This is the third article in a row of Catherine's I condensed lately, which I think may help understand how the economy was wrecked and how we might fix it.
Mapping the Real Deal - Financial EcosystemsBy Catherine Austin Fitts, Thursday, 11 June 2009, 2:35 pm [edited by Luck]
http://www.scoop.co.nz/stories/HL0906/S00122.htm The Participatory Democracy Project at Chicago’s 49th Ward under the direction of Watson Institute for International Studies at Brown University is indeed exciting. Participatory budgeting has the potential to strike a much healthier relationship between citizenry and the creation and application of government credit, regulation and taxes. Developed originally in Brazil, it has not yet been tried in the United States. The opportunities to re-engineer government resources in communities are much greater than many of us realize. Alas, we have a significant challenge with many Americans and companies now dependent on billions in government programs developed through political considerations without professional investment standards and accountability for performance.
America is filled with “community arbitrages,” which offer the potential to get much more for less if we approach change with a new concern for people, natural resources and both public and private financial resources. To find and re-engineer these opportunities is a complex task, ideally done with citizen participation. One of the reasons to map your financial ecosystems, is because it is best to understand existing resources and what has been happening to them before you take action. Those who don’t know history are doomed to repeat the mistakes of the past.
The reason we are considering participatory budgeting is in response to the prospect of significant reductions in municipal revenues and spending, due to economic decline, because of federal government sanctioned financial fraud. An approach that leads to real solutions is to step back and look at the bigger picture, the full financial ecosystem. For example, rather than just looking at the immediate assets on our municipal balance sheet, let’s incorporate the enormous pools of state and local pension funds and other capital reserves.
* Are we investing them in ways (A) that create income in our economy or (B) that strip our economy and savings with leveraged buy outs and mortgage frauds?
* Who is getting the fees from these pools? Is it (A) ethical firms or is it (B) the same Wall Street banks that have been so instrumental in recent financial frauds?
* Where are all the government contracts related to activities in our communities? (A) Do they reflect productive expenditures, or (B1) are we pumping up corporate stocks (B2) paying someone $50-150 an hour to do something that (A2) someone in our community would love to do for $10-25 per hour plus health care benefits?
* Are we outsourcing tax payer funded jobs to Asia while paying Americans unemployment, welfare and food stamps, hence removing the jobs here that would save taxpayers funds, when we look at government budgets on an integrated basis within a place?
* What are the laws and regulations that create public and private expense in our place and who is making or losing money from them? Is it time to reinvent some fundamental rules?
So that’s how we can look at the bigger picture. We also need to look at the bigger picture through time. Available assets are not just those currently existing. We need to understand whether we are missing assets—either to understand the drains in our economy so we can heal them presently or determine if there are methods to recapture missing assets. In short, we want to understand who and what drained assets and what the state of economic warfare in a place is so that we can create lasting change.
* Who has been distributing narcotics into our communities? (See: "Narco Dollars for Beginners.")
* Who has been engaging in mortgage fraud? (See “The Myth of the Rule of Law.”)
* What money has gone missing from our various levels of government, including off balance sheet agencies and arrangements? (See: "The Missing Money.")
* What has been the impact on savings of Federal Reserve monetary policy and the manipulation of the precious metals and financial markets? (See: "Positioning Your Assets" and "Positioning Your Assets: Is Your Community Waving Goodbye to $3.3 Billion?.")
* Are public or private financial institutions engaging in usury, fraudulent inducement or other practices that are grounds to judicate recovery of illegal profits or abrogation of fraudulently created liabilities?
We need to find a process in which such questions can be asked. Let’s step back and look at some of the financial ecosystems around the Chicago project. There are numerous investment interests represented on the Watson board and the Brown Corporation board, including a Citigroup board member and several former Goldman Sachs partners, both of which companies are known to engage in financial fraud. How the private interests of the board members relate to the Corporation’s endowments and investments is worth considering, because many private financial interests have profited in ways that are highly destructive of communities. Are we to understand and address the root dynamics or not? The federal Administration, with the assistance of Congress, has redirected trillions of taxpayer resources to the very banking and investment interests that are responsible for the economic crisis and their thefts are exhausting our currency and our borrowing capacity, thanks in part to the so-called “bailouts.” Can our neighborhoods afford profligate banks but not local parks and services?
When cutbacks came in the 1990’s in Russia, Eastern Europe, and Latin America, highly profitable asset stripping is what happened. Do we run the risk that the investment interests that have engaged in such financial coups are now interested in using the same model to asset strip American communities? America does not have an economic problem. We have a political problem, which subsidizes a kleptocratic financial sector that no society can possibly afford. If we are going to transform to a healthy society, we are going to have to clean up our behavior and our money on both Main Street and Wall Street. Let’s map our financial ecosystems first, so that healthy participatory budgeting is real.