Never compromise?

Dear Hamas, Fatah, Palestinian Islamic Jihad Movement, Popular Resistance Committees, Tanzim, Al Aqsa Martyrs Brigade and Popular Front for the Liberation of Palestine... Especially Hamas...

Are you stupid, suicidal or an agent of the Israeli government? Have you forgotten your history? How you were created? You are the bastard child of Shin Bet and Mossad. I used to think that you grew up and became what Israelis feared; another PLO. In 2006 when Qassam rockets stopped wrecking the streets of Israel and you won the parliamentary elections in Palestine, I thought that peace could be established. I guess I was wrong. You continue to deny Israels right to exist, you continue to spread ridiculous anti-judaistic propaganda, you continue to use civilian buildings for weapons manufacturing and the worst of all the idiotic things you do; you fight with Fatah.

I know that Israeli warcrimes, occupation of Palestinian land and racist apartheid genocide has been critisized ad nauseum, so I won't be going there that much today. But I mean, come on! Israel is one of the biggest military powers in the world and is supported by The Biggest military machine on earth. Israel has over 400 nuclear warheads, Patriot missiles, F-16s, armored tanks, world class military training, contracts with the CIA and other intteligence agencies and missile defense systems that'd block any strike coming from afar. Yet the militarized Palestinian resistance confronts this with some primitive mortars and bottle rockets?

I understand your frustration, but do you seriously believe that the Zionist controlled media outlets of the West don't know how to exploit your pathetic attempts of armed resistance? They will crush you and your people and continue the occupation for 40 more years because for the Anglo-Americans and their satellites surrounding Israel profit from war and the resources of your country. I have and I always will support the two-state-solution where no racial discrimination becomes either veiled or written in the books of law.

So I ask you, are you suicidal or are you still an agent of Mossad? The right wing Irgun-spawned government of Israel will not negotiate with you seriously, if you don't stop the violent Intifada. Take a look what Hezbollah did in Lebanon. They smashed the color revolution supported by Israel and won the elections. Regardless what you think of Hezbollah, they are a united front and a real mass movement. Put your differences aside with Fatah and start taking responsibility for the reasons you were elected. Take responsibility for the Al Aqsa brigade, I know they'll listen to you.

Maybe it's time to think about compromising your position on Jerusalem? Regardless of the UN charter and the EU, Israel and the US will veto the statements ever implicating the East-Jerusalem part becoming the capitol of the Palestinian state. It's just not going to happen. Millions of innocent peace-loving Israelis and Palestinians are suffering because of this conflict. Take the first step: recognize Israel, renounce armed resistance and negotiate about Jerusalem. After the hot potato, the slaughter of Gazans in Operation Cast Lead, the world will hear your cry and demand a peaceful solution to end this genocide. I know Israel won't do it.

What You Didn't Know About The War

Guess what?

"In 1998, Dick Cheney, now US vice-president but then chief executive of a major oil services company, remarked: "I cannot think of a time when we have had a region emerge as suddenly to become as strategically significant as the Caspian." But the oil and gas there is worthless until it is moved. The only route which makes both political and economic sense is through Afghanistan.

From "U.S. INTERESTS IN THE CENTRAL ASIAN REPUBLICS HEARING BEFORE THE SUBCOMMITTEE ON ASIA AND THE PACIFIC OF THE COMMITTEE ON INTERNATIONAL RELATIONS HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTH CONGRESS SECOND SESSION
FEBRUARY 12, 1998:

The only other possible route is across Afghanistan, which has of course its own unique challenges. The country has been involved in bitter warfare for almost two decades, and is still divided by civil war. From the outset, we have made it clear that construction of the pipeline we have proposed across Afghanistan could not begin until a recognized government is in place that has the confidence of governments, lenders, and our company... As with the proposed Central Asia oil pipeline, CentGas can not begin construction until an internationally recognized Afghanistan Government is in place."

Two researches concluded this: "They affirm that until August [2001], the US government saw the Taliban regime "as a source of stability in Central Asia that would enable the construction of an oil pipeline across Central Asia" from the rich oilfields in Turkmenistan, Uzbekistan, and Kazakhstan, through Afghanistan and Pakistan, to the Indian Ocean. Until now, says the book, "the oil and gas reserves of Central Asia have been controlled by Russia. The Bush government wanted to change all that."

And this: "But, confronted with Taliban's refusal to accept US conditions, "this rationale of energy security changed into a military one", the authors claim.

"At one moment during the negotiations, the US representatives told the Taliban, 'either you accept our offer of a carpet of gold, or we bury you under a carpet of bombs,'" Brisard said in an interview in Paris."

Guess what? Jane's Defense reports that India Joined US led plan against Afghanistan in March 2001: "India is believed to have joined Russia, the USA and Iran in a concerted front against Afghanistan's Taliban regime."

Guess what? BBC reports that American government told other governments about Afghan invasion IN JULY 2001: "A former Pakistani diplomat has told the BBC that the US was planning military action against Osama Bin Laden and the Taleban even before last week's attacks. Niaz Naik, a former Pakistani Foreign Secretary, was told by senior American officials in mid-July that military action against Afghanistan would go ahead by the middle of October.

The wider objective, according to Mr Naik, would be to topple the Taleban regime and install a transitional government of moderate Afghans in its place - possibly under the leadership of the former Afghan King Zahir Shah. Mr Naik was told that Washington would launch its operation from bases in Tajikistan, where American advisers were already in place."

Guess what? MSNBC reports that Afghanistan war plans were on Bush's desk on 9/9/2001: "President Bush was expected to sign detailed plans for a worldwide war against al-Qaida two days before Sept. 11 but did not have the chance before the terrorist attacks in New York and Washington, U.S. and foreign sources told NBC News. ... The plan dealt with all aspects of a war against al-Qaida, ranging from diplomatic initiatives to military operations in Afghanistan, the sources said on condition of anonymity."

Then came 9/11... Guess what happened on 27 December 2002? This: "An agreement has been signed in the Turkmen capital, Ashgabat, paving the way for construction of a gas pipeline from the Central Asian republic through Afghanistan to Pakistan.

The building of the trans-Afghanistan pipeline has been under discussion for some years but plans have been held up by Afghanistan's unstable political situation."

Obama - The Man of Peace?

Today president Obama won the Nobel peace prize for "his extraordinary efforts to strengthen international diplomacy and cooperation between peoples... The committee said it attached special importance to Obama's vision of, and work for, a world without nuclear weapons."

First of all, I find the Nobel committee to be horribly wrong on almost every time they give the peace prize, but this is getting pretty over-the-top. Since the topic is peace, let me question some of the actions of president Obama.

1) Obama intends to escalate the war in Afghanistan by sending in tens of thousands of more troops. Make war for peace, huh?

2) Newly released Pentagon statistics show that in both Iraq and Afghanistan the number of armed contractors is rising. The DoD says it sees “similar dependence on contractors in future.”

3) To meet June deadline, US and Iraqis redraw city borders...Meaning the troops are no longer in cities, because the Iraqi & US military REDREW the city limits

4) "President Obama has reaffirmed a 4-decade-old secret understanding that has allowed Israel to keep a nuclear arsenal without opening it to international inspections." Once again, it is Israel who threatens Iran (who, by the way, does not have nukes or the capability to make them), not the other way around.

5) At this time it seems that there won't be missile shield in Poland, but "With the end of this land based system Obama and Secretary of Defense Gates have stressed that the coverage gap would be replaced by shorter ranged systems including those based on U.S. Navy ships." And AGAIN, the winners are the defence contractors such as Raytheon and Lockheed Martin. The so called "Polish missile crisis" is far from being over.

6) Since Obama took power, he's been bombing the living daylights out of Pakistan. CIA drones hammer the tribal areas almost every single day. You call that peace? Oh and now Blackwater/Xe is operating in Pakistan.

7) The Honduras coup happened on Obama's watch. Incidently, John Perkins has some inside info on this: "Everyone I talked with there was convinced that the military coup that had overthrown the democratically-elected president of Honduras, Manuel Zelaya, had been engineered by two US companies, with CIA support. And that the US and its new president were not standing up for democracy."

8) The Obama adminstration & the intelligence section tried to orchestrate a color revolution ( CIA's people power coup) in Iran. As Paul Craig Roberts (Assistant Secretary of the Treasury in the Reagan administration) points out: "The protests in Tehran no doubt have many sincere participants. The protests also have the hallmarks of the CIA orchestrated protests in Georgia and Ukraine. It requires total blindness not to see this."

Probably the list would go on and on. The point is, Obama is not the man world thinks he is. He is a puppet of the Trilateral commission and the soft power CIA intelligence front. He is completely dominated by the interests on Wall Street and the City of London along with the military-industrial-complex.Finally, I quote dr. Roberts: "It requires total blindness not to see this."

Al-qaedaskfsnsdjkfsdn part 23234234

“Abu Omar al-Baghdadi was arrested today in Baghdad,” Baghdad security spokesman Major General Qasim Atta told AFP.

“It was Iraqi forces who arrested him based on an intelligence tipoff from someone,” he added.

Also known as Abu Hamza al-Baghdadi and Abu Abdullah al-Rashid al-Baghdadi, many questions have surrounded the so called leader of al Qaeda’s political front organization the “Islamic State of Iraq”.

He was thought to have been one of the figures to succeed the equally shadowy Abu Musab al-Zarqawi as a leader of insurgent forces in Iraq in 2006, after al Zarqawi, who was also previously reported captured and killed on several occasions, was laid to rest for good by the PR arm of the Pentagon.

The announcement of al-Baghdadi’s capture today jars with multiple previous reports from up to two years ago, detailing his arrest, his death and even questioning his existence altogether.

In March 2007, the Interior Ministry of Iraq claimed that al-Baghdadi had been captured in Baghdad. This was reported by AP and picked up by the likes of CNN, whose report stated that another insurgent had positively confirmed al-Baghdadi’s identity.

The U.S. military denied that al-Baghdadi was in their custody, however, and one day later Iraqi officials retracted their statements regarding his arrest.

Indeed this back and forth announcement of capture and later retraction occurred three times in the space of one week.

Then one month later, on May 3, 2007, the Iraqi Interior Ministry announced that al-Baghdadi had been killed by American and Iraqi forces north of Baghdad.

However, in July 2007, the U.S. military reported that al-Baghdadi had never actually existed and was, for all intents and purposes, a myth.

A reportedly high ranking “Al Qaeda in Iraq” detainee identified as Khaled al-Mashhadani, then claimed that al-Baghdadi was a fictional character created to give an Iraqi face to a foreign-run terror group, and that the “Islamic State of Iraq” was a “virtual organisation in cyberspace” created by al-Qaeda in Iraq leader Abu Ayub al Masri.

The person claiming to be Baghdadi continued to release video and audiotapes attacking U.S. occupation of Iraq, but refused to show his face.

The U.S. military’s claim that Baghdadi is a fictitious character was then challenged in May 2008 after a police chief in Haditha said Baghdadi’s real identity is Hamed Dawood Mohammed Khalil al Zawi. “He was an officer in the security services and was dismissed from the army because of his extremism,” the police chief told al Arabiya television.

Now Baghdadi has been reported captured again!

This saga is another example of how a manufactured smoke and mirrors propaganda veils reality. The “war on terror” mantra continues to be propagated as justification to wage permanent occupation and control over the middle east by the global elite.

Al Qaeda in Iraq, al Zarqawi, al Baghdadi and the legions of other al qaeda operatives who have been reportedly captured and killed over and over are used as interchangeable PR tools.

Are or were any of them ever real? Possibly. However that matters little now.

Once again 99% of the corporate media will no doubt enthusiastically champion this latest arrest as a key victory in the continuing war on terror, and the majority of Americans who even notice will not take a second glance at the ludicrous back story.

- Infowars -

9/11 truth, again

NOTE: click on the pics to open them in new window for real size and high quality


Why is noone covering this? I'm sure you're aware of the paper called "Active Thermitic Material Discovered in Dust from the 9/11 World Trade Center Catastrophe", published by The Open Chemical Physics Journal made by Niels H. Harrit, Jeffrey Farrer, Steven E. Jones, Kevin R. Ryan, Frank M. Legge, Daniel Farnsworth, Gregg Roberts, James R. Gourley, Bradley R. Larsen. If you are not, here's the link for it. That's huge! That's something we've suspected for many years now, but there's finally a confirmation. Now here's where it REALLY gets hot!

911blogger reports:

"Turner Construction, who supervised the 2000 demolition of the Seattle Kingdome, participated in the post-9/11 Ground Zero clean-up and performed extensive renovations within the World Trade Center towers just prior to 9/11, was in fact performing unspecified renovation work throughout the WTC complex until the very morning of September 11, 2001. The Port Authority of NY/NJ now claims that records describing such work or other projects were destroyed on September 11, 2001. A December 2000 WTC property assessment described required renovation work to be completed within one year, upon steel columns within elevator shafts of both WTC towers that was immediately pending or already underway.

Terror devastates A/E/C firms

12 employees of Turner Construction were located in an office in the third subbasement of Tower 1, the north tower. Turner had been performing renovation work in various parts of the center and had occupied various office spaces. http://www.highbeam.com/doc/1G1-79439506.html

In 1997 Turner Construction also constructed the new headquarters for the Naval Sea Systems Command (NAVSEA). The Indian Head Naval Surface Warfare Center, a laboratory managed by NAVSEA was described during the 1990s as the "National Center for Energetics", the "Pentagon's jargon to broadly describe explosive materials, propellants and pyrotechnics" and as the "only reliable source of aluminum nanopowders in the United States".

http://www.highbeam.com/doc/1P2-574412.html

Turner Corporation 1997 10-K Report

During 1997, the company completed work on ... the Naval Sea Systems Command Headquarters (NAVSEA) for the Navy in Washington, DC.

http://www.buck.com/10k?tenkyear=97&idx=T&co=!TURNERC&nam=DEMO2&pw=DEMO2

Naval Sea Systems Command

http://en.wikipedia.org/wiki/Naval_Sea_Systems_Command

The Top Ten Connections Between NIST and Nano-Thermites

http://www.journalof911studies.com/volume/2008/Ryan_NIST_and_Nano-1.pdf

Previous work performed by Turner Construction at the WTC included fireproofing of the only floors that were struck by United and American airlines flights on September 11, 2001 and that later burned and "failed".

http://www.911blogger.com/node/13272

A December 2000 WTC property assessment recommended immediate renovation work upon steel columns contained within elevator shafts of both WTC towers:



The Port Authority of NY/NJ claims that contracts with Turner Construction - including those that might describe the renovation work being performed by Turner Construction until the very morning of September 11, 2001 - were destroyed on September 11, 2001.


However, Port Authority records detailing other work performed by Turner Construction and requested by NIST during its investigation of the WTC building collapses, were not destroyed on September 11, 2001.



http://www.911podcasts.com/files/documents/NIST-Fireproofing.zip

Turner Construction Company occupied the 38th floor of WTC 1.

List of Tenants in One World Trade Center

http://en.wikipedia.org/wiki/List_of_tenants_in_One_World_Trade_Center

Turner Construction particpated in the collection and disposal of the steel wreckage of the WTC towers following September 11, 2001.

Australia's Lend Lease has secured the contract to manage the clean-up operation at New York's World Trade Center site ... will also be in charge of AMEC Construction Management, Turner Construction and Tully Construction, which have been contracted to work on the site.

http://www.highbeam.com/doc/1G1-81303508.html

The CEO for Turner Construction Company appointed in 1999, was Tom Leppert, who joined the board of Turner in 1998, is currently the mayor of Dallas, Texas and who has ties with former president George W. Bush and Carlos M. Gutierrez, Secretary of the U.S. Department of Commerce. The National Institute of Standards and Technology, a bureau of the Department of Commerce, was assigned to investigate the collapses of the WTC 1,2 and 7.

Thomas C. Leppert Named To Succeed E.T. Gravette, Jr. As Chairman Of The Turner Corporation

http://www.turnerconstruction.com/corporate/content.asp?d=1222&p=1153

PRESIDENTIAL APPOINTMENT FOR MAYOR LEPPERT

President George W. Bush appointed Dallas Mayor Tom Leppert to the President’s Commission on White House Fellows.

http://www.tomleppert.com/PR/docs/fellows_commission.pdf

Mayor Leppert meets with Bush

Dallas Business Journal

Dallas Mayor Tom Leppert, along with a group of 11 other mayors, met with President George W. Bush and Commerce Secretary Carlos M. Gutierrez Wednesday at the White House to discuss a free trade agreement with the South American countries of Peru and Colombia.

http://www.bizjournals.com/dallas/stories/2008/01/21/daily26.html?jst=m_ln_hl&surround=lfn

Carlos M. Gutierrez

http://www.commerce.gov/bios/Gutierrez_bio.htm

NIST and the World Trade Center

http://wtc.nist.gov/

***

Now add that with all the other evidence including drills, patsies, government lies, insider trading, confessions and foreknowledge and you get a pretty huge story! Why isn't the media hyping this like crazy?!?

Al-CIA-duh

Today's headlines inspired me to write this. I'm going to post mainstream news which totally discredit and debunk the war on terror and Al-qaeda blunders that's going on in the media. Here's The News:

"LAHORE: Of the 60 cross-border predator strikes carried out by the Afghanistan-based American drones in Pakistan between January 14, 2006 and April 8, 2009, only 10 were able to hit their actual targets, killing 14 wanted al-Qaeda leaders, besides perishing 687 innocent Pakistani civilians. The success percentage of the US predator strikes thus comes to not more than six per cent." ...and it goes on to point out what a failure the whole operation is.

Here's Daily Times:
"Pakistan has not received any credible intelligence report about the presence of Al Qaeda leadership inside its borders, Foreign Office (FO) spokesman Abdul Basit said on Thursday.
“We have not come across any authentic intelligence which would indicate that Al Qaeda leadership is in Pakistan, and we do not attach importance to speculations,” Basit said in a weekly briefing.
He said the United States drone attacks might have achieved certain tactical gains but they were largely counterproductive and in violation of Pakistan’s sovereignty. “We cannot condone these attacks,” he said."

Now all the stuff I'm hearing on the news is that the US bombs the living daylights out of Pakistan is because of Al-qaeda. Now, we all know that US funded and created Al-qaeda in the 70s, so we don't have to go over that again. Let's look at some interesting headlines from the past:

Meet Kamal Jalil Uthman: "Another Al Qaeda In Iraq Leader Killed Twice by U.S": "The U.S. military command in Iraq was forced to retract showpiece statements made this week that they had killed a high profile Al Qaeda leader due to the fact that they had already announced the killing one year ago."

Meet Abu Musab al-Zarqawi, the supposed former leader of Al Qaeda in Iraq, was apparently killed no less than five times by coalition forces. 5!

"He was first killed in the Sulaimaniyah mountains of northern Iraq, then he was killed in the northern Iraqi city of Mosul, followed by a death during Operation Matador near the town of Qaim on the Syrian border, then he was killed, along with his mentor, Osama bin Laden, in the besieged city of Fallujah, and finally met his fifth demise in a U.S. air raid north of Baghdad in the town of Hibhib near Baquba."

Now, whereas the CIA is an adept toying with these patsies and psyops, British intelligence can do it as well. Here's Times Online with a headline:

"Al-Qaeda cleric exposed as an MI5 double agent"....

And then there was the case of "...SAS soldiers, dressed as Arabs, were spotted by plain clothes Iraqi policemen...The soldiers engaged in a gun battle before being captured and taken to Jamiat police station in the southern Iraqi city." ...by Telegraph. After killing dozens of Iraqis they were arrested and a few days later the British army in Iraq destroyed the prison they were in and freed the provocateurs.

Mossad likes to play Al-qaeda roleplaying games as well. Larouchepub comes with an article that states as an opening chapter: "The United States government has been provided with concrete evidence that the Israeli Mossad and other Israeli intelligence services have been involved in a 13-month effort to "recruit" an Israeli-run, phony "al-Qaeda cell" among Palestinians, so that Israel could achieve a frontline position in the U.S. war against terrorism and get a green light for a worldwide "revenge without borders" policy."

There's tons of other stuff likes the fake passports and almost all the so called Al-qaeda terrorists working as intelligence assets in Kosovo, Bosnia, Philippines, Somalia, Sudan...you name it. The point is, Al-qaeda is fake boogeyman. So when Bush used to say that "terrorists attacked the US (which they didn't) because they hate our freedom".. I'd think that if they were any credible terror threats that wouldn't operated by the intelligence agencies, they would hate you because you bomb their countries for selfish interests like oil and other natural resources.

Reality check

Alrighty then. Here's the Concise Encylopedia of Economics: "Where socialism sought totalitarian control of a society’s economic processes through direct state operation of the means of production, fascism sought that control indirectly, through domination of nominally private owners. Where socialism nationalized property explicitly, fascism did so implicitly, by requiring owners to use their property in the “national interest”—that is, as the autocratic authority conceived it."

Here's Wall Street Journal:
"Some $340 million in TARP cash flowed back this week from four small banks in Louisiana, New York, Indiana and California. This isn't much when we routinely talk in trillions, but clearly that money has not been wasted or otherwise sunk down Wall Street's black hole. So why no cheering as the cash comes back?

My answer: The government wants to control the banks, just as it now controls GM and Chrysler, and will surely control the health industry in the not-too-distant future. Keeping them TARP-stuffed is the key to control. And for this intensely political president, mere influence is not enough. The White House wants to tell 'em what to do. Control. Direct. Command."

What's associated with fascism? Concentration camps, goon squads, busting trade unions, pseudo-science (race-science & the likes), a messianic leader and glorifying propaganda poster art.

Concentration camps:

"The United States Federal Emergency Management Agency has numerous detainment camps throughout the United States. Some camps have been recently constructed and / or renovated and are fully staffed. The existence of the camps coupled with Presidential Executive Orders giving the President and Department of Homeland Security (of which FEMA is now part) control over ‘national essential functions’ in the event of ‘catastrophic emergency’ have resulted in concerns that the camps will be used to forcefully detain American citizens for unconstitutional purposes.

Readiness Exercise 1984 (REX-84) is an emergency response program involving the implementation of martial law, the movement of civilian populations and the arrest and detainment of segments of the population. A rehearsal of the program was carried out April 5-13, 1984. It was led by FEMA and the Department of Defense and involved the coordination of 34 other Federal departments and agencies. REX-84 was mentioned during the Iran-Contra hearings and publicly exposed by the Miami Herald on Sunday July 5th, 1987.

Operation Garden Plot is a United States Army and National Guard program under control of the US Northern Command (NORTHCOM) to provide Federal military support during domestic civil disturbances. One example of the program’s implementation was during the 1992 Los Angeles riots when US Army and Marine forces were used in conjunction with the California National Guard. In Los Angeles an Executive Order was made to permit the use of the Federal army to uphold domestic laws pursuant to the 1878 Posse Comitatus Act, which places restrictions on the domestic use of the military for law enforcement purposes.

Recently, however, Section 1076 Public Law 109-364, or the "John Warner Defense Authorization Act of 2007" (H.R.5122) has amended Posse Comitatus and The Insurrection Act (which also places limits on domestic military deployment) to allow the Federal government to unilaterally take control of state National Guards and position Federal troops anywhere in the country during a ‘public emergency’.

Goon squads:

1) The US Senate voted yesterday to procedurally clear the way for President Obama’s National Service Corps. The bi-partisan vote approved a $6 billion scheme to increase the number of “community service” jobs in America from 75,000 to well over 250,000. Presumably under the direction of this cadre, the plan is designed to enlarge the number of Americans engaged in “community organizing” to about 7 million.

2) Defense Department Establishes Civilian Expeditionary Workforce:
"The Defense Department is forming a civilian expeditionary workforce that will be trained and equipped to deploy overseas in support of military missions worldwide, according to department officials.
The directive emphasizes, however, that volunteers be sought first for any expeditionary requirements, before requiring anyone to serve involuntarily or on short notice. Overseas duty tours shall not exceed two years."

3) This was years ago, but still worth a mention:
"Political analyst Al Martin, who has in the past proven accurate in getting ahead of the news curve, is reporting that Homeland Security have hired former Stasi head, the 'Silver Fox' Markus Wolf.

Martin states,

"Wolf is the man that effectively built the East German state intelligence operation’s internal directorate," Martin continues. "He turned half the population into informants. That is his specialty, is taking a population, constructing the various state divisions, mechanisms of control, in order to organize informants within the population. That is his real specialty. And that is precisely, as Primakov has intimated, why Wolf is being brought in. The regime knows that once all of Patriot II is in law and they begin working on Patriot III, they will then begin to establish the internal mechanism to coordinate, as an official function of state, a system of informants. Wolf’s speciality was to turn East Germany into the greatest and most efficient informant state ever created."

Busting trade-unions:

"Senator Obama is saying decisively that he does not support private school vouchers, while sticking with his support for incentive pay for teachers based on their students' performance. Mr. Obama also raised concerns when he endorsed the idea of "merit pay" at a convention last year for the other national teachers union, the National Education Association.

In his address to the NEA this year, he acknowledged that the idea "wasn't necessarily the most popular part of my speech last year," but vowed to stand by it, eliciting some boos. Those at the AFT convention said that no boos followed the remarks, though some union members later said they were concerned by them.

Pseudo-science:

1) President-elect Barack Obama met this afternoon in Chicago with former vice president Al Gore to discuss climate change, declaring after the meeting, "The time for denial is over."
"We all believe what the scientists have been telling us for years now," Obama said, "that this is a matter of urgency and national security, and it has to be dealt with in a serious way. That is what I intend my administration to do."

2) Even Drayson is outbid, however, by the groupies in The Guardian, who now suggest that people like Christopher Booker should no longer be compared to “Holocaust deniers” but consigned to even more outer darkness by branding them as climate “Creationists”, the dirtiest word they know. Meanwhile at the University of the West of England in Bristol this weekend, a conference of “eco-psychologists”, led by a professor, are solemnly exploring the notion that “climate change denial” should be classified as a form of “mental disorder”.


Messianic Leader:

1)Cnn: President Barack Obama is "President of the World"

2) Farrakhan: "A black man with a white mother became a savior to us," he told the crowd of mostly followers dressed in Nation of Islam attire including long white suits and matching head scarfs for women and navy-colored uniforms with caps for men. "A black man with a white mother could turn out to be one who can lift America from her fall."


Propaganda poster art:

Washington Post telling about the poster artist Shepard Fairey:
"Fairey's artwork follows the style of his predecessors. His Obama posters (and lots of his commercial and fine art work) are reworkings of the techniques of revolutionary propagandists -- the bright colors, bold lettering, geometric simplicity, heroic poses -- the "art with a purpose" created by constructivists in the early Soviet Union, like Alexander Rodchenko and the Stenberg brothers, and by America's own Depression-era Works Projects Administration."

Amazon.com sells a book called Barack Obama: Son of Promise, Child of Hope. The description says:
"Ever since Barack Obama was young, Hope has lived inside him. From the beaches of Hawaii to the streets of Chicago, from the jungles of Indonesia to the plains of Kenya, he has held on to Hope. Even as a boy, Barack knew he wasn't quite like anybody else, but through his journeys he found the ability to listen to Hope and become what he was meant to be: a bridge to bring people together."

Amazon.com also sells Pocket Obama - a little blue book, which contains speeches by mr. Obama.
************************************************

You also have army brigades on the streets, a huge genocidal depression with a derivatives bubble, preachers trained to sedate their flocks for gun confiscation and FEMA camps and a fumbling dollar that's about to collapse. If I were an American, I'd leave the country. Not that I'd have anywhere to hide, since this mess is becoming global under yet-to-come tyrannical world government, but I think the US is going to collapse first.

Let's ban guns and invade Pakistan

"(Reuters) - A man armed with two handguns killed 13 people at an immigration services center before apparently turning the gun on himself, authorities in Binghamton, New York, said on Friday.

Police Chief Joseph Zikuski told a news conference the gunman blocked the back entrance of the building with a car, walked in the front door and shot two receptionists, one of whom died, before entering a classroom and killing 12 more people and then apparently committing suicide.

He said that four other people were critically wounded in the latest U.S. shooting incident with multiple casualties.

One of the receptionists survived, pretending to be dead before crawling under a desk where she managed to call police, Zikuski said. She was in critical condition in a hospital.

"We have no idea what the motive is," Zikuski said, adding that the man was no stranger to the center."
***

" A Pakistani Taliban militant leader has claimed responsibility for the attack on a U.S. immigration center in New York state in which 13 people were killed, Reuters reported.

"I accept responsibility. They were my men. I gave them orders in reaction to U.S. drone attacks," Baituallah Mehsud told Reuters by telephone from an undisclosed location on Saturday. U.S. officials were not immediately available for comment about Mehsud's claim, Reuters reported, and one Pakistani security analyst dismissed the claim as a publicity stunt.

Representative Maurice Hinchey, whose district includes Binghamton, told the New York Times that indications are the gunman was an immigrant from Vietnam.

Mehsud's claim comes as a suspected U.S. drone fired two missiles at an alleged militant hide-out Saturday in northwestern Pakistan, killing 13 people."
**

Oh yeah, it's a stunt alright. An excerpt from Sky News article:

He is in his mid-thirties and was named by Time magazine as one of the top 100 most influential figures in the world. He’s been called more dangerous than Osama Bin Laden by Newsweek - and Musharraf and the America CIA said he was the mastermind behind Bhutto’s death.

The journalists who met him in South Waziristan, in Pakistan’s tribal belt, describe him as courteous, slightly plump, short and earnest.

According to a news report he died of renal failure.
**
I guess when you join the CIA as a puppet terrorist, you must sacrifice your kidneys for the cause. Winter Patriot breaks it down:

"Pakistan's most feared terrorist communicates with encryption so strong the Pakistani intelligence services cannot crack it. He gets information on Pakistani troop movements from an unidentified foreign government. He's said to be responsible for the vast majority of terrorist attacks in Pakistan (including the assassination of Benazir Bhutto), but the Americans -- who don't mind bombing "Islamic militants" in Pakistan every now and then -- have refused to attack him despite having solid information as to his whereabouts. And on, and on, and on...

All this and more is highlighted in a excellent piece from "State of Pakistan", which I have reproduced in full below, with just a bit of editing and a few comments.

Baithullah Mehsud could be a CIA ‘intelligence asset’ in this double game
A report published by the News on August 5, 2008 includes the following (apparently based on information given by the ISI officials):
”The top US military commander and the CIA official were also asked why the CIA-run predator[s ] and the US military did not swing into action when they were provided the exact location of Baitullah Mehsud [photo], Pakistan’s enemy number one and the mastermind of almost every suicide operation against the Pakistan Army and the ISI since June 2006. One such precise piece of information was made available to the CIA on May 24 when Baitullah Mehsud drove to a remote South Waziristan mountain post in his Toyota Land Cruiser to address the press and returned back to his safe abode. The United States military has the capacity to direct a missile to a precise location at very short notice as it has done close to 20 times in the last few years to hit al-Qaeda targets inside Pakistan. Pakistani official[s ] have long been intrigued by the presence of highly encrypted communications gear with Baitullah Mehsud. This communication gear enables him to collect real-time information on Pakistani troop movement from an unidentified foreign source without being intercepted by Pakistani intelligence.”
Both the CIA and the ISI have been playing a double game. Fighting and nurturing terrorists and warlords at the same time! Why?
If this is a serious question then perhaps I can answer it.
Now please carefully read the following published and circulated by the State of Pakistan on January 31, 2008.

Nicholas Schmidle, who was expelled from Pakistan in January 2008 for writing a detailed report in the NY Times on the tribal areas and the NWFP, later wrote in the Washington Post,
“foreign journalists are barred from almost half the country; in most cases, their visas are restricted to three cities — Islamabad, Lahore and Karachi. In Baluchistan province, which covers 44 percent of Pakistan and where ethnic nationalists are fighting a low-level insurgency, the government requires prior notification and approval if you want to travel anywhere outside the capital of Quetta. Such permission is rarely given. And the Federally Administered Tribal Areas (FATA), where the pro-Taliban militants are strong, are completely off-limits. Musharraf’s government says that journalists are kept out for their own security. But meanwhile, two conflicts go unreported in one of the world’s most vital — and misunderstood — countries.”
What does the government want to hide?
I could probably answer that, too.
Most governments make every effort to expose terrorists. Authorities pursue them relentlessly including placing advertisements about purported crimes, requesting people to come forward and give information. When arrested they prosecute the alleged terrorists vigorously and publicize convictions. But no such pattern in Pakistan. The website of Pakistan’s Federal Investigation Agency lists only two, yes only TWO terrorists from the federally administered tribal areas (FATA) as wanted. The star of ‘Jaish-e-Muhammed’ Masood Azhar was allowed to escape. The other star, Omar Saeed Sheikh, is still alive (ostensibly because his case is under appeal) although he was sentenced to death in July 2002. The alleged ‘master mind’ of the plan to blow up trans-atlantic flights, Rashid Rauf, has mysteriously escaped and the government does not even want to hear about it. Khalid Sheikh Mohammed, the master mind of 9/11, has been kept in Guantanamo since 2004 and has not been tried. Abdullah Mehsud (Baitullah’s relative) was released by the U.S. from Guantanamo and allowed to return? Why? So that they can issue threats to blow up the White House (interview to Al-Jazeera on Jan. 29, 2008) and provide justification for the so-called ‘War on Terror’ which has not seen a single terrorist attack on the U.S. soil since 9/11?
YES! Exactly!
Let’s now talk about Baitullah Mehsud who became a big militant leader soon after Abdullah’s release by the U.S. government from Guantanamo Bay in March 2004. Until the end of 2004, Baitullah Mehsud (former FATA secretary Brig. Mahmood Shah says he is in 40s) lived in the shadow of his daring and charismatic fellow tribesman, Abdullah Mehsud, who, with his long black hair, was considered a terrorist rock star. Abdullah fought with the Taliban in Afghanistan against the Northern Alliance and in 1996 lost a leg when he stepped on a land mine. He was taken captive by warlord Abdul Rashid Dostum who turned him over to American forces. Abdullah Mehsud was sent to Camp Delta at Guantanamo Bay Naval Base in Cuba and held for two years, insisting the whole time that he was just an innocent tribesman. He was released in March 2004 for reasons which remain unclear and returned to Waziristan. Soon after his return, he orchestrated the kidnapping of two Chinese engineers working on a dam in his region, proclaiming that Beijing was guilty of killing Muslims. He also ordered an attack on Pakistan’s Interior Minister in which 31 people perished. The government came under tremendous pressure from the Chinese to hunt Abdullah after the killings of their engineers.

The Afghan Taliban, who were in the process of organizing themselves to fight in Afghanistan and were desperately trying to avoid a head-on confrontation with Pakistani forces in the tribal regions, were not pleased with the killing of the Chinese engineers. Abdullah was made a deputy of Baitullah Mehsud and a shura or tribal council was set up which further undermined his authority. It was said at the time that the Taliban preferred a cool-headed Baitullah over the temperamental Abdullah. Dejected, Abdullah left for Afghanistan to fight in Musa Qilla in the southern Afghan province of Helmand and was killed by security agencies in the Zhob area of the south-western province of Baluchistan while returning home to Pakistan.

Mehsud’s first battlefield experience was in Afghanistan in the late 1980s against Soviet invaders. His mentor at the time was Jalaluddin Haqqani, a powerful commander in eastern Afghanistan backed by the United States against the Soviets. Now Haqqani is wanted as a terrorist by the U.S. and NATO but the CIA has also been trying to get his support according to the Wall Street Journal. The ISI once considered him a ‘moderate’ Taliban.

For almost three years now, Baitullah Mehsud has been the leading face of militant resistance whose influence, security officials acknowledge, transcends the borders of South Waziristan, according to the sources in the governments of Pakistan and the United States. But there is little independent reporting on the tribal areas. Most of the so-called experts writing for the think tanks have never visited these areas. Mostly they cite each other in their papers or quote US or Pakistani officials.

[The] government [...] acknowledged Baitullah Mehsud as the new chief of militants in the Mehsud part of South Waziristan [...] in February, 2005, when it entered into an agreement with him in Sara Rogha following violent clashes and ambushes. He was reportedly paid [20 million rupees] as part of this deal though it remains unclear who picked [up] the tab, Pakistani or the U.S. government? But read the following report of Jan. 30, 2005 published by the Daily Times, Karachi:
“Baitullah Mehsud gets ready to surrender, Sets aside demand for amnesty to Abdullah Mehsud

By Iqbal Khattak

PESHAWAR: A key local Taliban militant expressed his willingness to surrender to the government after holding talks with tribal elders and clerics at an undisclosed location in South Waziristan Agency, said one of the negotiators on Saturday.

Baitullah Mehsud, a key tribal Taliban commander in the troubled South Waziristan tribal region bordering Afghanistan, expressed readiness to surrender, Brig (r) Qayyum Sher, a member of the peace committee that met the militant, told Daily Times from Tank.

“He (Baitullah) is ready to settle the matter with the government,” said the tribal negotiator. “We met him today and he said he is ready to resolve the matter.” The tribal negotiator said Baitullah did not press his old demand that his comrade Abdullah Mehsud should also be pardoned if he surrenders. “He (Baitullah) will surrender alone,” said Brig Qayyum.

However, the peace committee will discuss modalities for Baitullah’s surrender with the government. “The modalities will now be sorted out with the government. How, when and where he will surrender will be discussed with the military and the political administration,” said Brig Qayyum.

A military source told Daily Times that Baitullah’s surrender would prove a serious setback to Abdullah Mehsud. “That is what we want. But we have to wait for the moment when he (Baitullah) surrenders,” the source said on condition of anonymity. Lt Gen Safdar Hussain exempted Abdullah Mehsud from amnesty after his alleged involvement in two Chinese engineers’ kidnapping in October last year.

Brig Qayyum said Baitullah, who unlike Abdullah Mehsud and Nek Muhammad was not in the media limelight, set no conditions for his surrender and the Peshawar corps commander had already declared amnesty for him if he laid down arms.

Gen Safdar set a January 26 deadline for the two militants to surrender or “face military onslaught” and hoped sanity would prevail upon Baituallah to live peacefully. However, Gen Safdar had refused to pardon Abdullah Mehsud.

He pledged to cease attacks on security forces and government installations in return for a commitment by the government to withdraw forces from the Mehsud territory and not to take any punitive action against him and his associates. This followed a brief lull in fighting, prompting the then Pakistani army corps commander, Peshawar, Lt-Gen Safdar, to declare Baitullah Mehsud a “soldier of peace” after a meeting with him at Jandola in August, 2005.

The meeting followed accusations by Baitullah Mehsud that the government was not honouring its commitments, was refusing to withdraw its forces and was continuing to attack his mujahideen. Violence erupted again in the restive tribal region and a time came when the government’s writ was restricted to the compounds of the political administration.”
Why was not Baitullah captured when he was ready to surrender? Instead, he was given money and allowed to grow his militia from a few hundred to nearly 20,000? Why? Who made the decision?
Who else?
Baitullah Mehsud addressed his tribe after the Sararogha pact and clearly swore allegiance to Mullah Umar of the Taliban. His power over the two agencies is owed to his wealth and his ability to wage war. He goes around in a bullet-proof car and is followed around by 30 armed guards. Like Nek Muhammad, he too has two wives and has three castle-like houses in North and South Waziristan. Although he is not a tribal leader by lineage or by election, he is more respected as a warlord by the people of the two agencies than any other person. Although he denies that he received [20 million rupees] from the secret funds of the government without signing a receipt, corps commander Peshawar General Safdar Hussain is on record as saying that the money was indeed set aside for him.

Government officials now claim that Baitullah has been running a number of training camps for militants and suicide bombers. And in January 2007, helicopter gunships targeted what the government claimed was a militant compound, killing 20 people. Baitullah responded angrily and threatened revenge which he said “would be such that it would pain their heart”. It was followed by a string of suicide attacks in Peshawar, Dera Ismail Khan and Islamabad. By this time, government officials had begun pointing the accusing finger at Baitullah Mehsud. A UN report released in September 2007 blamed Baitullah for almost eighty percent of suicide bombings in Afghanistan. Now since when has the UN become so well informed as to be able to account for the exact percentage of the perpetrators of suicide bombings as to their source? Who is feeding this information (or disinformation).

In an address to the nation on January 2, 2008, Mr. Pervez Musharraf said that he believed Maulana Fazlullah and Baitullah Mehsud were prime suspects in the assassination of Bhutto.In its January 18, 2008 edition, The Washington Post reported that the CIA has concluded that Mehsud was behind the Bhutto assassination. “Offering the most definitive public assessment by a U.S. intelligence official, [Michael V.] Hayden said Bhutto was killed by fighters allied with Mehsud, a tribal leader in northwestern Pakistan, with support from al-Qaeda’s terrorist network.”

The CIA is really well informed! It could not trace Mullah Omar (who reportedly lived in Quetta) or Osama (who escaped helped by the cease fire ordered by Dick Cheney at Musharraf’s request in 2001) in more than six years but it can “conclude’ within three weeks of the assassination of Benazir Bhutto that Mehsud was behind it. Meanwhile Talibans in Afghanistan want to distance themselves from him?

According to a DAWN report (Jan. 28, 2008), the Taliban in Afghanistan have distanced themselves from Pakistani militants led by Baitullah Mehsud, saying they don’t support any militant activity in Pakistan. “We do not support any militant activity and operation in Pakistan,” Taliban spokesman Zabihullah Mujahid told Dawn on telephone from an undisclosed location on Monday. The spokesman denied media reports that the Taliban had expelled Baitullah Mehsud, the head of the Tehrik-i-Taliban Pakistan. “Baitullah is a Pakistani and we as the Afghan Taliban have nothing to do with his appointment or his expulsion. We did not appoint him and we have not expelled him,” he said.

Now a $10 billion question: What is the end-game of the U.S. if Baitullah Mehsud is indeed an ‘intelligence asset’ of the CIA?
That's simple: Either they continue to protect him and hide the truth (about him, about themselves, about 9/11, and about the entire bogus "War On Terror"), or they all go straight to the guillotines.
Is the aim is to create a theatre of the ‘War on Terror’ in Pakistan to create the justification for the landing of the U.S. troops so that the republican administration can continue to tell American people that it is fighting terrorism while spending billions to enrich the military-industrial complex, win the next elections in Nov. 2008 and tighten its control over Pakistan to pursue its anti-China and anti-Iran foreign policy goals?

For those Pakistanis who may think this is far-fetched, here is a quote from “Devil’s Game” by Robert Dreyfuss (pp. 336-337, published 2005). Citing the infamous policy memo written by leading neocons in 1995, entitled, “A Clean Break” to then Prime Minister Netanyahu of Israel to ‘contain, destablize, and roll back’ various states in the region, Dreyfuss concludes:

“Neoconservatives want to control the Middle East, not reform it, even it means tearing countries apart and replacing them with rump mini-states along ethnic and sectrian lines. The Islamic right, in this context, is just one more tool for dismantling existing regimes, if that is what it takes.”
It's not far-fetched at all; it's happening in many countries simultaneously.

And "dismantling existing regimes" is indeed "what it takes".

Furthermore, it will continue until and unless a few "existing regimes" -- in Washington, Islamabad and a few other places -- are "dismantled". That is to say: indefinitely."
**
This is by far one of the most retarded CIA black op's I have ever seen.

G20 & IMF

Trillion for IMF and World Bank? The G20 must be incompetent, insane or just plain devilish. Greg Palast interviewed Joseph Stiglitz, former WB head, and a Nobel prize winning economist. It's common knowledge that it was Stiglitz who leaked the documents describing the actions of these two entities. Here's why, along with the idiocy of the plan of throwing money to halt derivatives losses ($1-1,5 quadrillion in total), I'm not a fan of IMF:

"OE STIGLITZ: TODAY'S WINNER OF THE NOBEL PRIZE IN ECONOMICS

by Greg Palast

The World Bank's former Chief Economist's accusations are eye-popping - including how the IMF and US Treasury fixed the Russian elections

"It has condemned people to death," the former apparatchik told me. This was like a scene out of Le Carre. The brilliant old agent comes in from the cold, crosses to our side, and in hours of debriefing, empties his memory of horrors committed in the name of a political ideology he now realizes has gone rotten.

And here before me was a far bigger catch than some used Cold War spy. Joseph Stiglitz was Chief Economist of the World Bank. To a great extent, the new world economic order was his theory come to life.

I "debriefed" Stigltiz over several days, at Cambridge University, in a London hotel and finally in Washington in April 2001 during the big confab of the World Bank and the International Monetary Fund. But instead of chairing the meetings of ministers and central bankers, Stiglitz was kept exiled safely behind the blue police cordons, the same as the nuns carrying a large wooden cross, the Bolivian union leaders, the parents of AIDS victims and the other 'anti-globalization' protesters. The ultimate insider was now on the outside.

In 1999 the World Bank fired Stiglitz. He was not allowed quiet retirement; US Treasury Secretary Larry Summers, I'm told, demanded a public excommunication for Stiglitz' having expressed his first mild dissent from globalization World Bank style.

Here in Washington we completed the last of several hours of exclusive interviews for The Observer and BBC TV's Newsnight about the real, often hidden, workings of the IMF, World Bank, and the bank's 51% owner, the US Treasury.

And here, from sources unnamable (not Stiglitz), we obtained a cache of documents marked, "confidential," "restricted," and "not otherwise (to be) disclosed without World Bank authorization."

Stiglitz helped translate one from bureaucratise, a "Country Assistance Strategy." There's an Assistance Strategy for every poorer nation, designed, says the World Bank, after careful in-country investigation. But according to insider Stiglitz, the Bank's staff 'investigation' consists of close inspection of a nation's 5-star hotels. It concludes with the Bank staff meeting some begging, busted finance minister who is handed a 'restructuring agreement' pre-drafted for his 'voluntary' signature (I have a selection of these).

Each nation's economy is individually analyzed, then, says Stiglitz, the Bank hands every minister the same exact four-step program.

Step One is Privatization - which Stiglitz said could more accurately be called, 'Briberization.' Rather than object to the sell-offs of state industries, he said national leaders - using the World Bank's demands to silence local critics - happily flogged their electricity and water companies. "You could see their eyes widen" at the prospect of 10% commissions paid to Swiss bank accounts for simply shaving a few billion off the sale price of national assets.

And the US government knew it, charges Stiglitz, at least in the case of the biggest 'briberization' of all, the 1995 Russian sell-off. "The US Treasury view was this was great as we wanted Yeltsin re-elected. We don't care if it's a corrupt election. We want the money to go to Yeltzin" via kick-backs for his campaign.

Stiglitz is no conspiracy nutter ranting about Black Helicopters. The man was inside the game, a member of Bill Clinton's cabinet as Chairman of the President's council of economic advisors.

Most ill-making for Stiglitz is that the US-backed oligarchs stripped Russia's industrial assets, with the effect that the corruption scheme cut national output nearly in half causing depression and starvation.

After briberization, Step Two of the IMF/World Bank one-size-fits-all rescue-your-economy plan is 'Capital Market Liberalization.' In theory, capital market deregulation allows investment capital to flow in and out. Unfortunately, as in Indonesia and Brazil, the money simply flowed out and out. Stiglitz calls this the "Hot Money" cycle. Cash comes in for speculation in real estate and currency, then flees at the first whiff of trouble. A nation's reserves can drain in days, hours. And when that happens, to seduce speculators into returning a nation's own capital funds, the IMF demands these nations raise interest rates to 30%, 50% and 80%.

"The result was predictable," said Stiglitz of the Hot Money tidal waves in Asia and Latin America. Higher interest rates demolished property values, savaged industrial production and drained national treasuries.

At this point, the IMF drags the gasping nation to Step Three: Market-Based Pricing, a fancy term for raising prices on food, water and cooking gas. This leads, predictably, to Step-Three-and-a-Half: what Stiglitz calls, "The IMF riot."

The IMF riot is painfully predictable. When a nation is, "down and out, [the IMF] takes advantage and squeezes the last pound of blood out of them. They turn up the heat until, finally, the whole cauldron blows up," as when the IMF eliminated food and fuel subsidies for the poor in Indonesia in 1998. Indonesia exploded into riots, but there are other examples - the Bolivian riots over water prices last year and this February, the riots in Ecuador over the rise in cooking gas prices imposed by the World Bank. You'd almost get the impression that the riot is written into the plan.

And it is. What Stiglitz did not know is that, while in the States, BBC and The Observer obtained several documents from inside the World Bank, stamped over with those pesky warnings, "confidential," "restricted," "not to be disclosed." Let's get back to one: the "Interim Country Assistance Strategy" for Ecuador, in it the Bank several times states - with cold accuracy - that they expected their plans to spark, "social unrest," to use their bureaucratic term for a nation in flames.

That's not surprising. The secret report notes that the plan to make the US dollar Ecuador's currency has pushed 51% of the population below the poverty line. The World Bank "Assistance" plan simply calls for facing down civil strife and suffering with, "political resolve" - and still higher prices.

The IMF riots (and by riots I mean peaceful demonstrations dispersed by bullets, tanks and teargas) cause new panicked flights of capital and government bankruptcies. This economic arson has it's bright side - for foreign corporations, who can then pick off remaining assets, such as the odd mining concession or port, at fire sale prices.

Stiglitz notes that the IMF and World Bank are not heartless adherents to market economics. At the same time the IMF stopped Indonesia 'subsidizing' food purchases, "when the banks need a bail-out, intervention (in the market) is welcome." The IMF scrounged up tens of billions of dollars to save Indonesia's financiers and, by extension, the US and European banks from which they had borrowed.

A pattern emerges. There are lots of losers in this system but one clear winner: the Western banks and US Treasury, making the big bucks off this crazy new international capital churn. Stiglitz told me about his unhappy meeting, early in his World Bank tenure, with Ethopia's new president in the nation's first democratic election. The World Bank and IMF had ordered Ethiopia to divert aid money to its reserve account at the US Treasury, which pays a pitiful 4% return, while the nation borrowed US dollars at 12% to feed its population. The new president begged Stiglitz to let him use the aid money to rebuild the nation. But no, the loot went straight off to the US Treasury's vault in Washington.

Now we arrive at Step Four of what the IMF and World Bank call their "poverty reduction strategy": Free Trade. This is free trade by the rules of the World Trade Organization and World Bank, Stiglitz the insider likens free trade WTO-style to the Opium Wars. "That too was about opening markets," he said. As in the 19th century, Europeans and Americans today are kicking down the barriers to sales in Asia, Latin American and Africa, while barricading our own markets against Third World agriculture.

In the Opium Wars, the West used military blockades to force open markets for their unbalanced trade. Today, the World Bank can order a financial blockade just as effective - and sometimes just as deadly.

Stiglitz is particularly emotional over the WTO's intellectual property rights treaty (it goes by the acronym TRIPS, more on that in the next chapters). It is here, says the economist, that the new global order has "condemned people to death" by imposing impossible tariffs and tributes to pay to pharmaceutical companies for branded medicines. "They don't care," said the professor of the corporations and bank loans he worked with, "if people live or die."

By the way, don't be confused by the mix in this discussion of the IMF, World Bank and WTO. They are interchangeable masks of a single governance system. They have locked themselves together by what are unpleasantly called, "triggers." Taking a World Bank loan for a school 'triggers' a requirement to accept every 'conditionality' - they average 111 per nation - laid down by both the World Bank and IMF. In fact, said Stiglitz the IMF requires nations to accept trade policies more punitive than the official WTO rules.

Stiglitz greatest concern is that World Bank plans, devised in secrecy and driven by an absolutist ideology, are never open for discourse or dissent. Despite the West's push for elections throughout the developing world, the so-called Poverty Reduction Programs "undermine democracy."

And they don't work. Black Africa's productivity under the guiding hand of IMF structural "assistance" has gone to hell in a handbag. Did any nation avoid this fate? Yes, said Stiglitz, identifying Botswana. Their trick? "They told the IMF to go packing."

So then I turned on Stiglitz. OK, Mr Smart-Guy Professor, how would you help developing nations? Stiglitz proposed radical land reform, an attack at the heart of "landlordism," on the usurious rents charged by the propertied oligarchies worldwide, typically 50% of a tenant's crops. So I had to ask the professor: as you were top economist at the World Bank, why didn't the Bank follow your advice?

"If you challenge [land ownership], that would be a change in the power of the elites. That's not high on their agenda." Apparently not.

Ultimately, what drove him to put his job on the line was the failure of the banks and US Treasury to change course when confronted with the crises - failures and suffering perpetrated by their four-step monetarist mambo. Every time their free market solutions failed, the IMF simply demanded more free market policies.

"It's a little like the Middle Ages," the insider told me, "When the patient died they would say, "well, he stopped the bloodletting too soon, he still had a little blood in him."

I took away from my talks with the professor that the solution to world poverty and crisis is simple: remove the bloodsuckers.

******

A version of this was first published as "The IMF's Four Steps to Damnation" in The Observer (London) in April and another version in The Big Issue - that's the magazine that the homeless flog on platforms in the London Underground. Big Issue offered equal space to the IMF, whose "deputy chief media officer" wrote:

"... I find it impossible to respond given the depth and breadth of hearsay and misinformation in [Palast's] report."

Of course it was difficult for the Deputy Chief to respond. The information (and documents) came from the unhappy lot inside his agency and the World Bank.

Award-winning reporter Palast writes Inside Corporate America for the London Observer. To read other Palast reports, to contact the author or to subscribe to his column, go to GregPalast.Com"


Oh yeah.. IMF also wants to print global super currency, but I suppose you already knew that so it's no big deal. ;)

Booga-Wooga

In case you've seen the media hype on the missile test by North Korea set to come any day now, you need to know something. They say they're launching a satellite and that may very well be the case but the media propaganda never connects the dots. Here goes:

"Donald Rumsfeld, the US secretary of defense, was on the board of technology giant Asea Brown Bovery (ABB) when it won a deal to supply North Korea with two nuclear power plants.

Weapons experts say waste material from the two reactors could be used for so-called 'dirty bombs'.

The Swiss-based ABB on Friday told swissinfo that Rumsfeld was involved with the company in early 2000, when it netted a $200 million (SFr270million) contract with Pyongyang.

The ABB contract was to deliver equipment and services for two nuclear power stations at Kumho, on North Koreaís east coast.

Rumsfeld - who is one of the Bush administration's most strident 'hardliners' on North Korea - was a member of ABB's board between 1990 and February 2001, when he left to take up his current post.

Wolfram Eberhardt, a spokesman for ABB, told swissinfo that Rumsfeld ìwas at nearly all the board meetings during his decade-long involvement with the company.

The ABB contract was a consequence of a 1994 deal between the US and Pyongyang to allow construction of two reactors in exchange for a freeze on the North's nuclear weapons programme.

North Korea revealed last year that it had secretly continued its nuclear weapons programme, despite its obligations under the deal with Washington.

The Bush government has repeatedly used the agreement to criticise the former Clinton administration for being too soft on North Korea. Rumsfeld's deputy, Paul Wolfowitz, has been among the most vocal critics of the 1994 weapons accord.

Weapons experts have also speculated that waste material from the two reactors could be used for so-called 'dirty bombs'.

Rumsfeld's position at ABB could prove embarrassing for the Bush administration since while he was a director he was also active on issues of weapons proliferation, chairing the 1998 congressional Ballistic Missile Threat commission.

The commission suggested the Clinton-era deal with Pyongyang gave too much away because "North Korea maintains an active weapons of mass destruction programme, including a nuclear weapons programme."

***

It's extremely hard to read mainstream papers without a frustration that'll explode your brains. So yeah, it's all bonkers, once again.

Khmer Rouge Trials

First Red Khmer trials just started. Cambodia’s Pol Pot was the leader of the Khmer Rouge regime that was responsible for the deaths of up to 2 million people. Time magazine sheds some light on something you might not have known:

"The consequences of U.S. intervention in Kampuchea have made a mockery of American intentions before, and they could do so again. The emergence of Pol Pot's ultra-Maoist Khmer Rouge was partly a result of misguided American policy 20 years ago. Richard Nixon's secret bombing of Kampuchea in 1969 and the CIA's support for a coup by a feckless military junta the following spring contributed to the chaos in which the Khmer Rouge thrived. In 1975 Pol Pot seized power and unleashed a holocaust.

Four years and nearly 2 million deaths later, the Vietnamese invaded and installed their own regime in Phnom Penh. To much of the world, Hanoi's aggression against a neighbor mattered more than Pol Pot's atrocities against his own people. After all, Viet Nam was expanding not only its own influence but also that of its backer, the Soviet Union.

The Khmer Rouge, whom the arch-moralist Jimmy Carter called "the worst % violators of human rights in the world," became an instrument to drive the Vietnamese out of Kampuchea.

"I encouraged the Chinese to support Pol Pot," recalled Zbigniew Brzezinski, Carter's National Security Adviser, in 1981. "Pol Pot was an abomination. We could never support him. But China could." The U.S., he added, "winked semipublicly" as the Chinese funneled arms to the Khmer Rouge, using Thailand as a conduit."

***

This was part of a wider policy of forcing the Vietnamese out of Cambodia by funding anti-Vietnamese guerrilla groups that the U.S. helped create. Between 1979 and 1981, the World Food Program, which was strongly under US influence, provides nearly $12 million in food aid to Thailand. Much of this aid makes its way to the Khmer Rouge. In January 1980 the US started funding Pol Pot while he was in exile. The extent of this support was $85m from 1980 to 1986. Brzezinski's support of the Khmer Rouge was a continuation of the friendly relations the US had with the Khmer Rouge during the presidency of Gerald Ford. Kissinger had already asked Thailand's foreign minister in 1975 to tell the Khmer Rouge that the US would be friends with them.

Both Kissinger and Brzezinski work for the current Obama adminstration.

"In the technotronic society the trend would seem to be towards the aggregation of the individual support of millions of uncoordinated citizens, easily within the reach of magnetic and attractive personalities effectively exploiting the latest communications techniques to manipulate emotions and control reason."
- Brzezinski, 1970, Between Two Ages : America's Role in the Technetronic Era

"(Soldiers are) dumb, stupid animals to be used as pawns for foreign policy."
- Kissinger, Woodward and Bernstein, The Final Days, chapter 14

"Change we can all believe in!"
- Obama

Credere, Obbedire....Combattere?

(Sananvapaus = Freedom of speech; Demokratian puolesta = For democracy)

[EDIT: The blog-post in question is translated into english here]

That's it! I planned not to write anything on this farce, but now I feel I'm obliged. I'm just about to snap.

Jussi Halla-aho is a Finnish Slavic linguist, blogger and a politician who has become famous for his texts that criticize Finland's policy of immigration and multiculturalism. Halla-aho maintains a blog titled Scripta that deals with issues such as ”immigration, multiculturalism, tolerance, racism, freedom of speech and political correctness”.

According to Halla-aho, the biggest problem is large amounts of immigrants compared to the chances to integrate newcomers. He has stated that minority group whose integration has failed everywhere are muslims that come from certain parts of the globe. According to Halla-aho, these are often cultures that honour force unlike western civilization and as long as these newcomers stick in to their characteristics and society encourages them to wrap into their divergence adaptation is not possible and that creates the problems of social exclusion and ethnic ghettoization. He has stated that discrimination and privileges should not be allowed because of ones culture or nationality. According to Halla-aho, criticizing "totalitarian fascist ideologies like political Islam" is not racism and the facts can not be criminalized. He has told that he has received death threats because of his web columns.

After delaying their decision for several times The Finnish Green Women's Association announced 18 November 2008 that they have asked Finnish police to began criminal investigation on Halla-aho. The Green Women's Association's leader Heli Järvinen claims that Halla-aho's texts are not just expression of freedom of speech and innocent multiculturalism criticism and that they stir to raping and hatred. Halla-aho has denied this and told that he opposes violence against women. In December 2008, Finnish police began investigation on Halla-aho for incitement against an ethnic group because of his texts. Finnish police are also considering whether they should review his gun licence.

Halla-aho has denied that he is an anti-foreigner. He maintains that he is simply “critical of immigration”. According to Halla-aho he has received positive feedback also from the immigrants.

Now the Finnish government has pressed charges against Halla-aho basically for insulting muslims and "racism". He himself commented that the charges were pressed because of political pressure to neutralize his potential candidacy for European Parliament just a day before the meeting of The True Finns party council, where the nomination could be decided. Go against the concensus and you'll be stigmatized.

What's also notable is that The European Court of Human Rights (ECtHR) has punished Finland for limiting the freedom of speech 7 times in 10 years, more than almost any other country in the Union. Only seven countries climb higher on the Hall of Shame, where Turkey holds the pole position.

The political elite in Finland obviously can't handle any criticism when it comes to certain subjects and taboos.

"Whether he went on with the diary, or whether he did not go on with it, made no difference. The Thought Police would get him just the same. He had committed— would still have committed, even if he had never set pen to paper— the essential crime that contained all others in itself. Thoughtcrime, they called it. Thoughtcrime was not a thing that could be concealed forever." - George Orwell, 1984.

Freeze The $1.5 Qaudrillion Derivatives Bubble As The First Step To Recovery

By Webster Tarpley
3-25-9

WASHINGTON, DC -- On the eve of the long-awaited London conference of the G-20 nations, we are rapidly descending into the chaos of a Second World Economic Depression of catastrophic proportions. In the year since the collapse of Bear Stearns, we have moved toward the disintegration of the entire globalized world financial system, based on the residual status of the US dollar as a reserve currency, and expressed through the banking hegemony of London, New York, and the US-UK controlled international lending institutions like the International Monetary fund and the World Bank. This is a breakdown crisis of world civilization, prepared over decades by the folly of deindustrialization and the illusions of a postindustrial society, further complicated by the deregulation and privatization of the leading economies based on the Washington Consensus, itself a distillation of the economic misconceptions of the Austrian and Chicago monetarist schools. If current policies are maintained, we face the acute danger of a terminal dollar disintegration and world hyperinflation.

The G-20 leaders are must deliberate a new set of policies capable of leading humanity out of the current crisis. We must first identify the immediate cause which has detonated the present unprecedented turbulence. That cause is unquestionably the $1.5 quadrillion derivatives bubble. Derivatives have provoked the downfall of Bear Stearns, Countrywide, Northern Rock, Lehman Brothers, AIG, Merrill Lynch, and Wachovia, and most other institutions which have succumbed. Derivatives have made J.P. Morgan Chase, Bank of America, Citibank, Wells Fargo, Bank of New York Mellon, Deutsche Bank, Société Générale, Barclays, RBS, and money center banks of the world into Zombie Banks.

Derivatives are financial instruments based on other financial instruments ­ paper based on paper. Derivatives are one giant step away from the world of production and consumption, plant and equipment, wages and employment in the production of tangible physical wealth or hard commodities. In the present hysteria of the globalized financial oligarchy, the very term of "derivative" has become taboo: commentators prefer to speak of toxic assets, complex securities, exotic instruments, and counterparty arrangements. At the time of the Bear Stearns bankruptcy, Bernanke warned against "chaotic unwinding." All of these code words are signals that derivatives are being talked about. Derivatives include such exchange traded speculative instruments as options and futures; beyond these are the over-the-counter derivatives, structured notes, and designer derivatives. Derivatives include the credit default swaps so prominent in the fall of AIG, collateralized debt obligations, structured investment vehicles, asset-backed securities, mortgage backed securities, auction rate securities, and a myriad of other toxic variations. These derivatives, in turn, are pyramided one on top of the other, thus creating a house of cards reaching into interplanetary space.

As long as this huge mass of kited derivatives was experiencing positive cash flow and positive leverage, the profits generated at the apex of the pyramid were astronomical. But disturbances at the base of the pyramid turned the cash flow and exponential leverage negative, and the losses at the top of the pyramid became immense and uncontrollable. By 2005-6, the disturbances were visible in the form of a looming crisis of the automobile sector, plus the slowing of the housing bubble cynically and deliberately created by the Federal Reserve in the wake of the collapse of the dot com bubble, the third world debt bubble. and the other asset bubbles favored by Greenspan. Financiers are trying to blame the current depression on poor people who acquired properties with the help of subprime mortgages, and then defaulted, thus ­ it is alleged -- bringing down the entire world banking system! This is a fantastic and reactionary myth. The cause of the depression is derivatives, and this means that the perpetrators to be held responsible are not poor mortgage holders, but rather globalized investment bankers and hedge fund operators, the derivatives merchants. We are now in the throes of a world wide derivatives panic. This panic has been gathering momentum for at least a year, since the fall of Bear Stearns. There is no power on earth which can prevent this panic from destroying most of the current mass of toxic derivatives. It is however possible that the ongoing attempts to bail out, shore up, and otherwise preserve the deadly mass of derivatives will destroy human civilization as we have known it. We must choose between the continued existence of derivatives speculation on the one hand, and the survival of human society worldwide on the other. If this be crude populism, make the most of it.


FREEZE DERIVATIVES FOR THE DURATION OF THE CRISIS

The G-20 must remove the crushing mass of derivatives which is now dragging down the world economy. Derivatives must be banned going forward, but this by itself will not be sufficient. The ultimate goal must be to wipe out and neutralize the existing mass of $1.5 quadrillion in notional values of toxic derivative instruments. Some governments may be able simply to decree that derivatives be shredded, deleted, and otherwise liquidated, and they should do so at once. Virtually all governments should be able to use their emergency economic powers to freeze derivatives and set them aside for at least five years or for the duration of the crisis, whichever lasts longer. Legal issues can be settled over the coming decades in the courts. Humanity is in agony, and we must act against derivatives now. Going forward, we must ban the paper pyramids of derivatives in the same way that the Public Utility Holding Company Act of 1935 banned the pyramiding of holding companies.

Derivatives were illegal in the United States between 1936 and 1983. In 1933, an attempt was made to corner the wheat futures market using options, and the resulting outcry led to a 1936 federal law banning such options on farm commodity markets. This ban was repealed by the Futures Trading Act of 1982, signed by President Reagan in January 1983. During the G.H.W. Bush administration, Wendy Gramm of the Commodity Future Trading Commission went further, promising a "safe harbor" for derivatives. Despite the key role of derivatives in the Orange County disaster during the Clinton years, a valiant attempt by Brooksley Born of the CFTC to make derivatives reportable and subject to regulation was defeated by a united front of Robert Rubin, Larry Summers (today running US economic policy), and Greenspan. Despite the central role of $1 trillion of derivatives in the Long Term Capital Management debacle of 1998, Phil Gramm's Commodity Futures Modernization Act of 2000 guaranteed that derivatives, notably credit default swaps, would remain totally unregulated. These pro-derivatives forces must bear responsibility for the current depression, and those still in power must be ousted

The Bush-Paulson-Obama-Geithner policy pursued by the United States, which amounts to a $10 trillion (Fed and Treasury) effort to bail out the world derivatives bubble on the backs of taxpayers, can only make the depression worse, will never lead to an economic recovery, and must therefore he rejected. Krugman is right: the "zombie ideas" rule Obama's Washington. The Fed's TALF amounts to subsidies for securitization, meaning more derivatives. The derivatives bailout was pioneered by Gordon Brown, Alistair Darling, and Mervyn King in the case of Northern Rock. These efforts are doomed to costly futility. The $1.5 quadrillion derivatives bubble is comparable to the black holes of astrophysics, those artifacts of gravity collapse which will irresistably suck in all matter that comes near them. This compares to a world GDP of a mere $55 trillion, itself a figure inflated by financial speculation. The derivatives are the black holes of financial engineering, and can easily consume all the physical wealth and all the money in the world, and still be bankrupt. Gordon Brown's demand of $500 billion for the IMF is enough to bankrupt several nations, but pitifully inadequate to deal with the derivatives. They can only be dealt with by re-regulation -- a quick freeze, leading to extinction and permanent illegality. We reject Brown's IMF world derivatives dictatorship.

Derivatives pose the question of fictitious capital -- financial instruments created outside of the realm of production, and which destroy production. In 1931-2, fictitious capital appeared as tens of billions of dollars of reparations imposed on Germany, plus the war debts owed by Britain and France to the United States. These debts strangled world production and world trade. Bankers and statesmen tried desperately to maintain these debt structures. But US President Herbert Hoover proposed the Hoover Moratorium of 1931-1932, a temporary freeze on all these payments. The Lausanne Conference of June 1932 was the last chance to wipe out the debt permanently. But the Lausanne Conference failed to act decisively, and passed the buck. By the end of 1932, there was near-universal default on reparations and war debts anyway. And by January 1933, Hitler had seized power. We urge the London G-20 to defend world civilization against derivatives. It is time to lift the crushing weight of derivatives from the backs of humanity before the world economy and the major nations collapse into irreversible chaos and war, as seen during the 1930s.

Business & War

This is really an over-simplification. What I am trying to point out are the symbiotic relations between international banking and war. There's a reason why many US presidents have warned the people of the world of the military-industrial-complex and the finance oligarchy. These two elements are interconnected as history points out. Present days make no exceptions, as I'm sure you've noticed. Key events in global eco-politics and the power structure of the world such as the rise of Hitler (and how that could've been prevented), the emergence of the Federal Reserve and the planned coup against Roosevelt have a lot in common. But as I said, this is an over-simplification, but I hope you'll take the time to read this and do more research if you like.

Let's first get into pre-WWII Germany with Michael Liebig:

" In my remarks here, I want to sketch the economic and political situation in Germany in the 1931-33 period, the worst years of the First World Financial Crisis and Depression. My special focus will be the weeks, beginning Nov. 6, 1932, when the Nazi Party suffered a massive defeat in the Reichstag elections, losing 2 million votes, until Jan. 30, 1933, when Adolf Hitler took power through a "legal coup."

Within this time frame, from Dec. 2, 1932 to Jan. 28, 1933, Gen. Kurt von Schleicher was German Chancellor. This man came, literally, within inches of defeating Hitler. On Dec. 21, 1932, the U.S. Ambassador in Berlin, Frederic Sackett, met with Gen. Kurt von Hammerstein-Equord, the chief of the Reichswehr army command. They agreed that the decline of the Nazi Party was "now well under way." So sure was Ambassador Sackett that the political tensions in Germany had finally "relaxed," and Chancellor von Schleicher was in control of the political situation, that he left Berlin to go to Switzerland.[1]

Here in the United States, on Nov. 8, 1932, Franklin Delano Roosevelt was elected President. On Feb. 15, 1933, an assassination attempt was made on President-elect Roosevelt, who survived uninjured, while Chicago Mayor Anton Cerman, standing near Roosevelt, was shot, and died of his bullet wounds. On March 4, 1933, Roosevelt was inaugurated President.

In Germany, on Feb. 27, 1933, the Nazis staged the Reichstag fire, the pretext for implementing a full-scale dictatorship. On March 17, 1933, Hjalmar Horace Greeley Schacht received, from Hitler's hands, the document naming him president of the Reichsbank.
Then as now: the subjective factor

We should, obviously, look back at the 1931-33 period from the standpoint of current history: the Second World Financial Crisis and Depression. I will not try to make an extensive listing of specific historical parallels between then and now. Instead, I will try to give a comprehensive, albeit sketchy gestalt of this historical period. I believe that, by taking this approach, we will be able to learn the most from history. I want to demonstrate here, that history is not predetermined; history takes no inevitable course, in the sense of "historical materialist" or "cyclical" interpretations of history. In reality, the subjective factor is what is crucial in history; the subjective factor determines the course of history. History is made by human beings.

The events which took place during 1931-33 in Germany, demonstrate this absolutely clearly. It was not inevitable that Hitler would take power. To the contrary, never in his political career was Hitler closer to defeat than in the period between November 1932 and January 1933. Goebbels's diaries from December 1932 are filled with depression and despair, and Hitler thought about committing suicide. The national elections on Nov. 6, 1932 brought a 4.2% loss in votes for the Nazi Party, down from the 37.2% they had received in the July 1932 elections, the highest vote the Nazis ever got in free elections. In December 1932, the Nazi Party finances were ruined, and Gregor Strasser had started an inner-party revolt against Hitler.

So, why was Hitler not routed then? Who came to his rescue? What was lacking among his republican enemies, who had come so close to defeating him? I will try to answer these questions. And here lies the lesson of history for today.
The Social Democrats and the Communists

First, we have to clear away some illusions. It must be said that the Social Democratic Party (SPD) and the German Communist Party (KPD) did not push Hitler to the wall. On the surface, the Communists, who got a 16.8% vote in November 1932, were the most bitter enemies of the Nazis. Continuous, ferocious street fighting and beer hall battles between Nazis and Communists led to hundreds of deaths on both sides. The Nazi Party's prime propaganda focus was "crushing Bolshevism" in Germany, and this propaganda focus was much more intense than their anti-Semitic tirades during this period.

However, beginning Nov. 2, 1932, the Nazis and the Communists jointly organized the Berlin transport workers' strike, which lasted one week. The KPD in October 1932 issued an election program, which defined the Nazis merely as the right wing of a vast fascistic complex, which included really all parties, business groups, trade unions, the Reichswehr, and government structures--everybody except the Communists themselves. In this fascistic bloc, according to the Communists, the Social Democrats and trade unions merely represented its "social-fascist" left wing. The Communists viciously fought any attempt to take effective measures against the Depression and mass unemployment, declaring that the working class must never play "doctor at capitalism's sick- or death-bed." The Communist leadership pursued a strategy which held that it would not be a disaster, if Hitler were to take power, because this would drive class conflict to its climax. Hitler would soon "expose himself" to the masses, and would be discredited. Thus, the way would be opened up for a socialist revolution, under the KPD's leadership, which would finally liquidate the capitalist-imperialist system and create a "Soviet Germany."[2]

In November 1932, the votes for the SPD had shrunk to 20.4%, compared to the Nazis' 33% and the KPD's 16.8%. At that time, the Social Democrats were politically marginalized, which was the result of the paralysis into which the SPD leadership had driven their own party. The army of unemployed in Germany in 1932 had swelled to 6 million, but the SPD's top men--parliamentary faction leader Rudolf Breitscheid, party boss Otto Wels, and the party's economic experts Rudolf Hilferding, Fritz Naphtali, and Otto Bauer--had obstructed any government-led public works policy for the SPD. Failing to effectively address the all-dominating issue of overcoming mass unemployment meant political suicide for the SPD. The SPD leadership, especially Hilferding, claimed that a sizable state-directed job creation program would inevitably be "inflationary." Thus, the SPD effectively backed Heinrich Brüning's austerity policy, albeit in a more "moderate" form, calling for "social justice" in its implementation. The climax of absurdity was that the same SPD leadership, nominally still Marxist, would argue that anyone who, through a state-led job creation program, wanted to assist the capitalist system when it was in deep trouble, was a no-good Marxist. Opposite to the SPD party leadership, in the German trade union movement, especially in the SPD-leaning ADGB trade union federation, there were different voices, who advocated a state-led, large-scale work creation program.[3] We will come to that in a moment.
Von Schleicher's address to the nation

We now have to turn to the man who represented the biggest threat to Hitler and the financial oligarchy, both German and Anglo-American, Gen. Kurt von Schleicher. Following the November 1932 elections, with the defeat of the Nazis, Schleicher became Chancellor on Dec. 2, 1932.

On Dec. 15, 1932, Schleicher made a radio address to the nation, in which he said: "I have felt a very grave reluctance to accept the office of Chancellor. . . . Especially because having the Defense Minister become the Chancellor smells of military dictatorship, and because there is a danger that the combination of these two posts will drag the army too much into politics. But the consideration that doing this, will illuminate strongly the gravity of the situation in which we are, and will tend to cool down certain troublemakers, and will thus make the deployment of the army unnecessary, has convinced me to set aside my concerns over accepting the post.

"Therefore, I want to ask my fellow citizens, to see in me not just the soldier, but also the administrator of the interests of all layers of the population, for, it is hoped, only a brief period of emergency. I have not come to bring the sword, but to bring peace.

"I think I can say that, as my thoughts about military dictatorship have not just now been formed, and are well known. As I have said before, you do not sit comfortably on the sharp edges of bayonets. In the long run, you cannot rule without having the broad mood of the people behind you. Such a mood in the broad population, my government has yet to earn by its deeds. I have no illusions about the severity of this task. For the moment, I will be satisfied, if the Reichstag, which understandably has currently a hefty dose of suspicion about the government, will allow it, without obstruction and well-known parliamentary maneuvers, to realize its program. This program consists of just one point: Create work! All measures which the Reich government will implement in the coming months will more or less serve this one goal. Travelling across Germany during the past weeks, I was myself convinced, that Germans of all social layers are dominated by one thought: Give us work, and thus, the hope for an economic recovery! Really, nothing else interests us, least of all, constitutional changes and other niceties, which do not fill your stomach. In our people lives a will to create, to produce, that cannot be suffocated by any setback. In all layers of society, there is the same courage and determination, which we have seen during the war, for combatting the profound economic suffering of our time. This deserves the highest admiration, and therefore it must be the supreme law of the state leadership to support this determination and this fight, irrespective of all economic or other considerations. A mood of desperation and catastrophe must be preempted. This can only be achieved, if psychological as well as economic considerations are applied to our job creation policy (Arbeitsbeschaffung). That stated, it is true that in the long run, unemployment can only be overcome through the gearing up of the whole economy.

"However, one cannot comfort people who are close to despair, by elaborations that, according to the laws of economic `rationality,' each economic low will eventually be followed by a high. They want to see immediate and tangible help. Therefore, we have to build the dams in time, so that the floods do not overwhelm us before a cyclical economic recovery can make itself felt. That is what we must do, even if the dams do not correspond 100% to the strict laws of economic `rationality.' I have proposed to the Reich President, that a Reich Commissioner for Public Works be named. His task will be to search for any opportunity for work, and to design and implement a generous public works program. The commissioner must take the role of the shepherd dog against all bureaucratic or other impediments.

"No doubt, such a job creation policy incurs greater risks than a normal expansion of employment would. Thus, expenditures for luxurious purposes are categorically ruled out in our job creation program. The program must be based on existing means of production, lying idle, for purposes of maintenance and improvement. Giving contracts to private firms, is preferable to doing it under public direction. What is decisive, is that we have found a solution for financing the program, which categorically rules out any inflation. This is assured, through the collaboration of Reichsbank President Luther, whom one can call the supreme protector of the currency. Equally, the best guarantee for a gradual improvement of the still very tight financial condition of the Reich, is the justified trust that the Reich Finance Minister enjoys at home and abroad. In short, we can characterize the financial situation as follows: `We will get through with the Reich budget, without introducing new taxes and without further cutting the wages of state employees. This means a certain progress in comparison with the past two crisis years. The Reich government will help the states and municipalities in troubled financial condition, through organizational and financial measures.' "[4]

One should note here that Schleicher's emphasis on inflation, must be seen against the background of the 1923 hyperinflation, which truly traumatized the German population, especially the middle class. Within a few months, the life's savings of tens of million of people simply vanished. The material loss, and the psychological shock, are probably difficult to imagine today, especially here in the United States.

Von Schleicher was no economist, but he understood precisely what the core problem was: overcoming the economic depression by rapidly reducing the mass army of desperate unemployed. Schleicher's Dec. 15 radio address suffices to recognize where the concept for his anti-depression strategy came from: It came from Wilhelm Lautenbach.[5]
Wilhelm Lautenbach's anti-crisis plan

Sixteen months earlier, on Sept. 16-17, 1931, a secret conference of the Friedrich List Society had been held in Berlin. The theme of the conference was the possibility and consequences of expanding the issue of credit, in order to boost German economic activity under conditions of the world economic crisis. In addition to Reichsbank President Dr. Hans Luther, some 30 leading economists, bankers, industrialists, and economic politicians participated. The keynote speech was delivered by Dr. Wilhelm Lautenbach (1891-1948), a high-level official in the Reich Economics Ministry and, although now little-known, an important economic theorist. He was a member of the Friedrich List Society and took part in every one of its conferences during 1928-32, which discussed issues of priority for the German economy.

Lautenbach's memorandum was titled "The Possibilities of Boosting Economic Activity by Means of Investments and Expansion of Credit." He wrote there, "The natural course for overcoming an economic and financial emergency" is "not to limit economic activity, but to increase it."

Lautenbach distinguishes two emergency situations: On the one hand, there were emergencies which "entail tasks for production." As an example of this kind of emergency, he cites a war economy, the conversion from war production to peace-time production, or the "reconstruction of Japan following the great earthquake" in 1923. On the other hand, there were economic and financial emergencies of national and international dimensions, in which it was clear, in general, that "we should and want to produce more. But the market, the sole regulator of the capitalist economy, does not provide any obvious positive directives."

The economic emergency of the second category--a depression and/or the collapse of the financial system--was characterized by the "paradoxical condition" that, "despite curtailed production, demand is less than supply and thus leads to the tendency to decrease production further." Under conditions of depression, there are normally two economic policy reactions. The first is a policy of deflation: The budget deficit is reduced by cutting state expenditures, and prices and wages are lowered. At the same time, credit is restricted. If credits are not curtailed, low interest rates would lead to an outflow of foreign capital, which endangers the exchange rate and produces still greater scarcity of available capital for the domestic economy. Lautenbach thought it was practically impossible to reduce taxes in a depression, because the tax base had already contracted and public budgets were already strained for resources. All of these measures, according to Lautenbach, produce "new and large losses of capital for the individual entrepreneur in commerce and industry," making them "uncompetitive and insolvent," compelling a "reduction of production and large-scale layoffs of the workforce," and also leading to "a deterioration of the status of the banks."

The reduction of public expenditures is doubly counterproductive, since public contracts and mass purchasing power are further reduced. The reduction of wages has an initially favorable effect upon exports, but it causes a far greater reduction in demand in the domestic economy. "The adjustment to reduced demand by correspondingly reducing prices causes losses . . . and draws additional reductions of production in its wake." The thus additionally growing unemployment, effects an acceleration of the downward spiral of the economy. Thus, Lautenbach argued, the deflationary policy will "inevitably lead to complete economic and political catastrophe." But, in a depression, there are "surpluses of commodities, unused production capacities, and unemployed labor." The use of this "largely unused latitude for production" is "the actual and most urgent task of economic policy and it is simple to solve, in principle." The state must "produce a new national economic demand," which, however--and this is the condition--"represents a national investment for the economy. One should think of tasks like . . . public or publicly supported works which signify a value-increase for the economy and would have to be done under normal conditions in any case." Lautenbach was thinking primarily of transportation infrastructure in this connection (roads/highways, railroads, land improvements, water management, etc.).

Then Lautenbach poses the question: "Since long-term capital is neither available to us on the foreign, nor on the domestic market, how are such projects to be financed?" And he adds, that "reasonable public works are already neglected due to the empty treasury in times of deep depression." If there is no possibility to finance the projects through the (empty) state treasury, or through the capital markets, "the consequence to be drawn, ought not to be, that it is not possible to realize projects of this sort."

But how is it possible? Lautenbach makes the initial observation, that "liquidity is chiefly a technical organizational issue. Banks are liquid when they are sufficiently supported by the Reichsbank." Lautenbach proposes that the Reichsbank give the banks a "rediscount guarantee" for the bonds for financing "economically reasonable and necessary projects." Once a firm had a contract from a state agency for the realization of a project, it would get a credit line from its bank, to pay for newly employed workers. While first using existing machinery and inventories, the firm soon would also buy new and additional raw materials, and also capital goods. As the project's realization progresses, the state agency will issue promissory notes to the contracting firm, for which the firm will get cash from its bank. The bank, in turn, will receive cash from the central bank, due to the rediscount guarantee. The central bank will prolong the promissory notes, until the general economic recovery has sufficiently improved tax revenues, so that the state can redeem the notes.

Short-term credit financing, by means of discountable, prolongable bonds for creating jobs and investments, has a direct and an indirect effect. The realization of the projects, financed by credits, signified an increase of production, with the productive utilization of machines, raw materials, and operating materials. The financial situation of the businesses would relax, and thus also, the situation of their banks, and the demand for capital goods would increase. The realization of the projects on credit, would entail payment of wages to newly engaged labor, which would have the effect of generating additional demand for consumption goods.

Lautenbach proceeded on the assumption, that "the stimulating effect of the primary credit expansion" for financing infrastructure projects, would effect "a stimulating movement in total production" in the economy. The initial boost of infrastructure and investment projects would lead to the "upward conjuncture" of the entire economy. The utilization of unused capacities of production would have the effect of increasing economic productivity. The improvement of tax revenue would enable the state to shift to a long-term management of the original liquidity provided to pre-finance the projects.

As for the fear that credit-financing of infrastructure projects would incur the risk of inflation, Lautenbach says that such projects are "rational and unobjectionable from an economic standpoint." These projects represent "in a material sense, real economic capital formation." The credit-financing would result in the creation of real economic values. Lautenbach further emphasizes that the expansion of credit and the expansion of production in infrastructure projects are disproportional. "The extent and rate of the expansion of production" grow at much higher rates than the "degree and rate of credit expansion." Here, Lautenbach was apparently thinking of a "productive multiplier effect."

In summary, Lautenbach says, "By means of such an investment and credit policy, the disproportion of supply and demand on the domestic market will be alleviated and thus total production once more provided with a direction and a goal. If we neglect to undertake such a policy, we will inevitably be heading in the direction of continuing economic disintegration, and a complete disruption of our national economy, into a condition in which, then, in order to avoid domestic political catastrophe, one will be compelled to undertake a strong increase of new short-term public debt for purely consumptive purposes, while today we have the instruments, by means of utilizing this credit for productive tasks, to bring both our economy and our public finances into balance once more."[6]

I should note here, that one well-known German economist at the time, was not invited to the conference where Lautenbach spoke: Hjalmar Schacht. The Friedrich List Society knew who Schacht and his Anglo-American banker friends were, and they knew that they were in deadly opposition to Lautenbach's ideas. Already in 1928, the leadership of the Friedrich List Society had signalled to Schacht that he would not be welcomed in this organization. While the conference proceedings were kept confidential, news of it did leak out to London and New York. Benjamin Anderson, the chief economist of Chase National Bank in New York, wrote a vitriolic attack against the "public works" debate in Germany, denouncing it as a violation of the Young Plan provisions for the German war reparation debt.

It is equally noteworthy, that until the late 1970s, Lautenbach was well known in academic economics departments and economic policymaking circles in Germany, who knew that much of what was known as "enlightened Keynesianism" during the 1950s and 1960s, in reality stemmed from Lautenbach. Opposite to Keynes, Lautenbach was solidly anchored in a physical-economic conception of the economy. There does exist a significant corpus of economic literature on Lautenbach, mostly from the 1950s and 1960s. And the American economist and historian Charles P. Kindleberger, in his standard work on the Great Depression, gives objective and positive coverage to Lautenbach, as well as to Wladimir Woytinsky, a co-thinker of Lautenbach who worked for the German trade union movement.[7]
The trade unions' public works program

In late 1931, economic policy concepts for a state-directed, large-scale job creation program, parallel to that of Lautenbach, began to be articulated in the German trade union federation (ADGB). The most significant economist of the ADGB was Wladimir Woytinsky, head of the federation's statistical department, and a member of the Friedrich List Society. Woytinsky had come to Germany in 1922 from Russia, seeking asylum from the Communist regime. (After 1933, he moved to the United States and became an American citizen.) The trade union leader Fritz Tarnow, and Fritz Baade, an SPD member of the Reichstag and expert on agricultural policy, supported Woytinsky.

On Dec. 23, 1931, Baade, Tarnow, and Woytinsky presented their "Theses on Combatting the Economic Crisis" to the ADGB's executive board. In this document, the three state: "We fear that irrationality in the world economy, and in world policymaking, has already assumed such proportions, that effective anti-crisis measures on the international level will not come about as speedily as is necessary for Germany to survive." Therefore, they present a "concrete program for combatting the crisis within the framework of the German economy," the central feature of which is "the employment of 1 million unemployed, in public works projects. . . . The creation of jobs will spark a revival of the consumer goods industry, thereby drawing a further, considerable number of unemployed back into employment. . . . A sum of approximately 2 billion reichsmarks would be required to finance these public works projects. Whatever portion of this amount cannot be raised by any other means, must be made available via a cash loan from the Reichsbank. . . . Such a one-time cash loan of a fixed amount, linked to a stipulation that it be used for job creation, poses no danger of a repeat of the runaway inflation of 1922-23. The guarantee against such inflationary effects, lies not in its fixed amount and restrictions on its use, but rather primarily in the fact that today, we have a huge amount of unutilized capacity in our productive apparatus. Consequently, increases in production can, without difficulty, follow along in the wake of planned increases in purchasing power."

These theses were incorporated into the final "WTB Plan," the job creation program, named after the initials of its three authors. The plan was presented on Jan. 26, 1932. It further elaborated the financing question: "The plan should ensure the rapid reabsorption of approximately 1 million unemployed back into the production process. In order to achieve this goal, the Reichsbahn, Reichspost, and municipal and other bodies, must issue contracts on a scale sufficient to create employment, directly or indirectly, for 1 million unemployed persons. . . . The contractees will receive an equivalent long-term loan at a low rate of interest and amortization, against promissory notes which are paid out by Reichskredit AG (or other suitable institutions) and are rediscountable at the Reichsbank."

We may add here, that the SPD leadership rejected the financing part of the WTB Plan as being inflationary, insisting on "traditional" financing through tax revenue or state bonds. The chairman of the trade union federation ADGB was Theodor Leipart, who in early 1930 had given the original assignment to Woytinsky to work out a job creation program for the trade unions.

Leipart also had regular discussions with Gen. Kurt von Schleicher. Why would one of the German Army's most senior officers engage in a long-standing contact with a trade union leader? Why would this military man, as Chancellor, present a state-directed work creation program, which no other politician--left, right or center--had dared to touch?
Von Schleicher's career

To answer this question, we have to sketch a bit more, what kind of personality Schleicher was, and who were his circle of friends and acquaintances. Born in 1882, Schleicher came from a typical, not-wealthy noble family in Prussia, in which it was almost self-evident that the sons would follow a military career. In World War I, Schleicher became the protégé of Gen. Wilhelm Groener, the central figure for logistical operations in the Supreme Army Command. On the government's side, the chief logistical-industrial administrator was Walter Rathenau. Toward the end of the war, Groener held, after Field Marshal Hindenburg, the second most important position in the military command, that of First General Quartermaster. It was Groener, with Schleicher as his "right hand," who brought about, in the weeks after Nov. 9, 1918, the "historical compromise" between the Army command and Germany's new Republican leaders, most notably the first Social Democratic President, Friedrich Ebert. This understanding between the Army and the new state leaders, prevented Germany from descending into utter chaos and civil war during the period 1918-21, and again during the hyperinflation period of 1923, with the ensuing Communist upsurges and the first revolt by Hitler on Nov. 9, 1923 in Munich.

Groener retired form the Army in 1920, and Schleicher became the head of the Military-Political Affairs Department in the Defense Ministry under Gen. Hans von Seekt, the formative leader of the Reichswehr until 1926. From the beginning, Schleicher was deeply involved in the secret cooperation of the Reichswehr with Soviet Russia; he knew personally most of the leading Soviet military and foreign policy figures. After Seekt had to retire in October 1926, Schleicher became the dominant "political-military affairs" figure in the Defense Ministry, who coordinated the policies among the Defense Minister, the Army leadership, the offices of the Chancellor and Reich President, who since 1925 had been Field Marshal Hindenburg, and the parliament, the Reichstag.

Schleicher also had close contacts with the two outstanding foreign ministers of the Weimar Republic, Walter Rathenau, who was assassinated in 1922, and Gustav Stresemann, who died in 1929. When, in 1931, André François-Poncet became French Ambassador in Berlin, Schleicher developed an unusually close relationship with him. Historical documents clearly show, that Schleicher advocated a "continental" strategy, with special relationships to France and Russia.

In June 1932, Schleicher became Defense Minister. Schleicher had a reputation as a "social general"--some, less charitably, dubbed him "the red general"--and this had occurred well before his famous July 26, 1932 speech, in which he declared that the Reichswehr was neither "the military arm of a single party," nor "the protector of any one class or interest," nor did it wish "to protect outmoded economic forms or untenable property relations." Also, he considered it his highest duty, "to relieve misery, precisely in those layers of the population that are the poorest."[8]
The banking crisis in summer 1931

By 1929, the First World Financial Crisis had fully set in. On Oct. 25, 1929, the bloated Wall Street stock market crashed. But already in June 1929, it had become evident that the whole world financial system was moving into disintegration, because the complex system of German war reparations payments--the financial "fuel" on which the working of the system depended--had become unmanageable. Between 1919 and 1929, Germany had paid directly, in kind, or through private losses (confiscation of private property outside Germany), 47 billion reichsmarks. Of this, some 17 billion were formally recognized by the Versailles powers as direct financial reparation transfers. But, following the 1923 hyperinflation and the ensuing 1924 Dawes Plan, which set Germany's total reparation obligations at 134 billion reichsmarks, a major chunk of the German debt transfers was financed through credits by Anglo-American banks. Knowing that Germany could not domestically generate the funds necessary to service its reparation debts, credits flowed to Germany and, from there, back to their places of origin, namely, New York and London--just as happens today with so-called IMF bailout packages to Southeast Asia, Russia, or Brazil.

In 1931, the whole Versailles reparations-centered system collapsed, and the center of the financial earthquake was Germany. There exists a fascinating, 167-page inside account of the breakdown of the German banking system in the summer of 1931, written in 1939 by the former State Secretary in the Reich Finance Ministry, Hans Schäffer.[9]

Since the October 1929 crash on Wall Street, there had been an increasing hemorrhage of foreign, mainly American, financial investments from Germany. But the German banking crisis of 1931 started in Austria. On May 11, 1931, Austria's largest bank, the Vienna Kreditanstalt, went bankrupt, which triggered a broad run on banks in Austria, across central-eastern Europe, and in Germany. The Kreditanstalt bankruptcy triggered a massive capital flight out of Austria, which brought that country rapidly to the brink of default. Triggered by the "Austrian crisis," capital flight from Germany accelerated during June 1931.

On June 17, rumors began to circulate that one Germany's major banks, the Darmstädter und National Bank (Danat Bank), was having financial problems. These rumors, in turn, further accelerated the capital withdrawals from Germany. An uncontrolled chain reaction of bankruptcies, starting from Germany, was about to engulf the whole international financial system. If Germany's banks defaulted, the whole house of cards built around the war reparations would collapse.

In this situation, on June 20, 1931, U.S. President Herbert Hoover announced a one-year moratorium on all sovereign reparations and inter-Allied war debt obligations. Had the moratorium been declared three years earlier, it might have stabilized the situation, but at this point, it came too late.

Then, on June 25, 1931, a short-term emergency credit line of $100 million was opened for Germany by the Bank of England, the Federal Reserve, and the Banque de France. But, these actions could not stop the capital flight out of Germany, which drove the country ever closer to default. On July 6, 1931, it became clear that the Danat Bank had indeed had very serious financial problems. On July 13, the bank closed its doors. Reichsbank President Luther flew to London, asking for a $500 million credit line. Up until July 21, senior American, British, French, and German central bank and government officials held crisis meetings in London. But, Montagu Norman, the governor of the Bank of England, declined to provide further credits to Germany, and, as a result, the others declined as well.

On July 13, 1931, the day Danat Bank closed, a bank holiday was declared in Germany, which lasted until Aug. 5. Beginning July 18, ever more extensive currency and capital controls were implemented. On Aug. 1, foreign deposits in Germany were frozen temporarily. By then, it had become clear that also Dresdner Bank, and its subsidiaries, Deutsche Orientbank and Deutsch-Südamerikanische Bank, were close to insolvency. Danat Bank and Dresdner Bank were put under state administration, and provided with emergency liquidity by the Reichsbank. Later, in September 1931, Deutsche Bank, Disconto Gesellschaft, and Commerzbank also came under state administration. Without this, and the pumping of massive amounts of liquidity by the Reichsbank into the financial system, in the dimension of at least 1 billion reichsmarks, all of Germany's leading banks would have defaulted. Please note here, that on Sept. 16-17, 1931 the above-mentioned conference of the Friedrich List Society, with Wilhelm Lautenbach's keynote address, was taking place.

By August 1931, the financial chaos in Germany began to radiate into Britain. On Aug. 24, the Labour government fell, and then the so-called National Government (Tories, Liberals, and a minority faction of Labour) under Ramsay MacDonald, was formed. On Sept. 21, 1931, Britain abolished the gold standard. By the end of 1931, the British pound had been devalued by 40%.

By that time, it had become clear that the German reparations-centered world financial system had indeed disintegrated. The pretense that this system could, somehow, be kept going, had become unsustainable. The Bank for International Settlements (BIS), about which I will say more later, declared politely that the Young Plan had become somewhat unrealistic. Three days before the Hoover debt moratorium was to have ended, on June 17, 1932, an international conference on the Versailles reparations began in Lausanne, Switzerland. The conference ended on July 8, 1932, with the formal termination of Germany's war reparation obligations. Five years earlier, this would have shaken the world in a positive way; now it was almost meaningless, because the world economy and world finances lay in ruins.
German politics, 1930-32

Therefore, the abolition of the Versailles war reparation system meant no "happy ending." By that time, the hegemonic Anglo-American financial establishment had already concluded that the world financial crisis, plus world depression, which had been caused by the Versailles reparations system, made the installation of dictatorial or quasi-dictatorial political regimes necessary. In the country with the worst economic, financial, and social conditions, Germany, the most totalitarian system would have to be installed. The course of events in Germany between 1930 and 1932 had been such, that the "Hitler project" became a realistic option.

In 1930, the economic situation in Germany had deteriorated rapidly. Unemployment went above the 3 million level. The political effect was immediate: In the Reichstag elections of May 1928, the Nazi Party had received 2.6%; now, in the national elections of September 1930, the Nazis received 18.3% of the vote. The Communists increased their vote from 10% to 13%. The non-radical right-wing parties and the liberal center parties lost catastrophically. In March 1930, the center-left Grand Coalition government under Chancellor Hermann Müller broke apart. From then on, there were no more parliamentary governments in Germany. The Chancellors--Heinrich Brüning, Franz von Papen, Kurt von Schleicher, and Adolf Hitler--did not lead governments based on a majority in parliament. The Chancellors were named by Reich President Hindenburg, based on the provision for emergency status of the Weimar constitution (Article 48), and ruled by emergency decree. The governments were "Präsidialkabinette," more or less independent from parliament.

Still, parliamentary sessions were held, and a Reichstag majority could still vote down the emergency decrees. But a majority of Nazis, Communists, Social Democrats, the Catholic Center, and the right-wing parties, was an improbable proposition. Mostly, the Präsidialkabinette were tolerated by the Social Democrats, the Catholic Center Party, and the now small right-liberal parties. When the tensions between the Reichstag, and the Chancellor and his government, became too intense, the Reichstag was dissolved by the Reich President, which is why there were still free elections between 1930 and 1933.

Under these conditions, between 1930 and 1933, the institutional power center in Germany was the Reich President, and this power was really based on the Army. The 100,000 soldiers of the Reichswehr, without an air force, armor, or heavy artillery, could not match the military strength even of Poland, Czechoslovakia, or Belgium, not to speak of France or Britain. But, in domestic political terms, the Reichswehr was a power factor. In the Army structure, Schleicher had gained a unique position, and he was the most political one within the Army command.

Brüning's Presidential government was toppled on May 30, 1932. He was ousted at the very moment that he began to shift away from his earlier, brutal deflationary austerity policies. Brüning's emergency decree of Dec. 8, 1931 had lowered wages to either the level of 1927, or a maximum wage reduction of 10%; standard prices and rents for housing were likewise cut by 10%; and a 6% ceiling was imposed on interest rates. After the announcement of the Dec. 8, 1931 emergency decree, Brüning's Finance Minister explained that what the German people were being asked to do, had pushed them to the very limit of their tolerance and willingness to sacrifice. Wages and salaries could not be reduced any further than the new emergency decree already had done, because otherwise the government would face the specter of serious threats to the state and to society at large. Brüning himself said, "The emergency decree is an absolutely integrated whole, from which no individual part can be subtracted. As of this moment, we are marking an end to the deflationary policy that has been forced upon us."

Brüning envisaged an economic policy-shift, once the reparation issue would be out of the way by mid-1932. Indeed, that happened just six weeks after he was ousted. He was toppled and replaced by Franz von Papen, a person as shallow as he was devious. We shall soon see, what a treacherous role von Papen will play in December 1932 and January 1933. But, Papen had one great advantage: Hindenburg liked him very much. The probable reason for this, was that Papen had cultivated a close personal relationship to Hindenburg's son, Oskar von Hindenburg. As we shall see, catastrophic consequences derived from this.

One of von Papen's very first acts as Chancellor was to enact even more ruthless emergency cuts in social services and wages. He lifted the ban on the National Socialist paramilitary organizations, the SA and the SS, which had been outlawed under Brüning, and dismissed the Social Democratic state government of Prussia, to make himself the Reichskommissar for Prussia.

We must note here, that General von Schleicher played a highly dubious role in the transition from Brüning to von Papen. Schleicher committed a mistake of the gravest sort, by actively playing along with the political maneuvers through which Papen became Chancellor. Obviously, Schleicher thought that that was the price he had to pay for becoming Defense Minister. But it was to cost him, and Germany, dearly.

Papen was Chancellor from June 1, 1932 to Nov. 17, 1932. On July 31, 1932, there were elections for the Reichstag. At that time, unemployment in Germany stood at 29.9%, just below 6 million. The production index (1928=100) stood at 58. The July election produced a breakthrough for the Nazis: They more than doubled their vote to 37.2% and had the largest faction in the Reichstag, with 230 deputies. As Papen governed on the basis of a Presidential decree, and there was no majority in the Reichstag for forming an alternative government, Papen stayed on as Chancellor after the July elections. But, he immediately tried to take Hitler into his government, offering him the post of Vice-Chancellor. Hitler refused, and demanded that he be made Chancellor.

On Aug. 13, 1932, Hindenburg received Hitler, who again demanded to be named Chancellor and to receive "full state power." But, Hindenburg categorically rejected this.

In the late summer of 1932, the economic situation in Germany further deteriorated. On Sept. 4, Papen introduced yet another emergency decree, imposing even more vicious austerity measures. When, on Sept. 12, 1932, the Reichstag convened, the Communists introduced a motion for abolishing Papen's austerity decree. The motion was voted up 512-42, the most massive defeat ever for a government in the whole Weimar period. In response, Papen, with Hindenburg's formal backing, declared the Reichstag dissolved. New Reichstag elections were set for Nov. 6, 1932. Hitler was confident that the new elections would bring him further gains, which would finally undermine the resistance to his becoming Chancellor and getting "full state power."

But, the opposite happened. The Nov. 6, 1932 election results turned out to be a disaster for Hitler. The Nazi Party lost 2 million votes, and 36 deputies in the Reichstag, compared to July. A weakened Hitler met again with Hindenburg, and again he demanded to be named Chancellor. On Nov. 24, 1932, Hindenburg wrote him a nasty letter, saying that a Presidential Cabinet, led by Hitler, would inevitably lead to a "party dictatorship," and that the Reich President's constitutional oath and his conscience would not allow that to happen.[10]

Schleicher now made his move. He saw the chance to first get rid of von Papen, and then to turn against the weakened Hitler. Papen was totally isolated, as indicated by the Sept. 12 Reichstag vote, when effectively all parties voted against him. On Nov. 17, 1932, von Papen resigned. Hindenburg, reluctantly, named Schleicher as the new Chancellor.
Von Schleicher becomes Chancellor

On Dec. 2, 1932, Schleicher becomes Reichs chancellor. He immediately repeals the brutal austerity decrees of Papen and energetically moves ahead with his public works program, as we heard earlier from Schleicher's national radio address of Dec. 15, 1932. Schleicher cannot count on the parties in the Reichstag backing him. He talks to all of them, including the Nazis. Individual deputies support him, but none of the party factions gives him a firm backing. He reaches an agreement with the parties, that the Reichstag will "pause" until January. But, as Schleicher heads a Presidential Cabinet, he does not depend on the Reichstag. Who, then, is backing Schleicher?

*

The Reichswehr. Schleicher has the full backing of Gen. Kurt von Hammerstein-Equord, the chief of Army Command.
*

Important elements in the civilian state bureaucracy, notably the State Secretary in the Chancellor's Office, Erwin Planck, the son of Max Planck. Also important is Günther Gerecke, the influential chairman of the Association of Rural Municipalities. Gerecke became Schleicher's Reich Commissioner for Public Works.
*

The trade unions. Theodor Leipart, the head of the ADGB trade union federation, fully backs Schleicher's public works program, which largely corresponds to the ADGB's "WTB Plan."
*

Some elements within the Social Democracy, notably the former Prime Minister of Prussia, Otto Braun, and Gustav Noske, then chief administrator of the Hanover region. Also supportive is the Reichsbanner, a Social Democratic-oriented republican mass organization, with certain paramilitary features.
*

An important group of industrialists and bankers, including:
o

Otto Wolff, of the Cologne-based steel and trading firm;
o

the industrialist Arnold Rechberg, with important ties to France and the Benelux countries;
o

the banker Wilhelm Regedanz, with strong ties to France and central-eastern Europe.

One should not forget, also, that Schleicher has good ties to France and Soviet Russia. Right after becoming Chancellor, in early December, Schleicher met with Soviet Foreign Minister Litvinov, with whom he discussed a further intensification of economic cooperation with Russia. Schleicher's ties to France, through Ambassador François-Poncet, were cordial as well.

I think it is useful here, to report what the American government's attitude toward von Schleicher was. U.S. policy toward Weimar Germany was always torn between America's genuine national interests and the interests of the Morgan complex. But, in late 1932 Ambassador Frederic Sackett was clearly positive toward von Schleicher. Basing himself on the diplomatic messages from the Berlin embassy to the State Department, Bernard Burke writes: "American diplomats, who earlier had very little positive to say about Schleicher, were impressed by the general's determined efforts to get broad backing for his government. Sackett was won over when the general solicited the support of the trade unions. Strangely, Sackett and his staff, who surely would not support trade union activity at home, found trade union leadership the most politically attractive group in Germany. . . . Sackett took heart as Schleicher succeeded in broadening his base of support. But nothing gladdened him more than the general's attempt to split the Nazi Party. . . . Sackett expressed pleasure that Schleicher, who was often called the `friend of the workingmen,' was going to address the problem of unemployment relief as the principal goal of his cabinet. . . . Sackett approved of the general for the enemies he made. . . . Sackett betrayed his new-found admiration for the general when he pointed out that the calm was made possible by `the tact and skill with which Chancellor von Schleicher dealt with the situation, in striking contrast to the provocative methods of his predecessor [von Papen].' "[11]

In contrast, the British Foreign Office, and British intelligence, had a thoroughly hostile attitude toward von Schleicher. John Wheeler-Bennett, the Foreign Office "Germany expert," entertained a lasting hatred of him. Wheeler-Bennett would later become infamous for expressing his satisfaction that the Gestapo had killed the German resistance leaders of July 1944, in a memorandum to Winston Churchill. The extermination of the German resistance, wrote Wheeler-Bennett, had ensured that these German elite figures would not represent a problem for the occupying powers of postwar Germany. Already in his 1934 book, The Disarmament Deadlock, Wheeler-Bennett denounced von Schleicher as an evil intriguer.
The Nazi Party plunges into crisis

After its defeat in the Nov. 6 Reichstag elections, the Nazi Party was in state of depression and disarray. Schleicher intended to exploit this, and to split the Nazi Party. This might look like a very dubious proposition, but there were substantial reasons for trying it. What a wretched state the Nazi Party was in during November and December 1932, is revealed by Josef Goebbels's diaries:

Nov. 6: "We have suffered a defeat. . . . The main thing now is to consolidate the organization and to improve the mood in the party."

Nov. 10: "Back to Berlin. The strong mood in the party has changed into ugly depression. Everywhere just anger, fights, and conflicts."

Nov. 11: "I get a report of the financial situation of the Berlin party organization, it's desperate. Just ebb, debts, and financial obligations, in addition the complete impossibility to raise large amounts of money after this defeat."

Dec. 6: "The [party] situation in the Reich is catastrophic. In Thüringia we lost 40% since July 31."

Dec. 8: "In the organization, there is real depression. We are depressed because there is the danger that the party might fall apart. . . . The Führer says: If the party disintegrates, it will take me three minutes to finish all with my pistol."

Dec. 12: "It takes a great effort to keep the SA and the party functionaries on a clear course."

Dec. 23: "1932 has been a string of bad luck, just forget about it. . . . I sit alone here and I am thinking about so many things. The past was so difficult, the future is dark and foggy, all perspectives and hopes seem to have vanished."

Goebbels had very real reasons to be depressed, not just because of the horrible state of the party finances. On Dec. 8, 1932, Gregor Strasser resigned from all his party posts. Strasser had been a key "organization man" in the Nazi Party since 1924. He had pushed for some sort of "social orientation." Strasser could credit himself with having played a major role in the party's massive gains in the July 1932 Reichstag elections. It had been he, who had authored an "employment action program," as part of the Nazi election platform. He even had publicly supported the ADGB's job creation program, and positively referenced Woytinsky, who was Jewish, in a Reichstag speech. After the July elections, Hitler had banned the Strasser program, and ordered remaining copies of it destroyed.

Also, during December 1932, an inner-party revolt began to brew in various party sub-organizations, notably in Bavaria. In the first days of December 1932, Schleicher met secretly with Strasser and offered him the Vice-Chancellorship. Strasser was open to the proposal. But Hitler was informed about the Schleicher-Strasser meeting, and immediately branded Strasser a traitor. Hitler kicked Strasser out of the party, and called a series of emergency meetings of leading party functionaries. Hitler had to threaten to commit suicide, if the party leaders would not unconditionally submit to his absolute command. Hitler's gamble only worked, because Strasser remained strangely passive. He did not stand up against Hitler; instead, he took a vacation in Italy.[12]

But, as Goebbels's diaries confirm, by Christmas, the situation in the Nazi Party was not yet back under control, even though Schleicher's ploy to split the Nazi Party through Strasser had clearly failed. But then, like dei ex machina, rescue came for Hitler, in the persons of Hjalmar Horace Greeley Schacht and the banker Baron Kurt von Schröder. Why would these two figures be in a position to carry through an action, which shifted a most promising situation for von Schleicher?
Schacht, Norman, and the Morgan complex

To answer that question, it is necessary to take a closer look at Schacht and von Schröder. Schacht was born in 1877 in Denmark, the son of a naturalized American father. Schacht's father returned from the United States the year his son Hjalmar Horace Greeley was born; for 30 years, he worked as a senior executive for the German branch of Equitable Life Insurance.[13]

Hjalmar became the Anglo-American financial establishment's "man in Germany" ever since, in November 1923, the Allied Reparation Commission decreed that he would become the head of the Reichsbank. Schacht was installed against the unanimous opposition of the Reichsbank staff. At that time, Schacht was on the executive board of the Danat Bank, which, as mentioned above, became infamous in the 1931 banking crisis.

On Dec. 22, 1923, Schacht formally became president of the Reichsbank. One week later, he was in London for extensive meetings with Montagu Norman, the governor of the Bank of England. The meetings between Norman and Schacht were regular, to say nothing of their almost daily correspondence and telephone conversations. As late as 1939, Norman came to Germany to become the godfather of one of Schacht's grandchildren. Montagu Norman was the towering figure of the City of London, a diabolical personality with enormous influence over the course of events, financial and political, from World War I into World War II.[14]

Montagu Norman had the most intimate connections to the J.P. Morgan financial-political complex, which, during the 1920s, included J.P. Morgan and Company in New York, Morgan Grenfell and Company in London, and Morgan et Compagnie in Paris. To call "Jack" Morgan, who headed the Morgan complex from World War I into the late 1930s, an "Anglophile," is a vast understatement; he was an integral part of the British establishment. "Jack" Morgan passionately hated Germans, Jews, and Catholics. The Morgan complex ensured that the British Empire made it financially through the war, and he exerted the probably decisive political influence on the U.S. government for joining the war on the side of the Allies in 1917, when Russia and France were close to military collapse, and the British Empire came near to financial-economic exhaustion.

The Morgan complex stood at the center of the inter-Allied war debt structure, and consequently played the key role in erecting and managing the Versailles reparations system, the prime purpose of which was to service the inter-Allied war debt.[15]

The key figures in managing the Versailles reparations system were either directly Morgan executives or closely tied to the Morgan complex:

*

Thomas W. Lamont, "Jack" Morgan's right-hand man;
*

Charles Gates Dawes, after whom the 1924-29 Dawes Plan was named;
*

Parker Gilbert, the Allied Reparations Agent, residing in Berlin from 1924-29, with enormous powers over Germany's financial affairs;
*

Benjamin Strong, the head of the New York Federal Reserve, another intimate of Montagu Norman;
*

George Harrison. who succeeded Strong in 1928;
*

Owen Young, after whom the Young Plan was named;
*

Andrew Mellon, the Treasury Secretary.

For the City of London/Morgan complex, Schacht--"their man"--ran Germany's finances--and politics--from 1924 on, to an extent that is difficult to imagine today. The 1924 Dawes Plan, which Schacht had worked out with Norman, Lamont, Dawes, and Gilbert, stipulated that Germany had to pay 134 billion reichsmarks in war reparations over the next 36 years, of which 22 billion had to be paid by 1928. After lengthy negotiations, in 1929, the Dawes Plan was superseded by the Young Plan, which, seeming to be more "realistic," stipulated that Germany had to pay 34 billion reichsmarks over the next 59 years, until 1988. Schacht negotiated and signed the Young Plan treaty for Germany, which included the formation of the Bank for International Settlements, for administrating the Young Plan reparation payments.

However, then, in late 1929, Schacht made a seemingly odd turn-around. Suddenly, he proclaimed that the Young Plan, which he himself had signed, was an unacceptable burden for Germany, for which he could not take responsibility. On March 7, 1930, Schacht resigned as president of the Reichsbank.

What had happened? Between the signing of the Young Plan treaty in the summer of 1929, and his resignation from the Reichsbank, on Oct. 25, 1929, Wall Street had crashed. Since the crash, the credit lines extended to Germany, mostly from America, with which Germany had paid a major chunk of its reparation obligations back to London and New York, had dried up. Credits were repatriated to the United States, instead of flowing into Germany, as they had done between 1924 and 1929.

Schacht knew that the Young Plan had indeed become very unrealistic, because, in the conditions of the rapidly escalating world financial crisis, squeezing reparation payments out of Germany would become increasingly difficult, as the American "buffer credits" dried up. Secondly, as long as there was no new type of dictatorial regime in Germany, it would not be possible to enforce the necessary "fiscal discipline" and austerity, to extract more from the country. This conclusion by Schacht was not the product of his personal ingenuity; it was the view held in the top echelons of the Anglo-American financial establishment.
Schacht goes for the `Hitler project'

Two weeks after Schacht's resignation, on March 23, 1930, the last parliamentary government in Weimar Germany, the "Grand Coalition" under Social Democratic Chancellor Hermann Müller, collapsed. It was replaced by the first "Presidential government," that of Heinrich Brüning. In the next Reichstag elections, on Sept. 14, 1930, the votes for the Nazi Party exploded from 2.6% (in 1928) to 18.3%!

The next day, Sept. 15, Schacht was in London for meetings with Montagu Norman. From England, Schacht proceeded to New York, where he stayed for some weeks, meeting his friends on Wall Street. When Schacht came back to Germany, he pursued a clear and determined policy line: Get on with the Hitler project! In late December 1930, Schacht had a first personal meeting with Hermann Göring. On Jan. 5, 1931, there was a memorable evening dinner at Göring's home, which lasted for several hours. Present were: the Göring couple, Goebbels, Fritz Thyssen, Schacht, and Adolf Hitler.

A few months later, on Oct. 11, 1931, Schacht for the first time made a joint appearance with Hitler at a public event, the infamous Bad Harzburg meeting. At roughly the same time, Schacht arranged the visit to London of Alfred Rosenberg, the chief Nazi ideologue, who met Norman and the publisher of the London Times, Geoffrey Dawson. In Germany, Schacht systematically organized support for Hitler in the business milieu. As he himself stated, it was tough work, but he made slow progress. Schacht knew he had the full backing of the Anglo-American financial establishment, and of Montagu Norman in particular. For them, the situation in Germany, financially and politically, had become "unmanageable," unless a brutal dictatorship were rammed through. Hitler was the only credible candidate for a German dictator.
Baron Kurt von Schröder

To accomplish this strategic perspective, Schacht had in Germany an active collaborator in high finance, who equally pushed the Hitler project: Baron Kurt von Schröder, who headed the German branch of the international Schröder financial complex. That complex included Schroeder Bank in the City of London, and the New York investment bank J. Henry Schroder. Baron von Schröder was well acquainted with the Nazi Party's finances: In November 1932, he told business friends in the Ruhr region, that the Nazis had short-term debts of up to 30 million reichsmarks. A few weeks later, Schröder had made sure that the Nazis' financial problems had improved dramatically. As we shall see, Schröder also made a decisive political intervention, to save the "Hitler project."

The third key business figure in Germany who was pushing the "Hitler project" was Fritz Thyssen, who had made financial contributions to Hitler since 1923. That financial support was greatly expanded after 1930. Thyssen was one of the mere handful of figures in the upper echelons of German industry, who did support Hitler before 1933. Hitler's first appearance before a large group of businessmen only occurred after January 1932, when Thyssen and Schacht arranged for him to address the Düsseldorf Industry Club. Among Thyssen's international financial connections, the American firm Brown Brothers Harriman of New York, played an important role.[16]
The Schacht-Schröder plot

In 1948, Schacht would have the chutzpah to declare before a de-nazification court, concerning his attitude to Hitler in 1932: "The only choice was between a military [Schleicher] government, coming to power by breaking the [Weimar] constitution, or Hitler becoming Reich Chancellor. Faced with these two alternatives, and based on my whole democratic identity, I had spoken out against a military government and for the formation of a cabinet by the National Socialists."

Back to Schacht's and Baron von Schröder's activities, after the Nazis' defeat in the Nov. 6, 1932 Reichstag elections. On Nov. 12, 1932, Schacht wrote to Hitler: "Let me congratulate you for the firm attitude which you exhibited right after these elections. I have no doubt about the course of events, which will inevitably end in your Chancellorship. It seems that my efforts to get signatures for your Chancellorship in the business milieu have not been in vain, even though heavy industry is not going along, but they are called heavy industry for a reason, they are so slow-moving."[17]

Then, on Dec. 19, 1932, Hitler received another letter, this time from another "liaison" to business circles, Wilhelm Keppler, who wrote: "In these days, I have met with Dr. Schacht and Baron Schröder; I presented them my assessment of the political situation. Dr. Schacht agreed with me. . . . Just now [Baron Schröder] called me, and told me he met with von Papen. . . . Papen sees a quick change in the political situation as being possible and necessary, and supports your becoming Chancellor. Von Papen would like to have a confidential meeting with you, to analyze what has happened and to talk with you over how to shape the political situation now. . . . It has been proposed to have such a meeting in Baron Schröder's house in Cologne; he is absolutely reliable. Even if many see the current political circumstances as not favorable, I remain convinced that we can reach our aims without having to go for elections again."[18]

What was the political situation when these letters were written? Schleicher was Chancellor, his public works program was going ahead with great political resonance. The internal situation of the Nazi Party remained critical, even though Schleicher's attempt to split the party through Strasser had failed.

Hitler knew that he had no chance to gain a majority in elections, which would make him Chancellor. Were he to try to grab power by illegal means, the Reichswehr would move in, and crush him. The chief of the Army command, General Hammerstein-Equord, had personally told Hitler in December 1932, if you try a coup by illegal means, "I'll give the order to shoot!"

So, and here we come to the core issue: Hitler had to get the Chancellorship by "legal" means, which meant that Hindenburg--who, twice in the past six months, had rudely rejected Hitler's bid--would have to name him as his choice for Chancellor.

There were two persons, who might convince Hindenburg: his son Oskar and von Papen. Now we will see, how Schacht and Baron von Schröder orchestrated an operation to do just this.

On Dec. 10, Baron von Schröder met von Papen in Berlin. They discussed arranging a meeting between Hitler and Papen at Schröder's house in Cologne, far away from Berlin, just as Keppler had written to Hitler. On Jan. 4, 1933, Hitler did meet with Papen and Schröder in Cologne. The meeting was staged in a truly conspiratorial manner: Hitler went by train from Munich to Bonn-Bad Godesberg, where he checked into a hotel. He stayed there until dark, and then went by car to Cologne, some 50 km away.

The talks among Schröder, Hitler, and Papen lasted several hours. Later, after the war, Schröder stated that, at the Jan. 4 meeting, he, Papen, and Hitler reached the following agreement: Schleicher must fall, Hitler will become Chancellor, and Papen will become Vice-Chancellor under Hitler. Papen would arrange for the non-Nazi right-wing parties to join a coalition government under Hitler and Papen. And, most important, Papen would work over the Hindenburgs, senior and junior. One day after the Schröder-Hitler-Papen meeting, Goebbels suddenly was no longer depressed. On Jan. 5, 1933 he wrote in his diary: "If this coup succeeds, we are not far from power. . . . Our finances have suddenly improved."
Von Schleicher's fatal blunder

In my view, the events of Jan. 4, 1933 are of decisive historical importance. They represent the punctum saliens of the tragedy. Schacht and Schröder, using von Papen, managed to give the political initiative back to Hitler.

But even after the Jan. 4, 1933 Cologne meeting, the course of events was not yet pre-programmed. In spite of all the secrecy, in which the Schröder-Papen-Hitler meeting was set up, the circles around von Schleicher knew in advance that something nasty was being orchestrated in Cologne. Probably the Reichswehr military intelligence tipped off the two journalists, who went to Schröder's house and photographed Hitler and Papen entering it.

Now, Schleicher had to move decisively. The Cologne plot--Schröder; the top banker, Papen, the most reactionary, anti-social politician in Germany; and Hitler, the dictator-in-waiting, had to be exposed. The "public works" issue had to be made the central issue: that Schröder, Hitler, and Papen were conspiring to de-rail the public works program, which was just getting off the ground. But, Schleicher did not do that.

Meanwhile, Papen had realized what danger derived from the fact that his meeting with Schröder and Hitler was no longer secret. He made a devious move, by asking von Schleicher for a confidential meeting, in which he would tell him what "really had happened at Schröder's house." The Papen-Schleicher meeting took place on Jan. 9, 1933, in Berlin. Papen assured Schleicher that the meeting was not to conspire against him, and that Hitler was still making "impossible" demands, which Hindenburg would never accept.

It seems that Papen's trick worked, and that he succeeded in keeping Schleicher from making an offensive counter-move. In an off-the-record briefing to selected journalists, on Jan. 13, 1933, Schleicher created the impression that he had situation under control, and that the Cologne meeting had not really changed the political situation.[19] That was Schleicher's fatal mistake, because the results of the Schröder-Papen meeting catapulted Hitler out of a desperate situation, right into a successful "legal coup d'état."
An evil little man: Oskar von Hindenburg

Meanwhile, Papen and Hitler were hyperactive behind the scenes. The details of the Schröder-Hitler-Papen agreement were worked out in several subsequent meetings during January, between Papen and Hitler at the Berlin residence of Joachim von Ribbentrop, then a wealthy champagne salesman. Then, Papen and Hitler worked on Oskar von Hindenburg. They, as well as Schröder and Schacht, knew, that Oskar, a "little man" without intellectual and moral substance, was the central figure, on whom everything depended. Only if they managed to get Oskar to exert sufficient personal pressure on his father, was there a chance to catapult Hitler into power. Papen saw Oskar, and old Hindenburg, almost daily. Oskar lived at Hindenburg's Presidential Residence, where Papen had unrestricted access. On Jan. 22, Hitler himself met for two hours with Oskar von Hindenburg. By that time, Oskar had already become the willing instrument of evil. He told the State Secretary in the Presidential Office, Otto Meissner: "There's is no way to get around this Hitler."[20]

Jointly, Papen and Oskar worked over the 87-year-old Reich President Hindenburg. On Jan. 28, 1933, Hindenburg relieved Schleicher of his duties as Chancellor, and on Jan. 30, named Hitler Chancellor. Why did old Hindenburg do this? Had he not, on Aug. 13 and on Nov. 24, 1932, flatly rejected Hitler's demand to be named Chancellor? The following should be considered here:

1. It was no secret that Oskar von Hindenburg passionately hated von Schleicher, even before Papen and Hitler had worked him over. At the above-mentioned press briefing by von Schleicher, the Reich Commissioner for Public Works Günther Gerecke, who was also there, emphasized this to the assembled journalists.[21]

2. Nine months later, on Aug. 10, 1933, the Nazi-controlled Reich government donated a vast tract of state forest in East Prussia to Oskar von Hindenburg.[22]

3. Oskar von Hindenburg had been in dire financial straits for several years. Moreover, Oskar's financial activities had moved into the realm of corruption and criminality. At a minimum, had his ruinous financial situation become public, it would have cost him his "honor," in terms of the honor code of Prussian nobility.

In his autobiography, The Long Road Home, Wall Street banker James P. Warburg reports that in July 1931, Paul M. Warburg had offered the German government an emergency credit for the collapsing Danat Bank, provided that first, a thorough audit would be made. According to Warburg, then-Chancellor Heinrich Brüning was in tears, when he said that he had to reject the offer, but could not say why. Remember that, before becoming Reichsbank president, Schacht been an executive of Danat Bank, and it is quite unlikely that he would not continue to receive sensitive information from his "old" bank. Warburg further writes, that later audits at Danat Bank revealed that on the books of Danat Bank was a "mysterious, non-performing loan of 10 million reichsmarks to Oskar von Hindenburg"!

Had this become known, Reich President Hindenburg would have had to resign immediately, as, after all, his son was his closest aide and adviser. At the time, there was a saying that Oskar von Hindenburg was "the son of the Reich President, not foreseen by the authors of the Constitution." That is why Brüning, at a moment of the worst financial crisis in July 1931, had refused the Warburg credit for Danat Bank.

In Oskar von Hindenburg's massive debt, lies probably the real secret of what was worked out among Schröder, von Papen, and Hitler, at that fateful meeting on Jan. 4, 1933 in Cologne. And Schacht, one can safely assume, also knew about Oskar's debts. The available evidence indicates that Oskar was the "Achilles' heel," which Schröder, Schacht, Papen, and Hitler diabolically used to "turn" old Hindenburg.

Once Hitler was in power though a "legal coup," he acted swiftly. On Feb. 27, the Nazis orchestrated the arson attack against the Reichstag building, and this incident was then used as the pretext for declaring a full state of emergency in Germany, suspending all constitutional rights. This was followed by the March 23 Ermächtigungsgesetz and the various Gleichschaltungsgesetze, which, by May 1933, led to the liquidation of all parties--except the Nazi Party, of course--and the trade unions. By that time, Jewish citizens were purged from the civil service. Already, on March 17, 1933, Schacht had been named president of the Reichsbank by Hitler. The totalitarian dictatorship was in place in early summer 1933.

On Aug. 2, 1934, Hindenburg died, and Hitler made himself Reich President, and from that point, the Army had to swear allegiance to Hitler personally. Two months earlier, on the morning of June 30, 1934, five SS men in plain clothes had stormed into the house of General von Schleicher. They were armed with pistols and instantaneously opened fire, killing Schleicher and his wife. At the same time, Maj. Gen. Ferdinand von Bredow was shot dead.

Bredow had been for many years Schleicher's closest collaborator in the Defense Ministry, a man with access to the Reichswehr's intelligence files, who knew the secrets that Schleicher knew, especially those which concerned Hitler's really powerful backers, in and outside Germany, and the way that Hitler's "legal coup d'état" was orchestrated in January 1993."

***

Now what's key here, is that sound economic policies in the likes of Roosevelt's New Deal (to some extent), could've prevented the rise of Hitler. Lautenbach's plans were deliberately shot down by international bankers like the Morgan Family. J.P. Morgan also plays a very significant role in the rise of the Federal Reserve. We'll go back in the into year 1886:

"The Jekyll Island Club was an elitist, segregated private club located on Jekyll Island, on the Georgia coastline. It was founded in 1886 when members of an incorporated hunting and recreational club purchased the island for $125,000 from John Eugune du Bignon. The original design of the Jekyll Island Clubhouse, with its easily identifiable turret, was completed in January 1888. The club thrived through the early 20th century with an exclusive limited membership consisting of many of the world's wealthiest families at the time, most notably the Morgans, Rockefellers, and Vanderbilts.

Jekyll Island was the location of a meeting in November 1910 that may have hastened the creation of the Federal Reserve. Following the Panic of 1907, banking reform became a major issue in the United States. Senator Nelson Aldrich, (R-RI) the chairman of the National Monetary Commission, went to Europe for almost two years to study that continent's banking systems. Upon his return, he brought together many of the country's leading financiers to Jekyll Island to discuss monetary policy and the banking system, an event which some say was the impetus for the creation of the Federal Reserve.

On the evening of November 22, 1910, Sen. Aldrich and A.P. Andrews (Assistant Secretary of the Treasury Department), Paul Warburg (a naturalized German representing Kuhn, Loeb & Co.), Frank A. Vanderlip (president of the National City Bank of New York), Henry P. Davison (senior partner of J. P. Morgan Company), Charles D. Norton (president of the Morgan-dominated First National Bank of New York), and Benjamin Strong (representing J. P. Morgan), left Hoboken, New Jersey on a train in complete secrecy, dropping their last names in favor of first names, or code names, so no one would discover who they all were.

Forbes magazine founder Bertie Charles Forbes wrote several years later:

'Picture a party of the nation’s greatest bankers stealing out of New York on a private railroad car under cover of darkness, stealthily riding hundreds of miles South, embarking on a mysterious launch, sneaking onto an island deserted by all but a few servants, living there a full week under such rigid secrecy that the names of not one of them was once mentioned, lest the servants learn the identity and disclose to the world this strangest, most secret expedition in the history of American finance. I am not romancing; I am giving to the world, for the first time, the real story of how the famous Aldrich currency report, the foundation of our new currency system, was written... The utmost secrecy was enjoined upon all. The public must not glean a hint of what was to be done. Senator Aldrich notified each one to go quietly into a private car of which the railroad had received orders to draw up on an unfrequented platform. Off the party set. New York’s ubiquitous reporters had been foiled... Nelson (Aldrich) had confided to Henry, Frank, Paul and Piatt that he was to keep them locked up at Jekyll Island, out of the rest of the world, until they had evolved and compiled a scientific currency system for the United States, the real birth of the present Federal Reserve System, the plan done on Jekyll Island in the conference with Paul, Frank and Henry... Warburg is the link that binds the Aldrich system and the present system together. He more than any one man has made the system possible as a working reality.'"

See what I mean? Now, along with Morgan and Rockefeller another name comes along: Vanderbilt. To get the picture at least in some extent, we have to go to year again into 1930s where a coup almost took place in the United States of America. We'll go there with an excerpt about Smedley Butler from a book called Business of War by Wade Frazier:

"Smedley Butler was one of the most beloved military leaders in American history. Teddy Roosevelt called him, "The finest fighting man in America." Butler was known as "the fighting Quaker." Butler was only one of four Americans ever awarded the Congressional Medal of Honor twice. He tried returning one of them because he did not feel it was earned, but was instead ordered to wear it. Rank-and-file American soldiers loved him. Butler helped run the Marines for a generation, carried a pack and was in the trenches with his troops. Butler was known for his honesty and appreciation for the common man.

Butler believed that all U.S. foreign interventions were self-serving acts, which lined the pockets of the rich at the expense of the nations it victimized, sending young boys to do the dirty work, wearing American uniforms. People such as Franklin Roosevelt sidled up to the trough, to "invest" in Haiti after it had been secured for American interests. Roosevelt drafted the Haitian constitution that overturned more than a century of Haitian strategy of not allowing foreign land ownership to gain a foothold in Haiti, which would begin undermining its sovereignty. FDR was an integral part of the neocolonial strategy of pillaging Haiti. Butler provided the muscle to pull it off.

Butler's opinions did not come from reading radical literature, but from his experiences. His correspondence early in his career complained loud and long when commercial interests and Machiavellian plotting by his superiors would force him to go back on his word with those he negotiated with, as in Nicaragua, which he helped plunder, another situation that continues to this day. Back then, brute force was yielding to a neocolonial strategy of the Taft administration known as Dollar Diplomacy, where the U.S. sought to control its subject nations through economic manipulation rather than marching in the armed forces, as with Teddy Roosevelt's Big Stick Diplomacy. Butler carried out part of its early implementation. The famous Butler quote, where he admitted to being an unwitting “gangster for Capitalism” is vintage Butler.

Although Butler ran for a Senate seat in Pennsylvania as a Republican, when he began his anti-imperialist campaign, he did not care to whom he spoke. He ended up speaking at Communist rallies and at other organizations, which would have given him problems if he had done it during the Joe McCarthy witch-hunt days. He did not care about ideology. He believed in telling the truth as he saw it. Whether his audience was made of communists, veterans groups or the U.S. Congress, his line was the same, with the honest, outspoken style that made him an American icon, and made him many powerful enemies.

In 1931, Butler talked informally after a speech, and discussed how European conquerors became drunk with power and became "mad dogs." He related an apparently true story told him by Cornelius Vanderbilt Jr. Vanderbilt spent time with Italian dictator Benito Mussolini, and they were driving in an armored car through the Italian countryside, with Mussolini driving. During their drive, Mussolini hit and killed a child. Mussolini did not even stop the car, telling Vanderbilt as he grabbed his knee, "Never look back, Mr. Vanderbilt, never look back in life." Mussolini passed off his hit and run incident with the observation that one life was insignificant when compared to the affairs of state.

Butler's comments caused an international outcry, and Butler was arrested and court-martialed by Henry Stimson, the Secretary of War, and ordered to publicly recant. He never apologized to Mussolini, and instead retired. Today, Butler looks like a prophet. The incident was the first time that Mussolini's image was tarnished in America. Back in 1931, Fascism was the up-and-coming form of government.

Stimson court-martialed Butler because he and other high-ranking American officials openly admired Fascism's "great experiment" in Italy. By 1934, the American ambassador to Italy, Breckenridge Long, President Roosevelt, and famous State Department negotiator Norman Davis were gushing over what was happening in Italy, with Roosevelt calling Mussolini an "admirable Italian gentleman" and the State department praising the sham 1934 Italian election where the Fascists took 99% of the vote, stating that the election "demonstrate(d) incontestably the popularity of the Fascist regime."

The July 1934 issue of Fortune magazine praised Fascism and its quick achievements, accomplishing in mere years what Christendom could not achieve in millennia. The article further stated, "The good journalist must recognize in Fascism certain ancient virtues of the race, whether or not they happen to be momentarily fashionable in his own country. Among these are Discipline, Duty, Courage, Glory, Sacrifice."

A 1937 State Department report stated that "Fascism is becoming the soul of Italy." The Fascist experiment was praised because it "brought order out of chaos, discipline out of license, and solvency out of bankruptcy." The report stated that in order to "accomplish so much in a short time severe measures have been necessary." The State Department in 1937 saw Fascism as compatible with the United States' interests. Just as after World War II, the United States would embrace anybody as long as they were anticommunist. While the Fascists were merely raping their own people and making the country safe for American investment, the U.S. government minimized the suffering of that nation's people, and eagerly participated. With Japan, Germany and Italy, it was only when they began stepping on imperial toes that it became a matter of war.

When Butler retired amid the Mussolini furor, he became an even bigger national hero than before. Although many politicians and industrialists were avid fans of Fascism, not everybody in America was. The veterans groups lionized Butler, and he was a big hit on the talk circuit, giving speeches to veterans groups almost daily. Butler was a paragon to the veterans groups and a populist hero, which made what happened in 1933 seem strange. A Wall Street bond salesman and former commander of the Connecticut American Legion approached Butler. Gerald MacGuire had a proposal. MacGuire said he was acting as a front man for wealthy industrialists and bankers, and J.P. Morgan, du Pont and other names came up in the conversations. The proposal was this: Butler would get elected as the American Legion's national commander. With that office, Butler would have the loyalty of 500,000 veterans. With that private "army" (du Pont would arm them through their controlling interest in Remington Arms Company) and up to $300 million of funding made available by the bankers and industrialists, they would take over the White House.

MacGuire said that the same people with the money also controlled the press, and would concoct a rationale that Roosevelt was ill and needed a strongman to help run the country. The public would easily swallow it, and Butler would be installed in a new cabinet position as Roosevelt's right hand, in a position dubbed the "Secretary of General Affairs." MacGuire had been studying the Italian and German Fascist "miracles," and the plan was closely modeled after Hitler's Brown Shirt coup. They would ease Roosevelt out of office, and Butler would be America´s new Hitler.

They picked the wrong man. Although Butler had been openly critical of Mussolini, they thought that Butler could be controlled. MacGuire mentioned other candidates they would approach if Butler turned them down, such as Douglas MacArthur. MacGuire even told Butler that his superiors doubted that Butler would obediently play the game right, but nobody else in America could gain the ready allegiance of millions of veterans. Butler did not say anything publicly and played along, trying to find out more, such as who was behind it. Butler enlisted Philadelphia Record reporter Paul French to dig deeper into the situation. Butler introduced French to MacGuire, and French gained MacGuire's confidence. MacGuire told French the same story that Butler heard. They tried getting MacGuire to give them more names, but he was too smart for that. Butler met one rich conspirator who said that he would spend half his fortune to save the other half.

When he got all the information he could, Butler went straight to the House Un-American Activities Committee (HUAC) in 1934, telling them all he knew. As with many other official "investigations," the HUAC was decidedly timid in pursuing those allegations. They refused to subpoena the names Butler had given them except for MacGuire, who predictably denied everything. The other names given by Butler to the HUAC were former-presidential contenders John Davis and Al Smith (who was a Morgan attorney), and Grayson Murphy, who was a co-founder of the American Legion, a board member of organizations such as Morgan Bank, Goodyear and Bethlehem Steel, and MacGuire's boss. The committee, which went to great lengths to ferret out commies, lost their zeal when confronted with those rich and powerful names, and largely swept the affair under the carpet. However, Butler went public. Nevertheless, without official corroboration, no other investigations were launched, nor did anybody in government appear too concerned. The establishment and media went out of its way to either ignore or slam Butler, with Time magazine openly ridiculing him. The rich conspirator that Butler met threatened to sue Butler for libel, but Butler's stance on Mussolini showed how easily intimidated he was. The conspirator never sued, and Butler never backed down.

While the HUAC's public posture was a quiet folding of its tents, it issued an internal report to Congress which journalist John Spivak obtained. The HUAC internal report told a starkly different story. The report to Congress stated that its investigation confirmed that Butler's story was true in every particular they could verify, and that MacGuire had perjured himself when he denied it. The truth was there, even documented in a report to Congress, but it got swept under the rug, as with most American scandals that involve the rich and powerful."

***

You can look at the parallels of what's happening today, the similarities are astonishing. But like the old saying goes: History repeats itself and those who don't know history are condemned to repeat it. Indeed I would add that when those who are kept in the dark and don't know history, the sons and daughters of those who took advantage of it at their time certainly do.