Today’s Keiser Show interviewed the wonderful Dr Michael Hudson of New York. He had been to the American Monetary Institute meeting in Chicago, to an economic conference in Kansas Sity and attended the banking group of Occupy Wall Street where Sheila Bair spoke two weeks ago. Sheila Bair has just written a book (and Michael Hudson has written another one). She is a conservative Republican appointed by Bush and was head of FDIC, the Federal Deposit Insurance Corporation during the Global Financial Crisis. After investigating Citibank she wanted to close it down, but Tim Geithner, Secretary of the Treasury, came to a meeting with her in the White House and refused. Tim Geithner, said Hudson, had resigned from his role with the NY Federal Reserve when Obama came to power. He wanted to succeed Robert Rubin as head of Citibank at $20 m a year. But the bankers came to him and said they needed him in the key role in Treasury. Hudson says "I am paraphrasing here" but Bair said it was like we want our man inside so that no one will prosecute us. We need a smooth sophisticated crook like you and when you step down we will look after you. Hudson says it is a Wall Street Mafia takeover. Banks don’t make loans to build factories or create jobs anymore. They only lend these days for real estate, gas or oil reserves or for corporate raiding. So you can get loans to buy companies but not to build them up. Credit is only available for looting. They downsize labour, cut costs and grab the pension fund and the economy shrinks. The deficit spending these days is not to build infrastructure, it is for lending to Wall Street. Ben Bernanke’s helicopter dropping money only flies over Wall Street. Sheila Bair says the system can’t be fixed without sending a lot of bankers to jail. The first part of the Keiser Show described a situation where JP Morgan is being sued for selling fraudulent financial products but of course it is a civil suit. No one will go to jail. In the UK the Financial Conduct Authority can’t send people to jail. They can rig LIBOR and someone MIGHT get fined. Where is the criminal justice system? Which leads me to what is happening in New Zealand. Before Parliament is a very overdue piece of legislation, the Financial Markets Conduct Bill, which has been through its first reading and committee stages. The Commerce Select Committee reported back on 12 Sept. I notice from reading submissions that it is a civil offence not a criminal offence here too. So if banks sell fraudulent products our Government Superannuation Fund and our ACC may lose millions or more but no banker will go to jail. The worrying thing is that the ECB can put in its technocrats, which is a euphemism for a bank lobbyist, to rule Greece, Portugal and Spain so that nobody can vote for letting banks fail. We must be so vigilant. Canterbury democracy has already failed and we rolled over like lambs when the government appointees continued with Canterbury Regional Council. Who is to say we won't do it again?
Why we need a republicAll of these proposals for change would of course be squashed by the Crown under the current system. A republic is a country where the supreme power of the state is dependent on the consent of the citizens it governs. In a republic it is commonly said that political power operates only with the ongoing consent of the people. This is usually expressed through elections. The citizens elect representatives who are in turn responsible to the citizens who have elected them. The majority of the world's nations are republics. Not all of them are fully democratic, although two-thirds of fully democratic countries are republics. In a republic the head of state is not a hereditary leader. The head of state is either directly elected or is appointed by an elected assembly. They are most often called the president. The arguments for a republic fall into three categories: