No one has done more to ensure the ultimate demise of the American
middle class than Alan Greenspan.
In the stately pantheon of class-warriors, Greenspan's spectral-image
looms larger than any other; the foremost proponent of hardnosed social-Darwinism
and exclusionary economics. Even his carpet-bagging consort, G.W. Bush, pales
In just under 5 years the Fed-master has engineered a coup so vast
and devastating that $1.3 trillion of borrowed revenue has been adroitly shifted
from the beleaguered middle class to the privileged 1% that Greenspan represents.
It is the biggest heist in the history of the planet, and it was designed and
executed within the leather-bound citadel of the Federal Reserve.
The partnership of Bush and Greenspan has been the moral equivalent of the
sacking of Rome; maxing out the nation's credit card until every last farthing
has been drained from the public till. Greenspan's tenure has left America bobbing
atop an ocean of red ink ready to capsize with the first gust of recession.
Greenspan was a key player in facilitating the Iraq war, pushing interest rates
to their lowest level 6 months before the war to keep the economy on life-support
while the propaganda campaign burst from the front pages of the New York Times
and the Washington Post.
It worked like a charm.
The American people were hoodwinked by White House fabrications and anesthetized
by cheap money. They began a borrowing frenzy that sluiced zillions into a hyper-inflated
housing market that is timed to detonate just as wistful Alan picks up his gold
watch and heads for the exit.
Good thinking, Alan.
Now, after years of mismanagement, Greenspan is offering caveats about the
chaos he's leaving behind. In his typical gibberish the chairman has warned
of "painful" adjustments if deficits are not brought under control.
"Painful" or life threatening?
It was Greenspan, the budget-busting tote for the patrician-class, who defended
the lavish Bush tax cuts that put the country on the fast-track to doomsday.
Now, he's joined Grover Norquist and the "privatization-kooks" who
want to dismantle the tattered ruins of the social safety net and christen the
new epoch of predatory capitalism. Alan is a big supporter of "survival
of the fittest" economics; the notion that people at the bottom of the
societal food-chain deserve to be there so their Nietzschean overlords, like
the Fed-chair, can rule supreme.
As Greenspan applies the last few turns of the screw (raising interest rates
twice more before he leaves) we're bound to see the credit-shackled middle class
begin an orderly march towards the nearest cliff where they will quickly disappear
lemming-like into the sea.
Seriously, the American people have no idea of the economic firestorm that's
just around the corner.
The economy is underwritten by $8 trillion of debt, requiring massive $2 billion
infusions of foreign capital EVERY DAY. As former Fed-chief Volker noted, "It
can't go one for ever."
No it can't. Besides, it's all part of a neoliberal plan that has been successfully
executed throughout the third world; plunging the host nation into insurmountable
debt with the help of crooked regime (Bush and Co.) and then pulling the rug
out from under the shocked public. The massive and calculated deficits are intended
to create a crisis of insolvency, resulting in the same type of "shock
therapy" and "structural readjustment" programs the IMF applies
to bankrupt nations around the world. Greenspan has moved the country closer
to his goal of dismantling popular social programs so the captains of industry
can privatize the public's assets.
So, how did Greenspan pull it off?
How did he keep the somnolent American public from noticing the widening deficits
and the alarming transfer of wealth from one class to another?
The answer is; low interest rates, the toxic elixir that can incapacitate an
entire nation, leaving its people drowsy and indifferent to imminent disaster.
Recently, Greenspan has begun warning of the difficulties ahead, cautioning
that our problems will only be "compounded by a protectionist reversal
of globalization". In other words, prepare yourself to compete with the
lowest paid worker in Canton province. The hemorrhaging of high-paying jobs
that sustain the middle class doesn't bother the Fed-chief. Greenspan has the
same irksome sense of equity as his ideological-twin at New York Times, Tom
Friedman. Friedman has been preaching the gospel of "free market"
capitalism for years. Neither one tries to conceal their contempt for organized
labor or the redistribution of profits. Friedman's Brigadoon is identical to
Greenspan's; a land of milk and honey where 99% of the denizens live in abject
poverty scraping to get by and where the not-so-invisible hand is savagely affixed
to the throat of a permanent underclass.
Welcome to Greenspan's nirvana.
Greenspan also warned that the budget "will substantially worsen in the
coming years unless major deficit-reducing measures are taken."
"Deficit-reducing measures"? You mean, like rolling back the Bush
Hell no; class-warrior Alan said "he did not believe that major increases
in taxes were the solution".
Of course, not. Why should the fat-cats in the silk suits and Ferraris have
to pay their share? After all, we can just raise the payroll tax again (Greenspan's
earlier plan) and take another pound of flesh from the middle class? No one
Baby boomers retirement?
Not to worry; Greenspan suggests we extend the age of retirement to some imaginary
date when the wealthy will stop fleecing the poor and the national ledger will
Cradle to grave; Americans are being prepared for the slaughter. The chances
for upward mobility or even subsistent living are being eclipsed by the day.
The yolk that one shoulders at birth will follow him until his death.
Greenspan's racketeers have absconded with the nation's bounty behind a smokescreen
of low interest rates. They lulled us to sleep with soothing words of "no-interest
loans", no down payments, and a real estate windfall for anyone bold enough
to sign on the dotted line.
Now, the grim reality has begun to set in. Interest rates are rising, the dollar
is reeling, energy costs are skyrocketing, consumer confidence is plummeting,
and gold is shooting through the roof. When China and Japan decide to jettison
their worthless US Savings Bonds; Greenspan's mighty fortress will collapse
in a heap.
The American people are crazy to think that a privately owned institution like
the Federal Reserve will ever function in the public interest. The Fed operates
behind an iron-curtain of secrecy to protect the interests of its primary constituents;
the parasite class. It was authorized under executive order by Woodrow Wilson
who was coerced into putting the country's future into the hands of its central
bankers so he could finance World War 1. Bankers have always understood that
the one who holds the purse-strings calls the shots. This explains what Thomas
Jefferson meant when he said, "Banking establishments are more dangerous
than standing armies."
While Greenspan teeters off to retirement, he can be confident that his trap
has already sprung. The country is dead-broke and will be forced to comply with
the demands of its creditors. The impending "austerity measures" will
be used to reshape the fabric of American life; a complete reordering of society
to meet the standards of a modern capitalist utopia; Greenspan's paradise, the
United States of Destitution.
Mike Whitney lives in Washington state. He can be reached