Paul Craig Roberts-- Facing Armageddon and the Hard Solutions It Will Take to Turn Things Around

Paul Craig Roberts

professor of economics,
associate editor and columnist for WSJ
Business Week's first outside columnist
congressional staff on House and Senate,
Assistant secty for the treasury for economic policy under Reagan
President of a water company.
Has run a small research organization
Has published nine books
Syndicated Columnist for Scripps Howard
on board of directors for a multinational company


various Arab countries that were our puppets-- looks like the people are trying to throw that off. That's a good development. People who have lived under authoritarian rule for decade can recover. That's a good sign for us.

The jobs that used to be ladders for upward mobility for the middle class have been offshored. This has reduced the value of a college education. We now have many young people returning home because they can't live independently

The federal reserve makes things worse by printing more money and keep the banks solvent by driving the economy with inflation-- which drives food up and drives the dollar down.

Dollar is now worth one Swiss Franc (could buy four Swiss Francs for a dollar in 1972.

So much of our so-called imports are offshored productions of our own firms. You can do anything for a trade deficit when you are producing offshore.
That erodes the tax base for federal, state and local governments.
The eroded tax base affects revenue collections which are down.
Then, they give more tax cuts to the mega rich, CEOs and corporations.

The real problem is wall street. Wall street demanded higher earnings which drove corporations to go offshore... and by the giant retailers, like Walmart. And also driven by congress, which passed a law, directed at the rich, so most of CEO's remuneration comes in performance bonuses that are higher with offshoring.

The financial crisis is because everything is deregulated-- everything is deregulated, even the commodity markets. Speculators were not allowed to dominate the commodity market because their positions were not allowed to be too high. Recently, Goldman got position limits removed so now there are indexes based on commodities. It was this kind of problem that allowed the Oil prices to reach well over $100 a barrel, with no increase in real demand. IT was because of deregulation of the commodity market.

These deregulations, have led to a complete open financial market where anything and everything goes. They leverage debt

Rob: Isn't this the free capitalism that Milton Friedman and the right call for.

Laissez-faire model of Greenspan-- the idea that the market regulates itself better than the regulators.

Free markets do not mean no regulation. What it means is, under the rules, however the regulatory market, prices are free to reflect supply and demand-- the prices can change reflecting supply and demand within the market regardless of the regulations.

A lot of people have conflated or confused Laissez-faire with free market, Laissez-faire says there should be no regulation of anything. Without regulations you get monopolies. The regulations of the market constrains human greed so it does not ruin the performance of the market.
Greenspan was part of the that that disservice. Matt Taibbi's book Griftopia explains the huge damage Greenspan did to this country. As

As FED chairman he abandoned his regulatory obligations and in addition, when Brooksley Born, who job was to regulate the derivatives market, Greenspan, and the US Treasury Secretary at the time, I think it was Rubin, or Paulsen or Summers, (all Goldman Sachs people) along with the Securities commission head got her removed. Then they got an act passed that completely deregulated the derivatives market. Brooksley Born was completely corrected in everything she said would happen.

This shows that either we put into high office people who didn't have enough wits to be there or they ". a new gang of robber barons.



Even if we put it down to extreme cunning, that people saw how to create a new monopoly, it's still stupid, because it is the fouling of their own nest. You don't gain when you destroy the currency.. it's such a narrow focus and implies stupidity. It could be a combination of very clever self interest on the part of some and stupidity on the part of others.


The tea party is many angry people about different and conflicting things. They think they can change things with the ballot box, but they can't because the oligarchy is too powerful.

I think the people who have this view against regulations are far more influential and powerful.
They include policymakers and the firms that provide the money for campaign contributions. If that's the case it doesn't much matter what the tea party believes because they're up against Bernanke and Geithner and the entire financial apparatus.

I think they're incompetent-- totally incompetent and they have no concept of what they're doing. you certainly cannot fix an economy by monetizing federal debt, which is what they are trying to do.

As recently as the George Bush administration, the US federal budget deficit was about the size of the US trade deficit, so, the trade partners were buying US trading bonds, so the money financed the federal deficit-- china france, OPEC, Japan--

So our interest rates to them rose over time, but they were financing. But with the collapse of the economy, weakened by the offshoring of jobs, bailouts, tax cuts and the war-- defense budget is $1/2 trillion dollar, so you have the situation where the federal budget is three times larger than the trade deficit, so there's not enough to finance the federal deficit.
So Bernanke is printing money to finance the debt. In my opinion the only reason this hasn't caused high inflation is that the banks are in such poor condition is that they are hoarding (the money ends up in banks) the banks are so impaired, they are hoarding the reserves and have very, very large reserves. And the American people are so in debt from mortgages, student loans and credit cards that they can't get credit and the banks can't expand the money supply through loans. Yet, there's the potential there, already, in the banking system, for massive inflation. Despite the fact that the inflation has not taken place yet, the reset of the world can see that ultimately this is going to wreck the dollar. People are moving out of the dollar into other currencies, gold, silver, commodities. The fall of the dollar causes prices to rise.

You can inflation two ways-- when the Fed supplies continuing money to banks or when the exchange value on your currency declines. When/if all this money gets into the economy inflation will explode. This is not a solution.

Notice, when they talk about the budget deficit, it's always about entitlements-- SS, medicare, , never about cutting the defense budget. The whole thing is a racket. You can't do anything about the budget deficit until you do something about the military.

We spend billions on security to prevent a shoe bomber while we allow millions of Americans to be foreclosed on and pushed out of their homes, which causes other home values to drop.

The military security complex is getting rich. The former head of homeland security is the one who markets the "Porno scanners." It's all being done for no real reason except the profits of the well connected firm of the former head of HSA.

The senate is owned by wall street, the military, insurance, AIPAC, agribusiness, and the pharmaceuticals- those are the people who make all the decisions. hey write all the bills that the president signs. Even when I was a congressional staffer in the seventies the bills were written by executive branch agencies and the lobbyists. That was true 35 years ago.

It's worse now. It's shameless now. Any disguise is gone Any pretense that this is in the public interest is gone.
This is a huge problem for Americans. They they think they have a democracy, they think they can affect it by the ballot box. When you get there you find out you're not going to be elected, the money's going to be against and you're going to be treated like an oddball, like Ron Paul and Dennis Kucinich-- they are principled, real people. Yet you can find known crooks and they're the ones running the show. There's really not much difference between how the US functions and how Mubarak and Tunisia and Libya function. It's not much different. It's a disguise to what really happens.

The utter hypocrisy of the US government and the population or much of it. We've been hearing all this about concern for human rights in Libya-- and this is from a govt. responsible for 1' milliion dead and 4 million dead Iraqis. and We have all these concerns for 1000 dead Libyans.

Now we're going to invade LIbya to save Libyan's from Ghadaffi's mercenaries. That's not even the tip of the iceberg. The hypocrisy is just massive.

Goons attack Ray McGovern for standing up and turning his back to Hillary Clinton while she's giving a speech on internet freedom-- while she's going after Julian Assange and wikileaks. This is amazing. This is utterly amazing. American hypocrisy reeks. it stinks. It's shameless. Did Hillary Clinton believe a word of what she's saying.

American government people have no shame, no integrity. They do not represent the people.

The empire, the economy are falling apart. you can't be an opportunity society when you close all the ladders o f upward mobility.

University graduates can't get jobs. They're creating the conditions here that caused the rebellions that we are now seeing in the middle east.

On Mideast revolutions:
Remember the Bolshevik and French revolutions didn't have technology.

I would buy the story that Twitter or facebook enabled the opposition. I think the power rests on the fact that people had nothing else to lose and they were scared.

The United States military never could occupy one city-- Baghdad. They had to build the green zone, and they often failed. IF the United States military can't occupy Bagdhad, it can't occupy the United States.

I think if the Egyptians and Libyans had been armed, things would have happened much quicker. In Egypt, they got rid of Mubarak, but the ruling class is still in place.

In Libya, because some troops went over to the revolution and because of Ghadffi's that r revolution may be more complete.

In the US I don't know how long people will be able to hold on to their guns.

If they can get rid of Habeus corpus, torture and spy without warrants, then the bill of rights is gone. If you lose one you lose them all. I think the second amendment is going to fall to the war on terror. That's why HSA say they are no longer concerned with terrorists, they are now concerned with domestic extremists hey've arrested all those war protest groups. We are country that values dissent. If they arrest war protest groups, then there's no first amendment. They're going to see we can allow the people we're arresting and whose houses we're breaking into to have guns.

I think that when lose the second amendment, which I don't see it can be much longer, that should be the righting on the wall, " that we are anything but a slave, generating money for the government. Some people see that and are leaving the country. You have to ask yourself, why in the world are people leaving the greatest country on earth. But they are. Just like the smart people got out of Germany before it was too late and the one's that didn't were dealt with in a barbaric manner. " W'ere not going to be able to stop them from taking away retirement pensions, health plans that that they paid 15% OF THEIR INCOME THEIR entire lives.

I think that everything that takes away power from people is a police state action.

Obama wants to be able to shut down the internet in the United states, unless he thinks there will be protest here. When you have 22% unemployment rate-- including short and long term unemployed-- between a fourth and fifth of the work force unemployed, how does that differ from Egypt.
People like Gerald Celente and John Williams, say we're experiencing bottom bouncing.

With 22% already unemployed and then the economy collapses further -- you've got economic Armageddon-- what are they going to do? Print more money?
This is where short term profit maximization, which is the entire focus of the US economy-- the attitude of the economic system, of the political leaders-- there's no way to get out of that alive There's no way to survive that. i think that the kinds of troubles that we've experienced so far are nothing compared to what's coming.

It would take some massive change of mind in the ruling class of the United states to pull this out and save the situation and I don't think there's much we can do about it.
Americans live in illusions and delusions, even the ones who want to be aware and most of them don't-- they want to know the football scores, the soap operas, want to go shopping and they think of if you criticize, you are a communist and should move to Cuba.

Rob:
Have to get rid forever of this neoconservative goal of hegemony over the world. All our policy of sustaining dictatorships must go. All of a sudden diversity appears in the world and we get free of a massive and economic budget drain.
Then we have to say we've moved millions of jobs and trillions of dollars. We have to bring it back. No more can American firms close plants in the US and move them to China. If you took those steps the rest of the world would change t heir view of the dollar and we could continue to use it as the reserve currency.

The whole way of thinking would have to change. You'd have to become humane. You'd have to say, we're really responsible for all that suffering and destruction in those countries.
I don't know if people have the emotional strength to face that... to accept the emotional responsibility for the evil that we've done in the world. We are wreckers, destroyers, we'd have to get t hat kind of mentality gone. it has to be quick because the process is so far advanced.

roll of globalization--

they're all inimical-- part of the way the evil spreads. Everyone is a victim-- the rich countries are victims because it puts their own workforces out of work. Globalization destroys all the agricultural communities everywhere. -- a country which produces food for itself all of a sudden finds it's producing corn for ethanol and finds it has to import food.

It destroys diversity. It homogenizes everything.

Rural life disappears. You get the appearance of massive slums because farms are replaced by megafarms and single crops. This is the reason for the slums in all the cities.

Globalization homogenizes, it destroys, everything-- the rich and the poor are all wiped out.

Two billionaires who we should have listened to-- Sir James Goldsmith-- wrote this thing called "THE TRAP" -- he was the biggest warrior for ordinary people that I know of.

Roger Millikan Amercan textile manufacturer-- spent decades trying to make congress aware that the economy could not afford having all the jobs offshored.

Globalization is based on the crazy, perverted idea of free markets.

Every since the Clinton administration the media is so concentrated and is no longer run by journalists at all.

We don't have a print or TV media an longer. They are shills, prostitutes and pimps for wall street and the corporateion and propagandiststhe government.
When you have the whole media controlled by five or six people, it's very easy to control the media. All they need to do is call them up.

The govt couldn't call up thousands of media outlets, (like we had ears ago) but they can call up five or six heads of giant conglomerates and tell them they can't publish something because it will hurt the national security. it's something the NY TImes does all the time.

RK; Wikileaks sh ould get Nobel prize.

PCR: Won't get it because it's a Swedish price and the prosecutor going after Assange is a CIA asset.

We have a criminal government.


if the internet hadn't come along we'd be so brainwashed we'd have not idea what's going on.