"The Federal Reserve System was the crucial anomaly at the very core of representative democracy, an uncomfortable contradiction with the civic mythology of self-government."
This is what William Greider wrote in the first chapter of his book 'Secrets of the Temple - how the Federal Reserve runs the country." His book arrived yesterday in the mail. Here's a quick summary - and my extrapolation from - the first 6 pages.
The western capitalist system depends on 'deeper transactions' than elections. Central banks are inconsistent with representative forms of government. They are, in fact, more powerful than elected governments because they possess the power to answer the main questions of political economy - who shall fail and who shall prosper. Central banks are both directors of the private economy and the protector of the most powerful players within it.
The co-emergence of concentrated political and economic power in the hands of the modern global corporation has meant that these entities have been able to accumulate profits at a greater rate than the development of wealth on the planet. As a result, inflation became a permanent feature of the world economy. If the central banks had implemented policy to put the breaks on this dangerous development it would have worked against the narrow self-interest of these multinationals. Inflation was, instead, addressed by increasing dangerous forms of 'productivity'. Forests were no longer given time to regenerate. People in third world nations (in particular) were forcibly evicted from their lands and conscripted into low-wage manufacture for TNCs. Environmental regulation was dismantled and dangerous forms of industrial agriculture were expanded everywhere. Wages were kept low across the globe.
Profits for the global corporation continued to expand at an even faster rate and now exceeded any relation to real wealth. It became truly fictional. Having brought the planet beyond the brink of reversible climate change and increasing impoverishment of humanity everywhere there is now very few places left to 'invest'.
The role of the US Fed had been to ensure that debtors would be rewarded over savers because such action was the corollary of ensuring the profits continued to flow to big business.
In 2008 the debtors can no longer pay their installments. It should be game over but the global corporations want to be bailed out yet again. Bailed out with what?!