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Summer Issue 2011

Anthony Freda / Dan Zollinger

Vol. XIX, No. 27

Game Changer

dmwphoto.com

In this Trends Journal, we break new ground. In


addition to identifying, analyzing and forecasting
the trends shaping the future and suggesting
proactive strategies to address them, we have
taken up the banner of Direct Democracy.
For some years weve been seeing the
promising stirrings of a global Renaissance;
a new order that would reject the gross
materialism, excessive consumerism and
glorified militarism that has dominated contemporary western societies.
But each initiative undertaken to retrofit and change the failing system has had
its momentum blocked or sabotaged by the entrenched agents of no change.
On economic and political fronts, the only goal permitted was an increase in GDP
growth and consumer consumption, even when that meant putting nations and
consumers deeper in debt. In any rational society such an approach would be
regarded as deranged.
As for militarism, awarding the Nobel Peace Prize to President Barack Bombs
Away Obama perpetuator-in-chief of old wars, and precipitator-in-chief of new
wars was proof apodictic that the system was beyond repair.
And yet, despite the glaring dysfunction and the endless string of failures, many
still look to the Presidents, Prime Ministers, Chancellors, Chairmen and assorted
political, financial and business leaders who have been running the system,
to change and fix the system. To entertain, even for a moment, the notion that
somehow the people in control would willingly make changes that would wrest
control from them, is to indulge in fantasy.
Therefore, Ive come to the conclusion that the only solution is to take that control
from the handful of them the power possessors and power brokers and put the
power into the hands of the people. But how?

Direct Democracy: The Future is in Your Hands


A Renaissance can take place only when there is a resurgence of the individual
human spirit and a rediscovery of humanitys divine purpose. Neither of these can
be achieved within a system that stifles creativity and individuality while raising to
elite status a socioeconomic and political class whose only interest is the exercise
of power and control.
The Italian Renaissance of the 14th century was born out of a shattered Medieval
system, in the aftermath of the Black Plague. For a 21st century Renaissance to take
hold, the current system must also be shattered and disempowered.
How can this be done?
In this issue of Trends Journal, I propose the Celente Solution of Direct
Democracy a potentially globe-changing movement that would replace todays
representative democracy. Positive change will not and cannot occur until power
is taken away from the power obsessed.
While, in 2011, no one would dream of reinstituting the divine right of kings, what
is passed off today as Democracy is little more than a structure to clandestinely
support an ersatz nobility that perpetuates that very divine right practice.
The Direct Democracy solution I propose will not only transfer power to the
public (for better or for worse!), it will make we the people fully responsible for
creating the future. The choice is stark. Either we take action to create our destiny, or
others will continue to create it for us and judging by past performance, were not
going to like what they create.
Gerald Celente
Publisher

Editor and Publisher


Gerald Celente
Executive Editor
John Anthony West
Senior Editor
Alex Silberman
Contributing Editors
Dr. Paul Craig Roberts
Ben Daviss
Dr. Mitchell Skolnick
Eldad Benary
Consulting Editor
Lynn Hazlewood
Editor
Laura Martin
Subscriptions Manager
Emily Arter
Illustrations
Anthony Freda / Dan Zollinger
Liza Donnelly
Fine Art
Eugene Gregan
Photo
David Matthew Walters
Design
Norgaard Advertising & Design

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The Trends Journal Summer 2011

The History of The Future:


THE GLOBAL GAME CHANGER
EPISODE X On March 18, 2011, exactly eight years to

the day George W. Bush took America to war against Iraq,


Barack Obama took America to war with Libya. Promising victory in days, not weeks, four months later, what
had been sugarcoated by the White House as a time-limited, scope-limited, kinetic action slogged on with nothing to show for it but billions of dollars spent, thousands
of Libyans killed and civil war.
Meanwhile, the Afghan and Iraq Wars dragged on
with more billions spent and more lives lost. The US economy grew a miserly 1.8 percent in the first quarter of 2011,
far below experts expectations. Despite all government
efforts to prop up and revitalize the real estate market,
housing prices continued their Great Depression plummet, while oil, food and other commodities were reaching
new highs.
Cleveland, St. Louis, Detroit, Cincinnati, Hartford
one after another, Americas once proud and vibrant cities festered and decayed as Americas once enviable infrastructure rotted and crumbled.
The physically deteriorating cities and infrastructure
were mirrored in the physical and mental deterioration of
the fast-food fattened, prescription drug-addicted citizenry. With poverty rates climbing, one in seven Americans
on food stamps, student loan debt surpassing credit card
debt, real wages slumping, unemployment intractable,
home foreclosures mounting, education standards dropping, and virtually every quality-of-life indicator falling
there were no detectable positive statistics to justify a
forecast for a brighter, more prosperous future.
Though the facts were common knowledge, the mainstream media either refused to add them up or were incapable of doing so. America was in the grip of a seemingly
incurable malaise written off as simply the new normal.
In a world away from the real world, Washington
politicians cherry-picked the facts to suit their agendas.
Depending upon which side of the aisle they stood, each
pitched his or her own brand of quick fix (no fix) political
solution.
From the White House, the message was that the
health of the nation was steadily improving, thanks to the
skilled care of President Barack Obama. To assure full
recovery, all that was needed was another four years in
office.

The Trends Journal Summer 2011

In early April 2011, fully 18 months before Election


Day 2012, Barack Obama kicked off his campaign with a
debut on the Oprah Winfrey Show, followed by a coast to
coast fund-raising drive with dinner tickets topping out
at $35,800 a pop.
The Presidential Reality Show had begun. Sharing
headlines with the President, billionaire TV personality and
real estate mogul Donald Trump jumped onto the political
stage. It was show business for ugly people. (See No Business Like Show Business, Trends Journal, Summer 2010.)
Though not even having announced his candidacy,
The Donald hogged the limelight with vitriolic attacks
on the Presidents economic and foreign policies. But it
was Trumps relentless badgering of Obama to produce his
birth certificate (proving he had been born in America)
that commandeered the headlines. After repeatedly refusing to address the so-called birther issue that had
dogged him since his 2008 run for the White House,
Obama finally caved in and produced a birth certificate.
TRUMP AND DUMP
With Trump snapping at his heels and his poll numbers
hitting new lows, the President used his platform at the
annual White House Correspondents Dinner to unleash
an uncharacteristic torrent of ridicule and scorn on Trump
that turned the mogul into a laughing stock and titillated
the press, but did nothing to improve Obamas Presidential stature.
It was more than jabs from Trump that had the President on the ropes. It was as it had been back in the 1992
Clinton campaign the economy, stupid! Except that in
the Spring of 2011, the economy and, for that matter, the
rest of the country, was in much worse shape than it had
been in 1992.
Pocketbook issues were gut issues. And rarely did
anything or anyone trump those for long, not even Donald Trump.
What also had the White House on the defensive at
the end of April 2011 was blowback from a bombshell
dropped by Fed Chairman Ben Bernanke that had rocked
the financial world. In a public relations effort to address
complaints about the Feds secrecy, a history-making
press conference was called (the first in its 98 years of
existence). At the conference, the Feds Grand Master, Ben

Anthony Freda / Dan Zollinger

Humanitarian Bombs

Bernanke, promised to keep interest rates at near-zero


lows. In White Shoe Boy lingo, this was called a loose,
accommodative or easy money policy. It was intended
to stimulate economic growth by keeping interest rates
low, thus making money less expensive to borrow.
In practical everyday language, it was called flooding
the world with cheap money. Effectively, it meant declaring war on the dollar, since the more digital dollars the Fed
printed out of thin air, the more the dollar would devalue.
What the Fed presented as esoteric and complex economic policy was understood by the financial community
to be nothing more than a basic expression of supply and
demand. If demand for a commodity is steady or decreasing, and supply is rapidly increasing, the price of that
commodity is going to decrease commensurately.
Despite denying that his loose-money policy would
devalue the dollar, even before Bernanke left the stage,
gold had spiked $20 an ounce, silver $2, and the dollar
fell to a three-year low against the trade-weighted basket
of currencies.

Ben Bernankes policy was no less than


an act of financial terrorism. It would have
far reaching and long lasting implications,
not only for America, but for the world. As
the dollar devalued, the cost of nearly everything was going up, except wages.
Not only were jobs in general hard to
find, well paying ones were even scarcer.
In the US for example, 40 percent of job
losses between Spring 2010 and Spring
2011 were in higher wage industries. Of
the new jobs created during that same
period, only 14 percent were in those industries. Meanwhile, low wage industries
accounted for just 23 percent of job losses
but 49 percent of job growth.
The direction America was heading
in was indisputable. Nearly everyone else
was getting poorer while the richest were
getting richer. In the US, where some 70
percent of GDP is consumer driven, fully
37 percent (of that 70 percent) was spent by
the wealthiest 5 percent of the population.
In fact, it was the upper 10 percent of
the population that would most benefit
from Bernankes low interest rate policy.
Low interest rates meant low borrowing
costs which translated into lowering the
cost of risk. This meant financiers could
continue to speculate and exploit the equity markets, with the profits going only to
the 10 percent of Americans that owned 90 percent of the
stocks, bonds and mutual funds.
While the Fed correctly reasoned that a cheap dollar would give a competitive edge to big US exporters, as
exports rose, so did the price of imports, putting further
strains on average consumers whose real wages were falling ever further behind the pace of inflation.
Prices of Imported Goods
Increase as the Dollar Declines
Prices of goods imported into the United States
rose 2.2 percent in April, more than forecast, as
the slumping dollar and growing economies overseas pushed up the cost of fuel and food. (New
York Times, 10 May 2011)
Economists were expecting only a 1.8 percent price rise.
Following on the heels of a March price increase of 2.7
percent, the inflation was significant and in turn the standard of living eroding. But Bernanke blew off the trend as

The Trends Journal Summer 2011

transitory.
As it unfolded, Bin Laden was not brought how a young half black/half
Another victim of Fed polwhite Harvard Law School
in at all, neither dead nor alive.
icy was the dollars position as
graduate worked his way up
the worlds reserve currency.
from a community organizer
Proposals were being floated for the establishment of a
in Chicago to become Commander in Chief of the worlds
new global currency standard, and major countries such
most powerful country; how he would help plan the inas Brazil, China, Russia and India were already cutting
genious strategy that would finally bring in the notorious
out Uncle Sam as the middle man by doing deals directly,
terrorist Osama bin Laden, dead or alive.
using the coin of their own realm.
As it unfolded, Bin Laden was not brought in at all,
All in all, Obamas April 2011 campaign kickoff ended
neither dead nor alive. Rather, according to the initial
the month on down notes. First it was Trump stealing the
White House account, a crack team of US commandos
headlines with the birther issue and his relentless attacks
staged a crack-of-dawn raid on Osamas fortified, walled
on Obamas economic and geopolitical incompetence.
compound somewhere in Pakistan. A fierce 40-minute
Then there was the Feds April 27th PR ploy. Intended
firefight ensued in which a armed Bin Laden, despite havto prove its new transparency, it proved only how transing cravenly used his wife as a human shield, was killed.
parently inept and self-defeating its Chairman and his
His body was washed in accordance with Islamic custom,
policies were.
and dropped overboard from a US aircraft carrier into the
Arabian Sea.
OBOMBA
Typical of the world media coverage was:
The next bomb to drop on the Obama campaign was the
Obama watched Bin Laden die on live
humanitarian bomb dropped by NATO upon the home
video
as shoot-out beamed to White House
of Muammar Qaddafis son, killing him and three of his
children.
President Obama was watching on a TV screen as
The bungled attempt to assassinate Qaddafi, who had
a commando gunned down Osama bin Laden. Via
been visiting his son, was condemned by Russia, brought
a video camera fixed to the helmet of a U.S. Navy
recriminations against NATO from other UN members for
Seal, the leader of the free world saw the terror
overstepping the UN mandate, and called the legality of
chief shot in the left eye.
the air strike into question. With a groundswell of public
The Seal then carried out what is known
sympathy for Qaddafis murdered grandchildren building
in the military as a double tap shooting him
around the world, the very purpose and future of the enagain, probably in the chest, to make certain he
tire mission was being called into question.
was dead.
While the leaders of France, the UK and US had all
The footage of the battle in Bin Ladens Pakideclared that Qaddafi had to go (either voluntarily or othstani hideout which played out like an episode
erwise), senselessly murdered grandchildren didnt sit well
of 24 is said to show one of his wives acting as
with the public at large, and even the compliant media were
a human shield to protect him as he blasted away
unable to put a positive spin on the collateral damage.
with an AK47 assault rifle.
She died, along with three other men, includFrom Osama to Obama Beset on all sides, poll numing one of Bin Ladens sons. Within hours, the Al
bers plummeting and the newly fired-up Obama camQaeda leaders body was buried at sea. (UK Daily
paign express moving in reverse, whether it was the result
Mail, 3 May 2011)
of providence, coincidental timing or a brilliant political
master stroke, the campaign momentum suddenly rockBut by the next day, the script was already beginning to
eted forward on the strength of a single event.
change. There was no firefight. No one fired on the Navy
On Sunday evening, May 1st, President Obama hit
SEALs in Bin Ladens house. Only one of Osamas associthe airwaves: Good evening. Tonight, I can report to the
ates was armed, and he was killed in an adjacent guestAmerican people and to the world that the United States
house at the start of the operation.
has conducted an operation that killed Osama Bin Laden,
An unarmed Osama did not use his wife as a human
the leader of Al Qaeda, and a terrorist whos responsible
shield. What was at first described as an elaborate and forfor the murder of thousands of innocent men, women, and
tified million-dollar compound was neither elaborate nor
children.
fortified (apart from the wall around it, not uncommon in
And so began Obama vs. Osama: a thrilling tale of
a Muslim country).

The Trends Journal Summer 2011

Bin Laden was not living


bags were all recorded by
A cinema showing a Hollywood B
high on the hog as claimed
tiny helmet cameras worn
movie
as
incoherent
and
unconvincing
as
by senior US defense and inby each of the 25 SEALs.
Obama vs. Osama would be mercilessly
telligence officials, nor was his
We now know that the
house a compound. Photos
only
firefight took place
panned by film critics.
revealed a rundown, rubbishin the guest house, where
strewn, shabby structure worth
one of bin Ladens courian estimated quarter million dollars situated on the outskirts
ers opened fire and was quickly gunned down. No
of the mid-size city of Abbottabad just down the road
one in the main building got off a shot or was
from Pakistans equivalent of West Point military academy.
even armed, although there were weapons nearby.
And despite the claim of respecting and adhering to
(CBS News, 12 May 2011)
Islamic custom, flying his body a thousand miles in order
to consign it to the sea, was, according to Islamic scholars,
What was the truth? Was there a 25-minute recording
a flagrant and humiliating violation of tradition.
gap, as the CIA Director claimed, or did the SEAL helmet
And then there was the famous, historically significams record footage entirely different than the events porcant defining moment
trayed for the public?
photo released by the White
What was historically
House, the one showing a
significant was the ineptitense President Obama, VP
tude and lack of professionBiden, Secretary of State
alism of the endlessly fiddled
Clinton and National Secuand amended coverage. A
rity team members anxiouscinema showing a Hollywood
ly watching the Situation
B movie as incoherent and
Room TV screen that was
unconvincing as Obama
said to give them real-time
vs. Osama would be mercivisibility into the progress of
lessly panned by film critics.
the operation.
But the White House had an
But the story line was
alibi. It was the fog of war
again swiftly changed by none other than CIA chief Leon
explained White House Press Secretary and Meteorologist
Panetta, who said, There was a time period of almost 20
James Carney except there was no war.
or 25 minutes that we really didnt know just exactly what
While it is indisputable that troops must prepare for
was going on.
the worst before a high-risk combat mission, the US assasAssuming they didnt know exactly what was going
sination team of 80 Navy SEALs that stormed Bin Ladens
on, was the defining moment photo staged to impress
house armed with the most lethal and sophisticated
the public that the Commander in Chief and his team of
killing equipment on earth was opposed by only a few
military experts were somehow in command?
women, a few children, and an unarmed Osama.
But just as virtually every element within the Obama
DING, DONG, THE WITCH IS DEAD
vs. Osama drama was subject to revisions, so was this one.
It took nearly two weeks for the news to reveal a more
While there was plenty of fog, what happened in Abbotaccurate defining moment that effectively discredited
tabad was NOT war. And if it had been, considering the
the earlier defining moments.
series of contradictions, the first casualty of war would
have been the truth. Had any CEO at a boardroom meetSEAL helmet cams recorded
ing or defendant in a courtroom presented a case so shot
entire bin Laden raid
through with contradictions, inconsistencies and blatant
WASHINGTON A new picture emerged Thurslies, he would have been either fired or convicted. But
day of what really happened the night the Navy
when the White House did it, it was trumpeted, applauded
SEALs swooped in on Osama bin Ladens comand celebrated as a national day of victory.
pound in Pakistan.
Thousands of instant terrorism experts declared May
CBS News national security correspondent
Day an historic day, a globe-changing event. President
David Martin reports the 40 minutes it took to
Obama assured Americans that the world was now a safer
kill bin Laden and scoop his archives into garbage
place for justice had been done.

The Trends Journal Summer 2011

The guy is dead. That is good, seconded former


President George W. Bush, who began the manhunt for
Bin Laden ten years earlier. Osamas death is a great victory in the War on Terror.
Secretary of State Hillary Clinton echoed President
Obamas justice assessment, but took tacit, undeclared
exception to the worlds alleged enhanced safety. Not only
was the War on Terror not over, she cautioned, but efforts
to put an end to it needed to be redoubled which not
only suggested that the world was actually less safe, it instantly reinvigorated the post-9/11 terror state of mind:

Sen. Schumer Calls For Amtrak Do Not Ride List


Two tunnel breaches cause scare in NYC
SUV bomb scare
Threats Divert Planes in Three Separate Incidents
Passengers, flight crew subdue man banging on cockpit door
Yemeni passenger had Calif. ID
Scary Flight To Chicago...
Threatening Note In Bathroom Departing Detroit
Are we gonna blow up?
Dallas Train Station Evacuated: Man Asked For Help
Carrying Packages
Saudi Student Charged with university bomb threat
4 Arrested For Videotaping TSA Line At Denver
Suspicious package found in mailbox: Cellphone sent
back to company
SHOCK PHOTO: TSA LOOKING FOR POOP BOMBS?
(9 May 2011)

Terror was back in vogue. The Drudge Report compendium


of headlines paid homage to the revitalized terror trend,
even though nothing of consequence had happened in the
US since 9/11 excepting the bungled minor attempts of
the Shoe, Underwear and Times Square bombers.
Once again, the American people threw their support
behind their President, cheered the brave warriors (a.k.a.
assassination hit squad) for taking out Bin Laden, tamely relinquished what little was left of their Constitutional
Rights, and would give more of what little money they had
left to combat the newly re-ignited War on Terror. And pay
they would:
Bin Ladens Death Wont End His
Toll on American Taxpayers
Even in death, Osama bin Laden will be taking
revenge on American taxpayers for years to come.
The U.S. government spent $2 trillion combating bin Laden over the past decade, more than 20

The Trends Journal Summer 2011

Eugene Gregan

USA FREAK OUT: TERROR FEARS; FALSE ALARMS


DRUDGE REPORT

The Ghost of George Bush Lingers

percent of the nations $9.68 trillion public debt.


That money paid for wars in Afghanistan and Iraq,
as well as additional military, intelligence and
homeland security spending above pre-Sept. 11
trends, according to a Bloomberg analysis.
This year alone, taxpayers are spending more
than $45 billion in interest on the money borrowed to battle Al Qaeda, the analysis shows.
The financial bleeding wont stop with bin
Ladens demise. One of every four dollars in red
ink the U.S. expects to incur in the fiscal year beginning Oct. 1 will result from $285 billion in annual spending triggered by the terrorist scion of a
wealthy Saudi family. (Bloomberg, 12 May 2011)
Yet all the time, money and effort spent did nothing to
prevent the Shoe, Underwear or Times Square bombers
at home (who were caught only because their attempts
failed, or as many alleged, they were set up as government
patsies), and redoubled efforts would do nothing to stop
the revenge attacks abroad.
Pakistan suicide bombs
kill 80 to avenge bin Laden
HABQADAR, Pakistan A pair of Taliban suicide
bombers attacked paramilitary police recruits eagerly heading home for a break after months of
training, killing 80 people Friday in the first act
of retaliation for the U.S. raid that killed Osama
bin Laden. (AP, 13 May 2011)

Anthony Freda / Dan Zollinger

Trend Forecast: As War on Terror efforts redouble, we


forecast that revenge attacks will escalate commensurately. Not necessarily in response to the assassination
of Bin Laden (though that may serve as the pretext) but
rather in response to ongoing wars in Iraq, Afghanistan
and Libya, and stepped-up CIA Predator drone strikes
against Pakistan and Yemen. When the foreign nations
involved in those conflicts are hit with reprisal attacks,
Western political leaders will cry that the culprits were
evil people who hate our freedom and liberty. Never
once will they acknowledge their own seminal roles as
invaders and occupiers.
Publishers Note: Having watched 9/11 as it unfolded,

on 9/12, the first note I wrote in my journal, as a shocked


America reacted to the strike, was: There was not a moment of introspection. Why did this happen? Evil people
they said. It was an unprovoked attack. Women and men
alike call for war.

Ten years later, trillions spent, millions


killed and with more money and lives still on
the line there was still no introspection.
Thousands of TV hours were spent covering 9/11. Presidents, politicians and pundits
endlessly pontificated, yet over the course of
that decade, not one network or cable station
has devoted an in-depth, investigative special to address the obvious question: Why
was America attacked on 9/11?
60 Minutes didnt give it six seconds.
It wasnt pressing enough for Meet the
Press, and Face the Nation didnt face it.
Was the attack really launched because
they hated our freedom and liberty? Or
were there possibly just possibly other
reasons? Tens of millions of people at home
and abroad were unconvinced by, or at least
had misgivings about, the simplistic official explanation. Yet from the media, the
Fourth Estate whose job was ostensibly to
hold the three branches of government (Executive, Legislative, Judicial) accountable for
their actions, there was silence. Surely such a
program would have been a ratings sensation
and an advertising revenue blockbuster.
Indeed, not only was the broadcast arm
of the Fourth Estate mum, the mainstream
print media also couldnt find any other
words than they hate us for our freedom
and liberty that were fit to print.

Trendpost: What will another major terror strike mean?


Should an attack hit one of the major NATO nations,
the effects, this time, will go global. Bank holidays
will be called, the US and other fragile economies will
crumble, gold and silver will soar, and already-troubled currencies will crash. Economic martial law will
be declared. Introduced as a temporary measure, once
in place it will remain in place (like the curfews and
draconian security precautions installed by despots and
dictators everywhere). Civil rights will be suspended
and, particularly in America, Homeland Security, already intolerably intrusive, will achieve an Orwellian
omnipresence.
With banks closed and economic martial law in
place, restrictions will be set on the amounts, times and
frequency of withdrawals. As we have cautioned before,
it will be essential to have a stash of cash on hand.
Even though governments will devalue their currencies,
it will happen in stages. Speaking only for ourselves,

The Trends Journal Summer 2011

we at The Trends Research Institute will not be storing


precious metals in bank safe deposit boxes.
Editors Note: While it appears that President Roosevelts
1933 order to search safe deposit boxes for gold is a widely
held folk rumor, considering how invasive the Federal government has become since that time, and given that the
government can demand access to all transaction records,
in the midst of a crisis (false flag or real) it could readily use
national security as the rationale for search and seizure.

Why Bin Laden and Why Now? Whether speaking


metaphorically or literally, Osama bin Laden had been
dead for years. Though the War on Terror launched in
his honor went on apace draining treasuries, creating a growth industry in terror, and providing politicians
(especially American politicians) with opportunities to
smear opponents with charges of being soft on Terror
Bin Ladens infrequently taped, empty threats were
lightly covered and quickly forgotten.
Wherever Bin Laden may have been in hiding, on
the lam, or even, as some were suggesting, already dead
he, or whatever was left of Al Qaeda, evidently did not
have the capacity or the will to strike again.
Apart from reawakening the dormant fear of terror and redoubling the nations fight against it, what
was behind bringing Bin Laden back into the limelight?
The question was never posed. And while the assassination plot must have been long in the planning, whatever
its original motivation may have been, the sensational
news had the effect of pushing out of the news virtually
all other news. Swiftly overshadowed was the killing of
Muammar Qaddafis son and three grandchildren, the
Feds War on the Dollar, and that pesky little problem on
the other side of the world, that even as it got worse, got
ever less press the nuclear meltdown at Fukushima.
What the surprise demise of the mothballed Bin
Laden also accomplished was an abrupt reversal of the
Presidents poll numbers an eerily similar replay of
the effect 9/11 had upon then President Bushs similarly
sagging poll numbers.
AP-GfK poll: Obama approval hits 60 percent
WASHINGTON President Barack Obamas approval rating has hit its highest point in two years
60 percent and more than half of Americans
now say he deserves to be re-elected, according
to an Associated Press-GfK poll taken after U.S.
forces killed al-Qaida leader Osama bin Laden.
In worrisome signs for Republicans, the
presidents standing improved not just on foreign

The Trends Journal Summer 2011

policy but also on the economy, and independents a key voting bloc in the November 2012
presidential election caused the overall uptick
in support by sliding back to Obama after fleeing
for much of the past two years.
Comfortable majorities of the public now call
Obama a strong leader who will keep America
safe. Nearly three-fourths 73 percent also
now say they are confident that Obama can effectively handle terrorist threats. And he improved
his standing on Afghanistan, Iraq and the United
States relationships with other countries.
Despite a sluggish recovery from the Great
Recession, 52 percent of Americans now approve
of Obamas stewardship of the economy, giving
him his best rating on that issue since the early
days of his presidency; 52 percent also now like
how hes handling the nations stubbornly high 9
percent unemployment. (11 May 2011)
Whatever the motivation behind taking out Osama, the
immediate effect upon Obamas poll numbers instantly
reshaped the Presidential race. With his approval rating
at a two-year high, Barack Obama took on the mantle
of strong leader, tough on terror and a protector of the
people.
PRESTO CHANGE-O!
After weeks of Obama vs. Osama monopolizing the news,
the boisterous Republican presidential hopefuls were suddenly either muted or in retreat. Mike Huckabee, who had
been leading the carefully watched Iowa polls, announced
he wouldnt run. Next to announce his non-candidacy was
Donald Trump, who, just days before the Osama hit, had
been center stage, hogging the headlines and seemingly
posing a real threat to Obama.
So unpromising were the challengers that former First
Lady Laura Bush was trying to convince Cheri Daniels,
wife of little-known Indiana Governor Mitch Daniels, to
encourage her husband to seek the GOP nomination, despite a well-known sex scandal in her own past.
GOP Search Continues
A new Gallup poll shows that the Republican presidential race is remarkably fluid in the wake of
decisions by Mike Huckabee and Donald Trump
not to run.
The GOP frontrunners are, not surprisingly,
those figures with the highest name ID. Mitt Romney polls at 20 percent among potential primary
voters, followed by Sarah Palin at 18 percent and

Newt Gingrich at 8 percent. Palin, Gingrich, and


Romney are the three best-known candidates, and
they top the list of Republicans preferences, says
Gallup Poll director Frank Newport. The poll was
taken before this weeks flap over Mr. Gingrichs
criticism of the Medicare reforms recently passed
by House Republicans. (The Wall Street Journal,
16 May 2011)
Presto change-o! After just one month, Obama, who had
stumbled out of the gate at the kickoff of his campaign,
was running far ahead of a Republican pack of used-tobes, wannabes and also-rans.
The conventional political wisdom in May 2011 was
that, given the weak opposing field, Obama looked like a
shoo-in for a second term. But in real life, trends have a
life of their own. There was no real recovery in the United
States, and the way the trends were heading, the economy would be a lot worse by Election Day 2012. And once
again as it had been so many times before its the
economy, stupid was the ballot box issue that mattered
most to voters.
Certainly, it wasnt war that was on the minds of most
Americans. Ten years of the Afghan War, eight in Iraq,
a proxy war in Pakistan, and a humanitarian mission
in Libya, and missile and drone strikes on Yemen would
not count as a vote changer. The nation had become so
conditioned that another new normal was the constant
state of war. The catastrophic drain on the treasury and
the insidious moral toll on the American psyche were not
part of the political or media discourse.
In that March of 2011, it was (quietly) reported that
the US, after 110-year run as the number one country in
factory production, had ceded the crown to China just
20 years earlier a third world, backward giant.
The business of China was business. The business of
America had become war.
Trend Forecast: Should a foreign nation or terrorist

group attack the American homeland or pull off a substantial strike against a US foreign installation, it will be
exploited as a causus belli to take the nation to war.
Whether real (the terror strike against the USS Cole
in Yemen) or contrived (the Gulf of Tonkin incident and
the claim of the existence of Saddam Husseins weapons of mass destruction that, respectively, took America
to war against Vietnam and Iraq), the fact or even the
threat of terror in the months before Election Day will
serve as a uniting force. Terror-fied Americans will rally
round the flag and look to the President for leadership
and protection.

10

Not Playing with a Full Deck In the Spring

of 2011 Republican hopefuls were on a political suicide


mission. Yes, entitlement excesses had to be addressed,
but making that the main focus of their campaigns was a
strategy that might have been devised by insidious Democratic infiltrators.
Absent from both Republican and Democratic presidential platforms were planks devoted to slashing the military budget, immediately ending the wars, cutting foreign
aid and raising taxes on mega-millionaires, billionaires,
and multinational corporations and closing tax loopholes.
Millions of average Americans were holding down two
jobs to make ends meet. Real wages were in decline, inflation mounting, unemployment intractable, homes foreclosed, millions more scrambling just to survive, 44 million Americans below the poverty line and living on food
stamps. Property taxes, nuisance taxes and fines, sales
taxes, license fees all were going up to extract every last
penny from those who had the least.
SUICIDE MISSION
Seventy-eight million baby boomers were reaching retirement age, many without enough to retire on, all facing
mounting health care costs all while the availability and
quality of medical services declined.
With these facts in front of them, and with everyone
except the top 10 percent of the population down the tubes
or feeling the squeeze, the Republicans launched an all-out
campaign to alienate the other 90 percent.
To balance the budget, cuts had to be made and national debt levels reduced.
The Republican final solution was to reduce and/or
eliminate entitlements a word that had taken on a pejorative meaning. How dare people whove worked all their
lives, acted responsibly and paid their taxes, feel entitled to
anything from their government? Health care, elder care
Republicans were running on a we dont care platform.
And, if they got their way, any care the people did receive
would be less than what they got before and would come
from the private sector; the health industry that gives generous campaign contributions (i.e., bribes and payoffs) to
politicians for passing legislation that will further enrich
them.
Another main Republican plank was to reform Social
Security. Under a complex partial privatization plan crafted by Wisconsin Representative Paul Ryan (Roadmap For
Americas Future), Social Security and Medicare benefits
would be cut, cost-of-living increases trimmed, and the retirement age for those under 55 would be modernized to
eventually reach 70. At the same time, the Social Security
agency itself would be significantly downsized to a level of

The Trends Journal Summer 2011

predictable inefficiency.
The third major plank of the
What accounted for the millions of Joe
The end result of their
Republican platform was to not
and
Jane
Does
who
supported
policies
that
Roadmap would be to steer
only keep in place the Bush-inithey obviously stood to lose from?
as much tax money as possible
tiated and Obama-perpetuated
away from the public sector and
tax policy that gave breaks to the
into the private sector. It was passionately held GOP Gospel
richest, but under the Ryan plan, to further lower the top
that corporations operated more efficiently than governtax rate from 36 percent to 25 percent. Incredible as it may
ment bureaucracy. While perhaps attractive in principle,
sound, the GOP genuinely believed that the more the very
in practice there was ample evidence demonstrating that
rich made and the less they paid, the better off everyone
privatization had its limits. (Private Prisons Found to Ofelse would be.
fer Little in Savings, NYT, 18 May 2011)
The Republican platform boiled down to: What can
And when it came to managing privatized social secuwe do to make the biggest bigger and the richest richer?
rity investments, the pitch to the public was that Wall Street
Not surprisingly, for the small percentile that stood to benwas best equipped to handle their money. It was as though
efit, the Republican platform was attractive. But very surthe Panic of 08 had never happened and the Wall Street
prisingly, the GOP support base extended far beyond big
Mob and the Banking Bandits responsible for the greatest
business and the very rich to a rich mix of all-collar/allfinancial crisis since the Great Depression had miraculouscolor ordinary Americans.
ly become trustworthy and prescient.
The Wannabes What accounted for the millions of
But just in case the best and brightest brains on the
average Joe and Jane Does who supported policies that
Street couldnt resist their lives of crime and/or once again
they obviously stood to lose from? While it was a comproved incapable of making sound financial judgments, the
plex question with no simple answer, at least a part of it
GOP attached a no risk clause to their Roadmap. If
was the wannabe factor the ability of the average Joe
contributors put money into government-approved personal
or Jane to keep dreaming the American dream, with the
retirement funds and the fund incurred losses or went bust,
belief that if they worked hard and did what was right,
the investments would be guaranteed by Uncle Sam (a.k.a.
they would have a good chance of reaching the top and
the American taxpayer).
striking it rich. And when they did, they wouldnt want
It was a variant of the Bush/Obama bailouts of Wall
the government raising their taxes and giving the money
Streets too-big-to-fails, in which profits were privatized
to welfare cheats, illegal immigrants, abortions for the
and losses socialized. In other words, the billionaire banks
poor, and other social programs.
and brokerages distributed the profits among themselves
And why not believe? Throughout much of Ameriwhen business was good, but when it went bad, the taxpaycas history that dream was not mere fantasy. It could be
ers were forced to bail them out.
realized and it was a driving force behind the millions
Similarly, under the GOP plan, the government-apfrom all over the world who flocked to the land of opproved private funds would earn profits from investing and
portunity. Realistically, of course, who you were, where
managing the money, but if losses occurred, the taxpayer
you came from, and who you knew made it much easier
would pay the bill.
to open doors. But imbued with Yankee ingenuity and
It had become fashionable for the new breed of Rea can-do spirit, the un-privileged and un-bankrolled
publicans to look back to Ronald Reagan as Mentor in
with big dreams and a small grub stake could, and often
Chief, as the President who won the Cold War, cut taxes,
did, succeed.
shrank the government, and saved the economy. But it
By 2011, that American Dream had, however, long
would have behooved them to look further back into their
been laid to rest, murdered in cold blood by Wall Street,
Republican history to a two-term, equally popular Presicorporate executives, and American politicians.
dent who counsel was:
The one-two knockout punch that floored the Dream
Should any political party attempt to abolish social sewas thrown by Bill Clinton and Al Gore back in 1993 with
curity, unemployment insurance, and eliminate labor laws
the passage of the North Atlantic Free Trade Agreement
and farm programs, you would not hear of that party again
(NAFTA). For nearly a decade, corporate honchos and fiin our political history. There is a tiny splinter group, of
nanciers had been pressuring Congress to eliminate barcourse, that believes that you can do these things. Among
riers to allow offshoring of jobs so they might generate
them are a few Texas oil millionaires, and an occasional
larger profits by accessing cheap foreign labor.
politician or businessman from other areas. Their number
(Continued on page 13)
is negligible and they are stupid. Dwight D. Eisenhower

The Trends Journal Summer 2011

11

A Chicken Hawk by Any Other Name

hat came into question, but a question never asked


by the media was: what were the credentials of
those politicians leading the budget deficit reduction charge that was primarily aimed at cutting Social Security,
Medicare and Medicaid benefits?
What was their life experience? What qualified them to propose policy changes so sweeping that even self-proclaimed conservative Newt Gingrich labeled them as radical examples of
right wing social engineering?
In endless hours of debate, not one word was devoted to the
crucial subject of the character and life styles of the politicians
promoting these dramatic proposals. Just who were they?
An admirable model and poster boy for the lot was the
41-year-old Congressman from Wisconsin, Paul Ryan, who was
leading the charge for the radical change. What expertise did he
possess? What was the personal experience and hands-on qualifications that gave Ryan the professional and moral authority to
craft a program that would impact every living American?
It was not only an appropriate question, it was an obvious one. But the media, supposedly charged with a duty for investigative journalism, never investigated his resume. Was it that the question never occurred to them, that they didnt care, or that they
didnt want to take a few minutes off from the scandal du jour to Google his past?

ON THE GOVERNMENT DOLE


According to Wikipedia and other sources, Ryan was brought up solidly middle class. His father, a lawyer, died when he was
sixteen. Ryan collected Social Security survivors benefits for two years that he claims to have put toward his college tuition.
During his senior year in college, he worked briefly as a Hotdogger, driving an Oscar Mayer Wienermobile.
Upon graduation in 1995, he worked briefly as a staff member for Sen. Bob Kasten. In 1996, he worked as a speechwriter
to both former US Drug Czar William Bennett and former US Rep. Jack Kemp. In 1997, he was legislative director for US
Senator Sam Brownback of Kansas. According to his congressional campaign, Ryans only experience in the private sector
(evidently overlapping his political jobs) was as a marketing consultant for his familys construction business.
Ryan was first elected to Congress in 1998 at the age of 28. What goes unmentioned in neutral biographical accounts and
his omnipresent press coverage is that, apart from his Wienermobile days and a vague nepotistic stint in the family business,
Ryan never worked a day of his life in the private sector.
Publishers Note: As I can personally attest from experience in not dissimilar jobs running political campaigns in New Yorks
Westchester County and as assistant to the Secretary of the New York State Senate these jobs mainly consist of brownnosing, glad-handing, sucking up and bowing down all in preparation for a life in politics.
It is a matter of record. Since his election to Congress at the age of 28, Ryan has been living off the taxpayer. Unlike the
hundreds of millions in the private sector who have to make it on their own, Ryans job comes with substantial health care
benefits and generous retirement programs, plus innumerable perks all approved by Congress, without having asked approval from we the people who pay them.
In short, Ryan didnt have the experience, training, nor the moral authority to so rabidly wave the banner of sacrifice that
he and the vast majority of his colleagues so ardently championed, but never carried.
Determined to launch a Crusade to Kill the Deficit, the deficit hawk is the domestic equivalent of the chicken hawk. Just
as the gutless chicken hawk, a well known fightless bird who has never worn a military uniform, screeches War and sends
others out to fight and die, so the windbag deficit hawk pontificates from the political stump and on the media circuit, exhorting others to tighten belts and pull up bootstraps, while they get fatter sucking on the public tit.
And speaking of Wienermobiles and the psychological Congressional profile, in the midst of the deficit reduction wrangling,
the news was diverted by the scandal du jour. Anthony Weiner, the New York Congressman, was forced to resign in disgrace for

12

The Trends Journal Summer 2011

Weiners Pension, Benefits


Could Top $1 Million
While Rep. Anthony Weiner may no longer have
the benefit of Congress generous health care
plan once he resigns, he will still be able to collect his pension and other benefits that could total more than $1 million during his lifetime.
According to an analysis of his available benefits by the National Taxpayers Union, the New
York Democrats pension and a savings plan lawmakers have access to similar to a 401(k) could be
worth $1.12 million to $1.28 million.
At 46, Weiner will not be eligible for his pension for another decade, at which point he could
begin drawing a reduced rate of $32,357 a year,
according to NTU. If he waits until age 62 to begin
drawing his pension, he will receive his full benefits, or $46,224, according to NTUs calculations.
Additionally, if Weiner aggressively invested
in the Thrift Savings Plan, his balance would be
roughly $216,000, the organization said. (Roll
Call, 16 June 2011)
The House of Weiners (a.k.a. Congress) was filled with
Ryan/Weiner clones who went into politics never having
known what it was like to have a real job. Weiner, like
Rep. Ryan, immediately began working for a member
of Congress upon graduation from college. Like Ryan,
while still in his 20s, Weiner began the life of an elected
public servant (i.e., began sucking off the public tit).
And as members of the privileged political class,
special Congressional privileges come with the job. For
example, no one else in the workforce who quits a job (or
is forced to resign in disgrace) gets a penny in unemployment benefits, let alone a generous pension and perks.
Should history serve as a guide and repeat itself,
perhaps Anthony The Weiner Weiner, will be rewarded with a lucrative new job as a primetime CNN (Cartoon News Network) host, a la disgraced (and recently
discarded) former NY Governor Eliott $4,300-a-NightHooker Spitzer.
There were two sets of laws: one applying to those
that made the laws, and another applying to those who
were forced to obey them. n

The Trends Journal Summer 2011

THE HISTORY OF THE FUTURE


(Continued from page 11)

A blatantly lethal, American job-destroying proposition that couldnt be sold to the people during the Reagan
and G.H.W. Bush presidencies was slick-willied through
Congress by Bill Slick Willie Clinton.
Clinton and Congress conned the public into believing that, with the passage of NAFTA, a New Economy
would arise and the American standard of living would
rise with it. Out would go those dirty-fingernail manufacturing jobs, to be replaced by a shiny-clean service society
spearheaded by the financial sector and juiced by good
old Yankee Ingenuity and innovation.
Another promised upside to off-shoring was based
on the idea that as poor people in cheap labor countries
earned more, they would evolve their own middle class, become consumer societies, and buy Made in USA imports.
The entire scheme was a fallacy and a fraud from the
onset, and we, like many others knew it. The jobs lost
would never return, the touted high-skilled service society would never materialize, and Americas balance of
trade became irretrievably unbalanced. (See What About
Nafta? Trends Journal, Fall 1993)
The New Economy was a busted economy busted
dreams, busted careers, busted banks. The old economy
was lost, and there was no new economy to take its place.
Now, in the Summer of 2011, only a few will remem-

Liza Donnelly

social networking his weiner for the world to see. Regardless of the side of the aisle he sat or where he stood on the
issues, the Weinergate episode provided an exemplary illustration of the divide between them and us.
Weiner lost his job, but kept intact his bountiful pension and many of his perks:

13

Anthony Freda / Dan Zollinger

Yet, the wannabes down, out, overworked,


underpaid kept on dreaming and kept on supporting the people and the policies responsible
for making the dream virtually impossible to
realize. It was an economic version of the Stockholm Syndrome; a paradoxical psychological
phenomenon in which prisoners and hostages
empathize with their captors, sometimes even
defending them and ultimately reaching a state
where they regard a lack of actual physical torture as an act of kindness.
So it was in mid-2011, as America began
gearing up for the distant 2012 presidential election. No matter how much abuse the
public had been subjected to over the years
by their Democratic and Republican enslavers, a startling number of them still deluded
themselves into believing that one candidate
or another, when elected, would prove to be a
savior. From sea to shining sea it was one
big Stockholm Syndrome.

Out of Right Field

ber that 1993 tide-turning, trade-turning debate between


Al Inconvenient Lies Gore and third party candidate
Ross Perot. Some 17 million Americans viewers scored
the bout 59-to-32 for Gore. The USA Today/CNN Gallup
poll reported that viewers believed Gores position reflected optimism for the future, while Perot represented
defeatism and fear. Days later, emboldened by the debate,
Congress voted in NAFTA.
In retrospect, Gore may have won the debate, but America lost both its soul and its empire. A few years later, when
the exodus of US jobs to Mexico became the stampede of
US jobs to China (manufacturing) and India (professional
services), the giant sucking sound prophesied by Perot
became reality. (See, Washingtons Response to a Failed
Economy, page 34).
If Free Trade was the Clinton knockout punch, the
kick to the head that finished off the Dream was delivered by George W. Bush in 2008 when he imposed TARP
(Troubled Asset Relief Program) upon the nation to rescue failing financial giants on the verge of going belly up
through their own malfeasance.
They were deemed, by Bush and his economic tag
team, too big to fail four fateful words that would
change the course of American history. It was now official. No longer, neither in principle nor in practice, were
all businessmen created equal.

14

So out of kilter was the


new GOP Medicare reform plan and so out of
touch was the party with the concerns and
needs of the general public, that it even drew fire from
GOP presidential hopeful Newt Gingrich. Brash, vocal, a
media regular, the impeccably credentialed, self-promoted, right-of-center conservative Gingrich lashed out, calling the Ryan Roadmap right-wing social engineering.
Republicans, infuriated by the use of this inflammatory
term that conjured up inadmissible left-wing socialist proclivities, forced Gingrich to issue an apology.
With Gingrich suddenly on the defensive for his comments, and continually confronted by his seamy history of
well publicized extra-marital affairs which ran counter to the
family values orientation so vociferously espoused by his
Republican party, the Gingrich bandwagon was broadsided
by yet another unseemly if not typically seamy scandal.
It was reported that Newt Diamonds are a Girls Best
Friend Gingrich had run up a $500,000 tab with Tiffanys. Moreover, wife Callista All in the Family Gingrich,
who sat on the House Agriculture Committee, had been
heavily lobbied by the exclusive jewelry company to support legislation favorable to its mining interests.
As for that substantial tab, not only was it an extravagance unlikely to sit well with suffering voters hard put just
to survive in recessionary times, the interest-free terms of
his Tiffany loan added insult to injury. Pressed for details
on the sweetheart deal, Gingrich explained, Its a standard,
no interest account, we paid no interest on it. There was no

The Trends Journal Summer 2011

problem with it. Its a normal way of doing business.


While a no interest account may have been standard, no problem and a normal way of doing business for Newt Gingrich, it was neither standard nor
normal for the roughly 180 million credit card-carrying
Americans who had a big problem paying interest rates
(as much as 30 percent) on a trillion dollars worth of debt.
Was it blatant arrogance stemming from a sense of political privilege? Was it an inadvertent slip of the tongue?
Was it pure hypocrisy on the part of the man who, as
House Speaker, preached the virtues of fiscal conservatism? Or was it that the world of Gingrich was a world
apart from everyone elses world, one in which interestfree credit did not exist?
OUR GANG
Actually, though not common knowledge, in the world of
Washington and Wall Street, interest-free (or effectively
interest-free) loans were normal. Just days after the
Gingrich loan/lobbying story broke, an under-the-radar
report briefly surfaced in the business news, revealing
that other influential insiders also received standard,
no problem loans. Under court order, the Federal Reserve was forced to make public the billions of virtually
interest-free dollars bestowed upon too-big-to-fail banks:
Fed Gave Banks Crisis Gains
on Secretive Loans Low as 0.01%
Credit Suisse Group AG, Goldman Sachs Group
Inc. and Royal Bank of Scotland Group Plc each
borrowed at least $30 billion in 2008 from a Federal Reserve emergency lending program whose
details werent revealed to shareholders, members
of Congress or the public.
The $80 billion initiative, called single-tranche
open-market operations, or ST OMO, made 28-day
loans from March through December 2008, and
paid interest rates as low as 0.01 percent.
This was a pure subsidy, said Robert A.
Eisenbeis, former head of research at the Federal
Reserve Bank of Atlanta.
Jeffrey V. Smith, a New York Fed spokesman
[countering Eisenbeis] claimed, This program
helped alleviate strains in financial markets and
support the flow of credit to U.S. households and
businesses. (Bloomberg, 26 May 2011)
In fact, this program helped alleviate strains for only the
biggest and best connected. It did nothing, nada, zip, zero,
zilch to support the flow of credit to U.S. households and
businesses (unless they were the size of GE and GM).

The Trends Journal Summer 2011

In a court of law, Jeffrey V. Smiths claim would


amount to perjury. But in the world of White Shoe Boy
reportage, Mr. Smith was given a free ride. No tough questions, and unlike non-White Shoe Boyz whod get raked
over the coals, Smith walked away un-grilled.
The same kid-glove treatment applied to other insiders who, rather than explain how and why they profited
from the sweetheart deals, took a financial Fifth Amendment:
Stephen Cohen, a spokesmen for Goldman Sachs,
declined to comment.
n Steven Vames, a Credit Suisse spokesman in New
York, declined to comment.
n John Gallagher, a [Deutsche Bank] spokesman, declined to comment.
n Mark Lane, a Barclays spokesman, declined to
comment.
n Mary Claire Delaney, a spokeswoman for Morgan
Stanley; Jon Diat, a Citigroup spokesman in New York;
Howard Opinsky, a spokesman for New York-based
JPMorgan Chase; and Megan Stinson, a spokeswoman
in New York for BNP Paribas, declined to comment on
their banks borrowing.
n

Not only did the White Shoe Boyz get the free money, they
got a free pass from the Presstitutes. No comment on
the special treatment they got to rescue their own failing
businesses (and keep on paying themselves enormous bonuses) while everyone else was left to fend for themselves.
Back in the 1930s, in Hitlers Germany and Mussolinis Italy, such overt collusion between the corporate
sector and the government was called Fascism. In 2011, in
Obamas America it was called no comment.
This was not the first revelation of behind-the-scenes
schemes between the Fed and the well-fed. The trillions in
back door deals with global banks, big businesses, hedge
funds and financial institutions had been earlier exposed
through law suits and requirements in the recently passed
Dodd-Frank Act without which no one would know
anything. Yet, it hardly mattered, because knowledge, in
these cases, did not mean power.
The Fed, Washington and the Pentagon all did as they
pleased and, regardless of how many egregious failures
were added to old egregious failures, they were never held
accountable.
PUBLIC ENEMY #1
As card-carrying sociopaths, they were exonerated from
admitting to failure, and the Presstitutes, who would
have eviscerated anyone outside the club who had
been responsible for failures of similar stature, bowed,

15

scraped, groveled and asked


polite questions about how
they intended to fix the failures theyd created.
And when it came to financial failure, there was no one
in Washington or on earth
who had masterminded more
disastrous policies or produced
more erroneous forecasts than
Federal Chairman Ben Bernanke. Had he been an imperial soothsayer in a medieval
court he would have lost his
head or, at best, hed be rotting
in a dungeon.
Instead, with real estate
home prices plunging more
sharply than they did during
the Great Depression, with
unemployment
intractable
and rising, retail sales softening, consumer confidence
sinking and the equity markets falling, Ben He of Short
Sight Bernanke finally saw
what we and a few others had
been screaming about for over
four years:

last met, eight weeks ago. At


that time, the central bank
said the job market was
gradually improving. (AP,
22 June 2011)

16

Anthony Freda / Dan Zollinger

But instead of headlines blaring,


Fed Chief Batting Zero Fails
Again or Bumbling Bernanke
Baffled by Bad News or Wrong
Again Ben Only an Imbecile
Would Still Take You Seriously, the media played it with a
straight face.
A Presstitute is a Presstitute
is a Presstitute. ABC, CBS, CNN,
AP, BBC, PBS; reporters and
journalists massage the egos of
the rich, powerful and famous,
while reducing the rest of the
population to a mass of lower beings barely capable of tying their
shoes, incapable of having an
original thought, and lost without direction from higher authorities.
It made perfect media sense
that the economys continuing
Presstitute
struggles would confound ordinary Americans, but that the
Economic Trouble Puzzles Fed Chief Too
non-recovery had also stumped the head of the Federal
Reserve that was newsworthy. After all, if Bernanke
The economys continuing struggles arent just
was caught off guard by recent signs of deterioration in
confounding ordinary Americans. Theyve also
the economy how could lesser beings expect to be unstumped the head of the Federal Reserve.
stumped?
Fed Chairman Ben Bernanke told reporters
The bland journalistic language conceals a shriekWednesday that the central bank had been caught
ing message: troubles could continue into next year
off guard by recent signs of deterioration in the
We dont have a precise read on why this slower pace of
economy. And he said the troubles could continue
growth is persisting more persistent than we thought
into next year.
factors working against economic growth appeared to
We dont have a precise read on why this
be transitory economy will face serious challenges next
slower pace of growth is persisting, Bernanke
year in contrast to the Feds more upbeat view when
said. He said the weak housing market and probofficials last met, eight weeks ago.
lems in the banking system might be more perWhat this story is saying, without saying it, is that the
sistent than we thought.
Chairman of the Federal Reserve is clueless and, by extenIt was the Fed chiefs most explicit warning
sion, so is everyone else in charge. The real story should
yet that the economy will face serious challenges
have read, Fed & White House Fail Again they didnt
next year. For several months, he had said the facsee it coming, and once it came the measures they took to
tors working against economic growth appeared
fix it didnt work.
to be transitory.
When we said that the Feds financial policies and
The Feds statement Wednesday stood in conWashingtons fiscal policies would serve only to devaltrast to the Feds more upbeat view when officials

The Trends Journal Summer 2011

ue the dollar and do next to nothing to regenerate the


economy, some, such as Foxs phony-liberal, Wimpocrat,
Obamapologist Alan Colmes, dismissed us as alarmists,
and others ignored us.
But when Alan Greenspan, the cheap money chief engineer and mastermind behind the ruinous policies that
would culminate in the Great Recession, belatedly acknowledged what we had been saying for years, the media
minions treated his proclamation with the respect due a
Papal encyclical:
Feds Massive Stimulus Had
Little Impact: Greenspan
The Federal Reserves massive stimulus program
had little impact on the U.S. economy besides
weakening the dollar and helping US exports,
Federal Reserve Governor Alan Greenspan told
CNBC Thursday.
In a blunt critique of his successor, Fed
Chairman Ben Bernanke, Greenspan said the
$2 trillion in quantative easing over the past two
years had done little to loosen credit and boost
the economy.
There is no evidence that huge inflow of
money into the system basically worked, Greenspan said in a live interview.
Greenspan said he would be surprised if
there was a QE3 because it would continue
erosion of the dollar. (CNBC, 30 June 2011)
The unholy alliance between Washington and Wall
Street proved how fixed the game was, and how far it
extended; and when the layers of fraud and corruption were peeled back, why and how those four simple
words, too big to fail destroyed the American dream.
Monumental failures were rewarded with bonanzas of
billions while the rest of the nation was left to make it
on their own.
As the nation went into Fourth of July holiday mode,
the White Houses Council of Economic Advisors reported that using mainstream estimates of economic
multipliers for the effects of fiscal stimulus (which it
describes as a natural way to estimate the effects of the
legislation) has added or saved just under 2.4 million
jobs at a cost to date of $666 billion or $278,000 per job.
Alternatively, if the government had cut a $100,000
check to everyone whose employment was stimulus generated, taxpayers would have come out an estimated
$427 billion ahead. Since the government emphatically
did not cut $100K checks for anyone, what happened to
the rest of the money?

The Trends Journal Summer 2011

UNSTIMULATED
Since working people did not get stimulated by the stimulus, who did? Certainly, many billions were frittered away
mysteriously to contractors, middle men and insiders, and
this money was not easily traceable.
But there was one group that cashed in big time and
openly: the too-big-to-fails. As the middle class evaporated and the working class was fast becoming the workless
class, Wall Street and corporate America were awash in
profits, awarding chief executives with pre-recession-size
bonuses. Compensation for the 200 highest-paid CEOs
increased by 23 percent, cash bonuses were up 38 percent (three times pre-recession levels) while the average
workers hourly wages (adjusted for inflation) declined by
1.6 percent since May 2010.
Trendpost: Now, in the Summer of 2011, the Fed implicit-

ly acknowledges it misinterpreted the data to read recovery and now they openly admit they read it wrong. But
the mainstream media not only give both Bernanke and
Greenspan a free pass, they also fail to acknowledge and/
or give credit to the few of us who predicted that both the
Feds money-pumping swindle and Washingtons stimulus
scams were doomed to fail. As a result, the great mass of
the public is kept in the calculated dark.
The Panic Button has been pushed. But it has been
muffled in linguistic media soundproofing. Dont be fooled,
the Panic is ON!
While the US and other economies are sinking ships,
they will not go under in a couple of hours. There is still
time to take stock of the situation and take measures that
will assure safety. If the Fed and Washington could not
keep the economy afloat after pumping tens of trillions
into it, it follows that nothing they do now will save it
either. At this juncture, safety wealth preservation not
speculation, should be paramount.

The Economy We had forecast that declining condi-

tions prevailing during the Spring of 2011 would become


dire conditions during the coming winter of discontent.
But thats not the way the Street saw it back in late June.
Forced to lower their growth forecasts, the medias select
circle of economic experts nevertheless did their best to
remain upbeat about the future.
Forecasts for Growth Drop, Some Sharply
A drumbeat of disappointing data about consumer
behavior, factory sales and weak hiring in recent
weeks has prompted economists to ratchet down
their 2011 economic forecasts to as little as half
what they expected at the beginning of the year.

17

Editors Note: The New York Times account of slowing


growth but no return to recession represented the general
economic consensus. Opposing forecasts (such as ours)
were either absent or, when cited, written off as long shots.
Thus, since the general public generally accepts the general consensus as reported by the Times and other mainstream sources, few in that portentous Summer of 2011
were actively preparing for the worst. (See Trend Lesson:
Unspinning The Spin, page 20)

By early July, General Consensus was still leading the economic charge since no one in charge had seen fit to
call his bluff. The stormy June equity markets ended the
month on a high note: US benchmark indexes had their
biggest weekly gains in two years on the news that the
US manufacturing index unexpectedly rose, and Greece
(according to the General) had moved closer to averting
a default.
Thats not the way we saw it. Yes, the equity markets
had improved. With interest rates near zero, betting on
stocks was seen by many as a better gamble than keeping
it in the bank and watching it devalue. The cheap money
policies of the US, EMU and China had kept the global
economy from crashing.
But Greece was not bailed out! Greece was sold out!
New debt was piled on old, taxes were raised, services were
cut, and valuable public resources and properties were

18

Eugene Gregan

Two months ago, Goldman Sachs projected that


the economy would grow at a 4 percent annual
rate in the quarter ending in June. The company
now expects the government to report no more
than 2 percent growth Macroeconomic Advisers, a research firm, projected 3.5 percent growth
back in April and is now down to just 2.1 percent
for this quarter.
Both these firms, well respected in their analysis, have cut their forecasts for the second half of
the year as well. Then this week, the Federal Reserve downgraded its projections for the full year,
to under 3 percent growth. It started the year with
guidance as high as 3.9 percent.
Two years into the official recovery, the economy is still behaving like a plane taxiing indefinitely on the runway. Few economists are predicting an out-and-out return to recession, but the
risk has increased, with the health of the American economy depending in part on what is really
transitory.
Analysts generally expect the economy to pick
up in the second half (NYT, 25 June 2011)

When America Sneezes

privatized (sold at fire sale prices to friends with connections). Greece would not be the only one of the PIIGS
(Portugal, Ireland, Italy, Greece, Spain) that would have its
throat slit by the Troika (European Commission, European
Central Bank and the International Monetary Fund).
IMFD
Neither in Greece nor in any of the PIIGS had the major
underlying problems been fixed. The budget deficits, debt
burdens, real estate crises, and intractable unemployment
(particularly among youth) continued to plague much of
Europe as well as the United States.
As long as money kept flowing in (digital money not
worth the paper it was not printed on), the Ponzi scheme
could keep going. That such flagrant finagles were passed
off as policies was a criminal act in itself.
As we had been insisting since the Panic of 08 hit
and the rescue/bailout policies were put in place, it was a
cover up, not a recovery. (See Trend Alert, Celente on Russia Today - Cover up, not Recovery, 15 September 2009)
Yet, as we continued to forecast no recovery, the pompom pundits of the Fortune 500 monopolized the financial
news with their upbeat message: the recession was over,
confidence was being restored, corporate profits were at record highs, consumers were shopping, manufacturing was
robust, and job creation was back on track.
Go back to July 7, 2011, the day before the Bureau
of Labor Statistics released its much anticipated employment numbers. Read what well respected analysts such as Mark Off the Mark Zandi said. The oftquoted mouthpiece for Moodys Investor Service (the
rating firm that escaped federal prosecution for fraud

The Trends Journal Summer 2011

despite finding evidence that the firm misled investors)


predicted a net increase of 110,000 jobs in June. Most
economists (a.k.a. General Consensus) were expecting 125,000 new jobs, while Nigel Gault of the oft-cited
firm, IHS Global Insight, projected 140,000 new jobs
for June.
Listen to a CNBC interview with Larry Meyer, former
Federal Reserve Governor and current vice chairman of
Macroeconomics Advisers (one of the well respected for
their analyses firms singled out by the Times) as he forecasts 160,000 new jobs for June just minutes before the
numbers were released. Watch each one of CNBCs selfdescribed All-Star Economic Panel strike out in turn,
missing the mark by a Meyer mile:
Jobs growth stalls, setting
back recovery hopes
WASHINGTON U.S. jobs growth ground to a
near halt in June as employers hired the fewest
workers in nine months, frustrating hopes the
economy would bounce back quickly from a slowdown in the first half of the year.
Nonfarm payrolls rose only 18,000, the Labor Department said on Friday. It was the weakest
reading since September and below even the most
dire forecast in a Reuters poll of economists.
The dismal report, which showed the unemployment rate climbing to a six-month high of 9.2
percent, stood in stark contrast with recent data
on manufacturing and retail sales that had shown
activity starting to perk up.
This report has dashed hopes that the economy was about to accelerate again, said Nigel
Gault, chief U.S. economist at IHS Global Insight
in Lexington, Massachusetts. It is showing a
much bleaker picture than other indicators and
we must hope that it is overstating the extent of
the slowdown. (Reuters, 8 July 2011)
One day later, and 122,000 jobs off the mark, with
hopes dashed but still insisting we must hope that
the terrible employment numbers were overstating the
extent of the slowdown, Gault, along with most economists and those well respected analysts who got it
dead wrong were not only spared criticism for their way
off-the-mark forecasts, but were given another shot at
getting it wrong again.
Whether delivered by Wall Street Barkers or White
House Hypesters, no matter how flagrant the miss or the
size of the broken promise no admission of error would
be forthcoming; no one would be held accountable:

The Trends Journal Summer 2011

Biden predicts economy will


create up to 500,000 jobs a month soon
Vice President Biden predicted Friday at a Pennsylvania fundraiser that the U.S. economy would
be adding up to 500,000 jobs each month some
time in the next couple of months.
All in all were going to be creating somewhere between 100,000 and 200,000 jobs next
month, I predict Im here to tell you, sometime
in the next couple of months, were going to be creating between 250,000 jobs a month and 500,000
jobs a month. (Washington Post, 23 April 2010)
Fifteen months later, no one from the media dared tell
the notoriously wrong windbag Veep he was full of sh*t.
Worse, he would be quoted again and again, the band
would strike up each time he entered the room or strode
down the red carpet, the crowds would cheer and admirers would ask for autographs.
This constant drumbeat of unsupported optimism
kept the general public believing in General Consensus.
The Trends Research Institute, however, contends
that, sooner or later, the speculative equity markets will
have to reflect the real world. But when?
In 2008, incontrovertible data pointed to an economic
final solution in 2010. But while the data didnt lie, we,
along with the rest of the world, were being lied to and
kept in the dark about the back door money-pumping
deals made to keep the sinking economies afloat. Binding treaties, agreements and accords (Maastricht, Lisbon,
ECB) were broken as though they had never existed while
the Fed kept feeding major banks, hedge funds, corporations and financial institutions with tens of trillions of
cheap dollars.
In knowing what we know now and also knowing how
little we can know of what goes on behind the scenes it
nevertheless appears that, rather than the total collapse we
initially forecast, the world will suffer a serial meltdown.
Governments will resort to increasingly desperate measures
to keep propping up the system to no avail. The end
result will still be the Greatest Depression.
Publishers Note: At every level the Federal Reserve,

the White House, the Justice Department, Wall Street and


the Media it was one big fraud and all were accessories
to the crime. Fascism, the merger of state and corporate
power, had replaced capitalism. It wasnt just that the economic playing field had been tilted to benefit the biggest
with bailout and rescue packages, the laws themselves had
been changed or bent to allow both government and the
corporations to operate and collaborate beyond the law.

19

TREND LESSON:
Unspinning The Spin

eople often ask, How do you track and forecast trends? There are many facets to our Globalnomic method, but as
with learning to play an instrument, before you can play the music, you have to learn the scales.
In trend tracking, one of the scales to learn is how to parse the language for the real story behind the printed
story. Sometimes its relatively obvious, e.g., when opponents of invading and/or occupying nations are demonized by the
invaders/occupiers as insurgents, militants, radicals and extremists. Repeated often enough ( la Josef Goebbels)
those labels become accepted as the truth.
So ingrained is the practice, that it is standard operating procedure within the invading American military to refer to the
enemy as the bad guys and themselves as the good guys. Following the military lead, the media and politicians take up
the theme. As former TV host Ted Koppel explained during the US-led Kosovo/Serbian war, People like to reduce the news
to good guys and bad guys. Maybe so, or is it that Koppel and his media mates like to reduce the news to good guys and
bad guys rather than do their job as journalists and report the news in its messy complexity?
In other instances, the language of propaganda is less obvious and the nuggets of spin have to be extracted from the raw
journalistic ore.
Thus, that studiously bland Times story quoted (see page 18) reveals itself as little more than economic propaganda.
Though the headline (Forecasts for Growth Drop, Some Sharply) sets up the reader for a downbeat message, the cumulative elements instead lead the reader to believe that though the road to recovery may be bumpier than anticipated, better
times lie ahead.

AN ANALYSIS OF THE LANGUAGE UNCOVERS THE SPIN:


The spin: weak hiring in recent weeks has prompted economists to ratchet down their 2011 economic forecasts to as
little as half what they expected at the beginning of the year.
The spin un-spun: Rather than simply state that the economists growth forecasts were dead wrong, the Times gives them
the leave to ratchet down their forecast.
The spin: Both these firms [Goldman and Macroeconomics Advisers], well respected in their analysis, have cut their
forecasts for the second half of the year as well.
The spin un-spun: To apply the adjective well respected to the Goldman Gang deserves a place of honor in the annals
of journalistic audacity.
Macroeconomics Advisers is self-described as the most trusted source for US macroeconomic analysis. As a Blue Chip
member in good standing of the White Shoe Boyz Club, when they make a wrong call, theyre given leeway to cut their
forecast by 40 percent without impugning their well respected status.
The reader is implicitly counseled to continue following the advice of these firms no matter that they were wrong. Since
they have received the Times imprimatur, they are well respected.
The spin: Two years into the official recovery.
The spin un-spun: The recovery may well be official, but its so far short of the recovery promised by officials that
calling it a recovery at all is as unwarranted as characterizing Goldman Sachs as well respected.
The spin: The economy is still behaving like a plane taxiing indefinitely on the runway.
The spin un-spun: For the jobless, the foreclosed, food stamp-fed and the barely-making-ends-meet millions, there aint
no plane and the millions not on it are not taxiing. Moreover, the bogus analogy implies that although taxiing indefinitely,
sooner or later, the non-existent jumbo jet on the runway will be taking off.
The spin: Few economists are predicting an out-and-out return to recession.
The spin un-spun: That only few economists see a return to recession is both irrelevant and misleading. Even fewer
economists forecast the real estate crash, Panic of 08, the ensuing credit crisis and the Great Recession. So why should
anybody pay heed to what the majority are now forecasting?
The hard data have obliged those well respected analysts to radically downgrade their forecasts, and there is no reason
whatsoever to assume the new figures are any better than the old.
The spin: Analysts generally expect the economy to pick up in the second half.
The spin un-spun: Which analysts and on what basis? We, who correctly forecast the Panic of 08, the real estate bubble,

20

The Trends Journal Summer 2011

CRIME PAYS
For example, the United States government now officially
adopted new guidelines which, despite a raft of inquiries
into alleged financial crimes that led to the Panic of 08,
resulted in just a few cases brought to trial. Termed deferred prosecution by the Justice Department, the new unconfrontational approach was lauded in White Shoe Boyz
lingo by Sullivan and Cromwell (a prominent law firm specializing in defending white collar criminal cases) as an
important step away from the more aggressive prosecutorial practices seen in some cases under their predecessors.
Euphemized as a gentler approach by The New
York Times, in plain English it meant crime pays: the
Washington-protected Wall Street Mob was too-big-toprosecute and too-big-to-jail.
No better illustration could be found than the deal
the Justice Department cut with American International
Group (A.I.G.) back in 2004 for helping clients improperly burnish financial statements (a.k.a. cook the books).
Let off the hook with a deferred prosecution agreement
and a paltry $126 million fine, A.I.G. given a free ride to
pursue its business as usual would go down in history as
the notorious too big to fail that the American taxpayer
was forced to bailout in 2008, to the tune of $182 billion.
Nevertheless, even though the money mobsters were
free to live their luxurious lives of crime, even they
couldnt keep the mega-Ponzi scheme going in perpetuity.
The Panic Button had been pushed.

Trendpost: However tough the times, in the developed

countries, the majority will survive. Although the standard


of living will decline (absent any of the Doomsday prophesies coming to pass) life will go on.
There will be areas of safety and refuge for many and
even oases of great prosperity offering opportunities in
health, alternative energy, food, water, new education,
higher tech, etc., for the trend aware.
Obviously some countries will fare better than others.
Canada, Australia, Sweden, Norway resource rich, selfsufficient, low GDP-to-debt ratios, strong export markets,
manageable populations, highly educated, politically
stable, low poverty rates are a few examples. (We had
included New Zealand as a country to consider, but its
recent earthquakes that have destroyed so much of Christchurch, and the potential for continued activity, makes it
less attractive.)
We do not share the long-term enthusiasm of many
financial analysts for most of the emerging markets and
BRIC nations (Brazil, Russia, India, China). Where they
see booms, we see bubbles. While there is no doubt that
some investors, speculators and businesses will continue to
cash in even after the bubble bursts, many will be caught
up in the global contagion. As the old saying goes, When
America sneezes, the rest of the world catches cold.
The Panic of 08 exposed the fragility of those
economies. But by July 2011, the drastic money-pumping
schemes they too employed to re-inflate their sagging
(Continued on page 30)

the Great Recession and the bogusness of the vaunted recovery, see no pick up indicated by the data.
However, considering the lengths the Fed and White House will go to in order to prop up the failing economy, they may
well pump more trillions into it. Less than three weeks after Analysts generally expect the economy to pick up in the second
half, Ben Wrong Again Bernanke told Congress, We dont know where the economy is going to go.
He left open the possibility for yet another round of Fed intervention. More stimulus atop of old stimulus that didnt work
before would, again, at best, provide the appearance of a pick-up, but the reprieve would again be only temporary.
Pubishers Note: If you were going for your MBA at Harvard, or any top-of-the-line or bottom-of-the-barrel business school,
despite the tens of thousands of dollars spent, the thousands of hours endured listening to mind-numbing lectures, and the
endless hours spent poring through overpriced text books written in impenetrable business jargon, you would not be taught
this trend tracking lesson on how to distinguish spin from story.
And, to make matters worse, you would be systematically indoctrinated into the cult of the expert, where general consensus (most economists believe) is presented as if it were equivalent to evidence. The Sun orbits the Earth, phlogiston is
what allows combustion to take place, and the atom cannot be split are just a few of the hundreds of exploded ideas that were
once held as axiomatic truths by general consensus.
Yet, it is as though history had never happened. For anyone to draw definitive conclusions in any of the disciplines (health,
science, politics, economics, etc.) based upon general consensus is not just folly, but an insult to the intellect. The fundamentals of the economy are sound Go back to your offices, the fire in the North Tower is under control.
The failure to Think for Yourself could cost you money, and even your life. n

The Trends Journal Summer 2011

21

S O L U T I O N S
C E L E N T E

S O L U T I O N S
C E L E N T E
22

THE GLOBAL GAME CHANGER


Who Can Save America Who Can Save The World?
By Gerald Celente

The American Economy is in collapse. Nothing the White House, Congress or the Federal Reserve tries to do to stop the crash will stop it. Bushs TARP, Obamas stimulus and Bernankes
money-pumping schemes none have delivered the recovery each had promised. The digital
trillions injected by the government to keep financial firms afloat put America on temporary
life-support, no more than that. When the plug is pulled and the money pump stops, the US
economy will go down and much of the world will sink with it.

On the war front, the storys the same. Nothing the White House, Congress or the Pentagon
does will bring the results they promise. Afghanistan, Iraq, Pakistan, Yemen, Libya Bush,
Obama, Gates, Petraeus big talk, trillions spent, millions killed, nations destroyed, antiAmerican hatred seething and no victory in sight.
Undeterred by having batted zero, Republican and Democratic leaders and government
lackeys defend pitiful performances with the same hollow lines: Progress is being made; more
time is needed. From the economy to war and peace, from education to health care reform, new
failures are piled on old ones. Major disasters are compounded into tragic debacles.
But wait, theres hope! The 2012 campaign bandwagon is rolling. Jam-packed with a new class
of Presidential candidates, this time it will be different. The cameras roll, and candidates boast
that they, and only they, have what it takes to bring about prosperity and set the nation straight.
And from right and left, the kids at the circus jump from their seats and cheer for the clowns.
History tells us, in the most unequivocal terms, that a vote for any Republican or Democratic party candidate in 2012 will be a vote for more of the same. Nothing, Nothing, Nothing,
NOTHING that any Presidential front runner promises will bring about prosperity or Change
You Can Believe In.

DELUSION SOLUTION

Come Election Day, the media and politicians will be spinning the same old tale: Get out and vote. If you
dont exercise your right to vote, you lose your
right to complain.
What nincompoop made up this deceptive
line, one that sounds politically correct and morally persuasive, but, in reality, is pure nonsense?
Vote for whom? Tweedle Dee or Tweedle
Dum? A lesser of two evils? A choice between
very dishonest and very incompetent or just plain
dishonest and incompetent? What an historic day
it would be if the electorate entered the polling
place bewildered about having to choose between the greater of two greats. Then, and only
then, would the citizen who did not vote lose
their right to complain.
Regardless of who is elected Republican
or Democrat the only solution I can see at

22

this time that could save America (and be applied worldwide) is to take the power out of the
hands of politicians and put it into the hands
of the people.
In Switzerland, where this is practiced, it is
called Direct Democracy. The people vote on
major issues that affect them locally and globally, and the elected officials (whether they agree
or not) perform their duties as public servants,
carrying out the will of the people.
The US and other nations that call themselves democratic have representative democracy. In theory, elected officials pledged to carry
out (represent) the will of the people. But, in
practice, at least in modern memory, most elected officials carry out the will of special interests
whose campaign contributions (a.k.a. bribes
and payoffs) assure their subservience.
While most everybody knows this, its both

The Trends Journal Summer 2011

C E L E N T E

Regardless of who is elected, the only solution I can see that could
save America (and be applied worldwide) is to take the power out of the
hands of politicians and put it into the hands of the people.

S O L U T I O N S

Eugene Gregan

23

C E L E N T E

The Trends Journal Summer 2011

bailouts,
rescue packages,
budgets, taxes,
health care, oil
drilling, hydrofracking, subsidies, education,
abortion, drug
lega l i zat ion,
same sex marriage, zoning,
eminent
doDancing with Direct Democracy: The Third Party is You!
main and
yes, secessionCALL TO ACTION Virtually every day ism for all those who no longer want to be part
we receive emails asking us for direction on how
of an increasingly imperfect and dysfunctional
to reverse negative trends we have identified, and
union the European or the American Way:
how to successfully navigate the future.
Let the People vote!
Given todays dire socioeconomic and geoGive the public servants the unique oppolitical conditions and our forecast for them to
portunity to truly play the role they so insistently
dramatically deteriorate, I believe that changing
pretend they have been playing all along and
from a faux-representative democracy to Direct
serve the public.
Democracy would be a giant step in the right diWHERE TO START Understanding
rection. If the Swiss can do it successfully, why
the tremendous power that social networking
cant anyone else?
played in galvanizing the revolutions of the
As a political atheist, I belong to no politiArab Spring and the uprisings and protests
cal party nor adhere to an ideology. At this early
raging through Europe, I propose using the
stage of the 2012 campaign (though I disagree
same model to bring about a Direct Democracy
with certain of his strict libertarian principles), I
revolution.
would vote for Ron Paul for his bring-home-theThere will be legal hurdles to jump and potroops, close-the-bases, shrink-the-military, endlitical obstacles erected that will need to be overthe-drug-war, bring-down-the-Federal-Reserve
come. It is going to take passion and persistence
platform.
from people with relevant skills to push the moveYet, even if Paul were elected, the special
ment forward. It should never be forgotten that no
interests would fight to keep what they have
law is immutable. Laws are made only to be superand possibly kill not to lose it. And with a viable,
seded by new laws. No clearer example can be givtruly independent third party not in the cards for
en than the wholesale raping of the Constitution
2012, the only viable solution I can envisage that
by the Supreme Court and successive presidents.
could reverse the trends is take the vote out of
What better time to write a new one?
the hands of party politicians and put it in the
If the Founding Fathers could pull it off with
hands of the people: Direct Democracy!
horses, sheer will and quill pens, surely 21st cenOn issues ranging from federal to local
tury revolutionaries can make Direct Democracy
going to war, foreign aid, trade agreements,

S O L U T I O N S

tolerated and
accepted as political business
as usual. Only
school children,
the delusional
and the willfully dont-knownuthin
still
believe that the
officials theyve
elected represent them.

23

S O L U T I O N S
C E L E N T E

S O L U T I O N S
C E L E N T E
24

a reality with the strokes of a keyboard. Not only


can the Internet serve as the galvanizing force
to bring about Direct Democracy, it can also be
used as the 21st century ballot box.
Voting online could be subject to hacking
and fraud, the entrenched parties will argue.
But casting a vote online is no more susceptible
to irregularities than casting a vote at the polling place be it stuffing the ballot boxes or rigging the voting machines.
In fact, voting online, with full transparency,
would prove more secure than any polling place
run by party operatives. I say, If you can bank
online, buy online, gamble on line, you can vote
online! Going to vote should be easier than going to the ATM. And if you dont have your own
computer, theres always the polling place.
It is due time Thomas Jeffersons vision
that in due time the voice of the people will
be heard and their latent wisdom will prevail,
prevails.
For that vision to become a reality it will take
dedicated attorneys to create the legal framework
required to change old laws, make new ones, and
surmount the massive roadblocks that the politically entrenched will erect to stop the movement.
And it will take inspired web programmers
and designers to build the hi-tech site that provides the needed online structure, and savvy social networkers to galvanize the public.
The Trends Research Institute has taken the
first step by securing the domain name DirectDemocracyNow.org.
As G.I. Gurdjieff told his students, I provide
the leather, you make the shoes.
We look forward to hearing from those with
the skills and dedication.
Publishers Note: Representative Democracy,

the form of government we adhere to in the West,


is no more than a cruel sham, a bone thrown to
the proles following the overthrow of the aristocracies of the 18th, 19th and early 20th centuries. The restive public was gulled into believing
that, by voting for members of political parties
pledged to represent their interests, their voices
would be heard.
While attractive in principle, in practice, political parties come to represent the same very
rich and very powerful interests that have ruled
throughout history. Only the names and ranks

24

have changed. No longer called Kings, Queens,


Czars, Dukes and Barons, the new aristocracy is
called the too big to fail.
My call for the institution and spread of
Direct Democracy, which has been broadcast
on national and international radio and TV
programs, is resonating globally. While the
concept is not new, the interest in it is only
now gaining global traction. Thinking people
everywhere are recognizing that Direct Democracy can provide a blueprint for revolution
in the New Millennium. Non-violent, intellectually and philosophically sound, emotionally
empowering, and potentially inexorable the
greatest obstacle to Direct Democracy is to do
nothing.
THE DD TREND

Trends are born, grow, mature, reach old age and


die. While modern age Direct Democracy (DD)
was born in mid-19th-century Switzerland, its
success has been confined within that nations
borders. But seeds are now being sown in other
places. DD advocates in Poland, for example, disgusted with politics as usual and determined
to break free of party chains, have launched a
bold and practical initiative. Similar initiatives
exist in the UK, Czech Republic, and elsewhere.
These incipient movements all recognize the basic need to radically change the system, but to
date, theyve not yet gathered the necessary momentum to galvanize a mass movement.
A Polish Direct Democracy group that we
are in contact with emphasizes the need for DD
advocates to be very careful on the implementation of details to clear the maze of legal, bureaucratic and political hurdles purposely set in place
by the agents of no change.
They write, Therefore, it is worthwhile to
prepare the change into Direct Democracy carefully. We would be happy to recommend some of
our very knowledgeable colleagues to any group
of people that would like to make changes in
their political system in the direction of Direct
Democracy. They recommend three great sources of information:
n Initiative and Referendum Institute Europe: The president of IRI is Mr. Bruno Kauffmann, who can be very helpful. He is very
much involved in the direct democratization in
Iceland. He has a huge knowledge on issues of

The Trends Journal Summer 2011

On-Trend For Action Even with a Direct De-

Are they afraid or do they just feel powerless


when from Town Hall to Capitol Hill its the
power-mad that make the laws, give the orders,
and mete out punishment for disobedience
except, of course, for the privileged few and the
well-connected?
We the people are not obliged to blindly
follow orders that are designed to enrich the few
at the expense of the many. At a certain junc-

The Trends Journal Summer 2011

ture, obedience itself becomes a moral crime.


The hottest places in hell are reserved for those
who, in times of great moral crisis, maintain their
neutrality, wrote Dante Alighieri.
Be it a local zoning change pushed through
for a crooked crony or a corporate marauder, a
mountain top removed for a mega-mine or toxic
chemical hydrofracking approved for big energy,
a Presidential dictate that leads to war, or an Executive Order that robs the people of their Constitutional Rights silence and submission are
willful acts of self-enslavement.
Exhibit A. While the global financial wreck-

25

S O L U T I O N S

What prevents people from standing up, speaking


out, and taking action rather than getting steamrolled by an army of self-serving politicians and
bloated bureaucrats?

C E L E N T E

Your Life Depends on It

FIGHT!

S O L U T I O N S

mocracy system in place, voting to elect public


servants (representatives in pre-DD jargon)
will still be necessary. To help assure that public
servants serve the publics interests rather than
special interests, international financier Jim
Rogers has spearheaded GovAtHome, an important step in that direction.
While the Rogers proposal does not entail
the citizenry voting Swiss-style, directly on important individual issues, its focus is on requiring Congressmen and Senators to live and work
in their home districts, out of the reach of Washington-based lobbyists who, under the present
system, are the de facto lawmakers.
Washington is full of lobbyists and nearly
all laws are written by lobbyists and certainly
strongly influenced by lobbyists and so the
American public has little to do with how laws
come out or whats good for us, said Rogers.
The current system rewards corruption.
When Congressmen live isolated from those they
serve, and are constantly seduced and watched

by high-dollar campaign donors, is it any wonder


that they are so corrupt? asks GovatHome.
Some 40,000 registered lobbyists contributed
$3.5 billion (a.k.a. bribes) to political campaigns
in 2010, with the goal of passing legislation furthering their interests. A career in government
has become a stepping stone to a lucrative career in lobbying. Politicians dont just take money
from lobbyists they become lobbyists. Thousands of former federal employees, hundreds of
former White House staffers and ex-members of
Congress, as well as numerous former heads of
government departments have gone on to work
for, or run, lobbying firms.
The Rogers plan would retain the requirement written into the Constitution that representatives spend a week in DC and return
occasionally as needed. Otherwise, the rest of
their duties would be performed in their home
districts, using Internet, video conferencing,
and email technology. When they cast their
votes, it will be under the watchful eyes of
their constituents and with complete and immediate transparency.
Until the lobbyist/corporate stranglehold is
broken, the individual voter is but a slave to a
system he had no say in creating, and to masters
who are indifferent to the general welfare. An
immediate advantage of GovAtHome is that it
could be implemented without necessitating a
drastic rewriting of existing constitutions.

C E L E N T E

Direct Democracy and the biggest connections


network in the community.
n The Centre for Democracy Studies (ZDA):
A Swiss think tank that is also active in Icelandic
efforts to introduce Direct Democracy.
n Democracy International: An international
network for Direct Democracy.

25

THE FUTURE IS IN YOUR HANDS

26

Indeed, at virtually every level of government, the


legislative system is rigged. Politics today is little
more than legalized prostitution. While a streetwalker gets busted for selling her body to a john,
politicians get rewarded with campaign contributions for selling their souls to a corporation or
lobbyist.
With all of the whoring going on the money
exchanged and the pleasures lavished the only
one actually getting screwed was John Q. Public.
The proof lay in the report showing that two million fewer people were employed in June 2011
than 28 months earlier, when Congress passed
President Obamas $800 billion economic stimulus package, designed specifically to create jobs.
Where did all the money go?
The billions went mostly to their banking and
other business buddies and by law John Q. Public was stuck with the tab. It was big business as
usual.
Under such circumstances, practically speaking, what course of action is open to the Good
men (and Good women) to not obey the laws
too well or better yet, not obey them at all?
What! Not obey the laws? Sold to the pub-

26

lic as though they warranted Ten Commandment status, many were


no more than criminal
acts (disguised as legislation) passed by
money-junkies
and
power-junkies
(disguised as lawmakers)
to further their own interests.
What to do? What
are you prepared to do?
How do you prepare?
First, take inner
inventory. Are you
afraid to speak out?
Concerned you may jeopardize your job, your
reputation, your family? Dont have the time or
just dont care enough to take action? Or do you
believe that higher political authorities, by virtue of their office, actually know (or care about)
whats best for you? Do you lack the nerve?
Or do you feel powerless, convinced that you
cant fight City Hall much less change Congress
or the White House? You can! Never doubt that a
small group of thoughtful, committed citizens can
change the world. Indeed, it is the only thing that
ever has. Margaret Mead
The theme of this Trends Journal is Fight
For Freedom! Fight for your rights, fight for your
dignity, and fight as though your life is on the
line because it is!
Not everyone will agree, and possibly the majority wont.
On the issue of nuclear power, many dismiss
the radiation threats to their bodies and the timerelease threats to the worlds food supply, air and
water from the nuclear fallout that continues to
spread from the Fukushima meltdown, half a
world away.
They feel reassured by experts and politicians who attest that measures have been taken to prevent future nuclear disasters on such
a disastrous scale.
On the issues of food, air and water, most
express little concern and/or believe government officials and industry experts that the
amounts of pesticides, poisons and chemicals
they breathe and ingest meet regulatory safety
standards.
Anthony Freda / Dan Zollinger

S O L U T I O N S
C E L E N T E

S O L U T I O N S

C E L E N T E

age was almost entirely the responsibility of rapacious


banks, too-big-to-fail
financiers and their
political flunkies, it
was the people who
were forced, by law,
to pay the price.
Exhibit B. While
the ongoing, ruinously
expensive wars in Afghanistan and Iraq
and the newly minted
US/NATO
Libyan
War were launched by
politicians, without the
consent of the people, it is the people, not the politicians, that foot the bills and pay with their lives.
The above are just two of the more egregious
examples. By 2011, the prescient words of Ralph
Waldo Emerson rang truer than ever, Every actual State is corrupt. Good men must not obey the
laws too well.

The Trends Journal Summer 2011


C E L E N T E
S O L U T I O N S

27

S O L U T I O N S

The Trends Journal Summer 2011

C E L E N T E

For example, The theme of this Trends Journal is Fight For Freedom!
Its a headrecent US federache it imFight for your rights, fight for your dignity, and fight
al tests found 48
plies that someas though your life is on the line because it is!
different pestithing terrible is
cide residues in
going on, said
98 percent of apples (the nations second most
Mark Seetin, the trade groups director of regulaconsumed fruit). The public was reassured by
tory affairs. But growers are doing nothing illethe government that the pesticides were within
gal. Theyre just trying to keep their apples fresh
limits that federal regulators consider safe.
and nutritious.
The data we collect confirms that consumYes, for a majority, the apples, celery, spiners can assume that residues, for the most part, fall
ach, potatoes, etc., are accepted as fresh and
within the EPAs tolerance level for safe food, said
nutritious, and pose no health dangers. But for
Deputy Agriculture Secretary Kathleen Merrigan.
the members of the 20 Percent Club susCan assume? For the most part?
picious of government safety standards and disWhat about all those other parts that do not
trustful of all industry spokespersons avoiding
add up to such an assumption? It has been estabgenetically modified, chemically fertilized, and
lished (I wrote about it at length, 15 years ago, in
pesticide-doused foods was a matter of life and
Trends 2000) that there is no way for the EPA, or
death. (See 20 Percent Solution, Trends Jouranyone else, to measure the long-term effects of
nal, Spring 2010)
accumulated doses of the spectrum of pesticides,
TAXED TO DEATH
toxins and chemicals that virtually everyone in the
developed world is subjected to, nor is there a way
When Benjamin Franklin noted, In this world
to gauge their complex interactions.
nothing can be said to be certain, except death and
taxes, he was not taking into account the effects
Pesticides Far More Harmful
of taxes upon death!
When Combined, Study Finds
In todays world, the more the government
takes in taxes, the greater the toll it takes on the
Pesticides that by themselves have been
individual. The tried-and-true school, property,
linked to breast cancer and male birth
income and sales taxes combined with a host
defects are up to one thousand times
of license, sin, nuisance and other creative taxes
more potent when combined, according
are generally accepted as just another unpleasto a study.
ant fact of life. But, in fact, like those doses of raIf you test them individually you
diation, and like a steady diet of pesticide-tainted
could almost conclude that they were
factory food, chemically-treated water and pollutnon-estrogenic, almost inconsequential,
ed air, the cumulative effects of oppressive taxes
he [John A. McLachlan of Tulane Unibecomes a real matter of life and death.
versity] said. But when you put them in
The greater the taxes, the greater the stress.
combination their potency jumped up
The more the taxman takes, the less there is to
five hundred- to one thousand-fold.
pay the bills, with next to nothing left to put away
Instead of one plus one equaling two,
for retirement. The worse the economy gets, the
we found that in some cases one plus one
more difficult it becomes for the tens of millions
equals a thousand. (AP, 7 June 1996)
with little or no cushion to make it through the
hard times.
Yet, when the apple story was reported in June
Yes, its a matter of life and death. The sta2011, mention of the well-known, established
tistics support the obvious: the greater the stress
dangers of the chemical interactions were comlevel, the greater the impact on mental and physpletely avoided. True to form, rather than acical health.
knowledging any potential danger, the US Apple
Its more than just spirit-sapping: with the
Association countered with the argument that
revenuers taking ever bigger cuts, even the health
the pesticide amounts found fell within the limconscious who would like to eat pricier clean
its of the law which industry lobbyists had
food cant put money they dont have where their
helped to write.

27

COMBAT FATIGUE

S O LUT I O N S

Average citizens live in a state of disconnect. Unless they served in the military themselves, they
have no idea of the organizational dysfunction
that prevails from top to bottom. From maintaining several hundred far flung camps and bases,
and engaging in wars waged a world away, to
multi-billions spent on extravagant weapons programs and military contractors (a.k.a. mercenaries), the militarys agenda is: increase the budget
and spend every dime.
The more money that goes to feed the military machine, the less there is for ordinary people
to pay rent, mortgages, health needs, medical
care, tuition, retirement, etc.
But cozened by politicians into believing
its a patriotic duty to support the troops, and
poorly served by a media that plays up wars while
playing down both the moral consequences and
the financial costs, the public at large accepts
the unacceptable. With barely a protest, they
let the government dig into their pockets, take
what they want, reduce them to penury and keep
them at war all under the guise of national
security.
How could the public allow themselves to
accept this?
Actually, it was very easy. There was a simple,
tried-and-true formula, famously explained by
Herman Goering with the crystal clarity of a man
on his way to the gallows at Nuremberg:

28

28

S O L UTI O N S

C E L E N T E

C E LE NTE

mouth is. (See Clean Food Trend, Trends Journal, Spring 1994)
And when it comes to the issue of war, the
question of life and death is self-evident in the
numbers of the dead, the wounded, the psychologically crippled. Less immediately evident
are the not-so-hidden financial costs. Everyone
knows that keeping the military machine welloiled and fighting is astronomically expensive.
The military is marketed to the public as
brave young men and women in uniform
sacrificing their lives for the safety of the nation. And the wars themselves are also packaged in patriotism. Absent from the sales pitch
is the military high commands proven incompetence, gross and reckless financial profligacy,
and its monumental battlefield follies and failures. More men, more money, more time, is
the motto.

Naturally the common people dont want war:


Neither in Russia, nor in England, nor for that matter in Germany. That is understood. But, after all,
it is the leaders of the country who determine the
policy and it is always a simple matter to drag the
people along, whether it is a democracy, or a fascist
dictatorship, or a parliament, or a communist dictatorship. Voice or no voice, the people can always be
brought to the bidding of the leaders. That is easy.
All you have to do is tell them they are being attacked and denounce the peacemakers for lack of
patriotism and exposing the country to danger. It
works the same in any country.
Sound familiar?
Remember, the theme of this Trends Journal
is FIGHT but not for THEM.
Fight as though your life depends upon it, because it DOES. And if it doesnt yet, it will.
The fight takes different forms. In recent
Trends Journals we have featured articles by
Close Combat masters John Perkins and Bradley Steiner. While concentrating on the kinds of
preparation needed to survive physical combat,
the mindset involved in that training is applicable
to any other kind of fight; political, intellectual,
financial (taxes, foreclosures, pay scale, etc.) emotional even spiritual.
Its a fight for your self-respect and dignity.
There is no higher authority (not on the terrestrial plane) qualified to impose their moral
dictates and precepts on you and tell you what to
believe in, who to follow, what is right and wrong,
and/or how to worship.
It is a fight for freedom. Not the fake freedom that allows you to vote for a lesser of two
evils, but the real freedom that frees you from
peer pressure, conventional wisdom, social/educational conditioning, and allows you to Think
for Yourself.
On certain issues, strength in numbers is
essential. Join with others to fight for common
causes that you believe are, in one way or another, life threatening.
Be it the zoning change, mega-mine, hydrofracking, call to war, loss of Constitutional Rights,
tax hikes for you, tax exemptions for THEM
(e.g., General Electric, whose CEO, heading President Obamas Jobs and Competitiveness Council,
reaped $14 billion in profits and paid not a cent in
Federal taxes) do something, start something. n

The Trends Journal Summer 2011

A Working Model for Direct Democracy


By Thomas H. Naylor

The Trends Journal Summer 2011

Switzerland has a coalition government with a rotating presidency, in which


the president serves for only one year.
Many Swiss do not know who of the seven Federal Councillors in the government
is the president at any given time, since
he or she is first among equals.
In Switzerland a petition signed by
100,000 voters can force a nationwide
vote on a proposed constitutional change
and the signatures of only 50,000 voters
can force a national referendum on any
federal law passed by Parliament.
VOICE OF THE PEOPLE
Anthony Freda / Dan Zollinger

aking note of the unsustainable, unfixable, gridlock nature


of the US government and its
inability to fix the American economy,
Gerald Celente has proposed that the
United States turn to Swiss-style Direct
Democracy as an alternative way to resolve such divisive issues as the wars
in Afghanistan and Iraq, the magnitude
of the governments budget deficit,
how to finance health care, the size of
the defense budget, and national immigration policy. He envisions this being
carried out on the Internet.
With a population of only 7.3 million, a little larger than that of an average American state, Switzerland is one
of the wealthiest, most democratic,
least violent, most market-oriented
countries in the world, with the weakest central government and the most
decentralized social welfare system.
Founded in 1291 near Lake Lucerne, the Swiss Confederation
may be the most sustainable nation-state of all time.
Situated in the heart of Europe, Switzerland has always
existed in a state of tension between opening and closing its
borders to the outside world. Even today it has nearly one
million so-called guest workers. For centuries it has been
an area of settlement and a transit region of European northsouth commerce. The countrys economy has long been
geared to processing imported raw materials and re-exporting them as finished goods, such as specialty foods and pharmaceutical products.
The Swiss enjoy state-of-the-art technology, and their
banks and financial institutions are among the most stable
and financially secure anywhere in the world. The same is true
of the Swiss franc.
Over the past 700 or so years Switzerland has developed
a unique social and political structure, with a strong emphasis
on federalism and Direct Democracy, which brings together
its 26 cantons (tiny states), with populations ranging from
14,900 to 1,187,000, and its four languages and cultures German, French, Italian, and Romansch. The Swiss cantons enjoy
considerably more autonomy than do American states. One
finds a host of local and regional cultures and traditions melded into a patchwork of sights and events that are considered
typically Swiss.

Among the high profile issues that have


been resolved by Swiss national referendums are womens voting rights, abortion
rights, creation of a new canton, abolition
of the army, and Swiss membership in the
League of Nations, United Nations, World
Bank, IMF, and the European Union.
Several cantons still follow the centuries-old traditions of
Landsgemeinde (or open-air parliaments) each spring. Others
are experimenting with voting over the Internet.
However, it is at the commune level that Swiss democracy is most direct. Within the cantons, there are 2,902 communes in the Swiss Confederation, each run by a local authority. Just as the cantons enjoy a high degree of independence
from the national government, within the cantons many of the
communes also enjoy a high degree of independent authority
and decision-making.
Most political scientists agree that the Swiss have taken
the concept of democracy to levels heretofore unattainable
any place else in the world. In his excellent book Direct Democracy in Switzerland (Transaction Publishers, 2002), Gregory Fossedal describes Switzerland as a Direct Democracy, in
which, to an extent, the people pass their own laws, judge the
constitutionality of statutes, and even have written, in effect,
their own constitution. Thats a lot!
All of this is in stark contrast to the United States in which
our government is owned, operated, and controlled by Wall
Street, Corporate America, the Pentagon, and domestic and
foreign lobbies. Whereas the primary role of Swiss Direct Democracy is to protect the Swiss people from the Swiss government, the US government is more concerned with protecting its powerful clients from the will of the American people.

29

In Switzerland the people own their government. In the


United States the government owns us.
But a word of caution is in order before embracing the Swiss model of Direct Democracy. The United
States is more than 40 times larger than Switzerland
in terms of population. On one hand, it has one of the
most centralized governments in the world. On the other, it is also highly decentralized across 50 states, some
of which, like California, Texas, New York, and Florida
are quite large and powerful, unlike Swiss cantons.
Even if one sorts out all of the conceptual, constitutional, and legal problems required to make Direct Democracy work in the United States, the political balancing
act will be formidable.
Direct Democracy works in Switzerland because
Switzerland is a tiny, well-educated, hard-working country with a strong sense of community. The United States
is not Switzerland.
For starters, retrofitting the U.S. Constitution and legal system to accommodate Direct Democracy would require the expertise of a plethora of constitutional scholars
and legal experts. For those legal scholars and political
scientists up to the challenge of designing such a complex
system, courage and dedication will be required.
A process would also have to be developed to bring
important issues to the table for consideration by a nationwide referendum. And then there is the matter of the
computer network and software required to make Internet
voting work. Although introducing Direct Democracy into
the United States sounds like a very good idea, it would
involve a number of conceptual, legal, constitutional, economic, technical, and political challenges. Such a move
would require bold, creative leadership combined with
world-class marketing skills.
But the alternative is a nation whose government
has lost its moral authority and is tightly controlled by
a self-serving military/industrial/congressional complex
accountable only to itself a nation that has become unsustainable economically, militarily, socially, environmentally, and politically. The United States is so large that it
may no longer be governable and has possibly become
unfixable.
If there is a way out of our nations death spiral, Direct Democracy just might be one of our last remaining
viable options. We could do a lot worse than emulate
the Swiss. n
About the author: Thomas H. Naylor is Founder of the Second Vermont Republic (www.vermontrepublic.org) and is Professor Emeritus of Economics at Duke University. Mr. Naylor is co-author of Affluenza, Downsizing the USA, and The
Search for Meaning.

30

THE HISTORY OF THE FUTURE


(Continued from page 21)

economies had largely been forgotten.


If the West cuts back on imports and consumers dont
consume, BRIC markets cannot sustain domestic prosperity. And given the socio-political climate within these nations, they are not destinations we would choose as homes
for our money or ourselves.

Meanwhile Back on the Campaign Trail By the

Summer of 2011, with the great Obama got Osama saga


long since faded from the news and the public consciousness, President Obamas poll numbers fell back to a 42
percent approval vs. 50 percent disapproval rating.
With terror off the table and the wars a losing issue,
President Obama again played the populist/class warfare
card that played so well for him in 2008, when he was
candidate Obama.
In a June 29th press conference, he self-righteously
denounced the Bush tax cuts (which he had extended in
December 2010) and railed, on six separate occasions,
against the tax breaks awarded to corporate jet owners.
With everyday people stuck in grinding daily commutes
or forced to suffer groping, irradiation and cattle car discomfort when flying the unfriendly skies, fastening on the
fat cat image of the corporate jet was a skillful stroke of
populist propaganda.
Translated into policy, eliminating corporate jet tax
breaks would save the government a grand total of $3 billion over ten years. Put into proper perspective, ten years
of corporate jet tax break savings was equivalent to just
one week of spending for the Iraq War, that Obama perpetuated, and the Afghan War that he escalated.

BACKTRACKS BACK
Despite his barefaced hypocrisy and a presidential term
replete with economic policies that enriched the richest
while, at best, maintaining only basic social services for
the poorest (while slashing others), he again positioned
himself as Obama, the Peoples President.
It was a simple, time-honored strategy. Its what incumbents do regardless of which side of which mouth of
the two-headed one-party system was speaking: make big,
bold promises during the campaign and, once elected, renege on as many as possible, blaming your inability to
deliver on the opposing party.
Having been swept into office on a platform of Hope
and Change and in full control of the house and Senate for his first two years, Obamas greatest success was to
seamlessly perpetuate the G.W. Bush economic and military doctrine he had vilified as candidate Obama. Los-

The Trends Journal Summer 2011

ing the House in the midterm


Undaunted by his string of broken promises, controlled Ampad, had
2010 elections, but retaining
in the Summer of 2011, the born-again populist not done enough to settle
the Senate, provided the covthe strike and save some
positioned himself to retain his core
er for Backtrack Obama to
200 jobs .
go on backtracking.
Throughout his 15Democratic base.
Undaunted by his string
year career at Bain Capof broken promises, in the Summer of 2011, the born-again
ital, which bought, sold, and merged dozens of
populist positioned himself to retain his core Democratic
companies, Romney had other chances to fight to
base, while wooing swelling legions of the hard-pressed,
save jobs, but didnt. His ultimate responsibility
desperate for a government handout. Hoping against hope
was to make money for Bains investors, former
that Obama would, this time, deliver on his pledges, the
partners said.
out of work and down and out were left with a Hobsons
Much as he did when running for MassachuChoice: either take Obama or be left out in the cold by the
setts governor, Romney is now touting his busiRepublicans.
ness credentials as he campaigns for president,
Even with all of the necessary ingredients in place for
asserting that he helped create thousands of jobs
a one-term presidency in place, given the cast of unimposas CEO of Bain. But a review of Bains investments
ing Republican presidential hopefuls, an Obama victoryduring Romneys tenure indicates that job growth
by-default became a distinct possibility.
was not a particular priority But in almost all
By mid-July, the Republican card of candidates showed
cases Bain Capital made money. (Boston Globe,
neither a clear favorite nor the kind of widespread public
27 January 2008)
enthusiasm that could win the race for the White House:
As a candidate, Romney was twice cursed. His checkered
Majority of Republicans
business credentials distanced him from independent votCant Name a 2012 Favorite
ers, who saw him as a ruthless takeover artist. And he had
More than half of Republicans and Republicanalienated conservatives by signing into law, as Governor
leaning independents, 58%, do not express a
of Massachusetts, a mandatory health care plan that has
preference when asked in an open-ended format
been compared to the Affordable Care Act, also known as
with no candidates names read whom they are
Obamacare.
most likely to support for the partys 2012 presiIS THAT ALL THERE IS?
dential nomination. Those who do have a preference most often mention Mitt Romney and MiNumber two in the Gallup poll, with 9 percent, was Michele Bachmann. (Gallup, 15 July 2011)
chele Bachman. First elected to the House in 2006, the
former Minnesota state senator entered the race with a
Romney, leading the pack with a mere 13 percent of those
resum as thin as Barack Obamas, when he ran for Presipolled, had brought to the 2012 table exactly what he had
dent. A Tea Party favorite for her Get government out
left behind in his failed 2008 bid. Though he had proof the way of business message, a deficit hawk opposed
moted himself as a savvy and experienced businessman
to increasing government debt, Bachman voted against
who could create jobs and turn the country around, RomBushs TARP and Obamas stimulus.
neys resum was that of the kind of corporate raider who
Nevertheless, in July 2011, most media coverage
helped killed the American Dream:
pigeonholed her as a family values kind of gal with a
political history of uncompromising and impassioned
As Bain Slashed Jobs, Romney Stayed to Side
opposition to same sex marriage and gay rights. While
A review of Bains investments during Romneys
it attracted strong support among the evangelical contenure indicates that job growth was not a
servative wing of the Republican Party, and could well
particular priority.
set her up for the first presidential primary in Iowa, we
In early 1995, as the Ampad paper plant in Marforecast it would prove too polarizing a stance to win the
ion, Ind., neared its shutdown following a bitter
White House, even in the event of a long-shot nominastrike, Randy Johnson, a worker and union offition victory.
cial, scrawled a personal letter to Mitt Romney,
Although the rest of the announced Republican field
pouring out his disappointment that Romney,
registered 1s and 2s in the Gallup poll, the race had just
then chief executive of the investment firm that
begun. With a year before the nomination was to be de-

The Trends Journal Summer 2011

31

cided, and with the medias saturation coverage of candidates on the campaign trail licking ice cream cones,
chatting it up with just plain folks over coffee at the local
diner, and patting cows at the state fair it would not be
long before voter fatigue would set in, leaving an opening
for a dark horse to win the nomination, and conceivably
the White House.
Trend Forecast: In late July of 2011, our two dark horse

favorites, with the potential to break away from the pack,


are Texas Congressman Ron Paul, and Former Utah Governor and Ambassador to China, Jon Huntsman.
The Libertarian-leaning Ron Paul, a known quantity,
has run the Presidential race twice before and has a stalwart support base. As a Congressman, Paul commands
more air-time than most of his fellow Representatives. As
a Presidential candidate, however, he has been marginalized by his own party, maligned by pundits of both parties and but dutifully acknowledged as a contender by the
mainstream media.
Pauls poll numbers may have looked negligible, but
they belied his strong populist appeal and his proven ability to trump higher profile candidates in various Republican straw polls.

LIBERALTARIAN?
Pauls uncompromising end-the-wars, close-all-overseasmilitary bases, bring-home-the-troops platform should
have been music to the ears of the liberal left a foreign
policy dream come true, one that no Democrat President
in living history had dared propose. What liberal would
not support a President who pledged to end the War on
Drugs, legalize marijuana and dismantle the Patriot Act
that made a travesty of the Constitution?
Surely, these conscientious quiche-eaters would never
vote for a Republican with a track record that included
extending and expanding the Patriot Act, increasing military spending, prolonging old wars and starting new ones,
operated torture compounds in foreign countries, ratcheting up the War on Terror, and increasing funding for the
War on Drugs.
So why would they want to bring back Obama when
this was his precise track record, and why would they refuse to embrace Paul, who stood with them on so many
issues dear to their bleeding liberal hearts? It couldnt
have been Pauls anti-bail-out-the-bigs and close-downthe-Fed stances that were the definitive turn off.
No, it was mostly one issue that the ideologically entrapped liberals claimed turned them off: abortion. While
he opposed abortion, Paul contended it was a states issue,
not a federal one. Abortion! That was enough to make

32

diehard liberals forget all the other points of agreement


and, instead, support four more years of the Democrat
Obama who extended and expanded the Patriot Act,
increased military spending, prolonged old wars and
started new ones, operated torture compounds in foreign
countries, ratcheted up the War on Terror and increased
funding for the War on Drugs.
As for the hardcore conservatives, Paul was unacceptable to them because of his anti-militarism, antiWar on Drugs, anti-War on Terror platform. Nevertheless, given his substantial core support base and his Ross
Perot-style populist appeal among the growing ranks of
the unaffiliated and undecided, it was not inconceivable
that Paul could mount a serious challenge to the sitting
President.
JON WHO?
Jon Huntsman was, at first glance, the darkest of horses.
However, Huntsman had political chops, appealing credentials and a broad skill set. Governor of Utah from
2004 to 2009, a US ambassador to Singapore, deputy US
trade ambassador, and fluent in Mandarin Chinese from
his days as a Mormon missionary, he was appointed Ambassador to China by Democrat Obama.
Praising the Republican Huntsman as the right man
for what is arguably Americas most challenging ambassadorial position, Obama described his appointee as
the kind of leader who always puts country ahead of
party and is always willing to sacrifice on behalf of our
nation.
Independently wealthy, and therefore seemingly unbeholden to special interests, Huntsman who acknowledged climate change and supported civil unions stood
at odds with the Republican far right. Upon announcing
his candidacy, Huntsman also put himself at odds with
former boss Obama, who (according to Beltway scuttlebutt) had granted him the Chinese ambassadorship with
the tacit understanding Huntsman would not make a run
for the White House.
Fifty years old, fit, good looking, and a scandal-free
family man with solid professional credentials that
Huntsman had also played in a high-school rock band,
rode his bike to work in Beijing and is a motorcycle enthusiast made him a perfect contestant for the media
driven Presidential Reality Show.
Indeed, in a country on the brink of financial ruin,
bogged down in wars, faced with an ever growing list of
unsolvable social problems, that Esquire would waste
ink praising Mr. Huntsman for his perfectly cut, redchecked shirt, and noting that his distressed leather
belt actually makes him seem relatable, epitomized the

The Trends Journal Summer 2011

Winning Friends and Influencing Voters


on the Campaign Trail
Manufacturers and retailers at both ends of the consumer spectrum would do well to recognize the class warfare
atmosphere that will not only dominate the US Presidential campaign, but also permeates many other nations both
developed and developing where the widening gap between haves and have-nots has created tensions, sparked
protests and threatens governments.
On the high end, when an economic crisis such as the Panic of 08 strikes, upper income consumers in no financial jeopardy cut spending more as a reflex action than out of need, and also as a concession to public opinion.
But soon after the panic subsides, so do the qualms of conscience and the spending spree resumes. (According to the
Bloomberg Retail Sales Luxury Index, the 2010 Christmas shopping season showed high-end retail sales increasing 8.1
percent from Christmas 2009, while the Bloomberg Retail Sales Discount Index showed only a 0.9 percent rise.)
Socially conscious programs initiated by high-end manufactures and retailers that actually help, rather than hype
will not only assuage second thoughts about conspicuous consumption among the upper income demographic, but
generate good will, as well as provide a number of jobs.
As evidenced by the current round of budget cuts, the ax falls first on programs and services that provide the
simple pleasures of life to those who cannot afford to pay more than nominal fees for them. Since a return to WPAstyle government-funded public works (swimming pools, parks, the arts, etc.) is unlikely, luxury sector individual and
corporate patrons stepping into the breach could become a harmonizing force, both economically and emotionally, in
increasingly polarized societies.
At the low end fast food/restaurant chains, discount/mass market retail, consumer products forward-looking
management would do well to recognize the goodwill potential of an active social conscience. Caveat: a not-so-fine line
separates giving back to the community from brazenly buying your way into it:
As It Campaigns to Build in the City,
Wal-Mart Donates $4 Million
He called Wal-Mart one of the great corporate citizens in this country. He praised its efforts to conduct background checks before selling guns. He flatly rebuffed suggestions that the company was
killing jobs.
Mayor Michael R. Bloomberg took on the role of ardent defender of big-box America on Tuesday
at a news conference announcing a $4 million donation by Wal-Mart to a city program that offers summer jobs to young people. (NYT, 5 July 2011)
With Wal-Mart in the midst of an aggressive campaign to open its first store in New York City, was the donation
simply a coincidence?
While calling Wal-Mart one of the greatest corporate citizens might make for lively debate and livelier stand-up comedy, the obvious self-serving agenda behind their donation is hardly the philanthropy that will ease the class warfare
trend. Unfortunately, in 2011, the Wal-Mart way of giving a little in the hope of getting a lot back was still the norm. n

deep shallowness of what it takes to become President of


the United States of America.
The Republican primary field of late July was an open
field. Rounded out by former Governor of Minnesota Tim
Pawlenty, former Senator Rick Santorum, and former columnist, radio host and CEO of Godfathers Pizza, Herman
Cain, none displayed breakaway potential. But, at that
time, we saw Huntsman as having more of what it took to

The Trends Journal Summer 2011

win his partys nomination and a better chance than any


of the others of beating Obama.
Publishers Note: As the campaign heats up, it behooves

the voting public to keep in mind President Dwight D.


Eisenhowers seldom quoted, but sobering and appropriate insight, Any man who wants to be president is either
an egomaniac or crazy. n

33

Washingtons Response to a Failed Ecomomy:


More War
By Paul Craig Roberts

s the second decade of the 21st century began,


the US economy had not recovered from the
Great Recession that began in December 2007.
The economys failure to recover was despite the largest fiscal and monetary stimulus in the countrys history.
There was a $700 billion bank bailout, a $700 billion stimulus
program, a couple of trillion in quantitative easing, that
is, in debt monetization or the printing of money to finance
the governments expenditures. In addition the Federal Reserves balance sheet had expanded by trillions of dollars
as the Fed purchased troubled mortgage bonds and derivatives in its effort to keep the financial system solvent and
functioning. According to the Government Accountability
Offices audit of the Federal Reserve released by Senator
Bernie Sanders, the Federal Reserve provided secret loans
to US and foreign banks totaling $16.1 trillion, a sum larger
than US Gross Domestic Product (GDP).
Despite the enormous fiscal and monetary stimulus, the
economy remained dead in the water.
In 2011 the deficit in the federal governments annual
expenditures was 43 percent of the budget. In other words,
the US government had to borrow, or the Fed had to monetize, 43 percent of federal expenditures during fiscal year
2011. Despite this unprecedented fiscal and monetary stimulus, the economy did not recover.
At the end of the first decade of the 21st century, the
economys decline was temporarily halted by federal subsidies for car and home purchases. The $8,000 housing subsidy helped newlyweds purchase starter homes as the subsidy was a big chunk of the down payment in a depressed
housing market. The car purchase subsidy moved future
demand into the present. When these subsidies expired, the
economys life support was turned off.
Problems with the statistical reporting of unemployment, inflation, and GDP disguised the worsening economy.
Seasonal adjustments used to smooth the data over the
course of the year were not designed for prolonged recession. Neither was the birth-death model used by the US
Bureau of Labor Statistics (BLS) to estimate non-reported
jobs from new start-up companies and losses from companies that have gone out of business. The birth-death model
was designed for a growing economy and during downturns
overestimates the number of new jobs created.
The substitution effect used in the consumer price

34

index (CPI) underestimates inflation by assuming that consumers substitute cheaper foods for those that rise in price.
For example, if the price of New York strip steak rises, this
does not show up in the CPI, because of the assumption that
people shift their purchases to a less expensive cut such as
round steak.

COOKING THE BOOKS


The widely used core inflation measure does not include
food or energy. Core inflation is a useful measure for those
who want to put an optimistic spin on the outlook.
By underestimating inflation, the government can overestimate real GDP growth, thus creating a fictional rosy outlook. Similarly, by using the employment measure known
as U.3, the government underestimates unemployment.
The headline unemployment rate, the one emphasized by the media and the financial press, stood at 9.2
percent in June, 2011. But this rate does not include any
discouraged workers. A discouraged worker is a person
who has ceased looking for a job, because there are no
jobs to be found. A discouraged worker is not considered
to be in the work force and is not counted among the U.3
unemployed.
The federal government knows that this is phony and
has a U.6 measure of unemployment that counts the shortterm discouraged. This measure, seldom reported by the
media, stood at 16.2 percent in June, 2011.
Statistician John Williams (shadowstats.com) continues
to count also the long-term discouraged workers according
to the way it was officially done in 1980. In June, 2011, this
full measure of the US unemployment rate was 22.7 percent.
In other words, by 2011 between one-fifth and onefourth of the US work force were without jobs.
As 2011 progressed, the United States faced three simultaneous economic crises. One crisis arose from the
loss of US jobs, GDP, consumer income, and tax base
caused by corporations offshoring their production for
the US market. Instead of making their products at home
with American labor and providing Americans with jobs
and states and localities with tax revenues, US corporations provided countries such as China, India, and Indonesia with GDP, jobs, consumer income and a tax base. This
practice meant that economic stimulus was unable to revive the US economy as Americans cannot be called back

The Trends Journal Summer 2011

Anthony Freda / Dan Zollinger

to work jobs that have been


it became clear that the wars purmoved abroad.
pose was to evict China from its
Another crisis was the fioil investments in eastern Libya.
nancial crisis resulting from deUnlike the previous Arab proregulation, fraud, and greed. Setests, the Libyan rebellion was
curitization of mortgages meant
an armed uprising in which some
that issuers of mortgages no
saw the CIAs hand.
longer had any incentive to asThe Libyan war upped the risk,
certain the credit worthiness
because although hiding behind
of the borrower, because the
the veil of Arab protest, the US was
issuers sold the mortgages to
actually confronting China. Simithird parties who combined the
larly, in the US-supported armed
mortgages with others and sold
rebellion in Syria, Washingtons
them to investors.
target was the Russian naval base
As mortgages were issued
at Tartus. Overthrowing the Assad
for fees, the more mortgages isgovernment in Syria and installing
sued, the higher the income from
a US friendly regime would put
fees. In order to collect fee inpaid to Russias naval presence in
come, some issuers faked credit
the Mediterranean.
reports for borrowers. With the
By hiding its purposes behousing market booming, many
hind Arab protests in Libya and
Viking Spirit
people took mortgages in order
Syria that it might have initiated,
to make money on the resale
Washington avoided face-to-face
of the properties. With housing prices rising rapidly, down
conflicts with China and Russia, but nevertheless the two
payments and credit worthiness became concerns of the
powers understood that Washington was striking at their
past. The financial crisis was made worse by the ability of
interests. This elevated the recklessness of Washingtons
investment banks to get around capital requirements and,
aggressive policies by initiating confrontation with two nuthereby, leverage their equity by incurring enormous debt.
clear powers, one of which held financial power over the US
When all the bubbles burst, the house of cards collapsed.
as Americas largest foreign creditor.

ECONOMIC ARMAGEDDON
The third crisis was the $1.5+ trillion annual federal budget deficits, which were too large to be financed without
the Federal Reserve buying the Treasurys new debt issues.
Known as monetizing debt, the Federal Reserve purchased
the Treasurys bills, notes, and bonds by creating a checking account, which the Treasury would then draw upon to
pay the governments bills. The outpouring of Treasury
debt raised concerns about the dollars exchange value
and role as reserve currency, and it raised fears of inflation.
Gold and silver prices rose as the dollar declined in foreign
exchange markets.
Any one of these crises was serious. All together, they
implied economic armageddon.
There was no obvious way out, but even if one could be
found, the government was focused elsewhere on wars.
In addition to ongoing military operations in Iraq,
Afghanistan, Pakistan, Yemen and Somalia, the US and
NATO began military operations against Libya on March
19, 2011. As with the existing wars, the real purpose of
the aggression against Libya was not acknowledged, but

The Trends Journal Summer 2011

Chinas oil investments in Angola and Nigeria were another target. To counter Chinas economic penetration of
Africa, the US created the American African Command in
the closing years of the first decade of the 21st century. Disturbed by Chinas rise, the US undertook to prevent China
from having independent sources of energy. The great
game that in the past has always led to war is being played
out once again.
September 11, 2001, provided Washington with a new
threat to replace the Soviet threat, which had expired in
1991. Despite the absence of the Soviet threat, the military/
security budget had been kept alive for a decade. September
11, 2001, injected rapid growth into the military/security budget. A decade later the budget stood at approximately $1.1
trillion annually, or approximately 70 percent of the federal
deficit which was crippling the dollar and threatening the US
Treasurys credit rating.
Focused on Middle Eastern wars, Washington was losing the war for the US economy.
As the expectation of economic recovery evaporated over
the course of 2011, the need for war became more imperative.
(See Antiwar.com, Sen. Graham Very Close to War.) n

35

EU Bailouts: Serfs Up
By Paul Craig Roberts

e dont know what rhetoric elites used in the


13th century, when peasants were uprooted
from the land that had provided their sustenance
for centuries, to disguise expropriation by fire and sword.
Eight centuries later with expropriation again underway, the
rhetoric is Orwellian. Today the peasants in Greece, Ireland,
and Spain are being expropriated by having their wages and
pensions cut, their taxes raised, their jobs abolished, their social services slashed, and their social infrastructure privatized
in the name of making democracy work, rescuing Greek finances, winning a bailout, saving the Euro, internal devaluation, free market reform, and avoiding contagion.
Economist Michael Hudson calls it financialized neofeudalism. Peoples are being enserfed and economies destroyed so that bankers dont have to suffer losses on their
casino gambling bets.
Not only is the process immoral, it is also illegal. The European Central Bank (ECB) and the International Monetary Fund
(IMF) are illegally supplying the funds to bailout the German,
French, and Dutch banks that hold the Greek governments
bonds. The treaties that created the European Union (EU) prohibit the ECB from bailing out EU member governments. The
IMF Articles of Agreement prevent the IMF from lending to
governments for the purpose of fiscal or budgetary support.
IMF loans are restricted to balance of payments loans when a
country lacks the foreign exchange reserves to cover a deficit
in its balance of payments. Greeces problem is not its balance
of payments.
Despite the legal clarity, the charters of both financial organizations are being ignored for no other reason than to absolve
bankers from having to pay for their own mistakes.
Except for the UK, which still retains its own currency, EU
members no longer have central banks that can extend credit
to the government by monetizing the governments debt. EU
countries have to rely on private banks to finance their deficits. Quantitative easing the purchase of the governments
debt by a central bank is not an option open to them, and
the ECB is not allowed to finance member countries deficits.
Despite the prohibition, the ECB is nevertheless lending money to governments in order to finance the bailouts of EU countries creditor banks.
Bankers bought more Greek debt than Greece can pay interest on or retire. Normally what happens in such a case is
that the debt is restructured and reduced to an amount that the
debtor is able to pay. This involves the holders of the bonds
taking a haircut and having to write down losses on their investments. However, the bankers now have too much power

36

for it to work this way.


In Greeces case, the banker-imposed solution is that the
ECB and IMF violate the laws under which they are supposed
to operate and lend enough money to Greece for Greece to repay the bankers with more borrowed money. Indeed, it is even
worse than that.
Obviously, if Greece cannot make its bonds good, Greece
cannot repay the loans from the ECB and IMF. For the scheme
to go forward, the Greek government has to be coerced into
selling to private interests that is, to the bankers the state
lottery, the countrys ports, its postal service, the water companies of municipalities, and a string of Greek islands. The banks,
or business interests funded with bank loans, expect to pick up
these privatized public assets for pennies on the dollar.

TAKEOVER
In addition, the Greek government has to free up tax revenues
with which to repay the loans by laying off public employees,
cutting their pensions, raising taxes, and slashing the remaining public services. All the money and income flows leave
Greece and go to foreign bankers, driving the Greek economy
deeper into recession and inability to pay.
Needless to say, the Greek population opposes the austerity that is mandated in order to receive what the New York Times
calls the prize of winning a bailout. The winner, of course, is
not Greece, but the German, Dutch, and French bankers. This is
why Greeks have been protesting in the streets for weeks, only
to find that their socialist government does not represent them.
The Greek government has aligned with the foreign bankers. On June 23, the Greek finance minister won the bailout
with a five-year austerity plan that lowers the minimum threshold for income tax to 8,000 euros a year ($11,200), increases the
tax on heating oil, and imposes a solidarity levy on income of
between 1 and 5 percent. Obviously, the poor are being made
to pay for the rich bankers mistakes.
According to the head of the ECB, Jean-Claude Trichet, the
next step in making democracy work is to remove the sovereignty of the Greek government. In a speech on June 2, Trichet
said that the task was to bring Europe beyond a strict concept
of nationhood and the traditional practice of protecting debtors. Whether a country could afford to pay its debts was no
longer a question of its budgetary condition if the country has
public domain that can be privatized.
Greece would have to be made to pay, said Trichet, or other EU member states would demand restructuring and writedowns of their excessive debts. In order to avoid a contagion
(Continued on page 39)

The Trends Journal Summer 2011

A MEGA-TREND-IN-WAITING

here was a new normal! It was not only a matter of downgraded expectations for income, jobs
and hobbled GDP resulting in a lower standard of
living. What federal, state and municipal governments had
formerly provided, they could no longer afford to provide
at previous levels.
Health care reform, with its obvious grave implications
for the future of America, was a hot button issue that dominated heated partisan political debate at the onset of Campaign 2012. But a no less crucial issue that was not part of
the debate at all, and that had even graver implications for
the future of America, was education.
Like public health care, public education was a budgetdraining, bureaucracy-heavy burden on the taxpayer. Even
when it makes its way onto the campaign trail, candidates
debate how to improve education, rather than acknowledge that the system itself is inadequate, obsolete, dilapidated and beyond repair.
Those forward-thinking, deep-pocketed and big-hearted businesses and individuals that want to give back
with the intention of bringing the United States (or any nation) back to prosperity, might consider taking a page from
the Andrew Carnegie book of philanthropy.
Understanding that it is also in their economic interest
to have a well educated society and that the more people
earn, the more they will spend, it presents an opportunity
for the private sector to practice a form of enlightened self
interest.

THE GREATER GOOD


Unappreciated and barely remembered was Carnegies
bold and noble gift. By building libraries throughout much
of the English-speaking world, Andrew Carnegie provided
the general public access to a world of knowledge otherwise reserved for the wealthy and the formally educated.
Unlike those soulless, bottom-line book repositories
built by contemporary municipalities that blight the neighborhood, the Carnegie libraries were architectural gems.
Providing thousands of jobs for highly skilled craftsmen,
each was unique, constructed in various styles (BeauxArts, Italian Renaissance, Baroque, Classical Revival, Spanish Colonial, Scottish Baronial). Not only was the intellect
stimulated by the wealth of available knowledge, the beauty of the surroundings enriched the soul.
With Carnegie as a viable model of what money can
buy, in a world filled with billionaires, oligarchs and oil
sheiks, opportunities exist to create a worthy 21st century

The Trends Journal Summer 2011

version of his vision. More libraries, no, but education in


many new forms, yes!
Today, the educational system, especially in America,
is in crisis. Everyone knows it and the facts confirm it. Although the US spends more per student than most of the
developed worlds nations, its high school graduation rate
is below the world average.
Not only is the entire system outmoded, inefficient and
dysfunctional, its also corrupt:
Systematic Cheating Is Found
in Atlantas School System
ATLANTA A state investigation released Tuesday showed rampant, systematic cheating on test
scores in this citys long-troubled public schools,
ending two years of increasing skepticism over remarkable improvements touted by school leaders.
The results of the investigation, made public
by Gov. Nathan Deal, showed that the cheating
occurred at 44 schools and involved at least 178
teachers and principals, almost half of whom have
confessed, the governor said.
A culture of fear, intimidation and retaliation
existed in the district, which led to a conspiracy of
silence, he said in a prepared statement.
Mayor Kasim Reed of Atlanta called the release of the investigation a dark day for the Atlanta public school system.
The cheating, he said, showed a complete failure of leadership that hurt thousands of children
who might have been promoted to the next grade
without meeting basic academic standards.
At the center of the cheating scandal is former
Superintendent Beverly L. Hall, who was named
the 2009 National Superintendent of the Year and
has been considered one of the nations best at
running large, urban districts. (NYT, 6 July 2011)
In a world where President Obama is a Nobel Peace Prize
recipient for perpetuating the Iraq War, ramping up the Afghan War, escalating the drone wars in Pakistan, Yemen
and Somalia and taking the nation to war against Libya, it
made perfect sense that the recipient of the 2009 National
Superintendent of the Year award would be at the center
of the cheating scandal.
While students cheating on tests is nothing new,
teachers and administrators rigging the scores and cook-

37

principled people and that dishonesty


was relatively low in education.

ing the books to keep funding flowing,


in order to protect their jobs and be
awarded bonuses, was an alarming
new national trend:

Whatsamatta U?

Anthony Freda / Dan Zollinger

The Trends
Research Institute has been providing
Under Pressure, Teachers
evidence for the breakdown of the entire
Tamper with Tests
educational system for over two decades.
It was a trend that could not be denied.
The staff of Normandy Crossing ElYet the government, teachers unions and
ementary School outside Houston
vested interests were still adamantly ineagerly awaited the results of state
sisting that the unfixable could be fixed.
achievement tests this spring. For
A Nation at Risk, No Child Left Bethe principal and assistant princihind, harebrained schemes executed
pal, high scores could buoy their
by Education Czars that squandered huncareers at a time when success is
Peace Prize
dreds of billions but left the nation more
increasingly measured by such
at risk than ever and a generation of children left behind.
tests. For fifth-grade math and science teachers, the
The basic problem was obvious: resistance to change. In
rewards were more tangible: a bonus of $2,850.
the private sector, market forces put outmoded systems out of
But when the results came back, some seemed
business. But government bureaucracies, education included,
too good to be true. Indeed, after an investigation by
will fight to perpetuate their existence long after theyve bethe Galena Park Independent School District, the princome irrelevant.
cipal, assistant principal and three teachers resigned
Back in 1990, Gerald Celente wrote in his book Trend TrackMay 24 in a scandal over test tampering.
ing, Our school system was designed to meet the needs of a
The district said the educators had distributed a
growing industrial society. It taught people how to read, write,
detailed study guide after stealing a look at the state
and do some arithmetic. More important, it taught them how
science test by tubing it squeezing a test booklet,
to follow instructions and be good employees. It didnt teach
without breaking its paper seal, to form an open tube
them how to think. It didnt teach them how to ask questions,
so that questions inside could be seen and used in the
how to analyze problems, or how to find solutions.
guide. The district invalidated students scores.
The solution is: New Millennium Education.
Of all the forms of academic cheating, none may
be as startling as educators tampering with childrens
standardized tests. But investigations in Georgia, IndiTrendpost: Of all the trends we forecast, New Millennium
ana, Massachusetts, Nevada, Virginia and elsewhere
Education ranks high as both a game changer and a money
this year have pointed to cheating by educators.
maker. Twenty-one years ago, the computer revolution was in
Educators feel that their schools reputation,
its infancy. In those days of dial-up, the digital age was still but
their livelihoods, their psychic meaning in life is at
a dream. Now that hi-tech has become an integral part of daily
stake, said Robert Schaeffer, public education direclife, it is curious that it has not already supplanted or drastically
tor for FairTest, a nonprofit group critical of standardre-shaped the entire educational system.
ized testing. That ends up pushing more and more of
The possibilities for new courseware and new systems for
them over the line.
teaching it are limitless. Just as online shopping has taken a
Not everyone agrees. Beverly L. Hall, who, as the
big chunk out of brick-and-mortar retail business, so, too, the
superintendent of the Atlanta Public Schools, has won
technology already exists for advanced, interactive, virtual realnational recognition for elevating test scores, said disity classrooms to take a big chunk out of expensive, high mainhonesty was relatively low in education. Teachers
tenance, bus-dependent public schools.
over all are principled people in terms of wanting to be
With an entire younger generation tech hard-wired and
sure what they teach is what students are learning,
ready for change, the only obstacles impeding hi-tech educashe said. (NYT, 10 June 2010)
tional advances are the entrenched agents of no change. Its
the executive-level salaried superintendants, administrators,
A year later, with Ms. Hall herself at the center of the cheattenured teachers and their unions who so adamantly oppose
ing scandal, and with the District of Columbia, Maryland, Calieven discussing any new educational model.
fornia, Florida, and Ohio added to the test tampering roster,
On the infrequent occasions when the possibilities of an
it became hard to make the case that Teachers over all are
alternative system are raised, they are immediately attacked,

38

The Trends Journal Summer 2011

dismissed or filibustered. Nevertheless, since necessity is the


mother of invention (and skyrocketing school taxes are a major
issue to a large demographic segment), despite the roadblocks
erected by credentialed Commissars, as the millennium moves
forward nothing will be able to stifle the creation of a new educational model a Renaissance of individuality, creativity, independent thinking and dissent.

dants, to principals, to teachers to bored and refractory students forced to suffer through a curriculum that starves creativity and stifles individual thought, the system does not work.
Just as no amount of retrofitting an old typewriter can produce
a computer, no amount of reconfiguration of an outmoded system can create New Millennium Education.

Publishers Note: Whether online or off, not everyone is suitTrendpost: Whether or not still merited, America retains its
reputation for Yankee Ingenuity. New Millennium Education
provides an open-book opportunity to prove that America has
not lost the spirit of innovation that made it what it was. Unlike
health care, an area where other countries operate more costefficient and effective systems to refer to as models for reform,
New Millennium Education does not yet exist as a government
funded enterprise.
In 2011, educational reform at its best and most inventive
a mix of online courses and charter schools was little more
than a remodeling of the system in place. To recoin a phrase,
its the system, stupid. From Education Czars to superinten-

WASHINGTONS RESPONSE
(Continued from page 36 )
of write-downs, which would be at the expense of creditor
banks, the UCB was justified in disregarding its charter and
providing the forbidden loans to Greece in the context of a
strong adjustment program. However, if the Greek government did not stick to the mandates of the adjustment program
and sell off its public domain, a second stage of intervention would come into play. European Union authorities would
exercise an authoritative say in the formation of the countrys economic policies.
EU interdependence, Trichet said, means that countries
de facto do not have complete internal authority. The second
stage would make this de jure. European Union authorities
would simply take over Greeces fiscal affairs and decide its
budget. Sovereignty and representative government would be
abrogated, and EU member states would come under the rule
of private bankers.
Much the same thing has happened in the US. The Wall
Street executives who control the Treasury and financial regulatory agencies used public money and the Federal Reserves
balance sheet to bail out the casino bets of the irresponsible
financial institutions that they formerly headed, while millions
of taxpayers lost their homes, jobs and medical insurance. In
the US, Direct Democracy appears to be the only recourse to
rule by the private bankers.
But the Greek crisis has not yet played out, despite the
decision of the Greek government to submit, when its best option was simply to default and to leave the EU. Germans have

The Trends Journal Summer 2011

ed for academic studies with an eye toward college. For those


not college bound, the public system has provided a technical/vocational school option that requires extensive hands-on
training that could not be replaced by online learning.
Yet, in 2011, with less than a third of 25 to 29-year-olds
holding a bachelors degree or higher, the Obama administration made it a priority to increase funding for raising academic
standards (aimed at improving the college graduation rate) by
11 percent, while cutting back on already under-funded career
and technical education facilities and programs.
So what were the options open to that majority who cant
(Continued on next page)

been suspicious of monetary union from the start, because it


removes control over inflation from their hands. As the bailouts
of EU member countries by the ECB breach multiple clauses
of EU treaty law, the bailouts breach Germanys supreme and
sovereign Basic Law and have ended up in the German Constitutional Court, which must rule on their constitutionality.
The court began hearing the cases on July 5, and a ruling
could be months away. The court will be pressured to follow a
higher law than the one on the books and to accept that bailing out bankers is more important than German law. If that is
the result, then Germanys supreme and sovereign Basic Law
will be overthrown along with the ECB and IMF charters. The
supremacy of the bankers will be total.
On the other hand, if the court rules against the bailout, the
resulting fireworks could result in defaults and debtor countries
leaving the EU.
Another alternative is that the Greek and Spanish peoples
will overthrow their non-representative governments and repudiate the debts. This alternative had been open to Ireland, but
having lost their characteristic pugnacity, the Irish have submitted to rule by bankers.
So far only the people of Iceland, via the referendums of
Direct Democracy, have managed to force their government to
defy the bankers. n
About the author: Former associate editor of the Wall Street Journal and columnist for Business Week, Dr. Paul Craig Roberts served
on personal and committee staffs in the House and Senate, and
served as Assistant Secretary of the Treasury for Economic Policy
during the Reagan Administration.

39

ing trades, many studies attested to the value of a vocational


education: higher graduation rates, improved standardized
testing scores, and keeping in school those students most at
risk of being left behind.
In other countries, particularly Europe, vocational programs have long been viable choices of a significant percentage of teenagers. Cutting funding for vocational programs with
high job market potential, while increasing funding for academic-oriented careers in a shrinking job market, would have
been front page news and ridiculed as the height of government folly in any advanced nation.
In America, it was government as usual. n

A MEGATREND
(Continued from page 39 )
go to, didnt want to go to, or couldnt finish college? After
four years of conventional high school, a student who couldnt
make the academic grade left school having learned next to
nothing, with no marketable skills. In 2011, however, those who
had graduated from career/technical/vocational high schools
left with marketable, hands-on skills and practical knowledge,
with more possibilities than many college grads with degrees
in worthlessness and mountains of debt.
Apart from their obvious role in providing young people
with skill sets for careers in reliable, solidly paying and satisfy-

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