Jerome R. Corsi - America for Sale: Fighting the New World Order, Surviving a Global Depression, and Preserving USA Sovereignty

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Copyright 2009 by Jerome Corsi

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First Threshold Editions hardcover edition October 2009

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ISBN 978-1-4391-5477-9
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Never let a serious crisis go to waste. What I mean by that is its an opportunity to do things you couldnt do before.

White House chief of staff Rahm Emanuel, November 2008

Never waste a good crisis.

Secretary of State Hillary Clinton, March 2009

The global economic recession that began in December 2008 has resulted in a meltdown of U.S. financial institutions unlike any seen since the Great Depression of the 1930s. What follows are three vignettes that offer a first impression of how the economic crisis was manipulated into a vehicle to push the U.S. economy further in the direction of government control. The ultimate agenda of the globalists managing the economic crisis, in the presidential administrations of both George W. Bush and Barack Obama, has been to use the crisis as an opportunity to push the U.S. private-enterprise economy further in the direction of a government-managed economy.

In 2009, prominent economic and political figures, such as those cited in these three short snapshots, have been remarkably open about their intent to manipulate the economic crisis as a transitional crisis useful to advance their globalist goals.

A call to utilize the current global economic crisis as a panic in which governments worldwide could transform national economies into a truly global economy emerged from the World Economic Forum during its 2009 meeting in Davos, Switzerland.

The call came from none other than Klaus Schwab, the founder of the Davos forum. Schwab told CNN in a televised interview from Davos that the current global economic slowdown is a transformational crisis that should be utilized to shape a new world. The statement was shocking because it suggested that even if elite economists and world leaders did not cause the global economic recession in order to produce a global new world order, they were being advised to manipulate the global economic crisis for that purpose.

Above all else this is a crisis of confidence, Schwab said. To restore confidence you have to establish signposts that the world after the crisis will be different. We have to create a new world and that is what Davos 2009 will be all aboutserving society.

As if to underscore Schwabs dramatic conclusions, several economists used the 2009 Davos forum as a platform on which to proclaim that the dimensions of the world economic downturn reflected an unprecedented collapse of economic activity around the globe. The message was clear: the dramatic meltdown demanded solutions never before contemplated.

Nouriel Roubini, a professor at New York Universitys Stern School of Business, was interviewed live by CNBC from Davos on January 27, 2009. Roubini declared before a national audience that the global banking system was effectively insolvent. The possibility that the worldwide banking system was bankrupt was shocking, suggesting the asset crisis in the United States had by the beginning of 2009 spread across the globe. Roubini, who is a frequent guest on syndicated financial news shows, was adding to his reputation as Dr. Doom, a reputation Rou-bini earned for his typically gloomy but often accurate forecasts.

Roubini estimated that the worldwide crisis in bad bank assets would extend far beyond the collateralized-mortgage-obligation problem caused by subprime loans, to include bad loans in consumer credit cards, car loans, and student loans, as well as commercial loans that have been packaged into securities sold to banks and brokerage firms. Roubini estimated the toxic assets would total $3.6 trillion, about half of which he believed was held by U.S. banks and brokerage firms.

Roubinis estimate was shocking, especially since the U.S. Congress had allocated only $700 billion in two tranches of the Troubled Asset Relief Program, or TARP, funds to resolve the bank-asset problem, the largest bank bailout voted by Congress in U.S. history. If the true magnitude of the bank toxic-asset problem had to be measured in the trillions, then the TARP funds, admittedly huge, would be insufficient to solve it. Should bank toxic assets measure into the trillions of dollars, then solving the problem with $700 billion in TARP funds would be like trying to put out a fire raging in a New York skyscraper with a pail and a garden hose.

Roubini called on the Obama administration to employ a Swedish solution, in which the U.S. government would nationalize troubled banks, not just investing bailout cash but also taking over, giving management control to U.S. government bureaucrats. In the early 1990s, Sweden nationalized banks, but only after the banks had taken the losses.

Also interviewed by CNBC from Davos, Joseph Stiglitz, a Columbia University economics professor and 2001 Nobel laureate who advised the incoming Obama administration during its transition, expressed his concerns that the U.S. Treasury and the Federal Reserve had used TARP funds to overpay for bad assets. The private sector would not touch these bad assets with a ten-foot pole, Stiglitz said. Its not clear we have here a good deal for the taxpayers.

Arguing that taxpayers have provided capital, but have received no control, Stiglitz also contended the U.S. government should begin nationalizing the banks under the Swedish plan, where the private owners of the banks would first take the losses for the bad assets and the government would nationalize the banks at a much lower share price, as a result of the private liquidation of troubled assets. He reasoned that economic incentives dictated that private bank managers, if left in place after TARP funds were injected without government control, would have incentives to pay themselves bonuses, to pay shareholders dividends, and to use bailout funds to make acquisitions.

We need to run these banks for our interest, Stiglitz said, arguing the Obama administration should move quickly to nationalize banks receiving bailout funds. The government could not do worse than the banks themselves have done, he observed, insisting TARP bailouts made no sense unless the government ended up controlling the banks. You can call it conserving the banks, if you want to use a nice term, Stiglitz said, conceding his willingness to package his intent in a euphemism designed to obscure the true purpose of government taking over the banks. But right now the government is paying too much for bad bank assets and ending up with no real control. Its not clear its a good deal for the taxpayers.