Clash of the Titans Koch Brothers vs Federal Reserve

The Koch Brothers and the Federal Reserve are like two ticks on a dog's back fighting over who owns the dog.  Both are parasites that are draining the people of the United States of life blood.  A country that does not control its treasury is doomed to failure. 

We have been warned about this since the beginning of our Republic.

"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 them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered."

Attribution:  Thomas Jefferson

The debt ceiling is nothing new; it was statutorily imposed and has been in effect since 1917. Before 1917 there was no debt ceiling in force. 

Isn’t that odd, that there would be a ceiling on the U.S. Treasury borrowing after the 1913 establishment of the Federal Reserve Bank?

The United States has held public debt since the U.S. Constitution legally went into effect on March 4, 1789.  From 1796 to 1811 there were 14 budget surpluses and 2 deficits.  There was a sharp increase in the debt as a result of the War of 1812.  In the 20 years following that war there were 18 surpluses. 

The federal government actually paid off its debt entirely in January 1835 only to begin accruing debt anew by 1836 when the debt was $37,000.  Another sharp increase in the debt occurred as a result of the Civil War. The debt was $65 million in 1860, but passed $1 billion in 1863 and reached $2.7 billion by the end of the war.  During the following 47 years prior to the Federal Reserve, there were 36 surpluses and 11 deficits. During this period 55% of the national debt was paid off.

Secret meetings to develop the Federal Reserve Bank began in November 1910.  A meeting of a handful of rich political bankers met at a private resort on Jekyll Island, Georgia and secretly drew up a framework for the nation’s new banking system owned by extremely wealthy European banking families.  While the Fed would handle government debt, it would be a private institution. The U.S. Treasury would have a seat on the board, but would exercise no further oversight.

 How nuts is that, a country that would allow private banks to print their currency, charge them interest for printing the currency and have no oversight??

According to WordPress.Com:

The Federal Reserve was chartered by an act of deceit, by an act of congress when most of congress had gone home for Christmas holiday on December 23rd 1913. The Federal Reserve Act of 1913 passed the house, but was having difficulty getting through the senate.

No recess had been called, most senators had gone home, yet three senators passed the act with a unanimous voice vote. There was no objection. If there had been one person present in the absence of a quorum, the bill would not have been passed.

In 1923, Representative Charles A. Lindbergh, a Republican from Minnesota, and father of the famous aviator Lucky Lindberg stated. “The financial system has been turned over to the Federal Reserve Board. That board administers the finance system by authority of a purely profiteering group. The system is private, conducted for the sole purpose of obtaining the greatest possible profits from the use of other people’s money.

Former chairman of the House Banking and Currency Committee, during the great depression era, Louis T. McFadden in 1932 stated, “We have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board. This evil institution has impoverished the people of the United States and has practically bankrupted our Government. It has done this through the corrupt practices of the moneyed vultures who control it.”

On June 4, 1963, a little known attempt was made to strip the Federal Reserve Bank of its power to loan money to the government at interest. On that day President John F. Kennedy signed Executive Order No. 11110 that returned to the U.S. government the power to issue currency, without going through the Federal Reserve.

Mr. Kennedy's order gave the Treasury the power "to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury." This meant that for every ounce of silver in the U.S. Treasury's vault, the government could introduce new money into circulation. In all, Kennedy brought nearly $4.3 billion in U.S. notes into circulation. The ramifications of this bill are enormous.

With the stroke of a pen, Mr. Kennedy was on his way to putting the Federal Reserve Bank of New York out of business. If enough of these silver certificates were to come into circulation they would have eliminated the demand for Federal Reserve notes. This is because the silver certificates are backed by silver and the Federal Reserve notes are not backed by anything.

After Mr. Kennedy was assassinated just five months later, no more silver certificates were issued. The Executive Order was never repealed by any U.S. President through an Executive Order and is still valid. 

In 1992 after 12 years of Republican rule, 10 million Americans were unemployed, the country faced record deficits, and poverty and welfare rolls were growing. Family incomes were losing ground to inflation and jobs were being created at the slowest rate since the Great Depression.

In 1993, President Clinton and Vice President Gore launched their economic strategy: (1) establishing fiscal discipline, eliminating the budget deficit, keeping interest rates low, and spurring private-sector investment; (2) investing in people through education, training, science, and research; and (3) opening foreign markets so American workers can compete abroad.

After eight years, the results of President Clinton’s economic leadership are clear. Record budget deficits have become record surpluses, 22 million new jobs have been created, unemployment and core inflation are at their lowest levels in more than 30 years, and America is in the midst of the longest economic expansion in our history.

Alan Greenspan at the Fed did everything possible to slow down the economy but the Clinton boom went on.  More Americans became stock holders, more Americans had 401K’s, retirement funds, more college graduates, more everything good and everything American.  The Federal Reserve became an insignificant background noise.  Clinton was impeached but the American people wouldn’t stand for his removal.

As President Clinton was about to leave office the Democrats and Republicans in the U.S. Senate repealed the Glass-Steagall Act that regulated banks and the insurance industry. There were only 8 Senators who voted against the repeal and it was veto proof.  

After the Supreme Court Decision in Bush vs Gore on December 12, 2000 that handed the Presidency to the guy that lost by a half million votes, the Senate passed the Gramm Leach Bliley bill on December 15th that completely repealed any regulations on derivatives trading.

The entire mortgage backed securities debacle was the result of the U.S. Senate deregulation.  The Federal Reserve printed up $43 trillion dollars to bail out the banks holding mortgage backed securities, $17 trillion of which was put on the books of the United States Treasury.  

After the first wave of foreclosures on primary mortgages, the secondary mortgage crises occurred.  Those were the mortgage backed securities that had no collateral and the Fed has been printing up $35 billion a month to bail those Wall Street banks out.

The Federal Reserve Board's hundred year charter ends in December 2013.  

Then there's the Koch Brothers.  Remember this scene from Ebenezer Scrooge? 

Yes beware of the boy, he is ignorance.  He is the Koch Brothers' Tea Party, born of ignorance and hate.  They are fettered to the Koch Brothers and fed and nourished on ignorance and hate.  They spew the ignorance that the rich should not have to pay taxes, the rich create jobs and need to be protected.  

The billionaire brothers David and Charles Koch have been financiers for conservative front groups and nonprofits for nearly three decades. Their money has been spent to lobby for tax cuts for the wealthy, to deregulate and defund the EPA and to re-segregate schools by diverting government funds from public schools to privately owned charter schools.

Their family’s association with fringe right-wing groups began with their father Fred Koch.  Fred not only founded Koch Industries he was also a founding member of the John Birth Society. 

Fred helped engineer a hysterical wave of attacks on labor, intellectuals, public education, liberal clergy members, and other pillars of society he viewed as a threat. The apples haven’t fallen far from the diseased tree.   

The present day Kochs have bought up politicians in State Houses around the nation. 

They now own approximately 30 members of U.S. House and two U. S. Senators, Ted Cruz and Mike Lee.  These members, although their numbers are small, have been able to shut down the government and threaten a default by the United States Treasury.

But the Koch Brothers, while having fun seeing how far their Tea Party candidates would go ended up like a couple of teenagers playing with an Ouija Board.  They appear to be frightened by the Tea Party monster they conjured up.

According to an article in the Los Angeles Times entitled “Koch Industries Deflects Blame on Government Shutdown” the following excerpt:

WASHINGTON - Koch Industries, the multibillion-dollar company led by David and Charles Koch, tried to distance itself Wednesday from any blame for the government shutdown and congressional quagmire.

But doing so requires some explaining given the long track record that the Koch brothers have of supporting conservative Republican causes.

In a letter sent to Senate offices Wednesday, the company’s president of government and public affairs, Philip Ellender, said claims that Koch Industries pushed for a shutdown are “erroneous or misleading.”

 So it sounds like this whole government shutdown fiasco has been just that, a fiasco.  There was massive damage done to the people of the United States and for what?  

Wall Street got a big scare when the Koch Brothers' monster broke loose.  For now, the Federal Reserve can keep buying up Wall Street's mortgage backed, worthless securities and keep sticking the American people with the bill.  

The Tea Party will continue to demand that the debt owed to the American people by the Treasury for Social Security and Medicare go unpaid and written off as the Kochs and Wall Street continue their massive "rape of the American people".  All's well that end's well for the Fed and the Kochs.

But for the American people all's not well.

By Patricia Baeten