Economic Terrorism (Of, For And By The United States Of America), 1993-Present

By Chandrashekar (Chandra) Tamirisa, (On Twitter) @c_tamirisa

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Former President Bill Clinton’s signature institutional change, upon taking his oath of office in 1993 to put people first, was the establishment of the National Economic Council (NEC) in the White House. “By Executive Order,” according to the White House web site, “the NEC has four principal functions: to coordinate policy-making for domestic and international economic issues, to coordinate economic policy advice for the President, to ensure that policy decisions and programs are consistent with the President’s economic goals, and to monitor implementation of the President’s economic policy agenda. The Director is supported by a staff of policy specialists in various fields including: agriculture, commerce, energy, financial markets, fiscal policy, healthcare, labor, and Social Security.”

The first NEC, with White House coordination to balance the federal budget while growing the US economy and to establish control over it, was led by Robert Rubin, the Co-Chairman of Goldman Sachs. And later by Gene Sperling who had “predicted” in 2002 that George Bush would be Herbert Hoover. Several Goldman Sachs “alumni” who are graduates of the corporation’s “public service” work ethic have served in the United States government as high-level political appointees since 1993.

As terrorism began to rear its ugly head in the basement of the World Trade Center (WTC) in 1994, economic collapses around the world began, beginning with the Mexican peso crisis in 1994 along the same lines as the devaluation of the British pound in 1992 which made George Soros a billionaire.

There is no conspiracy in these raids. Elementary international economics applied in global finance to arbitrage disparities in currencies because of inherent economic weaknesses and economic outlook is old hat since Tulipomonia in the Netherlands in 1637: overvalued currencies correct themselves and investors who anticipate the timing of this correction profit handsomely. This contagion was inherited from The Netherlands by New Netherlands (New York) and the traders who began Wall Street finance under a buttonwood tree in 1792.

Former president Richard Nixon wrestled with similar issues in 1971 when the United States left the Bretton Woods fixed exchange rate system and so did former presidents Herbert Hoover and Franklin Delano Roosevelt with the gold standard since the 1929 crash of the stock market which caused the Great Depression.

Inflation, because of reparations imposed on Germany by the allies after the Treaty of Versailles in 1918 on the Weimar Republic after World War I, likewise created the conditions for the rise of Hitler and World War II.

That such large negative economic “shocks” can induce geopolitical change was a lesson learned over economic time. And that economic policies can be employed to normatively change the course of history was put into practice first by Alexander Hamilton in 1776, then by John Maynard Keynes in 1936, by Richard Nixon in 1971, and most recently by Bill Clinton since 1993.

Soros’ attack on the mighty British pound in 1992 was the culmination of Nixon’s withdrawal from Bretton Woods in 1971. Bill Clinton’s economic team expanded this approach to the emerging markets in 1994 by coming to the aid of Mexico after Wall Street had pulled out of the peso.

Naomi Klein in her book “The Shock Doctrine,” Jagdish Bhagwati of Columbia in his collection of Op-Ed pieces in the ‘90s and Dani Rodrik of the John F. Kennedy School of Government at Harvard in his book “Has Globalization Gone Too Far?” have critiqued the Clinton Administration’s policies of radical economic globalization to open world markets to the flow of US investment, at the de facto sole discretion of the United States, through global economic institutions such as the International Monetary Fund (IMF) and the World Bank serving as proxies for the US NEC.

As only recently acknowledged by the IMF, only China and India have escaped the wrath of the American economy ploughing across the planet, while Malaysia, a small country was criticized incessantly for challenging the radical policy of opening the world to open capital markets, floating exchange rates and independent central banking, the trinity of international economics, as if the economic groupthink was unaware that open market economic institutional development is necessary for the trinity to function in stability (for a tabulated list of policies that constituted the Washington Consensus see: Political Economy in Macroeconomics, Allan Drazen, University of Maryland, Tel Aviv University).

As I have postulated in 2009 and as economists Carmen Reinhart of University of Maryland and Kenneth Rogoff of Harvard proved later through their econometric analysis, the spread of the disease of orchestrated economic attacks on nations has made one full circle back to US capital markets beginning in 2007, after having almost done so in 1998 when Long Term Capital Management (LTCM) was about to collapse because of Russian default in Boris Yeltsin’s Russia, orchestrated through the US Department of State, Chatham House (foreign policy establishment of the United Kingdom) and the Council On Foreign Relations (CFR) for the North Atlantic Treaty Organization’s (NATO) to benefit after the Cold War from Russia’s immense natural resource wealth. Russian economy was taken down on the one hand and LTCM was saved through Federal Reserve coordination out of the offices of the Federal Reserve Bank of New York on the other.

What goes around comes around. The United States is ripe for a similar attack in 2011 on the almighty dollar by the emerging markets, led by China, in the face of the discredited economic institutions of capitalism in the Group of 7 nations (consisting of the United States, Japan, Germany, United Kingdom, France, Italy and Canada), despite the de jure trinity of international economics, not because of the critiques but because of its own complacency, hubris and state sponsored corruption. Asia is poised to lead the next industrial revolution, because clean energy has leveled the playing field.

The US dollar is correcting down since 2007. And it could overshoot on its way down as postulated by the late Rudi Dornbusch, a professor of economics at the Massachusetts Institute of Technology (MIT) who had taught the cohort of graduate students to which Paul Krugman and Ben Bernanke belonged.

The ‘90s critiques which continue to fall into deaf ears because of the recalcitrance of the policy makers from those years in preference for the continuation of the status quo are insufficient to change attitudes and policies unless the moral hazard induced as a safety net for undisciplined market behavior is contained through parsimonious but effective regulation, as I have extensively pointed out since 2002 in a collection of articles after the series of economic shocks which began with the recession in 2000 followed by corporate governance corruption and 9/11, and now the housing and euro crises from Iceland to Greece and Ireland.

The government’s resistance to better regulation continues to exist and is justified as self-regulation to encourage financial innovation. This resistance is evidenced by the behavior of the Federal Reserve since 2007 in the United States and that of the IMF during the ‘90s crises abroad and now in Europe, despite the recent US financial regulatory reforms. $16 trillion, about the size of the US GDP just as I had predicted in 2008, was provided to bail out the financial markets in the hope that some will trickle down to make real things for real people.

Global finance is running amuck, by intent, both at home and abroad at the expense of the peoples of the world under the threat and fear of recessions and depressions to cycle economic variables at will through money supply to save financial institutions rather than make industrial policy through the Federal Reserve to save jobs.

Wall Street is subsidized by the ex post bail out of crisis countries, including the United States, and this subsidy is expected ex ante by the traders of financial assets in New York and London. In the pursuit of this agenda, the NEC, in the name of “economic security,” a phrase coined by the Clinton administration as a counterpart to national security (which gave the Alan Greenspan Fed extraordinary latitude to silence its critics both inside and outside the institution), works silently, dodging criticism and subjecting its critics to professional and personal destruction, as has been evidenced since the economic and financial crisis of 2007 through testimony in the United States Congress by economic policymakers from the ‘90s who were subject to professional persecution by the Clinton economic team and the Federal Reserve.

The purpose of the NEC to safeguard the country’s economic security has been defeated, whether the president who succeeded Clinton would have been Gore or Bush, because of Clintonomics. Today the principal national security threat to the United States is its economic condition. And this is economic terrorism because corruption, whether Goldman Sachs or Halliburton, puts the wealth of nations at peril.


About Chandrashekar (Chandra) Tamirisa
This entry was posted in Economics, Terrorism, Transformations LLC, World and tagged , , . Bookmark the permalink.

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