Was America Set Up For Financial Crash?

By James Donahue

While we sometimes question the intelligence of our elected leadership, there has been an awareness that the people operating our banking and lending institutions, and manipulating our financial system know very well what they are doing.

This is why we suspect that the financial collapse that almost brought on a second great depression and allowed big banks and home mortgage companies to skim billions of dollars from federal coffers at the end of the Bush Administration was a planned ravaging of America’s capitalistic system. It was not a stupid blunder by a number of greedy men in high places who gambled with the money they held in trust, and lost. Is was sabotage and it has been in the planning for years.

Several extreme acts by our elected representatives leave clues that strongly support this thesis.

The first was the creation of the Federal Reserve in 1913. Most people believe this agency is part of the government. But that is not true. It is a privately held corporation owned by the largest banks in the country. It was supposedly created to act as a back-up for member banks in the event of financial collapse from bad investments. Yet the Great Depression occurred just 16 years after the reserve was created.

Now we are in the midst of another world-wide financial crisis that threatens to have as big an impact on the world economic system as the Great Depression. How could this be happening? Some believe that the Federal Reserve Bank of the United States, which operates under a shadow, has allowed bankers to gain unwarranted power over the country. In the process they have brought down the worldwide financial system. And they accomplished this by clever schemes and the use of a trade jargon that most people do not understand.

Most Americans were not around to live through the declaration of war against the big banking interests by Franklin D. Roosevelt that led to passage of the Glass-Steagal Act. The act put government controls on financial institutions. Those controls worked very well and brought financial stability and prosperity for most Americans following World War II.

Swiss columnist Patrik Etschmayer, in the publication Nachrichten, described the succession of events that brought us down once more and pilfered most of the world’s money into the pockets of the few. He wrote:

“Only when regulations were relaxed under Ronald Reagan did the first rather costly banking disaster ensue: The Savings and Loan crisis.” A total of 747 Savings and Loan Associations failed in the late 1980s and early 1990s at a cost of about $160 billion. President George H. W. Bush, who succeeded Reagan, arranged for a government financed financial bailout that cost American taxpayers about $124 billion.

Etschmayer wrote that what became known as the “S&L Crisis” led to a recession in the early 1990s that helped get Bill Clinton elected in 1992. “But Clinton didn’t heed the warning. Even though it is no longer discussed, and all fingers point toward George W. Bush – his actions alone could not have resulted in today’s disaster.

“Clinton worked until almost the end of his term to abolish Glass-Steagal. The Congress fought him for years just as it had under Reagan and Bush the First. But in 1997, the FED Board of Directors under Alan Greenspan eliminated rules that limited securities trading for savings banks,” Etschmayer wrote.

The passage of the Financial Services Modernization Act of 1999, after an agreement between the Clinton Administration and Congressional Republicans, finally recalled the Glass-Steagall Act. Now the big banking institutions were free to go back to business as usual, before Roosevelt came to town and spoiled everything.

After President George W. Bush began his second term in the White House, with a Republican controlled House and Senate, the big money interests made their move to seize control of the wealth.

There was just one final obstacle in place that still irked the big lending institutions. That was the federal bankruptcy law.

Congress approved and Bush signed a revised bankruptcy law in 2005 that makes it almost impossible for debt-strangled consumers to walk out of bankruptcy court debt free. Even people with meager incomes must pay credit card charges, medical bills and other obligations under a court-ordered bankruptcy plan. It also requires people in bankruptcy to pay additional costs for credit counseling. The legal fees for going bankrupt have almost doubled, with most lawyers now demanding at least $2,000 up front before agreeing to represent a bankruptcy client. When people are that down-and-out, they rarely have that much spare change lying around to hire a bankruptcy lawyer.

During the Bush years the banking industry went wild in approving credit for just about anybody asking for it. Our mail boxes were packed with pre-approved credit card offers. People found themselves getting new credit cards to use to help make payments on older credit cards. Students still in college and struggling to pay the cost of tuition and books suddenly found themselves eligible to buy things on credit. And balloon payment home mortgage loans were readily available for moderate income families that were fooled into buying more house than they could really afford. They could not meet the high interest payments that came along after the first years of low interest payments.

The secret key to banking financial and political power is debt. When people are deep in debt they can be controlled. When nations are deep in debt, they also can be controlled. We suspect there has been a devious and secret plan for national if not world control behind the events of the past decade.

The bankers obviously knew from the start that the house of financial cards they were building was designed to collapse. We suspect they were gambling that it wouldn’t happen until after Bush left office and that a Democratic successor would carry the blame for the financial crash. They knew Bush was an unpopular president. They probably thought that if they could set up the next president for a fall, the Republicans would be right back in power by 2012.

The bankers were wrong. The system collapsed between the time President Obama was elected and the day he was inaugurated. Consequently it was the Bush Administration that was left to approve the big bank bail-outs that threw our nation into a multi-trillion dollar deficit. Mr. Obama inherited a financial nightmare.

The Republicans have launched a propaganda campaign to blame the Obama Administration for the nation’s financial mess. A lot of people, especially the Teabaggers, appear to have already forgotten how it all came down and believe the lies. It is easy to blame Mr. Obama because the results of the GOP-created mess cannot be repaired overnight. And the Republicans, especially in the Senate, are doing all they can to slow down attempts to bring about economic recovery.

We must hope that wise heads in Washington and across the nation succeed in exposing what really happened and hold the real villains accountable for the disaster they created. It needs to be skillfully done before voters return to the polls in November.