Why TSA and DHS Agents Are Such Stupid Jerks! – reposted 5/18/2015

Why TSA and DHS Agents Are Such Stupid Jerks!

by John-Henry Hill, M.D.

Written: July 4, 2013

Edited and photos added: July 6, 2013

Revised: May 18, 2015


“We have people in government who should not be allowed to play with matches.” — Will Rogers

 As I sit in the airport today waiting to board my flight, our nation is celebrating the signing of the Declaration of Independence on July 4, 1776. After my routine opt-out at the TSA’s scanning “barbecue” machine, I was “patted down” – an unlawful “search and seizure” and, if performed by anyone else, would be considered legally a “sexual assault and battery”. My carry-on bag was x-rayed and searched; yet another unlawful “search and seizure”. As we are all aware, these inspections are carried out by TSA agents – officially assigned the fancy title of “Transportation Security Officers” or TSOs; unofficially are known as SOBs by the traveling public. These TSA agents work for the U.S. Transportation Security Agency (TSA) within the U.S. Department of Homeland Security (DHS).


A few days after the World Trade Center (WTC) disaster on 9/11/2001, the Patriot Act created Department of Homeland Security (DHS) and its sub-agency called the Transportation Security Agency (TSA).  The U.S. government’s problem then became HOW to fill the tens of thousands of news jobs available at these two new agencies. But WHO would want such a low-level job as a TSA inspector or DHS agent? The economy, despite a temporary downturn following 9-11, quickly rebounded. Most qualified job seekers easily found high-paying jobs in the professions of their choice. If you wanted a job, you could easily find one – and for above-average wages not seen for a generation! The only pools of potential workers available to the TSA and DHS were the unskilled, the poorly-educated and the low-paid individuals seeking a better wage. And, for the most part, that is precisely who was hired for these low-level jobs as inspection agents for the TSA and DHS.

It should be noted that TSA agents are NOT the police or law-enforcement officers or peace officers. Similarly, the DHS Border Patrol agents manning the “internal U.S. checkpoints” – now permitted on major highways within 100 air-miles of U.S. international borders – are NOT the police or law-enforcement officers. In fact, the TSA and Border Patrol agents are not legally considered to be “law enforcement” personnel at all, since they have NO (for TSA) or extremely limited (for Border Patrol) powers of arrest within the U.S. When within the U.S. these TSA and Border Patrol agents, at most, have the legal authority to detain a traveler while a REAL state or local police officer, or other REAL law enforcement officer, is summoned to the scene. The TSA agents are INSPECTORS only. I repeat, they are NOT law enforcement officers. Consequently, their 2-week training period does not allow them to learn much about the laws, statutes and regulations governing their behavior at work. In America the actual enforcers of legislated “statutory law” and administrative regulations (which are, in fact, only POLICY) are the federal, state and local police, regardless of the titles assigned to them – they all possess the power to arrest people, subject to limited jurisdictions. The true enforcers of true LAW (at least in Britain, America, Australia and most other former British colonies) are called peace officerswho job is to maintain the peace. In Great Britain such peace officers are called “constables”; in America they are called “sheriffs” (gaining office through public elections) and “justices of the peace”. When acting as Peace Officers they enforce the Common Law ONLY; and never civil law (as legislated statutes and administrative regulations). As soon as they attempt to enforce civil law (statutes and regulations), they cease to be “peace officers” and become police officers who, by definition, enforce POLICY, not true LAW which we call the Common Law.

(see YouTube VIDEOS listed below under SOURCES as Item # 2 at end of article)


A brief aside for the “unenlightened” reader which, sad to say, includes almost ALL attorneys and rookie district court judges!:

LAW and STATUTES (often called “statutory law”) are NOT the same by a long shot! True LAW refers to the unwritten Common Law (which determines what is “lawful” and “unlawful”) was developed over the centuries by juries and tribunals in Common Law courts in Britain, America and most former British colonies. STATUTES and ORDINANCES refer to legislated POLICIES (which determine what is “legal” or “illegal”, which are themselves derived from the word “legislated”) or rules passed by a legislature or legislature-like political body on the local level (such as a city council or a town’s board-of-selectmen). Regulations are simply detailed rules written by unelected, administrative government personnel to implement the legislated statutes and ordinances. These legislated POLICIES (a statute or a collection of statutes called “codes”) and administrative regulations are enforced by the POLICE – that is, “police” enforce legislated and administrative “policy”; they do NOT enforce true LAW, which is the unwritten Common Law. Common Law consists ONLY of unwritten Common Law established through numerous Common Law court decisions accumulated over the centuries in Britain and its former colonies, including America. Make no mistake: the unwritten Common Law remains today the highest “law of the land” both in Britain and America. Further, in America the Common Law is superior in authority to the U.S. Constitution and all U.S. Supreme Court decisions – a fact the U.S. Supreme Court has repeatedly affirmed in their written opinions to this very day!

Why is the distinction between Common Law (true LAW) and statutory law (i.e., legislated POLICY and administrative REGULATIONS) so extremely important? Because Common Law must be followed by everyone and does NOT require your individual consent. It is the LAW of your society. Conversely, statutes and regulations require that you, as an individual man or woman, give your CONSENT to that statutory law (legislated policy) BEFORE you fall under its jurisdiction and under the authority of the police and the legislative-administrative courts. That is what is meant by the phrase “consent of the governed”: You must give your individual consent BEFORE you are obligated to follow legislated statutes or administrative regulations. You are required to follow Common Law, which is based on God’s law of “do no harm”. However you, as an individual man or woman, must CONSENT to a statute or regulation before you may be subject to any penalties under that statute and/or regulation as adjudged by a legislated-administrative legislated court. Most state and federal appeals and supreme court “judges” are, in fact, NOT judges at all. They are called “justices”; not “judges”. Justices in the state and federal appeals and supreme courts are required to act FIRST under Common Law – and, have no doubt, they know this fact of law. Only after the person has waived his Common Law rights in the inferior courts (lower-level courts such as district courts) may the higher (superior) courts invoke statutes and regulations. And these justices most certainly know the enormous difference between an “unlawful” act and an “illegal” act. That is precisely why they are properly called “justices” – they are required to administer justice under the Common Law FIRST. The “judges” of the lower state and federal courts (most often called “district courts”, “traffic courts”, etc.) are NOT properly called “justices” – they do NOT administer “justice” under the Common Law. Instead, they most often enforce legislated policy. But be warned: do NOT count on attorneys and lower-level judges knowing these facts, much less “police officers” by any titles assigned to them by their governments at all levels – local, state or federal!


OK. True LAW is the “Common Law” only. Statutes, regulations, ordinances and codes are legislated POLICY; not true LAW. But WHY should it matter to the average person? What PRACTICAL significance can this distinction make in anyone’s life?

If you violate a POLICY created by a legislated statute, you have committed an “illegal” act – that is, you acted contrary to legislated policy – and have NOT necessarily committed an “unlawful” act (properly a “crime”) by violating Common Law. For our first example, by applying for and accepting a state-issued “driver’s license”, you have actually signed a CONTRACT. If you are then stop by the “police” for “speeding” (exceeding the posted “speed limit” which is an “illegal” act) while “driving” in a “motor vehicle” on a public road, you have violated public policy (statutes and regulations) under that contract. If you knowingly or unknowingly CONSENT to these statutes or regulations, either by word or deed, then you fall under the jurisdiction of their statutory administrative, non-judicial courts and/or their administrative agencies. On the other hand, while traveling in your automobile on a public road at a speed exceeding their posted speed limit, you have NOT committed an “unlawful act” under Common Law, UNLESS you caused injury or harm to another other human being and/or his property (which is a true “crime” in Common Law). Under Common Law, you have an inherent and unalienable right to travel. (An “Unalienable” right means a natural, inherent right that you can never forfeit or involuntarily have taken from you.) Further, under Common Law, you may be jailed or fined ONLY after being convicted of a crime by a 12-person jury operating in a true Common Law court-of-record. However, it is possible to WAIVE your natural rights under Common Law, after which you fall under the jurisdiction of statutes and regulations – deceptively called “statutory law”. The state is merely enforcing a contract to which you consented.

In our second example, if you rob another man’s house, you will have broken BOTH the Common Law and so-called “statutory law” (legislated policy). Under Common Law jurisdiction, if a 12-person jury finds you, the “accused”, guilty in a true judicial Common Law court-of-record, then the usual penalty is DEATH. (The only alternative finding by a jury is “innocent” – never “not guilty.) If you retain your rights under Common Law, you are assuming full criminal and commercial liability for your actions. However, the government offers you an alternative. If you waive your rights under Common Law and consent to the jurisdiction of the state’s legislated policies under STATUTES, then by contract with the state, the state grants you the “benefits and privileges” of “limited commercial liability”. The state assumes “full commercial liability” for your actions and reduces your criminal liability. In return, by contract and consent, you are required to follow their RULES enforced by their police and administrative courts, in which you are called the “defendant” (not the “accused”). Consequently, now you must pay fines for those speeding tickets and other “illegal” actions, even though you have harmed or injured no other man or woman. However, with the bitter comes the sweet! If you stole someone’s property or physically injured someone, you may choose to consent to the state’s jurisdiction under its “statutory law” or policy. By consenting to this policy, the state grants you the “benefit and privilege” of “limited commercial liability” and reduced criminal liability for your actions. As a result, your punishment will be limited by contract to a fine and/or brief imprisonment as prescribed by their legislated rules (statutes and regulations) – NOT death, as per Common Law. Under which system you operate in any given situation is YOUR choice.

When most people appear in a so-called “court-of-law”, in most instances they are appearing in a non-judicial, legislative-administrative court operating under commercial-contract law; and NOT a true judicial “court of record” which is required to operate ONLY under the unwritten Common Law – NO exceptions! Such a Common Law “court of record” out-ranks absolutely ALL other courts – even the U.S. Supreme Court (which may act either as a true judicial court or a legislated-administrative court under contract-commercial court). In numerous court rulings the U.S. Supreme Court has affirmed the superior and absolute authority of true Common Law court-of-record (which is the ONLY true “superior court”), stating that verdicts and rulings in a Common Law “court of record” can NOT be challenged by ANY other court, including state and federal district courts, state and federal appeals courts, state supreme courts, or even the U.S. Supreme Court and all international courts. Wow!

“The judgment of a court of record [a court operating under the Common Law only; NO statutes allowed] whose jurisdiction is final, is as conclusive on all the world as the judgment of this court [the U.S. Supreme Court] would be. It is as conclusive on this court [the U.S. Supreme Court] as it is on other courts. It puts an end to inquiry concerning the fact, by deciding it.” U.S. Supreme Court decision in Ex parte Watkins, 3 Pet., at 202-203. [cited by SCHNECKLOTH v. BUSTAMONTE, 412 U.S. 218, 255 (1973)]

But HOW do you know if you are operating in a legislative-administrative court and not in a true judicial court, which by definition is required to be a true Common Law court-of-record? Quite easily, If the judge issues ANY decisions or rulings about proper procedure, issues warnings or rulings about “contempt of court”, or issues decisions regarding guilt or innocence; or threatens to fine or imprison you at ANY time, then you are DEFINITELY in a non-judicial legislative-administrative “court of no record”, regardless of whether or not a transcript (call the “minutes”) is kept of the proceedings. In a true judicial Common Law court-of-record, the judge can act ONLY as an administrator of court procedures, such as scheduling hearings, collecting documents and maintaining reasonable order. The judge can NOT ever function as the TRIBUNAL. Under Common Law the TRIBUNAL is the SOLE lawful entity that can decide what are the LAW and the FACTS of the case. And ONLY the TRIBUNAL (as either the person acting as the plaintiff OR a 12 jury of no fewer than12 people) can make any decision on the innocence or guilt of an accused person, or impose any sentence upon the accused person found guilty, whether the punishment is a fine and/or imprisonment. To repeat myself, in a true judicial Common Law court-of-record a court judge can NEVER act as the Tribunal which is the ONLY lawful entity that can decide both the LAW and FACTS of the case and can impose a sentence upon those found guilty.

Further, ONLY a Tribunal can issue a judgment of “contempt of court” in a true Common Law court-of-record. Consequently, a judge in a typical court (a non-judicial, administrative court-of-no-record) may “legally” issue a “contempt of court” ruling against a person ONLY if that person has consented to the administrative authority of that court. If that person has NOT consented to the court’s jurisdiction, that same “contempt-of-court” is “legal”, but “unlawful” under true LAW (Common Law). If this explanation is too confusing, you can be absolutely certain that any court you have ever observed on TV or real-life was NOT been a true judicial Common Law court-of-record. A lower-level judge will almost NEVER allow it. In fact, the judge may be unaware of the different types of courts! Instead the judge will presume (under implied consent and/or by your words or actions demonstrating any adherence to his/her administrative court rules) that you have WAIVED your Common Law right to 12-person jury trial before a true judicial Common Law court-of-record, UNLESS you demand it over and over and over again!!! And under the unwritten Common Law, the judge will be correct: an ancient maxim of unwritten Common Law states that “A statement or presumption NOT rebutted before or during a court appearance becomes a fact of law in that particular case. As an ancient Roman maxim of law proclaimed, “He, who would be deceived, let him.”; or in modern English, “If you do NOT know the law and consequently waive your rights, that is YOUR fault! The court is under NO obligation to teach you.”

When in court, if you stand when instructed by the court when the judge enters the courtroom; or pass through the courtroom’s railing to the prosecution and defense tables; or plead either “guilty”, “not guilty” or “nolo contendre” (“no contest”) at arraignment, hearing or trial; or do NOT object to ALL rules, regulations, orders and decisions by the judge (even those favorable to you!); or if you remain silent and do not expressly object to EACH and EVERY presumption made the prosecution and the judge, then the judge will make a “presumption of fact in law” that you have WAIVED all your natural rights under Common Law, agree with everything the prosecutor and judge have said, and have CONSENTED to the jurisdiction of the judge’s legislated, non-judicial administrative court operating under legislated statutes and regulations. That is why you can be fined and/or imprisoned in a legislated, non-judicial administrative court without the benefit of a 12-person trial by jury. Knowingly or unknowingly, by either words or deeds, by actions or non-actions, you have waived all of your rights under Common Law. Silence is NOT golden – it can be fatal! Now, back to our narrative.


The TSA and HHS agents in airports, in train and bus stations, and at sports stadiums evidently know little to nothing about our unalienable, individual rights under Common Law and guaranteed (NOT granted) by our Constitution. If you have ever spoken with a TSA or DHS agent about the various amendments to the Constitution, federal statutes, the LAW defined as the Common Law, OR relevant U.S. Supreme Court decisions (especially regarding searches and seizures or the right to remain silent when questioned), you may have concluded that the ONE word that best describes these agents is STUPID. Sorry if I offend anyone, but facts are facts. The truth remains the truth, unaltered by opinion or beliefs.

The question then arises, Just HOW in the world did such ignorant, uninformed, ill-mannered, poorly-educated, rude, poorly-trained, obnoxious and power-hungry people (that is, STUPID people!) ever become employees of the federal government with responsibility for the safety of America’s transportation system? For the answer we need to back in history to 1997.

To be generous to the TSA folks, I will cite primarily the mainstream media news organization most sympathetic to BIG GOVERNMENT: namely CNN – formerly known to most Americans as “Cable Network News” or, alternately, the “Clinton Network News”.

We should recall the Asian financial crisis triggered in Thailand in July 1997, which rapidly spread to neighboring Asian countries such as the Philippines, Malaysia and Indonesia. By the fall of 1997 this crisis extended to Hong Kong and China and even South Korea. Brazil and Russia followed in 1998, resulting in what was described as a “financial and economic meltdown”. International stock markets crashed to record lows and the once-ballyhooed DOT-COM internet web site companies, symbols of the new “service economy”, disappeared as prairie grass in a wild-fire. Now know as the “Crash of 1998”, this bursting of the so-called “Dot.com Bubble” and its subsequent catastrophic effects on the global financial markets obliterated the wealth of hundreds of millions of people throughout the world. But at valuable lesson was learned – at least by some of us – about financial “bubbles” created by excessive credit and money-printing. Luckily for most Americans and others world-wide, unemployment did not increase. To the contrary, by the fall of 2000 employment statistics steadily improved, with unemployment rates falling to lows of about 4% (official rate from the U.S. government) or 11% (John William’s ShadowStats.com). (see the graph immediately below re: Unemployment rate) The government’s figures on unemployment reached near-historic lows. The message to people and to the stock markets was clear: If you wanted a job, you could easily find one – and for above-average wages not seen for a generation!


Source: http://www.shadowstats.com/alternate_data/unemployment-charts

According to the U.S. government, the private Federal Reserve banks and CNN, everything was great in America and around the world! There were a few high-profile critics of Federal Reserve and U.S. government monetary and fiscal policies, including Joseph Stiglitz, the World Bank’s chief economist. In late 1998 Stiglitz discussed the world’s economic outlook on “The Moneyline News Hour with Lou Dobbs” in which he was interviewed by Moneyline anchor Jan Hopkins. Carefully parsing his words, Stiglitz stated, “If the current situation is managed well, which means if the United States economy remains strong, if Europe does the right thing and its economy remains strong — remember, these are very large fraction of the global economy — there won’t be a recession. The precariousness comes from the fact that there are real sources of weakness… A second important downside risk is the paralysis of global capital markets.” Stiglitz then proceeded to predict that a deep recession was extremely likely, if not inevitable.

Observing the improving economy and low unemployment Federal Reserve chairman Alan Greenspan panicked. Greenspan tightened credit by increasing interest rates and decreasing the money supply. Shortly thereafter, the U.S. economy began to slow down and unemployment began to slowly increase. In response, Alan Greenspan and the Federal Reserve panicked again – they now loosened credit and increased the money supply. Over a three-month period of time – from December 2000 to March 2001 – the Federal Funds Rate (FFR) climbed dramatically from 5.50 to 6.50; then quickly plummeted from the high of 6.5% in March 2001 to a startling 3.75% in June 2001 – sometimes called “putting on the brakes”. To make matters worse, the U.S. government and the private Federal Reserve banks issued numerous, conflicting official reports on the economy. As CNN wrote, “Still, some analysts noted that the government revised its reading for July to a rise of 13,000 jobs, from a previous estimated drop of 42,000. And the sharp drop in wholesale inventories could eventually help pave the way for a pickup in production if companies start to restock shelves.” Unfortunately for the American people, the private Federal Reserve Bank has a very poor “driving” record when it comes to the economy. Instead of gradually increasing and decreasing interest rates, the Federal Reserve prefers to alternately “slam on the brakes” and then “release the brakes” completely! – that is, rapidly easing credit and increasing the money supply, then quickly tightening credit and decreasing the money supply.


Federal Reserve System: Federal Funds Interest Rates for 1st & 2nd Qtrs 2001

Source: http://money.cnn.com/2001/09/07/economy/economy


Source: http://www.shadowstats.com/alternate_data/money-supply-charts

The outcomes of the Federal Reserve’s actions were predictable to everyone with any common sense – everyone EXCEPT the private Federal Reserve bankers, the main-stream corporate media and government officials in Washington, D.C.: by August 2001 the unemployment rate was the highest since a 4.9 percent reading in September 1997.

However, by late summer and early fall of 2001 CNN cited official reports released by the Commerce Department’s Bureau of Labor Statistics (the U.S. agency tasked with calculating the government’s official rates of unemployment) in which CNN quoted the ever-optimistic (or, should I say, “ever-opportunistic”?) government spokespersons and mainstream, non-Austrian school economists stating that the American economy in the fall of 2001 was doing just fine, than you very much!

A CNN article on the web site www.Money.CNN.com dated September 7, 2001 titled “U.S. Unemployment Jumps: Rate hits 4.9%, highest in four years, as payrolls sink 113,000”, unemployment had increased slightly. Despite the August 2001 unemployment figures, most government officials and Keynesian economists considered this unemployment rate as normal and they continued to describe the American economy as extremely good. Ironically, John Maynard Keynes, for whom these economic theories are named, was NOT an economist and possessed no formal training in economics.

CNN stated, “The unemployment rate was the highest since a 4.9 percent reading in September 1997.” The CNN article continued: Federal Reserve Chairman Alan Greenspan and the Federal Reserve “the FED had cut its target for short-term rates seven times this year in a bid to keep consumers spending and prevent the slowdown from becoming a recession.” Some main-stream economists and the Federal Reserve were primarily concerned that consumers would reduce their spending on discretionary products and services – meaning services and products that they did NOT really need. Wrote CNN: “Federal Reserve Chairman Alan Greenspan and other economists worry that consumers, whose spending has helped keep the economy afloat, though barely, will cut back on purchases if they fear for their jobs. Consumer spending fuels two-thirds of the economy.”

CNN quoted Bruce Steinberg, chief economist at Merrill Lynch, “The increase in the unemployment rate, while very large, is really a catch-up, as the rate had been stable for four months,” said Steinberg. “This brings the unemployment rate to where we believe it should be at this point.” CNN continued, “The Fed [the private Federal Reserve Bank] has cut its target for short-term rates [FFR or Federal Funds Rate] seven times this year in a bid to keep consumers spending and prevent the slowdown from becoming a recession.” The reader may recall that the investment bank of Merrill Lynch received no bail-out in 2008 from Hank Paulson’s Treasury Department. One of the few banks NOT considered “too big to fail”, Merrill Lynch soon collapsed and was absorbed by the other remaining investment banks at taxpayers’ expense.

Just FOUR days later on 9-11 came the World Trade Center disaster with the total collapse of Buildings 1 and 2 (the Twin Towers) and Building 7 (the Solomon Brothers building) in New York City. Soon after the Congress passed and President Bush signed into statutory law the infamous “Patriot Act” (written by Vice-President Dick Cheney long before the 9/11/2001 WTC disaster!) bringing into existence the Department of Homeland Security (DHS) and its sub-agency called the Transportation Security Agency (TSA).


The primary concerns of newly-created DHS and TSA were how to full the tens of thousands of news jobs available. But WHO would want such a low-level job as a TSA inspector or DHS agent? Despite the immediate after-shock of 9-11, the stock exchanges had recovered and the American economy appeared to be functioning very smoothly. Indeed, despite the slight increase in unemployment – about 1% regardless of the measures techniques used (see first unemployment graph above), the economy appeared to be humming along very nicely. Earlier in 1999 the Glass-Steagall Act was repealed, henceforth allowing banks to merge with insurance companies and investment houses. From 2002 to 2007, spurred by the Federal Reserve’s low interest rates and implementation of the Dodd-Frank Act, the American economy prospered – at least on paper! Further fuel was added to the economic bonfire by Federal Reserve Alan Greenspan by his explosive increases in the real money supply and credit. In addition, Greenspan lobbied for the easing of federal regulations regarding the purchase of housing, de-regulation of the major private Wall Street investment banks; and new bank policies for low to no down-payments on home-purchases with variable-rate loans, whose interest rates and therefore monthly payments “ballooned” over time. Further future economic damage was created through the urging of politicians, bankers and realtors that all Americans should “reach for the American dream” of home ownership regardless of the buyer’s long-term ability to pay. Finally, the major investment banks on Wall Street and abroad (who curiously also own the private Federal Reserve banks!) created and sold massive numbers of financial instruments backed by questionable future mortgage payments backed only by “sub-prime loans” to unqualified buyers. These exchange-traded financial instruments were hypothecated and re-hypothecated ad infinitum, thereby creating financial obligations unknown in history. The “housing bubble” was created – only most people did not yet know it! Or, more correctly, people chose not to see it! The public was repeatedly told by the new Chairman of the Federal Reserve, Bernard Bernanke that he foresaw absolutely NO problems ahead regarding home mortgages and mortgage-based securities affectionately called “derivatives”. Boy! Do these banksters have a way with words or what!

“I believe that banking institutions are more dangerous to our liberties than standing armies . . . If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] . . . will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered . . . The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”Thomas Jefferson (The Debate Over The Recharter Of The Bank Bill in1809)

“I have never had but one opinion concerning BANKING. They [banks] are like party spirit, the delusion of the many for the interest of a few.”John Adams in letter to John Taylor of Caroline; Quincy, Massachusetts, March 12, 1819 as cited in “The Life and Works of John Adams”, 10 volumes, (Charles Francis Adams, Editor); Boston, 1850-1856, X, Page 375

After all, declared Federal Reserve Chairman Ben Bernanke in Congressional hearings, in the history of modern America the prices of housing had never declined! Everyone “KNEW” that housing prices would continue to rise!!! More homes were sold to unqualified buyers, followed by ever-increasing amounts of the “derivatives” backed solely by dubious home-loans. Of course, everyone on Wall Street knew the government would “pick up the tab” should the banks encounter trouble. Besides, high-paying jobs were plentiful in every profession for qualified applicants; and money and easy credit poured forth. Happy Days were here again! “Don’t worry, be HAPPY” from a popular song became the slogan of the decade! The average American consumer, perceiving the open “gate to the land of plenty”, spent and then spent some more – on credit, of course! The American people were best symbolized, in my opinion, by the cartoon character Alfred E. Neuman in the old Mad Magazine who used to say,  “What? Me worry?” 


 “What? Me worry?”


But just WHO in the world would fill the newly-created jobs at the TSA? Most qualified job seekers easily found high-paying jobs in professions of their choice. The only pools of potential workers available to the TSA were the unskilled, the poorly-educated and the very low-paid individuals seeking a better wage. And, for the most part, that is precisely who was hired for these low-level jobs as inspection agents for the TSA — and these same people remain at TSA to this day.

Then the defaults on mortgage payments began, multiplying exponentially. In 2007 the mortgage crisis finally made its inevitable appearance. The markets crashed, people lost their jobs, even greater numbers of home buyers defaulted on their mortgages and home-equity loans, and the value of trillions of dollars of mortgage-based financial securities crashed. By 2008 the huge insurance companies (such as AIG) and investment banks on Wall Street and elsewhere faced bankruptcy. Former Goldman-Sachs CEO and Treasury Secretary Hank Paulson froze the assets of some Wall Street banks, whereupon the international system of credit instantly froze solid! President Bush, Secretary Paulson (and later Bernard Bernanke) allowed a few very small banks to fail, then suddenly demanded $800 billion from Congress to rescue the major Wall Street investment banks. This $800 billion “bail-out” was provided solely to these few enormous investment banks and insurance companies, NOT as loans, but as out-right gifts that never required repayment to the U.S. Treasury. The Federal Reserve next issued tens of trillions of dollars of near-zero interest loans to these same private Wall Street investment banks, as well as central banks around the world. These Federal Reserve “discount-window” loans allowed these banks to borrow money at near-zero interest, collateralized by these banks solely with financial instruments backed by worthless “sub-prime” mortgages. This process conducted by Federal Reserve chairman Ben Bernanke, with the approval of Presidents Bush and Obama, and Treasury Secretaries Henry “Hank” Paulson, Timothy Franz Geithner and Jacob Joseph “Jack” Lew, will continue indefinitely.

Of great interest, but hardly surprising, are the backgrounds of the government officials involved in the financial collapses of 2000 and 2008. Both Paulson and Geithner served as the CEOs of large Wall Street investment banks or their subsidiaries (such as Goldman-Sachs, JP Morgan, Citigroup, etc.) and/or one of private Federal Reserve banks. Jack Lew worked as an up-scale attorney and political operative prior to his appointment as Treasury Secretary. The current Federal Reserve Bank chairman Ben Bernanke attended Harvard University, where he lived in the prestigious Winthrop House with the future CEO of Goldman-Sachs, Lloyd Blankfein.

Of greatest interest is former Federal Reserve Bank chairman Alan Greenspan, whose monetary policies created the “Dot-Com bubble” and “housing bubble”, the direct causes the financial-economic crises of both 1998 and 2007, respectively. In 1977, Greenspan obtained a PhD degree in economics from New York University in 1977. His dissertation is not available from the university since it was removed at Greenspan’s request in 1987, when he became Chairman of the Federal Reserve Board. However, in April 2008, Barron’s obtained and published a copy of the dissertation. Ironically, in that dissertation Greenspan wrote about ”soaring housing prices and their effect on consumer spending.” He even warned of a future “bursting of the housing bubble”! Perhaps Greenspan should have re-read his own dissertation AFTER he became the chairman of the Federal Reserve Bank!!! Earlier in his career, Greenspan worked at the Wall Street investment bank Brown Brothers Harriman, working in the firm’s equity research department. Greenspan then served chairman and president of Townsend-Greenspan & Co., Inc., an economic consulting firm in New York City. Subsequently, he served as a corporate director for Aluminum Company of America (Alcoa); Automatic Data Processing; Capital Cities/ABC, Inc.; General Foods; J.P. Morgan & Co.; Morgan Guaranty Trust Company; Mobil Corporation; and the Pittston Company. He was a director of the Council on Foreign Relations foreign policy organization between 1982 and 1988. He also served as a member of the influential Washington-based financial advisory body, the Group of Thirty in 1984.

The ONE unsurprising characteristic all of these men, along with presidents Bush and Obama, are that they are all multi-millionaires.


From 2008 to the present the Federal Reserve has loaned to huge American and foreign banks, at near-zero percent interest rates, money totaling a reported $35 Trillion dollars! However, some economists believe that the amounts were far larger. For what purposes were these massive loans to banks world-wide used? As loans to homeowners and businesses struggling to survive the collapse of property values and the banks’ subsequent demands to repay their loans? Not a chance! Instead, these private banks used most of the bail-out money to purchase U.S. Treasury bonds paying an interest rate greater than the interest rate they had paid for the loans received from the Federal Reserve Bank. For these massive private investment banks, it was a “no-lose” situation! By borrowing money at near-zero interest rates from the Federal Reserve and subsequently purchasing U.S. government Treasury bonds paying the banks much higher interest rates, these huge private investment banks could never lose money on these deals. Never!


In addition, soon after the massive 2008 U.S. Treasury bail-out of the major Wall Street investment bank, the Federal Reserve began monthly purchases of hundreds of billions of dollars of U.S. government Treasury bonds. In exchange the U.S. government received newly printed money and credit from the Federal Reserve. This practice, called “quantitative easing” by Federal Reserve Chairman Ben Bernanke, has resulted in a massive and historic expansion of the federal debt – from $8 trillion to more than $17 trillion!


In fact, the new money and credit provided to the federal government by the Bernard Bernanke’s Federal Reserve was created out of thin air, backed neither by gold or any other assets of value. This newly-minted money and credit has no more value than the “Monopoly money” used in the Parker Brother’s board game! As the renowned economic and political trends forecaster Gerald Celente has repeatedly stated, the Federal Reserves new money and credit “is not worth the paper it is not printed on.” As of today, July 4, 2013, this monthly “quantitative easing” and its accompanying increases in the federal debt BOTH continue in the amount of $80 billion per month. With no termination date yet set for this “quantitative easing”, the federal debt and the money supply will continue to increase for an indefinite period of time.


Soon after the recession in America began in 2007, tens of millions of Americans became jobless – and not much later, millions of Americans became homeless through home foreclosures by these same Wall Street investment banks. World-wide, the number of jobless and/or homeless people currently numbers in the hundreds of millions, with no relief in sight. Instead, their governments have been drastically reduced benefits to their citizens by a process euphemistically labeled “austerity measures” by government bureaucrats and central bankers.


Many governments are technically bankrupt and have been forced by the private central banks to sell government-owned public assets, ranging from entire islands, railroads, oil and gas companies, oil and gas fields, international shipping companies, cash and others assets seized from the public by government, and so on – NOT to pay off their nations’ debts, but rather to pay to these private banks a small fraction of the accumulated interest owed on their nations’ debts! As a result of the “strip-mining” of these nations’ and citizens’ assets, these same private banks then grant these nations the “privilege” of borrowing even more billions of dollars. No person can ever pay off a past loan and its accumulated interest solely by taking out subsequent loans. Consequently, the interest and principal on these national debts can NEVER be paid off and will only increase with time.

The sole viable option for these debtor nations – including the United States – is to refuse to pay (in full or in part) their national debts. The only viable option for the creditor banks is a partial or full debt cancellation for these nations. Further loans to these nations will result in ever-increasing national debt which can never be paid off. And continued massive increases in the money supply (as currency and credit) ultimately will result in uncontrolled hyperinflation, the total loss of value for these nations’ currencies, and economic chaos world-wide.

While the economies and social structures of America and other nations continue to decline, the TSA workers continue at their jobs, confident that they can NOT be fired for no cause. While others starve, they will eat. While others seek shelter, they will rest comfortably in their homes. Previously they were at the bottom of America’s social and economic ladder. Ironically, thanks to their government jobs paid for by our confiscated tax dollars, these TSA workers are now among the few who survive and even prosper. Perhaps THAT is the reason they remain so extremely rude, so offensive, so bullying, so intolerant of other peoples’ rights, so authoritarian in their words and actions. Unable or unwilling to recognize likely future events, they believe that they and their families are safe and secure. And perhaps they are correct in their beliefs —- at least until the people of America and the world act either to reform or abolish their current, respective governments and banking systems. Once the violence begins and governments respond with escalating levels of repression through force, the ensuing rebellion is certain to follow. Perhaps these TSA workers cannot even conceive of such events. Perhaps THAT is why these TSA agents are such STUPID JERKS!



16_DoD_Memo_emergency_power__excluding_president__memo_2-27-2013 (2)

History teaches that such changes in governments and societies will be resisted by those few people with the remaining wealth, food, shelter, power and, mostly importantly, the biggest guns! Most likely, as in the past, they will use violence carried out by the police and military under “color-of-law”. However, once the violence begins, all bets are off – including for the employees of the TSA!


MARIO SAVIO: BEST Speech of 20th Century America! (Sproul Hall steps, December 2, 1964)  <div class="jetpack-video-wrapper"><span class="embed-youtube" style="text-align:center; display: block;"><iframe class='youtube-player' width='640' height='360' src='https://www.youtube.com/embed/tcx9BJRadfw?version=3&rel=1&fs=1&autohide=2&showsearch=0&showinfo=1&iv_load_policy=1&wmode=transparent' allowfullscreen='true' style='border:0;'></iframe></span></div>





(1) Transportation Security Administration on Wikipedia

Source: http://en.wikipedia.org/wiki/Transportation_Security_Administration


(2) Open YouTube using your web browser (www.YouTube.com) and search for videos using search terms such as:

TSA abuses

TSA opt-out

refuse TSA

and similar search terms


 (3) John William’s web site: Shadow Government Statistics



Source: http://www.shadowstats.com/alternate_data/unemployment-charts


Source: http://www.shadowstats.com/alternate_data/inflation-charts


Source: http://www.shadowstats.com/alternate_data/money-supply-charts


 (4) Time-line of the Financial Panic of 1998-1998 (PBS’s “Frontline”)



Time-line of the Financial Panic of 1998-1998

May 14, 1997
Thailand, with the intervention of Singapore, spends billions of dollars of its foreign reserves to defend the Thai baht against speculative attacks.
July 2, 1997
Thailand devalues the baht. News of the devaluation drops the value of the baht by as much as 20%–a record low. The Thai government requests “technical assistance” from the International Monetary Fund (IMF).
July 8, 1997
Malaysia’s central bank intervenes to defend its currency, the ringgit.
July 11, 1997
The Philippine peso is devalued.Indonesia widens its trading band for the rupiah in a move to discourage speculators.
July 18, 1997
The IMF announces that it will make more than a billion dollars available to the Philippines to help relieve pressure on the peso. The IMF action is the first use of its “emergency funding mechanism.”
July 24, 1997
The Singapore dollar starts a gradual decline.Malaysian Prime Minister Mahathir Mohamad accuses “rogue speculators” for Southeast Asia’s economic upheaval. He later singles out billionaire financier George Soros.
August 5, 1997
Thailand agrees to adopt tough economic measures proposed by the IMF in return for a $17 billion loan from the international lender and Asian nations. The Thai government closes 42 ailing finance companies and imposes tax hikes as part of the IMF’s insistence on austerity.
August 14, 1997
Indonesia abandons the rupiah’s trading band and allows the currency to float freely, triggering a plunge in the currency.
Oct. 8, 1997
Indonesia asks the IMF and World Bank for help after the rupiah falls more than 30% in two months, despite interventions by the country’s central bank to prop up the currency.
Oct. 23, 1997
Hong Kong’s stock index falls 10.4% after it raises bank lending rates to 300% to fend off speculative attacks on the Hong Kong dollar. The plunge on the Hong Kong Stock Exchange wipes $29.3 billion off the value of stock shares.The South Korean won begins to weaken.
Oct. 27, 1997
Rattled by Asia’s currency crisis, the Dow Jones Industrial Average plummets 554 points for its biggest point loss ever. Trading on US stock markets is suspended.
Oct. 31, 1997
The IMF agrees to a loan package for Indonesia that eventually swells to $40 billion. In return, the government closes 16 financially insolvent banks and promises other wide-ranging reforms.The IMF announces that it will delay a $700 million quarterly disbursement to Russia due to the country’s lax tax collection.
Nov. 3, 1997
Sanyo Securities Co. Ltd., one of Japan’s top 10 brokerage firms, goes bankrupt with liabilities of more than $3 billion. It is the first Japanese securities house to go bust since World War II.
Nov. 17, 1997
Hokkaido Takushoku Bank Ltd., one of Japan’s top 10 banks, collapses under a pile of bad loans.The Bank of Korea abandons its effort to prop up the value of the won, allowing it to fall below 1000 against the dollar, a record low.
Nov. 21, 1997
South Korea requests IMF aid.
Nov. 22, 1997
South Korean nationalists criticize the IMF loan request as humiliating. President Kim Young Sam apologies on television to the country for South Korea’s economic malaise.
Nov. 23, 1997
At the Asia-Pacific Economic Cooperation (APEC) summit in Vancouver, President Clinton describes the Southeast Asian economies as temporarily experiencing a “few glitches in the road.”
Dec. 3, 1997
The IMF approves a $57 billion bailout package to South Korea, the largest in history. President Bill Clinton earlier urged “tough medicine” for South Korea.
Dec. 8, 1997
The Thai government announces that it will close 56 insolvent finance companies as part of the IMF’s economic restructuring plan. 30,000 white-collar workers lose their jobs. Michel Camdessus, the IMF’s managing director, praises Thailand for “solid progress.”
Dec. 12, 1997
The IMF restarts its loan disbursement to Russia. The pact releases $700 million delayed in October. In the accord, the IMF urges Russia to boost revenues and cut spending.
Dec. 18, 1997
Kim Dae Jung becomes South Korea’s first president elected from the country’s opposition party. Within days, the South Korean won hits new lows.
Dec. 23, 1997
In an unprecedented move, the World Bank releases an emergency loan of $3 billion, part of a $10 billion support package, to South Korea to help salvage its economy.
Dec. 24, 1997
Seoul wins an early payment of $10 billion in loans from the IMF and Group of Seven (G-7) to forestall a default on its short-term loan debts. In return for the aid, South Korea agrees to expedite financial reforms and open its domestic financial markets.
Jan. 7, 1998
In a speech given in Helsinki, Finland, chief economist of the World Bank, Joseph Stiglitz, breaks with orthodoxy and questions the assumptions and effects of the “Washington Consensus.”.
Jan. 8, 1998
International creditors agree to a 90-day rollover of South Korea’s short-term debt.The Indonesian rupiah nose-dives to an all-time low after Indonesian President Suharto unveils his state budget plan. Critics say that the unrealistic budget does not comply with the IMF’s reform program.
Jan. 8-9, 1998
Indonesians clear store shelves of food and staple goods fearing that further currency declines will lead to food shortages.
Jan. 10, 1998
Pressured by the IMF to take strong measures against Indonesia’s ongoing economic decline, Suharto postpones 15 major government-subsidized projects–a number of them linked to members of the Suharto family–to help cut expenditures and foreign debt.
Jan. 12, 1998
Asia’s largest private investment bank, the Hong Kong-based Peregrine Investments, files for liquidation. The company is left badly exposed from its loan investments in Indonesia.
Jan. 13, 1998
Students in Jakarta rally to protest against the IMF-imposed policies.
Jan. 14, 1998
South Korean labor unions agree to discuss layoffs with businesses and government leaders. Layoffs are a key condition insisted upon by the IMF in exchange for the fund’s record $57 billion aid package. IMF chief Michel Camdessus defends the IMF’s demand for mass layoffs saying that they are the only way Seoul can restore its financial credibility and draw in foreign investment.
Jan. 15, 1998
Suharto signs a new loan deal with the IMF agreeing to eliminate the country’s monopolies and state subsidies. Prices for basic food staples increase by as much as 80%. The IMF signing follows a week of the rupiah’s free-fall–10,000 to the dollar–which prompts waves of panic buying in Indonesia.
Jan. 22, 1998
Officials from South Korea meet with international bankers in New York in an effort to restructure the country’s short-term debt.Indonesia’s currency plunges to a new all-time low–12,000 rupiah against the dollar–amid anxiety over Suharto’s apparent choice for vice president–Technology Minister Bacharuddin Jusuf Habibie.
Jan. 28, 1998
International banks and South Korea agree on a plan to exchange $24 billion of short-term debt for longer-term loans.
Feb. 6, 1998
South Korean unions, government and businesses reach a landmark agreement to legalize layoffs. The legislation is ratified by Seoul’s National Assembly.
Feb. 19, 1998
Camdessus announces that he will extend the IMF’s loan program to Russia by one year. He also says that the IMF will relax the stringent tax-revenue targets that have been used as a criteria for awarding loans to Russia.
March 9, 1998
The IMF announces that is delaying a $3 billion installment of its $40 billion loan package to Indonesia, citing Suharto’s unwillingness to implement his side of the deal. This prompts a charge from Suharto that the IMF reforms are “unconstitutional.”
March 11, 1998
Suharto is sworn in for a seventh five-year term as president of Indonesia.
March 23, 1998
Russian President Boris Yeltsin abruptly dismisses his entire cabinet, including Prime Minister Viktor Chernomyrdin. Yeltsin appoints Energy Minister Sergei Kirienko as acting premier.
March 24, 1998
The US announces that it will send $70 million in food and medical emergency aid to Indonesia, despite the fact that the IMF had suspended its loan package. The US emergency aid is intended to quell the increasing food riots.
April 8, 1998
Indonesia and the IMF reach a third pact in six months for a bailout. Both sides make concessions: the IMF withdraws its mandate that the government dismantle its subsidies of food and fuel, Suharto agrees to close more insolvent banks. IMF Deputy Director Stanley Fischer declares “the worst of the crisis is over.”
May 4, 1998
The IMF resumes a stalled lending program to Indonesia, approving a payment of $1 billion.
May 5, 1998
Students in Indonesia hold demonstrations across the country, protesting steep fuel and energy price hikes. Student protests denounce the Suharto administration for its failed economic policies and demand extensive political reforms.
May 12, 1998
In Indonesia, troops fire into a peaceful protest at a Jakarta university, killing six students and sparking a week of riots.
May 19, 1998
Suharto attempts to assuage student demonstrators by promising early elections. The students reject his proposals. Suharto’s key parliamentary allies call for his resignation.
May 21, 1998
Suharto resigns after 32 years in power. Vice President Habibie succeeds as president.
May 22, 1998
The IMF indefinitely postpones aid disbursement to Indonesia of $1 billion scheduled for June 4. US Treasury Secretary Robert Rubin says the aid should be delayed until the political situation stabilizes.
May 27, 1998
Russia’s financial system is stretched to the breaking point as panic-striken stock and bond markets continue to plunge, forcing the Russian central bank to triple interest rates to 150% to avert a collapse of the ruble.
May 27-28, 1998
A two-day, nation-wide strike is held in South Korea by union workers to protest the growing wave of unemployment in the country. Since February, South Korean companies have been laying off 10,000 workers per day.
June 1, 1998
Russia’s stock market crashes and Moscow’s cash reserves dwindle to $14 billion amid unsuccessful attempts to prop up the ruble and pay off burgeoning debts. President Clinton pledges support for Yeltsin.
June 12, 1998
Japan announces that its economy is in a recession for the first time in 23 years.
June 17, 1998
The yen’s fall to levels near 144 to the dollar rattles Wall Street, prompting the US Treasury and Federal Reserve to intervene to prop up the yen. Japan and the US spend some $6 billion to buy yen in order to strengthen it. Clinton calls on Tokyo to quickly resolve its banking problems and stimulate the economy.
June 24, 1998
Russian Prime Minister Sergei Kirienko submits a budget austerity plan to the IMF, which releases a previously held loan installment of $670 million.
June 25, 1998
Indonesia and the IMF announce a fourth agreement to rescue an economy quickly sinking into chaos. The IMF agrees to restore subsidies for food and fuel and provide another $4 billion to $6 billion for basic necessities.
July 1, 1998
Russia’s lower house of parliament, the Duma, postpones action on spending and tax reforms needed to close the budget deficit and qualify for IMF loans.
July 6, 1998
Moscow’s markets get pummeled as the government fails to raise cash by selling government shares of a state-owned oil company. Moscow hints that an IMF loan agreement is near.
July 10, 1998
President Clinton calls on the IMF to quickly conclude negotiations over emergency loans for Russia after getting a call for help from Boris Yeltsin, sparking a rally in Moscow’s markets.
July 13, 1998
The IMF announces a package of $23 billion of emergency loans for Russia. The international lender dips into an emergency line of credit to provide its share of financing. Russian stocks and bonds soar.
July 16, 1998
Russia’s Duma approves some of Yeltsin’s $16 billion proposed tax reforms needed to meet conditions for IMF loans. But it rejects higher sales and land taxes.
July 19, 1998
Yeltsin vetoes tax cuts approved by parliament and issues decrees imposing a 3% tax on imports and quadrupling land taxes to close the budget deficit and secure IMF loans. He also pledges renewed efforts to collect taxes.
July 20, 1998
The IMF gives final approval to a $22.6 billion loan package to Russia. However, because the Duma fails to enact some of the austerity measures mandated in the loan agreement, the first two planned installments are reduced from $5.6 billion to $4.8 billion.
July 28, 1998
The IMF announces that it will ease conditions on its $57 billion aid package to South Korea which had been blamed for rising unemployment and overburdened welfare programs.
August 3, 1998
Wall Street reacts to the deepening crisis; the Dow plunges 300 points in its third-biggest loss.
August 4, 1998
Amid speculation that China will be forced to devalue its currency, Hong Kong’s dollar and stock market come under attack.
August 6, 1998
The World Bank approves a $1.5 billion loan for Russia as Moscow puts pressure on striking miners and tax deadbeats in an effort to put its finances in order.Asian markets plummet as Hong Kong and China step in to defend their currencies against attack.
August 11, 1998
The Russian market collapses. Trading on the stock market is temporarily suspended. World markets are rocked by fears of a financial meltdown in Asia and Russia.
August 13, 1998
Russia’s markets collapse on fears that Moscow will run out of money and default.
August 14, 1998
Yeltsin calls for an emergency session of parliament and declares that “there will be no devaluation” of the ruble.In Hong Kong, authorities spark a stock rally by moving to foil speculators with surprise purchases of stocks and dollars.
August 17, 1998
Russia announces a devaluation of the ruble and 90-day moratorium on foreign debt repayment, triggering panic in Moscow as Russians line up to buy dollars. Western leaders denounce the Russian default.Latin American stock and bond markets plunge on fears of default and devaluation in South America.
August 19, 1998
Russia fails to pay its debt on GKO or treasury bills, officially falling into default. The IMF and Group of Seven (G-7) say they won’t provide additional loans to Russia until it meets existing promises.
August 21, 1998
Russia’s economic crisis shakes world markets, bulldozing stocks and bonds in Latin American and reverberating through the US and Europe. Russia’s Duma calls for Yeltsin’s resignation. Investors pile into US Treasury bonds as a safe haven from the storm, causing yields to drop to record lows.
August 24, 1998
Yeltsin dismisses Kirienko and names Viktor Chernomyrdin as primeminister.
August 31, 1998
After weeks of decline, Wall Street is overwhelmed by the turmoil in Russia and world markets. The Dow Industrial average plunges 512 points, the second-worst point loss in the Dow’s history.
Sept. 4, 1998
Federal Reserve Chairman Alan Greenspan says that the US is ready to cut interest rates to keep the crisis from snuffing out US growth. “It is just not credible that the United States can remain an oasis of prosperity,” he says.Latin stocks and bonds plummet.
Sept. 7 or 8, 1998
Russia’s Duma rejects Prime Minister-designate Chernomyrdin and the central bank chairman resigns, deepening the country’s political and economic turmoil. Russian investors and lenders estimate their losses at $100 billion.The Dow surges 381 points after Greenspan suggests that policy makers are considering an interest cut.
Sept. 10, 1998
The Dow loses 249 points as Brazilian stocks fall 16%, adding to drops that have erased half the Brazil market’s value. In Mexico, the Central Bank sells some $50 million in its first attempt to buoy the peso in three years.Yeltsin nominates Yevgeny Primakov as prime minister.
Sept. 11, 1998
The IMF announces that the debacle in Latin American markets is “an overreaction to Russian events” and that it is ready to lend Latin American countries, using an emergency line of credit. Investors flee Brazil, drawing out more than $2 billion a day despite an interest rate rise to 50% by the Central Bank.
Sept. 17, 1998
Tokyo’s Nikkei index hits a 12-year low amid steep declines in Hong Kong, France, Britain and the US. The Dow drops 216 points. Congress blocks Clinton’s request for $18 billion in funding for the IMF.
Sept. 23, 1998
Pushed by the New York Federal Reserve, a consortium of leading US financial institutions provides a $3.5 billion bailout to Long Term Capital Management, one of the largest US hedge funds, amidst fears that a collapse could worsen the panic in the financial markets.
Sept. 24, 1998
Stocks on Wall Street and in Europe swoon amid fears that the losses suffered by the world’s largest banks in the Long Term Capital debacle could put the entire banking system at risk.
Sept. 29, 1998
The Fed cuts interest rates by a quarter point.
Sept. 30, 1998
Worries that the Fed isn’t doing enough to rescue the US and global economies cause a 238-point drop in the Dow, for a loss of more than 500 points in a week. Investors around the world flock to US Treasury bonds for safety, causing the yield on 30-year bonds to drop below 5% for the first time in three decades.
Oct. 3, 1998
Japan announces a $30 billion aid package for Southeast Asia to help the region recover from recession.
G-7 ministers create a rescue plan for Brazil.
Oct. 5-8, 1998
In Washington, the IMF and World Bank hold a joint plenary session to debate the global economic crisis.
Oct. 15, 1998
The Fed cuts interest rates for a second time to prevent weak financial markets from tripping the US into a recession. The Dow shoots up 331 points and world markets rally.
Oct. 22, 1998
Amid warnings of winter food shortages in Russia, Moscow creates an emergency food reserve and approves an emergency spending plan that will require the central bank to print at least $1.2 billion to help pay back wages, rescue banks and bring food to desperate regions.
Oct. 27, 1998
Brazil’s President Fernando Cardoso announces an austerity plan of $80 billion in tax increases and spending cuts over three years in order to secure an IMF assistance package.
Oct. 31, 1998
The IMF refuses to disburse to Russia a $4.3 billion installment of the $22.6 aid package it agreed to in July, and says it will not resume negotiations about disbursement until Russia produces a realistic budget for 1999.
Nov. 5, 1998
Russia strikes an agreement with foreign investors to accept repayment in rubles of $40 billion of debt frozen in August, but says it will not be able to repay $17.5 billion of debts due in 1999 and will reschedule them. Russia also wins an $800 million loan from Japan, originally part of the IMF rescue deal.
Nov. 6, 1998
The US agrees to provide 3.1 million tons of food to Russia to help offset Russia’s worst grain harvest in 45 years and declining food imports because of the fall of the ruble.
Nov. 13, 1998
The IMF, World Bank and leading industrial nations announce a $41.5 billion rescue package for Brazil.
Nov. 17, 1998
The Fed, citing “unusual strains” in the credit markets, cuts interest rates for a third time in seven weeks.
Dec. 2, 1998
The World Bank projects that the crisis has cut world growth in half, to around 2%, and that unless Japan reverses the decline of its economy, the world could fall into recession in 1999.Official studies report that 80 million Indonesians–or 40% of the population– have fallen below the poverty line since the start of the economic crisis.
Dec. 3, 1998
In Brazil, the congress rejects a key social security tax increase sought by the IMF, prompting a rout in Brazilian markets and stock sell-offs throughout Latin America and on Wall Street.
Jan. 15, 1999
The Brazilian government allows its currency, the real, to float freely on world markets by lifting exchange controls. The move leads to a surge in markets in Latin America and around the globe as investors buy up Brazilian stocks at reduced prices.
Jan. 27, 1999
Brazil’s central bank raises interest rates in an effort to stabilize the market and to stem capital flight which has reached $200 million to $500 million a day.
Feb. 2, 1999
Arminio Fraga, a former portfolio manager to billionaire George Soros, is named president of Brazil’s Central Bank.
March 25, 1999
The IMF approves a $1 billion increase in its emergency loan package for Indonesia. The fund also approves the release of a $460 million installment that it had held back due to Indonesia’s delay in closing down insolvent banks.
March 29, 1999
The Dow Jones Industrial Average closes above the 10,000 level for the first time in its history.
May 12, 1999
The Dow Jones Industrial tops 11,000.


(5)   U.S. unemployment jumps

Rate hits 4.9%, highest in four years, as payrolls sink 113,000

September 7, 2001: 11:03 a.m. ET


Source: http://money.cnn.com/2001/09/07/economy/economy

NEW YORK (CNNfn) – The U.S. unemployment rate jumped to its highest point in four years in August, the government said Friday, as employers cut far more jobs than private economists had expected, pointing to more weakness in the world’s largest economy.

The unemployment rate was the highest since a 4.9 percent reading in September 1997.

“For those people hoping for a light at the end of the tunnel, this report reveals the tunnel is still under construction,” said Anthony Chan, chief economist with Banc One Investment Advisors.

Separately, the Commerce Department reported wholesale inventories fell 0.7 percent to $299.6 billion in July, the steepest drop since a 0.9 percent decline in September 1996, compared with a revised 0.4 percent drop in June. Economists surveyed by Briefing.com expected a decline of 0.2 percent.

On Wall Street, stocks dropped sharply while Treasury bond prices rose, sending bond market yields lower, as investors bet on another cut in short-term interest rates by the Federal Reserve.

Click here for more on the Fed and rates
The Fed has cut its target for short-term rates seven times this year in a bid to keep consumers spending and prevent the slowdown from becoming a recession. Federal Reserve Chairman Alan Greenspan and other economists worry that consumers, whose spending has helped keep the economy afloat, though barely, will cut back on purchases if they fear for their jobs. Consumer spending fuels two-thirds of the economy.

Federal Reserve System: Federal Funds Interest Rates for 2001

Source: http://money.cnn.com/2001/09/07/economy/economy


“What this report means is the economy is still losing jobs, and we’ll probably have another Federal Reserve (interest) rate cut, and maybe more than one,” said Astrid Adolfson, economist with MCM Moneywatch.

Still, the unemployment number is a lagging indicator, and many economists expected it to continue to rise even as the economy began to recover.

“This will doubtless shock the markets, and makes an October rate cut more likely, but it does not change the outlook for a near-term recovery,” said Ian Shepherdson, chief U.S. economist with High Frequency Economics Ltd. “Falling employment, rising unemployment lag activity. These numbers reflect the second quarter economic stall.”

The economy was particularly sluggish in the second quarter, growing at just a 0.2 percent rate, its weakest in eight years.

Click here for more on job cuts
The unemployment rate must also catch up with the staggering number of job-cut announcements made so far this year — 1.1 million through August, according to research firm Challenger, Gray & Christmas.

“The increase in the unemployment rate, while very large, is really a catch-up, as the rate had been stable for four months,” said Bruce Steinberg, chief economist at Merrill Lynch. “This brings the unemployment rate to where we believe it should be at this point.”

The beleaguered manufacturing sector lost 141,000 jobs in August, the biggest monthly drop of the year, bringing total cuts in the sector to 1 million since July 2000. The job cuts take some of the wind out of an unexpectedly positive report earlier this week on manufacturing activity from the National Association of Purchasing Management.

“That’s a huge drop in manufacturing… that throws that NAPM number in a less favorable light,” said James Jackson, director of fixed income at Brinson Partners.

Still, some analysts noted that the government revised its reading for July to a rise of 13,000 jobs, from a previous estimated drop of 42,000. And the sharp drop in wholesale inventories could eventually help pave the way for a pickup in production if companies start to restock shelves.

Click here for CNNfn.com’s economic calendar
Also encouraging was the fact that wholesalers’ sales rose 0.6 percent in July after falling in June. The inventories report seemed to confirm the belief of many analysts that businesses may be near the end of an inventory correction and are finally getting the supply of goods more in line with actual sales.

“Wholesalers had been struggling with bulging inventories through the winter and spring,” said Steven Wood, economist with FinancialOxygen. “However, plunging sales had largely thwarted their efforts. July’s improvement is a welcome respite in this struggle.”

The closely watched stock-to-sales ratio, which measures how long it would take to deplete current inventories, dropped to 1.32 months in July from June’s 1.33 months.

– from staff and wire reports


(6) World on Recession’s Brink

World Bank expert says global economy can keep

December 2, 1998: 11:59 p.m. ET

Source: http://money.cnn.com/1998/12/02/economy/moneyline_intv

NEW YORK (CNNfn) – In its annual economic report, the World Bank said Wednesday the global economic outlook is precarious.

The best-case scenario: economic growth in the world would slow to almost to a halt next year. The worst-case: the global economy could slip into a deep recession. On Wednesday, the IMF approved an $18 billion rescue loan to Latin America’s largest economy, Brazil.

Josepth Stiglitz, the World Bank’s chief economist, discussed the landscape Wednesday on “The Moneyline News Hour with Lou Dobbs.” Here are highlights of that interview, conducted by Moneyline anchor Jan Hopkins:
JAN HOPKINS: The world economy in a precarious state. How close are we to a worldwide recession?
JOSEPH STIGLITZ, CHIEF ECONOMIST, WORLD BANK: Well, I think that fundamentally that if the current situation is managed well, which means if the United States economy remains strong, if Europe does the right thing and its economy remains strong — remember, these are very large fraction of the global economy — there won’t be a recession.
The precariousness comes from the fact that there are real sources of weakness. East Asia remains weak and Japan remains weak. Even if we arrest the slide of these economies, their output is substantially below what it used to be the source of the engine of growth, and now they’ve been experiencing actual decline.
HOPKINS: Now, we saw Boeing (BA) announce job cuts blaming Asian economic slowdown. Are we likely to see more cut backs by U.S. companies because of this slowing economic situation?
STIGLITZ: Well, clearly there are firms that are heavily dependent on trade with Asia and those firms will face cutbacks. The economic downturn in Asia is a serious one. As I said before, this is a region that had been the source of growth for the world economy, and now it’s a drag on the world economy.
There’s another dimension, of course, which is that commodity prices have fallen partly as a result and largely as a result of East Asian crisis. And those falls of commodity prices, themselves, will have severe consequences for many firms.
HOPKINS: But in terms of consumers, that’s actually good news.
STIGLITZ: That’s right. Two sides of the coin. We do not have any inflationary pressures and that means that there’s plenty of room for maintaining low interest rates, and that means, for the U.S. economy, if the situation is managed well, I think the U.S. economy can make it’s way through this present problem with reasonably good circumstances.
HOPKINS: What do you look at as risks, though?

STIGLITZ: Well, the risk that one sees are a continuation of the decline in Asia — Japan’s economy, it’s showing signs of stabilizing. It will probably take a while for it recover, but the down-side risk is it doesn’t do that and the economy slides even further. Remember that Japan is a very large fraction of Asia — 90 percent of Asia’s GDP. So that represents one obviously important downside risk.
A second important downside risk is the paralysis of global capital markets. After the problems in Russia, there was basically a halt to the flows of capital from the developed to the less developed countries. And this has caused untold problems throughout the developing world.
Even countries that have good economic policies found it difficult to get access to capital, and when they could get access, the interest rates were very high. That kind of shortage of capital — that sudden turn around is imposing heavy costs for a very large fraction of the world economy.
HOPKINS: You’re actually a critic of the IMF. How much of the IMF actually makes things worse?
STIGLITZ: Well, I think one has to remember that we were in this situation moving in uncharted territory. East Asia was the source of growth as I said before, for it was the region which had the most robust growth over a 30 year period.
We had dealt with problems in Latin America where you had high deficits — high inflation and we had gotten some expertise in dealing with those kinds of problems. These were highly leveraged economies, private sector debt.
And so I think the issue isn’t whether somebody did make a mistake or didn’t make a mistake. The real issue is for us to extract the lessons from this experience so that next time a similar experience occurs we can hopefully address it more effectively.


(7) Federal Reserve Bank of New York web site

 Definition – Federal Funds Rate: By trading government securities, the New York Federal Reserve Bank and other Federal Reserve Banks affect the federal funds rate [FFR], which is the interest rate at which depository institutions lend balances to each other overnight. The Federal Open Market Committee [FOMC] establishes the target rate for trading in the federal funds market.


(8) Glass-Steagall Act: The Senators And Economists Who Got It Rightwww.HuffingtonPost.com

Written by Sam Stein     stein@huffingtonpost.com


First Posted: 6/11/2009; Updated: 05/25/2011

Source: http://www.huffingtonpost.com/2009/05/11/glass-steagall-act-the-se_n_201557.html

The footage of him speaking on the Senate floor has become something of a cult flick for the particularly wonky progressive. The date was November 4, 1999. Senator Byron Dorgan, in a patterned red tie, sharp dark suit and hair with slightly more color than it has today, was captured only by the cameras of CSPAN2.

“I want to sound a warning call today about this legislation,” he declared, swaying ever so slightly right, then left, occasionally punching the air in front of him with a slightly closed fist. “I think this legislation is just fundamentally terrible.”

The legislation was the repeal of the Glass-Steagall Act (alternatively known as Gramm Leach Bliley), which allowed banks to merge with insurance companies and investment houses. And Dorgan was, at the time, on a proverbial island with his concerns. Only eight senators would vote against the measure — lionized by its proponents, including senior staff in the Clinton administration and many now staffing President Obama, as the most important breakthrough in the worlds of finance and politics in decades.

“It was more like a tidal wave in 1999,” the North Dakota Democrat recalled of that vote in an interview with the Huffington Post. “You’ve seen the roll call. We didn’t really have to deal with push back because they had such a strong, strong body of support for what they call modernization that the vote was never in doubt… The title of the bill was ‘The Financial Modernization Act.’ And so if you don’t want to modernize, I guess you’re considered hopelessly old fashioned.”

Ten years later, Dorgan has been vindicated. His warning that banks would become “too big to fail” has proven basically true in the wake of the current financial crisis. He seems eerily prescient for claiming then that Congress would “look back ten years time and say we should not have done this.” But he wasn’t entirely alone. Sens. Barbara Boxer, Barbara Mikulski, Richard Shelby, Tom Harkin and Richard Bryan also cast nay votes.

As did Sen. Russ Feingold, who, in a statement from his office, recalled that “Gramm-Leach-Bliley was just one of several bad policies that helped lead to the credit market crisis and the severe recession it helped cause.”

The late Sen. Paul Wellstone also opposed the bill, warning at the time that Congress was “about to repeal the economic stabilizer without putting any comparable safeguard in its place.”

Outside government, doomsday-ing over the repeal of Glass-Steagall seemed far more palatable a position to take. Edward Kane, a finance professor at Boston College, warned that “nobody will be able to discipline a Citigroup” once the legislation passed, because the banks would be too big and the issues too complex.

“It made it possible for the very big firms to take risks in away that would require a great deal of investment risk and time for regulatory agencies,” Kane recalled ten years later. “You had people who could basically outplay the regulators.”

Jeffrey Garten, who at the time had left his post as Undersecretary of Commerce for International Trade at the Clinton White House, wrote in the New York Times that if these new “megabanks” were to falter, “they could take down the entire global financial system with them.”

“Sooner or later, perhaps starting with the next serious economic downturn,” he wrote, “the US will have to confront one of the great challenges of our times: how does a sovereign nation govern itself effectively when politics are national and business is global?”

Consumer protection advocate Ralph Nader, meanwhile, was far more succinct in his skepticism. “We will look back at this and wonder how the country was so asleep,” he said at the time. “It’s just a nightmare.”

When the Senate voted to pass Gramm-Leach-Bliley by a vote of 90-8, it reversed what was, for more than six decades, a framework that had governed the functions and reach of the nation’s largest banks. No longer limited by laws and regulations commercial and investment banks could now merge. Many had already begun the process, including, among others, J.P. Morgan and Citicorp. The new law allowed it to be permanent. The updated ground rules were low on oversight and heavy on risky ventures. Historically in the business of mortgages and credit cards, banks now would sell insurance and stock.

Nevertheless, the bill did not lack champions, many of whom declared that the original legislation — forged during the Great Depression — was both antiquated and cumbersome for the banking industry. Congress had tried 11 times to repeal Glass-Steagall. The twelfth was the charm.

“Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century,” said then-Treasury Secretary Lawrence Summers. “This historic legislation will better enable American companies to compete in the new economy.”

“I welcome this day as a day of success and triumph,” said Sen. Christopher Dodd, (D-Conn.).

“The concerns that we will have a meltdown like 1929 are dramatically overblown,” said Sen. Bob Kerrey, (D-Neb.).

“If we don’t pass this bill, we could find London or Frankfurt or years down the road Shanghai becoming the financial capital of the world,” said Sen. Chuck Schumer, D-N.Y. “There are many reasons for this bill, but first and foremost is to ensure that U.S. financial firms remain competitive.”

Looking back, members of Congress have tried to downplay the significance of their support. One high-ranking Hill aide notes that his boss, who voted for the bill, did so because banks were already beginning to merge with investment houses. It should be noted, additionally, that Dodd and Schumer were able to hammer out, as part of the legislation, the Community Reinvestment Act, which required banks to extend lines of credit to predominantly minority areas.

Officials from the Clinton White House, meanwhile, shift between defensiveness and repentance. One former high-ranking official argued that while the legislation changed the balance between a bank’s commercial and non-commercial activities, the problem was not necessarily the blurring of those lines. “What really brought the economy to its knees was the incredibly over-leveraged and unregulated risks taken by these non commercial banks.” In short: there wasn’t enough oversight.

“The White House task force meetings covered a whole series of these issues,” said the official. “A lot of people raised serious questions about how far we were going. And it wasn’t just here. There were a whole series of issues around the same time in which the Treasury was always promoting the interest of big finance. It was true under [Bob] Rubin and at least as true under Larry [Summers].”

Not everyone looks back at that vote with regret. The repeal of the law, they argue, was responsible for the sharp growth that the market experienced in the subsequent years. Moreover, the argument goes, if not for the over-leveraging of credit in the housing market the gut shot that many major banks endured could have been avoided.

That said, the concept of regulation has, over the past decade, taken on a drastic shift in public perception, from being viewed as a hindrance to economic growth to a guardrail from future disaster. And spearheading that effort at revamping the regulatory system is the same senator who foresaw the problem in the first place.

“I’m from a little small town of 300 people in North Dakota,” Dorgan told the Huffington Post. “Where I grew up, we have seen a history… of some of the larger banks and difficulties farmers have had in dealing with some of the larger banks over the last century or so. And so, my own view about these issues is that there needs to be, to the extent that you can, create a free market that works with price competition and product differentiation and so on, but there needs to be a referee with a whistle and a striped shirt, I mean the free market sometimes needs referees.”

MARIO SAVIO: BEST Speech of 20th Century America! (Sproul Hall steps, December 2, 1964)  <div class="jetpack-video-wrapper"><span class="embed-youtube" style="text-align:center; display: block;"><iframe class='youtube-player' width='640' height='360' src='https://www.youtube.com/embed/tcx9BJRadfw?version=3&rel=1&fs=1&autohide=2&showsearch=0&showinfo=1&iv_load_policy=1&wmode=transparent' allowfullscreen='true' style='border:0;'></iframe></span></div>

MARIO SAVIO: BEST Speech of 20th Century America!
(Sproul Hall steps, December 2, 1964)
[youtube http://www.youtube.com/watch?v=tcx9BJRadfw%5D


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