, would result in starvation and deaths from curable diseases. 

Tax increases make even less sense. It is widely acknowledged that the majority of households cannot survive on one job. Both husband and wife work and often one of the partners has two jobs in order to make ends meet. Raising taxes makes it harder to make ends meet—thus more foreclosures, more food stamps, more homelessness. What kind of economist or humane person thinks this is a solution?

Ah, but we will tax the rich. The usual idiocy. The rich have enough money. They will simply stop earning.

Let’s get real.  Here is what the government is likely to do.  Once the Washington idiots realize that the dollar is at risk and that they can no longer finance their wars by borrowing abroad, the government will either levy a tax on private pensions on the grounds that the pensions have accumulated tax-deferred, or the government will require pension fund managers to purchase Treasury debt with our pensions. This will buy the government a bit more time while pension accounts are loaded up with worthless paper. 

The last Bush budget deficit (2008) was in the $400-500 billion range, about the size of the Chinese, Japanese, and OPEC trade surpluses with the US. Traditionally, these trade surpluses have been recycled to the US and finance the federal budget deficit. In 2009 and 2010 the federal deficit jumped to $1,400 billion, a back-to-back trillion dollar increase. There are not sufficient trade surpluses to finance a deficit this large. From where comes the money?

The answer is from individuals fleeing the stock market into "safe" Treasury bonds and from the bankster bailout, not so much the TARP money as the Federal Reserve’s exchange of bank reserves for questionable financial paper such as subprime derivatives. The banks used their excess reserves to purchase Treasury debt.

These financing maneuvers are one-time tricks. Once people have fled stocks, that movement into Treasuries is over. The opposition to the bankster bailout likely precludes another. So where does the money come from the next time?

The Treasury was able to unload a lot of debt thanks to "the Greek crisis," which the New York banksters and hedge funds multiplied into "the euro crisis." The financial press served as a financing arm for the US Treasury by creating panic about European debt and the euro. Central banks and individuals who had taken refuge from the dollar in euros were panicked out of their euros, and they rushed into dollars by purchasing US Treasury debt. 

This movement from euros to dollars weakened the alternative reserve currency to the dollar, halted the dollar’s decline, and financed the massive US budget deficit a while longer.

Possibly the game can be replayed with Spanish debt, Irish debt, and whatever unlucky country swept in by the thoughtless expansion of the European Union.

But when no countries remain that can be destabilized by Wall Street investment banksters and hedge funds, what then finances the US budget deficit?

The only remaining financier is the Federal Reserve. When Treasury bonds brought to auction do not sell, the Federal Reserve must purchase them. The Federal Reserve purchases the bonds by creating new demand deposits, or checking accounts, for the Treasury. As the Treasury spends the proceeds of the new debt sales, the US money supply expands by the amount of the Federal Reserve’s purchase of Treasury debt.

Do goods and services expand by the same amount?  Imports will increase as US jobs have been offshored and given to foreigners, thus worsening the trade deficit.  When the Federal Reserve purchases the Treasury’s new debt issues, the money supply will increase by more than the supply of domestically produced goods and services. Prices are likely to rise.

How high will they rise? The longer money is created in order that government can pay its bills, the more likely hyperinflation will be the result.

The economy has not recovered. By the end of this year it will be obvious that the collapsing economy means a larger than $1.4 trillion budget deficit to finance. Will it be $2 trillion? Higher? 

Whatever the size, the rest of the world will see that the dollar is being printed in such quantities that it cannot serve as reserve currency. At that point wholesale dumping of dollars will result as foreign central banks try to unload a worthless currency. 

The collapse of the dollar will drive up the prices of imports and offshored goods on which Americans are dependent. Wal-Mart shoppers will think they have mistakenly gone into Neiman Marcus. 

Domestic prices will also explode as a growing money supply chases the supply of goods and services still made in America by Americans.

The dollar as reserve currency cannot survive the conflagration. When the dollar goes the US cannot finance its trade deficit. Therefore, imports will fall sharply, thus adding to domestic inflation and, as the US is energy import-dependent, there will be transportation disruptions that will disrupt work and grocery store deliveries.

Panic will be the order of the day.

Will farms will be raided? Will those trapped in cities resort to riots and looting?

Is this the likely future that "our" government and "our patriotic" corporations have created for us?

To borrow from Lenin, "What can be done?"

Here is what can be done. The wars, which benefit no one but the military-security complex and Israel’s territorial expansion, can be immediately ended. This would reduce the US budget deficit by hundreds of billions of dollars per year.  More hundreds of billions of dollars could be saved by cutting the rest of the military budget, which in its present size, exceeds the budgets of all the serious military powers on earth combined. 

US military spending reflects the unaffordable and unattainable crazed neoconservative  goal of US Empire and world hegemony. What fool in Washington thinks that China is going to finance US hegemony over China? 

The only way that the US will again have an economy is by bringing back the offshored jobs. The loss of these jobs impoverished Americans while producing over-sized gains for Wall Street, shareholders, and corporate executives. These jobs can be brought home where they belong by taxing corporations according to where value is added to their product. If value is added to their goods and services in China, corporations would have a high tax rate. If value is added to their goods and services in the US, corporations would have a low tax rate.

This change in corporate taxation would offset the cheap foreign labor that has sucked jobs out of America, and it would rebuild the ladders of upward mobility that made America an opportunity society. 

If the wars are not immediately stopped and the jobs brought back to America, the US is relegated to the trash bin of history.

Obviously, the corporations and Wall Street would use their financial power and campaign contributions to block any legislation that would reduce short-term earnings and bonuses by bringing jobs back to Americans. Americans have no greater enemies than Wall Street and the corporations and their prostitutes in Congress and the White House.

The neocons allied with Israel, who control both parties and much of the media, are strung out on the ecstasy of Empire. 

The United States and the welfare of its 300 million people cannot be restored unless the neocons, Wall Street, the corporations, and their servile slaves in Congress and the White House can be defeated.

Without a revolution, Americans are history.

Paul Craig Roberts [email him] was Assistant Secretary of the Treasury during President Reagan’s first term.  He was Associate Editor of the Wall Street Journal.  He has held numerous academic appointments, including the William E. Simon Chair, Center for Strategic and International Studies, Georgetown University, and Senior Research Fellow, Hoover Institution, Stanford University. He was awarded the Legion of Honor by French President Francois Mitterrand. He is the author of Supply-Side Revolution : An Insider's Account of Policymaking in Washington;  Alienation and the Soviet Economy and Meltdown: Inside the Soviet Economy, and is the co-author with Lawrence M. Stratton of The Tyranny of Good Intentions : How Prosecutors and Bureaucrats Are Trampling the Constitution in the Name of Justice . Click here for Peter Brimelow’s Forbes Magazine interview with Roberts about the recent epidemic of prosecutorial misconduct.

It's Primary Election Day in Arizona ...and the Maricopa County Election Department finds itself under an omni-partisan legal assault demanding that it stop breaking a multitude of election laws. Republicans, Democrats, and Libertarians who may agree on little else are united today in their determination that everyone's vote should be counted exactly as it was cast.

Are Arizona's Political Leaders Deliberately Blocking Electronic Voting Machine Transparency?

Monday 23 August 2010

by: Denis G. Campbell, t r u t h o u t | News Analysis

Why did Arizona's two main gubernatorial candidates, Gov. Jan Brewer, former secretary of state/head of elections, who contracted for highly criticized and easily-hacked Diebold and Sequoia ballot scanning systems, and Attorney General (AG) Terry Goddard, with his three-year "criminal investigation" into a 2006 Pima County (Tucson) local election allegedly hacked, according to a whistleblower, do everything in their power for years to stifle polling accountability while expensively fighting enforcement of Arizona's election laws?

"The people who cast the votes decide nothing. The people who count the votes decide everything." - Joseph Stalin

Arizona voters head Tuesday 24 August to primary polling places. They will mark paper ballots that will be optically scanned by Diebold and Sequoia vote scan machines. And there is absolutely no guarantee their vote will ever be tabulated.

Six plaintiffs recently filed a lawsuit in Maricopa County (Phoenix) alleging recently relaxed ballot handling rules ensure a lax chain of control over ballot papers in direct violation of Arizona law. Coupled with unapproved software installed on multiple election department computers, and it creates what the citizen watchdog group AUDIT AZ calls an "interlock." "This makes manipulation of vote counting easy and thus leaves elections vulnerable to undetectable fraud."

Arizona public officials confidently claim their system is completely safe from hackers. Yet, Maricopa County is the USA's fourth-largest elections department handling 56-58 percent of all Arizona votes cast. Its polling places rely on 22, sole-purpose laptop computers and their phone line modems to transmit final polling data from the Sequoia machines to election headquarters over phone lines and the Internet.

If CIA and Defense Department sites are hacked thousands of times daily, what, besides desert bravado or blind arrogance, gives anyone any indication their vote is safely counted?

John Roberts Brakey

As AUDIT AZ co-founder John Brakey told us, "Lax handling of ballots and decisions relieving poll-workers of audit responsibility mean, regardless of the wishes of individual voters, the entire system can be manipulated and outcomes determined on central tabulation computers with expert hackers who are then able to completely cover their tracks."

And before you take Governor Brewer's or AG Goddard's (neither of whom would answer questions posed over three years by this reporter) tack of ignoring the message and instead attacking the messenger, dismissing all charges as baseless conspiracy theory ... ask yourself why Arizona's elected and unelected leaders (who all took a forced, unpaid, furlough day Friday to save money) have spent more than $1 million tax dollars hiring high-profile law firms to fight citizen-filed lawsuits from multi-partisan groups seeking ballot handling reforms?

William "Bill" Risner

Bill Risner, Democratic Party attorney for Pima County, is no stranger to election procedure battles. In 41-years of practice, he says the central problem of the current computerized systems is they are easy to cheat. "When the fact of 'easy to cheat' is combined with the 'impossibility of challenge' and 'nobody is looking,' the seriousness of the present vulnerability of our election system is obvious," he says.

Brad Roach, unsuccessful Republican candidate for Pima County attorney and lead counsel on the voter case said, "John Brakey and I are as politically opposite as you can find and would not likely agree on anything, but we agree on this." He describes Brakey as being as passionate as any death penalty opponent crusader he's ever met. "John's devoted years to this and we should thank him. While we disagree on most things political, he's absolutely right, your vote is the most important thing any citizen has," said Roach.

Brad Roach

Roach further said he cannot fathom why elected leaders don't understand that "when you fight, fight, fight everything, you make things worse and it serves no utility." He continued, "If you have nothing to hide, why not just be open on something this important?"

He is suing the Maricopa County Board of Supervisors and others requesting "Mandamus" and Injunctive Relief. The Mandamus action is unique in that it demands the court order public officials to follow existing Arizona election laws.

Plaintiffs want to ensure the entire ballot chain of custody is secure and Arizona's mandated audit trail is returned to full compliance, no matter how inconvenient or time consuming, to ensure integrity in the voting process.

The case was recently assigned its second judge. In a Friday telephone hearing, Judge Oberbillig, County Defense Attorney Colleen Conner and Roach all agreed nothing could be done in time for the primary election on Tuesday.

However, the Mandamus action falls outside of cumbersome civil trial rules and the judge said there was time to move forward with an expedited jury trial and emergency orders issued from the bench before the November general election.

Said Roach, "How patriotically ironic is it that on a question as important as insuring everyone's individual vote is counted, a jury of one's peers will decide the merits of this case?"

But what, if anything, can stop the arrogance of Arizona's elected and unelected leaders?

When Governor Brewer was secretary of state, she wrote the rules for voting machines across the state, however, when questioned repeatedly about them, claimed she had no authority to change the rules or order new ones.

The bar in Arizona for any recount is already higher than in almost every other states, with a minuscule one-tenth of 1 percent margin and inside five days the standards to trigger a recount. Miss either milestone and no recount can ever be granted.

Indeed, during a 2004 primary election between two Republicans decided by just four votes, officials were ready to begin a hand recount of all paper ballots, at their own expense, to ensure accuracy. Secretary Brewer called the local supervisor of elections and informed them they were "breaking state law and ordered them to stop." The only way to count ballots under Arizona law was to rerun them through the same machine that had already spit out this data. Jan Brewer explained on video she stopped the recount because "an angel was on her shoulder and guided her in the right direction."

In the second machine run, 496 extra ballots magically appeared inside one machine's "count" that were not part of the first ballot. Maricopa Elections Supervisor Karen Osborne under deposition stated, "an 18 percent error rate in machine tabulations was within their acceptable margin of error." What citizen would volunteer their ballot to be one of the nearly one in five miscounted in that "acceptable margin of error"?

Across Arizona, there is a pattern of refusal to cooperate with voter groups. Elected officials refuse to return phone calls asking for comment, ignore or obfuscate Freedom of Information Act requests for information and, later, even ignore judge's orders. And there seems to be zero consequences for state workers. To date, no one has been fired, reprimanded or reassigned for incompetence for any of these bungled elections.

Even when brought into court, the rank incompetence causes judges to throw their hands up in disgust, resulting in convoluted rulings. Two years ago, Bill Risner won all of the legal argument, but lost his case when Maricopa County Judge Edward O. Burke agreed County Elections Director, Karen Osborne, did not follow election law, ensure ballot integrity and provide an unbroken custody chain.

However, he ruled against the plaintiffs saying, "in a county the size of Maricopa, perfect compliance with the statutory electoral scheme, while desirable, is not possible due to time, space, the practicalities of the electoral process and the number of persons involved" in denying their injunction for a hand recount.

So, where does the voter go to ensure the accuracy of their vote count? Well, one could try voting in the UK as an example. There, the hand vote count performed across 650 parliamentary constituencies during the recent general election was a model of efficiency and accuracy.

This reporter covered Wales' Vale of Glamorgan constituency hand count. The result was declared final at 2:23 AM, with congratulations all around. It was completely transparent. All votes were counted across the nation in exactly the same way, with party observers and even candidates sitting directly across the table from and silently observing the counting teams throughout the night. Too, there was no artificial time pressure of reporting vote results on the 11:00 PM news. They were committed to getting it right.

The sanctity of one person, one vote, unites otherwise deeply divided and polarized Republican, Democrat, Libertarian, Tea and every other party. So, why won't a Republican governor and a Democratic AG, both seeking the state's highest office, demand transparent accountability by state officials?

Terry Goddard

AG Goddard has led a "Keystone Cops" criminal investigation of the 2006 Regional Transportation Authority (RTA) election. Bill Risner sued Pima County, demanding a recount (and they are the party that WON!), trying to assure vote integrity as the result made no sense. How could a measure they supported suddenly win after losing so badly in every previous election?

 When a whistleblower came forward saying the election result had been hacked, AUDIT AZ entered the fray. In the original UK Progressive article on this subject, they alleged and proved a Pima County election official had purchased an illegal scanner. Election Director Brad Nelson admitted in a deposition he wanted to test for himself whether ballot scanning machine memory cards could be hacked as demonstrated by Finnish scientist Harry Hursti in the HBO film "Hacking Democracy."



And boy did they test. (The question remains ... until they got it right?) Seventy plus machine memory cards were reported as "damaged." Hacking enough voting machine memory cards to affect an outcome before an election is clearly difficult. The more ingenious way is, as alleged in Risner's case documents, to break into the central tabulator using a simple and untraceable Microsoft Access table. This instantly changes results inside headquarters and leaves no trail.

And this was four years ago, imagine how sophisticated hackers have become since 2006 (placing a full PacMan game on one "sealed" machine being but one example.)

Risner asserts one can determine if the RTA ballot results were hacked by reviewing the polling summary tape totals included with the ballots from the poll site and comparing them with the actual paper ballots from each polling location. A furious legal battle, costing Pima County hundreds of thousands of dollars, ended when AG Goddard's team swooped in and removed the ballots to an undisclosed location from a storage facility in Tucson. He then did his own recount without reconciling the poll tapes and declared the result final.

The problem? Almost one-third of the poll summary tapes, supposedly stored with the ballots, were reported "missing" at the time of his count. No one knows and the AG will not answer whether they were missing when he conducted his recount or before. Too, Pima County officials as "the customer," were allowed unfettered access to the ballot storage facility despite being implicated in the criminal investigation. And the logs of who visited the facility have not been released by the AG.

The issue has been stonewalled because, according to a local attorney wishing to remain anonymous, "by implication, the AG's office ends up looking either incompetent or complicit in a cover-up. With the election just 10-weeks away, the impact it could have on Goddard's election chances to the only office he has coveted since childhood, would be devastating."

Aside from immigration reform, economic loss issues around the "Paper's Please" law and an increasingly radical right-wing agenda, any further light on her otherwise anonymous tenure as secretary of state would create more problems for Governor Brewer's re-election campaign.

The irony is Democrat Goddard may end up hoisted on this petard and never know for certain his own ballot count fate since the rules change makes it easier for heavily Republican and lax-on-security Maricopa County officials to find results that favor Governor Brewer's re-election bid.

No matter what happens, democracy could be the ultimate casualty. As I wrote after the '08 general election for The Huffington Post, with the Maricopa recount case and result, was it possible Arizona's John McCain actually lost his own red state when every other state touching Arizona voted FOR President Obama?

Connecting electoral dots, Phoenix (Maricopa 56-58 percent) and Tucson (Pima 18-22 percent) account for roughly 75 percent of votes cast in any Arizona election. Evidence also exists that Pima County election department staff frequently accessed the early "vote by mail" official count database. Imagine the impact of this "Zogby poll from hell" as John Brakey calls it. "Illegally passing along actual early vote totals to party insiders allows them to conduct a series of Robocall and other campaign activities that could sway voters based not on research or polls but on actual vote counts!"

Arizona is no stranger to election controversy. Paper or machines? Most would probably now vote paper every time. To quote AUDIT AZ's motto: "Election Integrity is not about the Right or Left; it's about right, wrong, greed and corruption."

Denis G Campbell is the American Editor of UK Progressive. He is a political and business pundit contributor to both BBC television and radio. Denis specializes in translating the American electoral and governing process for UK and EU audiences and vice versa, contributing regularly on UK elections and issues to the Huffington Post. He has contributed to newspapers and magazines around the globe. In his “spare” time, he is managing director of Target Point Ltd focused on social media, communication strategy, leveraging technology, corporate change and building world class selling organisations. Denis has lived in the EU since 1998.

Dean Baker: "Our income is a cost to the rich. They will look to cut it wherever they can, whether this is wages for private sector workers, pensions for public employees, or Social Security for retirees."

Counterpunch Weekend Edition
August 20 - 22, 2010

When Wall Street Rules, We Get Wall Street Rules

Whacking the Middle Class

By DEAN BAKER

The middle class is getting whacked by the Great Recession. Fifteen million people are out of work, another 9 million workers can only find part-time jobs, and millions more have given up looking for work altogether. Those lucky enough to be employed are unlikely to see any substantial wage gains for years to come.

Dean Baker

Millions of homeowners are facing the loss of their home and more than 10 million are underwater in their mortgage. Most of the huge baby boom cohort is approaching retirement with little other than Social Security to support them, now that the collapse of the housing bubble has destroyed their home equity and much of the rest of their savings.

This pain is infuriating for two reasons. First, this was an entirely preventable disaster. The housing bubble was easy to see. Competent economists had long warned of its dangers.

The second reason why the current situation is infuriating is that we know how to get the economy out of this mess. We just need to boost demand. This can be done either with much more government stimulus, more aggressive monetary policy from the Fed, or pushing the dollar down to boost exports.

If this disaster were preventable and we knew how to get out of it, why didn't our leaders try to stop it before it happened? Why don't they take the steps necessary now to get the economy moving again?

The answer to both these questions is simple: The politicians work for someone else. On Election Day, the politicians might need our votes, but they won't get to be serious contenders unless they've gotten the campaign contributions of the big money crew. And the moneyed elite has been using its control of the political process to ensure that an ever larger share of the economy's output is redistributed upward in their direction.

The reason that there was little interest in cracking down on the housing bubble is that Goldman Sachs, Citigroup and the rest were making a fortune from the financial shenanigans that fueled the bubble. Former Treasury Secretary Robert Rubin personally pocketed over $100 million from this fun. Why would they want the government to rein it in?

Of course, when the bubble did finally blow and threaten their banks with bankruptcy, the Wall Street crew just ran to the government for help. And they got trillions of dollars in loans and loan guarantees to ensure that they would not be victims of the crisis they had created. Now that they are back on their feet, with Wall Street profits and bonuses both again at near record levels, they see little reason to concern themselves with the measures that might set the economy right for the rest of us.

After all, the steps necessary to revitalize the economy could mean some inflation. This would reduce the value of the debt owned by the wealthy. And the wealthy don't see any reason that they should risk any of their wealth just for the good of the economy.

We have enormous ground to cover to restore an economy that works for the vast majority, but the first step is to know where we are. The upward redistribution of the last three decades has nothing to do with the market and a belief in "market fundamentalism." This is about a process where the rich and powerful have rewritten the rules to make themselves richer and more powerful.

For example, they wrote trade rules that were designed to put downward pressure on the wages of the bulk of the U.S. workforce by placing manufacturing workers in direct competition with low-paid workers in China and other developing countries. This had nothing to do with a belief in "free trade." They did not try to subject lawyers, doctors or other highly paid workers to the same sort of international competition. They only wanted international competition to put downward pressure on the wages of workers in the middle and bottom, not those at the top.

This elite has instituted a system of corporate governance that allows top executives to pilfer companies at the expense of their shareholders and its workers. Top executives are overseen only by a board of directors who owe their hugely overpaid sinecures to the executives they supervise. And of course the Wall Street barons themselves are given a license to gamble with the implicit promise that government picks up their tab when they lose.

No progressive movement will make any progress until we understand the battle we are fighting. Our income is a cost to the rich. They will look to cut it wherever they can, whether this is wages for private sector workers, pensions for public employees, or Social Security for retirees. That is their target.

We have to fight back using the same logic. Their income is our cost -- the multimillion dollar bonuses for the Wall Street wizards is a direct drain on the economy. So are the bloated paychecks of top executives and their lackey boards. Progressives must be prepared to use all the same tactics to bring down the income of the rich and powerful that they have used to reduce the income of everyone else.

This means restructuring the rules of corporate governance to put serious downward pressure on the pay of top executives. The highest paid workers (doctors, lawyers, and economists) must be subjected to international competition in the same way as manufacturing workers have been subjected to international competition. And, we should sharply limit the extent of the patent or copyright protections that are exploited by the drug industry and the entertainment and software industries.

We have to put the focus on the ways the rich have rigged the rules and place this at the center of political debate. The three decade-long battle over tax cuts for the rich is important, but at the end of the day it is a side show. If we let them steal all the money at the onset, it really doesn't make much difference if they end up letting us tax a little of it back.

Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of Plunder and Blunder: The Rise and Fall of the Bubble Economy and False Profits: Recoverying From the Bubble Economy.

Ellen Brown: "...hordes of victims of predatory lending could end up owning their homes free and clear—while the financial industry could end up skewered on its own sword."

HOMEOWNERS' REBELLION:
COULD 62 MILLION HOMES BE FORECLOSURE-PROOF?

Ellen Brown, August 18th, 2010
http://www.webofdebt.com/articles/homeowners.php

Over 62 million mortgages are now held in the name of MERS, an electronic recording system devised by and for the convenience of the mortgage industry. A California bankruptcy court, following landmark cases in other jurisdictions, recently held that this electronic shortcut makes it impossible for banks to establish their ownership of property titles—and therefore to foreclose on mortgaged properties. The logical result could be 62 million homes that are foreclosure-proof.

Mortgages bundled into securities were a favorite investment of speculators at the height of the financial bubble leading up to the crash of 2008. The securities changed hands frequently, and the companies profiting from mortgage payments were often not the same parties that negotiated the loans. At the heart of this disconnect was the Mortgage Electronic Registration System, or MERS, a company that serves as the mortgagee of record for lenders, allowing properties to change hands without the necessity of recording each transfer.

MERS was convenient for the mortgage industry, but courts are now questioning the impact of all of this financial juggling when it comes to mortgage ownership. To foreclose on real property, the plaintiff must be able to establish the chain of title entitling it to relief. But MERS has acknowledged, and recent cases have held, that MERS is a mere “nominee”—an entity appointed by the true owner simply for the purpose of holding property in order to facilitate transactions. Recent court opinions stress that this defect is not just a procedural but is a substantive failure, one that is fatal to the plaintiff’s legal ability to foreclose.

That means hordes of victims of predatory lending could end up owning their homes free and clear—while the financial industry could end up skewered on its own sword.

California Precedent

The latest of these court decisions came down in California on May 20, 2010, in a bankruptcy case called In re Walker, Case no. 10-21656-E–11. The court held that MERS could not foreclose because it was a mere nominee; and that as a result, plaintiff Citibank could not collect on its claim. The judge opined:

Since no evidence of MERS’ ownership of the underlying note has been offered, and other courts have concluded that MERS does not own the underlying notes, this court is convinced that MERS had no interest it could transfer to Citibank. Since MERS did not own the underlying note, it could not transfer the beneficial interest of the Deed of Trust to another. Any attempt to transfer the beneficial interest of a trust deed without ownership of the underlying note is void under California law.

In support, the judge cited In Re Vargas (California Bankruptcy Court); Landmark v. Kesler (Kansas Supreme Court); LaSalle Bank v. Lamy (a New York case); and In Re Foreclosure Cases (the “Boyko” decision from Ohio Federal Court). (For more on these earlier cases, see here, here and here.) The court concluded:

Since the claimant, Citibank, has not established that it is the owner of the promissory note secured by the trust deed, Citibank is unable to assert a claim for payment in this case.

The broad impact the case could have on California foreclosures is suggested by attorney Jeff Barnes, who writes:

This opinion . . . serves as a legal basis to challenge any foreclosure in California based on a MERS assignment; to seek to void any MERS assignment of the Deed of Trust or the note to a third party for purposes of foreclosure; and should be sufficient for a borrower to not only obtain a TRO [temporary restraining order] against a Trustee’s Sale, but also a Preliminary Injunction barring any sale pending any litigation filed by the borrower challenging a foreclosure based on a MERS assignment.

While not binding on courts in other jurisdictions, the ruling could serve as persuasive precedent there as well, because the court cited non-bankruptcy cases related to the lack of authority of MERS, and because the opinion is consistent with prior rulings in Idaho and Nevada Bankruptcy courts on the same issue.

What Could This Mean for Homeowners?

Earlier cases focused on the inability of MERS to produce a promissory note or assignment establishing that it was entitled to relief, but most courts have considered this a mere procedural defect and continue to look the other way on MERS’ technical lack of standing to sue. The more recent cases, however, are looking at something more serious. If MERS is not the title holder of properties held in its name, the chain of title has been broken, and no one may have standing to sue. In MERS v. Nebraska Department of Banking and Finance, MERS insisted that it had no actionable interest in title, and the court agreed.

An August 2010 article in Mother Jones titled “Fannie and Freddie’s Foreclosure Barons” exposes a widespread practice of “foreclosure mills” in backdating assignments after foreclosures have been filed. Not only is this perjury, a prosecutable offense, but if MERS was never the title holder, there is nothing to assign. The defaulting homeowners could wind up with free and clear title.

In Jacksonville, Florida, legal aid attorney April Charney has been using the missing-note argument ever since she first identified that weakness in the lenders’ case in 2004. Five years later, she says, some of the homeowners she’s helped are still in their homes. According to a Huffington Post article titled “‘Produce the Note’ Movement Helps Stall Foreclosures”:

Because of the missing ownership documentation, Charney is now starting to file quiet title actions, hoping to get her homeowner clients full title to their homes (a quiet title action ‘quiets’ all other claims). Charney says she’s helped thousands of homeowners delay or prevent foreclosure, and trained thousands of lawyers across the country on how to protect homeowners and battle in court.

Criminal Charges?

Other suits go beyond merely challenging title to alleging criminal activity. On July 26, 2010, a class action was filed in Florida seeking relief against MERS and an associated legal firm for racketeering and mail fraud. It alleges that the defendants used “the artifice of MERS to sabotage the judicial process to the detriment of borrowers;” that “to perpetuate the scheme, MERS was and is used in a way so that the average consumer, or even legal professional, can never determine who or what was or is ultimately receiving the benefits of any mortgage payments;” that the scheme depended on “the MERS artifice and the ability to generate any necessary ‘assignment’ which flowed from it;” and that “by engaging in a pattern of racketeering activity, specifically ‘mail or wire fraud,’ the Defendants . . . participated in a criminal enterprise affecting interstate commerce.”

Local governments deprived of filing fees may also be getting into the act, at least through representatives suing on their behalf. Qui tam actions allow for a private party or “whistle blower” to bring suit on behalf of the government for a past or present fraud on it. In State of California ex rel. Barrett R. Bates, filed May 10, 2010, the plaintiff qui tam sued on behalf of a long list of local governments in California against MERS and a number of lenders, including Bank of America, JPMorgan Chase and Wells Fargo, for “wrongfully bypass[ing] the counties’ recording requirements; divest[ing] the borrowers of the right to know who owned the promissory note . . .; and record[ing] false documents to initiate and pursue non-judicial foreclosures, and to otherwise decrease or avoid payment of fees to the Counties and the Cities where the real estate is located.” The complaint notes that “MERS claims to have ‘saved’ at least $2.4 billion dollars in recording costs,” meaning it has helped avoid billions of dollars in fees otherwise accruing to local governments. The plaintiff sues for treble damages for all recording fees not paid during the past ten years, and for civil penalties of between $5,000 and $10,000 for each unpaid or underpaid recording fee and each false document recorded during that period, potentially a hefty sum. Similar suits have been filed by the same plaintiff qui tam in Nevada and Tennessee.

By Their Own Sword: MERS’ Role in the Financial Crisis

MERS is, according to its website, “an innovative process that simplifies the way mortgage ownership and servicing rights are originated, sold and tracked. Created by the real estate finance industry, MERS eliminates the need to prepare and record assignments when trading residential and commercial mortgage loans.” Or as Karl Denninger puts it, “MERS’ own website claims that it exists for the purpose of circumventing assignments and documenting ownership!”

MERS was developed in the early 1990s by a number of financial entities, including Bank of America, Countrywide, Fannie Mae, and Freddie Mac, allegedly to allow consumers to pay less for mortgage loans. That did not actually happen, but what MERS did allow was the securitization and shuffling around of mortgages behind a veil of anonymity. The result was not only to cheat local governments out of their recording fees but to defeat the purpose of the recording laws, which was to guarantee purchasers clean title. Worse, MERS facilitated an explosion of predatory lending in which lenders could not be held to account because they could not be identified, either by the preyed-upon borrowers or by the investors seduced into buying bundles of worthless mortgages. As alleged in a Nevada class action called Lopez vs. Executive Trustee Services, et al.:

Before MERS, it would not have been possible for mortgages with no market value . . . to be sold at a profit or collateralized and sold as mortgage-backed securities. Before MERS, it would not have been possible for the Defendant banks and AIG to conceal from government regulators the extent of risk of financial losses those entities faced from the predatory origination of residential loans and the fraudulent re-sale and securitization of those otherwise non-marketable loans. Before MERS, the actual beneficiary of every Deed of Trust on every parcel in the United States and the State of Nevada could be readily ascertained by merely reviewing the public records at the local recorder’s office where documents reflecting any ownership interest in real property are kept....

After MERS, . . . the servicing rights were transferred after the origination of the loan to an entity so large that communication with the servicer became difficult if not impossible .... The servicer was interested in only one thing – making a profit from the foreclosure of the borrower’s residence – so that the entire predatory cycle of fraudulent origination, resale, and securitization of yet another predatory loan could occur again. This is the legacy of MERS, and the entire scheme was predicated upon the fraudulent designation of MERS as the ‘beneficiary’ under millions of deeds of trust in Nevada and other states.

Axing the Bankers’ Money Tree

If courts overwhelmed with foreclosures decide to take up the cause, the result could be millions of struggling homeowners with the banks off their backs, and millions of homes no longer on the books of some too-big-to-fail banks. Without those assets, the banks could again be looking at bankruptcy. As was pointed out in a San Francisco Chronicle article by attorney Sean Olender following the October 2007 Boyko [pdf] decision:

The ticking time bomb in the U.S. banking system is not resetting subprime mortgage rates. The real problem is the contractual ability of investors in mortgage bonds to require banks to buy back the loans at face value if there was fraud in the origination process.

. . . The loans at issue dwarf the capital available at the largest U.S. banks combined, and investor lawsuits would raise stunning liability sufficient to cause even the largest U.S. banks to fail . . . .

Nationalization of these giant banks might be the next logical step—a step that some commentators said should have been taken in the first place. When the banking system of Sweden collapsed following a housing bubble in the 1990s, nationalization of the banks worked out very well for that country.

The Swedish banks were largely privatized again when they got back on their feet, but it might be a good idea to keep some banks as publicly-owned entities, on the model of the Commonwealth Bank of Australia. For most of the 20th century it served as a “people’s bank,” making low interest loans to consumers and businesses through branches all over the country.

With the strengthened position of Wall Street following the 2008 bailout and the tepid 2010 banking reform bill, the U.S. is far from nationalizing its mega-banks now. But a committed homeowner movement to tear off the predatory mask called MERS could yet turn the tide. While courts are not likely to let 62 million homeowners off scot free, the defect in title created by MERS could give them significant new leverage at the bargaining table.

______________________________________________________________________

Ellen Brown wrote this article for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas with practical actions. Ellen developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest of eleven books, she shows how the Federal Reserve and "the money trust" have usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are webofdebt.com, ellenbrown.com, and public-banking.com.