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America is a Farcist State


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The Silver Curtain

Long, but well worth your time. I've shotened it below if you want my highlights.

On the 5th of March in 1946, in Fulton Missouri, at Westminster College, Winston Churchill delivered an address (since christened the "Sinews of Peace") lamenting the burgeoning power and influence being slowly but surely gathered up by the Soviet Union. Perhaps the address will be familiar to some of you owing to its most famous passage:

From Stettin in the Baltic to Trieste in the Adriatic, an iron curtain has descended across the Continent. Behind that line lie all the capitals of the ancient states of Central and Eastern Europe. Warsaw, Berlin, Prague, Vienna, Budapest, Belgrade, Bucharest and Sofia, all these famous cities and the populations around them lie in what I must call the Soviet sphere, and all are subject in one form or another, not only to Soviet influence but to a very high and, in many cases, increasing measure of control from Moscow. Athens alone — Greece with its immortal glories — is free to decide its future at an election under British, American and French observation.

Ironic, as I will address, that he should mention Greece.

Much less well known perhaps is this later passage:

Our difficulties and dangers will not be removed by closing our eyes to them. They will not be removed by mere waiting to see what happens; nor will they be removed by a policy of appeasement. What is needed is a settlement, and the longer this is delayed, the more difficult it will be and the greater our dangers will become.1

The "Iron Curtain" came, of course, to signify the cavernous ideological, and eventually concretely physical, divide between East and West. It took some 43 years before it was lifted once more, first and haltingly, in the form of the removal of Hungary's border fence in mid-1989 and then, of course, finally via the fall of the Berlin Wall in November that same year.

Not to be compared with a production of Italian Opera, the Iron Curtain did not describe a sudden, smooth, abrupt descent over the stages of Eastern Europe. Quite the contrary, its drop was in stutters of discrete, fractional lowerings, such that it was a full fifteen years after Churchill used the term before its ultimate expression, the Berlin Wall, was finally erected in response to the emigration westward of a full fifth of East Germany's population between 1950 and 1961.

Appeals to patriotism (or accusations of treason, the criminalization of abandoning the state "Republikflucht" and eventually the very credible threat of deadly force) did little to stem the tide of departures from the East until it was erected. But, obviously, it is in the nature of confiscatory governments to fence in the subjects from which they wish to appropriate- whether the asset that fuels their lustful avarice is freedom or (merely) capital. (As if there is a difference).

Is it not despicable when for the sake of a few alluring job offers or other false promises about a "guaranteed future" one leaves a country in which the seed for a new and more beautiful life is sprouting, and is already showing the first fruits, for the place that favors a new war and destruction? Is it not an act of political depravity when citizens, whether young people, workers, or members of the intelligentsia, leave and betray what our people have created through common labor in our republic to offer themselves to the American or British secret services or work for the West German factory owners, Junkers, or militarists?2

A copyeditor might change only five words in the above passage for it to be easily mistaken for the words of a democratic representative on the House floor before slipping into the Health Insurance Portability and Accountability Act of 1996 an amendment imposing confiscatory taxes on expatriating U.S. Citizens.

This last bit of déjà vu is interesting, and was not lost on foreign commentators. When the United States tightened its grip on departing expats in 2008, the Economist went so far as to call it "America's Berlin Wall." The comparison is more than apt once one discovers §8 USC 1182 ("Inadmissible Aliens"), which asserts:

Classes of aliens ineligible for visas or admission

Except as otherwise provided in this chapter, aliens who are inadmissible under the following paragraphs are ineligible to receive visas and ineligible to be admitted to the United States:

[...]

Any alien who is a former citizen of the United States who officially renounces United States citizenship and who is determined by the Attorney General to have renounced United States citizenship for the purpose of avoiding taxation by the United States is inadmissible.

Just a few paragraphs away from the exclusion barring the admittance of:

Participants in Nazi persecution, genocide, or the commission of any act of torture or extrajudicial killing...

You know... Republikflucht, Nazi persecution... same deal.

Fortunately (or unimportantly), it is not the soul of its subjects the United States seeks to hem in. (Yet). In fact, the failure of the Iron Curtain to contain what Thatcher called "the essence of the human spirit and desire for freedom" seems to be a lesson well learned by what can only be termed "the left" in these pages.3

Avoiding direct assaults on this essence is a lesson the left have transformed into a most adept mastery of and adroit affinity for the more Machiavellian elements of political science. Shadowy machinations like: The midnight vote. The backroom deal. The bill we must pass in order to read. Reconciliation. The anonymous earmark. The bankruptcy priority end-around. The Cornhusker Kickback. The Chicago Way. This deeply Chekist approach is a subtle acknowledgement either that postmodern subjects simply cannot be made to believe in the optimistic assertions of the benefits of these interminable social programs, or that clandestine-legislation is the only means to sneak damaging edicts past an increasingly educated and informed population. So far, this approach has worked swimmingly for both the left and (despite?) the right. Consider:

It is almost impossible not to smirk just imperceptibly in admiration when contemplating the achievements of Rep. Barney Frank. He did, after all, manage in the short span of fifteen years to transfer several trillion dollars from the middle and upper classes to his constituents (and if you think these are limited to Massachusetts residents you aren't paying attention) right under the nose of an opposition party via the DeBeersian invention of "The American Dream of Home Ownership." Even linguistically, simply grafting the term "Home Ownership" onto the brand of "The American Dream" is a bit of elegant marketing genius that should forevermore serve as a centerpiece in graduate level marketing programs. As if this were not itself impressive, he has managed to deflect essentially all criticism related to the inevitable collapse onto the evil specters of greedy bankers. Lavrentiy Beria would have wept to be able to wield such control while maintaining such a low profile.

The selection of Supreme Court Justices now almost excludes the possibility of selecting talented and brilliant jurists in favor of those political devotees unassailable enough to be confirmed by virtue of the raw rarity of written work which might actually tend to illuminate their skills and talents.

Despite terms like "Lockbox," "Trust Fund" and "Trustees" the only assets currently held by the Social Security Trust Fund are IOUs from the United States Treasury that will, in any event, have to borrow (or seize) the money to repay them- literally an impossible endeavor to complete. Of course, this effectively means that for some time now, social security has been nothing more than a tax and that its description as "security" or a retirement scheme has long been a rather unimaginative lie. Against this background Kevin Drum asserts:

Back in 1983, we made a deal. The deal was this: for 30 years poor people would overpay their taxes, building up the trust fund and helping lower the taxes of the rich. For the next 30 years, rich people would overpay their taxes, drawing down the trust fund and helping lower the taxes of the poor.

Well, the first 30 years are about up. And now the rich are complaining about the deal that Alan Greenspan cut back in 1983. As it happens, I agree that it was a bad deal. If it were up to me, I'd fund Social Security out of current taxes and leave it at that. But it doesn't matter. Once the deal is made, you can't stop halfway through and toss it out. The rich got their subsidy for 30 years, and soon it's going to be time to raise their taxes and use it to subsidize the poor. Any other option would be an unconscionable fraud.

The ease with which the assertion that this was obviously merely a regressive to progressive mutating tax scheme all this time and everyone knew better comes to Mr. Drum should be instructive (though others are prone to call it historical revisionism).

If it was really true that this was merely a tax scheme all this time with proceeds intended all along for the general fund why not say so? Voters may have been upset perhaps? Of course, this implies a rather deep penchant for deception on the part of the political class.

On the other hand, its possible that Social Security was the progeny of the best intentions, and was merely raped and pillaged wildly by Congress to fund... well... whatever they liked. This would make the same political class nothing more than felons in effect.

Of course, in the end it makes no difference if the political class are charlatans or outright thieves. What is of no small import is the pattern of governance here. It is a pattern that has become so prevalent that my own ego cannot resist the temptation to label it with a term that I hope takes root.

This manner of government is not driven by overt collectivism and the blatant, state-enforced social subjugation that characterizes communism. Nor is it well understood to be dominated by the pernicious nationalism, autocratic industrial centralization and megalomaniacal personality cults framed by fascism. Neither can it be sketched as the consenting construction of broad and broadly parasitic labor pools and growth ######ing redistribution schemes that make up the key tenants of socialism. Quite differently, this manner of government is premised on the suspension of disbelief via sophistication, word play, disguise, deception, mistaken identity, the deliberate use of nonsense and absurdity to distract and will, no doubt, end in a melodramatic chase scene (treasury officials in absurd uniforms chasing stage left to stage right after foreign borrowers perhaps?)

In short, the United States has come to be governed by Farcism.

Farcist PIIGS

The success of Farcism depends on, and in some ways derives a measure of legitimacy from, the acquiescence (or abject ignorance of) a lazy citizenry. Truly, it is hard otherwise to explain phenomena like the perpetuation of the myth that President Reagan shrunk the government, or that President Clinton ever presided over a surplus in the United States when budget and historical debt outstanding figures are openly available permitting anyone at all to falsify these claims in seconds. In fact, under the Clinton administration it was the wholesale pillaging of the Social Security trust fund (accounted for in Intragovernmental Holdings instead of "public debt") that permitted the specious claim that somehow a material slice of the aggregate debt of the country had been paid off. In other words, the sort of accounting and insurance fraud that would send anyone in the private sector to jail and so familiar to forensic accountants and prosecutors it actually has a name: "Cookie Jarring." The last real surplus was in 1957, by the way.

Likewise, and in a more contemporary construction, that any member of Congress or the current administration might assert that pouring trillions of dollars of liquidity via Government Sponsored Entities into cheap mortgages had no real inflationary effect on housing prices and, almost in the same breath, scold the public on the importance of supporting via blank check the unaudited Fannie, Freddie and Federal Housing Administration to prevent a housing crash, and so assert without howls of public protest strains the very imagination in the absence of rampant Farcism.

Perhaps unsurprisingly, America is not alone in these practices. In fact, with apologies to Churchill, a silver curtain, lovingly lowered by Farcist leaders, has long since descended over the free markets of the West. It encompasses and conceals from public view the finances and balance sheets of all the major powers and many private firms housed therein. It is typified by the sort of opacity that permits the United States to claim a mere $12.9 trillion in debt. It is the blocking force that simply dares "independent" ratings agencies to even think of downgrading a sovereign (clearly Egan Jones must then be a member of the financial Maquis on this basis). It smothers the utility of FAS 157, drawing a metallic shield over the balance sheets of large banks until guessing what lies behind becomes an exercise in futility. It surrounds and isolates price inputs like short sellers and buyers of credit default swaps. It permits European banks to reduce capital requirements (read: increase leverage) by loading AIG up with $172 billion in exposure in its "foreign regulatory capital portfolio." It retains the heat required to keep mysterious Special Purpose Vehicles within e.g., the Federal Reserve warm and dry. And in the United States, member of a very exclusive club of sovereigns that tax worldwide income of their subjects, a club in which North Korea is also a charter member, as the desperate need for capital to support a flagging treasury begins to bite down, it carves out a "death strip" and orders its revenue agents to audit on sight, and its immigration officials to banish forever any subject with thoughts of Republikflucht.

It is somewhat Ironic that Greece, also called out by Churchill would be among the first to begin to emerge (entirely involuntarily as it happens) from behind the silver curtain. It is as if Farcism, which erected the barrier in the first place, is itself eventually corrosive to the metal. No surprise that Farcism's NKVD immediately targeted and hunted down, like Western agents caught in East Berlin, traders in sovereign credit default swaps. In the case of Greece, they even used the state intelligence services to do so. (Sheesh, at least Germany only uses its Gestapo foreign intelligence appendages to track down tax evaders). Perhaps lies, damn lies and GDP statistics eventually burn holes in silver curtains, when the painted over rust that is a Farcist economy can no longer support its own weight. Until then, however, you must realize that you actually have no idea how much something in a Farcist market is actually worth.

For a moment, just a brief moment this week, the silver curtain seemed at least translucent in the United Kingdom. Some days ago, carefully after the shadow of Gordon Brown seemed sure to recede, Governor of the Bank of England, Mervyn King made several simply astounding pronouncements prompting Jeremy Warner at the Telegraph to Headline "Free At Last".

With crooked finger King pointed at the United States, shattering for a precious moment the illusion that letters like AAA should appear on the same page with the words United States or United Kingdom. But even as the ripples in the pond undulated, the forces of Farcism, reeling for just a moment, seemed to collect themselves and reassert their dominance.

I do not want to comment on a particular measure by a particular country, but I do want to suggest that within the Euro Area it’s become very clear that there is a need for a fiscal union to make the Monetary Union work.

Read: Euro wide tax and spend authority.

Act III, The Chase Scene

Even the smallest cracks in the silver curtain may permit subjects in the United States to finally realize the extent and duration of the outright lies they have been subjected to by the Farcist political and regulatory classes. It remains to be seen if these revelations will have any impact or if, in fact, the great power of Farcism (denial) will overcome enlightenment until utter collapse finally takes hold.

The fact is that, absent assumptions that strain the very fabric of space-time (perhaps the United States will invent cheap fusion power and become an energy exporter to the world? Or will the massive deflation of such a discovery merely accelerate the debt collapse?) there is simply no math that results in a calculation whereby the United States can pay off its outstanding obligations.

The United States will not outgrow its debt. The United States will not tax away its debt (even marginal rates of 70% and 80% would not achieve this). ("Mr. Obama, tear down this wall!" seems unlikely to do much good.) The United States almost certainly lacks the political will to austere away the debt (to even balance the budget would require a 40% across the board cut using the 2009 or 2010 baseline, a 30% across the board cut using the 2011 baseline... etc). Even a Republican sweep is highly unlikely to bring out the required change. Instead the country must, as Greece has, begin to pursue frantically any source of capital it can grasp at. Taxes must not only increase, but broaden, and capture more and more of the economy. In this connection, slipping into the unread health bill the requirement that 1099s be filed for effectively every single transaction in the country over $600 easily reminds one of Greece's recent ban on cash transactions over €1500.

When a business buys a $1,000 used car, it will have to gather information on the seller and mail 1099s to the seller and the IRS. When a small shop owner pays her rent, she will have to send a 1099 to the landlord and IRS.

And here too is a measure of the power of Farcism. It seems to Americans impossible that their 401(k) plans or IRAs might be the targets of sovereigns in the Final Chase scene. "We would never let that happen!" Of course, they forget that outright seizure and forfeiture are the hallmarks of communism and fascism. Farcism is hardly so crude. The Farcist government doesn't pass laws with overt seizure of retirement funds spelled out. The Farcist government waits until midnight before slipping a small provision into the fast-tracked Child Protection and Education Act of 2011 that simply levies a corporate level tax on greedy retirement communities, the wealthy and exploitative licensed medical professionals who service them, slaps safety surcharges on the sale of each of those dangerous "ultra-light super compact electric vehicles," (read: Rascals), establishes a Homeland Security and border protection fee on all cruise tickets to the Bahamas, and establishes a surcharge on Kenny Rogers tickets.

edit to fix my itailics and indents. (so as not to confuse CAlex anymore.)
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Aw come on, you're not even going to bold the good parts? I need to know what the gist is before I commit to something this long.

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Ok, here is the cliffnotes (which merely demonstrates the author's point on the Laziness of the US citizenry):

Not to be compared with a production of Italian Opera, the Iron Curtain did not describe a sudden, smooth, abrupt descent over the stages of Eastern Europe. Quite the contrary, its drop was in stutters of discrete, fractional lowerings, such that it was a full fifteen years after Churchill used the term before its ultimate expression, the Berlin Wall, was finally erected in response to the emigration westward of a full fifth of East Germany's population between 1950 and 1961.

Appeals to patriotism (or accusations of treason, the criminalization of abandoning the state "Republikflucht" and eventually the very credible threat of deadly force) did little to stem the tide of departures from the East until it was erected. But, obviously, it is in the nature of confiscatory governments to fence in the subjects from which they wish to appropriate- whether the asset that fuels their lustful avarice is freedom or (merely) capital. (As if there is a difference).

Avoiding direct assaults on this essence is a lesson the left have transformed into a most adept mastery of and adroit affinity for the more Machiavellian elements of political science. Shadowy machinations like: The midnight vote. The backroom deal. The bill we must pass in order to read. Reconciliation. The anonymous earmark. The bankruptcy priority end-around. The Cornhusker Kickback. The Chicago Way. This deeply Chekist approach is a subtle acknowledgement either that postmodern subjects simply cannot be made to believe in the optimistic assertions of the benefits of these interminable social programs, or that clandestine-legislation is the only means to sneak damaging edicts past an increasingly educated and informed population. So far, this approach has worked swimmingly for both the left and (despite?) the right. Consider:

It is almost impossible not to smirk just imperceptibly in admiration when contemplating the achievements of Rep. Barney Frank. He did, after all, manage in the short span of fifteen years to transfer several trillion dollars from the middle and upper classes to his constituents (and if you think these are limited to Massachusetts residents you aren't paying attention) right under the nose of an opposition party via the DeBeersian invention of "The American Dream of Home Ownership." Even linguistically, simply grafting the term "Home Ownership" onto the brand of "The American Dream" is a bit of elegant marketing genius that should forevermore serve as a centerpiece in graduate level marketing programs. As if this were not itself impressive, he has managed to deflect essentially all criticism related to the inevitable collapse onto the evil specters of greedy bankers. Lavrentiy Beria would have wept to be able to wield such control while maintaining such a low profile.

The selection of Supreme Court Justices now almost excludes the possibility of selecting talented and brilliant jurists in favor of those political devotees unassailable enough to be confirmed by virtue of the raw rarity of written work which might actually tend to illuminate their skills and talents.

Despite terms like "Lockbox," "Trust Fund" and "Trustees" the only assets currently held by the Social Security Trust Fund are IOUs from the United States Treasury that will, in any event, have to borrow (or seize) the money to repay them- literally an impossible endeavor to complete. Of course, this effectively means that for some time now, social security has been nothing more than a tax and that its description as "security" or a retirement scheme has long been a rather unimaginative lie.

On the other hand, its possible that Social Security was the progeny of the best intentions, and was merely raped and pillaged wildly by Congress to fund... well... whatever they liked. This would make the same political class nothing more than felons in effect.

Of course, in the end it makes no difference if the political class are charlatans or outright thieves. What is of no small import is the pattern of governance here. It is a pattern that has become so prevalent that my own ego cannot resist the temptation to label it with a term that I hope takes root.

This manner of government is not driven by overt collectivism and the blatant, state-enforced social subjugation that characterizes communism. Nor is it well understood to be dominated by the pernicious nationalism, autocratic industrial centralization and megalomaniacal personality cults framed by fascism. Neither can it be sketched as the consenting construction of broad and broadly parasitic labor pools and growth ######ing redistribution schemes that make up the key tenants of socialism. Quite differently, this manner of government is premised on the suspension of disbelief via sophistication, word play, disguise, deception, mistaken identity, the deliberate use of nonsense and absurdity to distract and will, no doubt, end in a melodramatic chase scene (treasury officials in absurd uniforms chasing stage left to stage right after foreign borrowers perhaps?)

In short, the United States has come to be governed by Farcism.

The success of Farcism depends on, and in some ways derives a measure of legitimacy from, the acquiescence (or abject ignorance of) a lazy citizenry. Truly, it is hard otherwise to explain phenomena like the perpetuation of the myth that President Reagan shrunk the government, or that President Clinton ever presided over a surplus in the United States when budget and historical debt outstanding figures are openly available permitting anyone at all to falsify these claims in seconds. In fact, under the Clinton administration it was the wholesale pillaging of the Social Security trust fund (accounted for in Intragovernmental Holdings instead of "public debt") that permitted the specious claim that somehow a material slice of the aggregate debt of the country had been paid off. In other words, the sort of accounting and insurance fraud that would send anyone in the private sector to jail and so familiar to forensic accountants and prosecutors it actually has a name: "Cookie Jarring." The last real surplus was in 1957, by the way.

It is typified by the sort of opacity that permits the United States to claim a mere $12.9 trillion in debt. It is the blocking force that simply dares "independent" ratings agencies to even think of downgrading a sovereign (clearly Egan Jones must then be a member of the financial Maquis on this basis). It smothers the utility of FAS 157, drawing a metallic shield over the balance sheets of large banks until guessing what lies behind becomes an exercise in futility. It surrounds and isolates price inputs like short sellers and buyers of credit default swaps. It permits European banks to reduce capital requirements (read: increase leverage) by loading AIG up with $172 billion in exposure in its "foreign regulatory capital portfolio." It retains the heat required to keep mysterious Special Purpose Vehicles within e.g., the Federal Reserve warm and dry. And in the United States, member of a very exclusive club of sovereigns that tax worldwide income of their subjects, a club in which North Korea is also a charter member, as the desperate need for capital to support a flagging treasury begins to bite down, it carves out a "death strip" and orders its revenue agents to audit on sight, and its immigration officials to banish forever any subject with thoughts of Republikflucht.

The United States will not outgrow its debt. The United States will not tax away its debt (even marginal rates of 70% and 80% would not achieve this). ("Mr. Obama, tear down this wall!" seems unlikely to do much good.) The United States almost certainly lacks the political will to austere away the debt (to even balance the budget would require a 40% across the board cut using the 2009 or 2010 baseline, a 30% across the board cut using the 2011 baseline... etc). Even a Republican sweep is highly unlikely to bring out the required change. Instead the country must, as Greece has, begin to pursue frantically any source of capital it can grasp at. Taxes must not only increase, but broaden, and capture more and more of the economy. In this connection, slipping into the unread health bill the requirement that 1099s be filed for effectively every single transaction in the country over $600 easily reminds one of Greece's recent ban on cash transactions over €1500.

When a business buys a $1,000 used car, it will have to gather information on the seller and mail 1099s to the seller and the IRS. When a small shop owner pays her rent, she will have to send a 1099 to the landlord and IRS.

And here too is a measure of the power of Farcism. It seems to Americans impossible that their 401(k) plans or IRAs might be the targets of sovereigns in the Final Chase scene. "We would never let that happen!" Of course, they forget that outright seizure and forfeiture are the hallmarks of communism and fascism. Farcism is hardly so crude. The Farcist government doesn't pass laws with overt seizure of retirement funds spelled out. The Farcist government waits until midnight before slipping a small provision into the fast-tracked Child Protection and Education Act of 2011 that simply levies a corporate level tax on greedy retirement communities, the wealthy and exploitative licensed medical professionals who service them, slaps safety surcharges on the sale of each of those dangerous "ultra-light super compact electric vehicles," (read: Rascals), establishes a Homeland Security and border protection fee on all cruise tickets to the Bahamas, and establishes a surcharge on Kenny Rogers tickets.

Best I could do. It's good stuff.

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I quit reading around the time where the author claimed our laws equate tax evasion to Nazi genocide because they are mentioned "a few paragraphs apart".

Are you arguing the fact that we have a law that treats expats the same as Nazis. You're not offended by the law, but you're offended by the author for pointing that out?
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Are you arguing the fact that we have a law that treats expats the same as Nazis.

Yes, I am. We also have laws that prohibit convicted felons and underage children from buying guns, but it would be ridiculous to argue that the law treats children like felons.
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Are you arguing the fact that we have a law that treats expats the same as Nazis.

Yes, I am. We also have laws that prohibit convicted felons and underage children from buying guns, but it would be ridiculous to argue that the law treats children like felons.
Very poor analogy. First of all, you're missing the author's humor. Probably on purpose, to disregard the rest of the commentery. You'd hate for people to get to the criminal actions of Mr. Frank, which are blindingly obvious (and which makes Farcism a great term).The reference law in 2008 is very harsh to people who leave the US for political reasons. That's the only point of that whole exchange. My guess is that you're not familiar with the massive capital controls that we've put on in the past few years. These are not the actions of a free democracy.
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You'd hate for people to get to the criminal actions of Mr. Frank, which are blindingly obvious (and which makes Farcism a great term).

You got me. I'm actually part of the criminal elite robbing the American sheeple blind. Now please stop exposing our nefarious deeds.
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fightingduck knows his stuff. thanks for posting.

Thanks. I've now gone back and further bolded the original post to focus the conversation. The whole thing is so good in context to Greece and the curtain imagry, but I've realized that the part that I like the most is the term Farcism. I just have a had time even talking politics anymore, since the whole thing seems like such a bad dream and reality is completely turned on its head.We've argued on these boards about what to call Obama - a socialist, statist, Liberal, etc. I love the term Farcist. I encourage those on the left to find good examples of the GOP Farcists. They are the same party. Getting back the article, I'd agree that Barney Frank is the poster-child from Farcism.
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You'd hate for people to get to the criminal actions of Mr. Frank, which are blindingly obvious (and which makes Farcism a great term).

You got me. I'm actually part of the criminal elite robbing the American sheeple blind. Now please stop exposing our nefarious deeds.
Sorry for the confusion. I think I'm only accusing you of being part of the sheep. And, an exceptional cheerleader, as well.
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fightingduck knows his stuff. thanks for posting.

Thanks. I've now gone back and further bolded the original post to focus the conversation. The whole thing is so good in context to Greece and the curtain imagry, but I've realized that the part that I like the most is the term Farcism. I just have a had time even talking politics anymore, since the whole thing seems like such a bad dream and reality is completely turned on its head.

We've argued on these boards about what to call Obama - a socialist, statist, Liberal, etc. I love the term Farcist. I encourage those on the left to find good examples of the GOP Farcists. They are the same party. Getting back the article, I'd agree that Barney Frank is the poster-child from Farcism.

1. Everyone from the Bush Administration

2. Rush, Beck, etc.

Do I really need to post links or give examples?

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I encourage those on the left to find good examples of the GOP Farcists.

The last president seems to fit this article to a "t."I remember a time when I was truly frightened to publicly voice my misgivings about invading Iraq. And I am no knee-jerk hippie anti-war liberal. But I didn't even want people to KNOW that I was against invading Iraq, for fear of being labelled a traitor, or having some redneck get in my face.
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fightingduck knows his stuff. thanks for posting.

Thanks. I've now gone back and further bolded the original post to focus the conversation. The whole thing is so good in context to Greece and the curtain imagry, but I've realized that the part that I like the most is the term Farcism. I just have a had time even talking politics anymore, since the whole thing seems like such a bad dream and reality is completely turned on its head.

We've argued on these boards about what to call Obama - a socialist, statist, Liberal, etc. I love the term Farcist. I encourage those on the left to find good examples of the GOP Farcists. They are the same party. Getting back the article, I'd agree that Barney Frank is the poster-child from Farcism.

1. Everyone from the Bush Administration

Do I really need to post links or give examples?

:lmao: , if you mean Bush, Cheney, Wolfowitz, etc. . . .
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All this country does is support the Revolutionary Armed Forces of Colombia.

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fightingduck knows his stuff. thanks for posting.

Thanks. I've now gone back and further bolded the original post to focus the conversation. The whole thing is so good in context to Greece and the curtain imagry, but I've realized that the part that I like the most is the term Farcism. I just have a had time even talking politics anymore, since the whole thing seems like such a bad dream and reality is completely turned on its head.We've argued on these boards about what to call Obama - a socialist, statist, Liberal, etc. I love the term Farcist. I encourage those on the left to find good examples of the GOP Farcists. They are the same party. Getting back the article, I'd agree that Barney Frank is the poster-child from Farcism.
I'm going to give you the benefit of the doubt here and assume that you're implying that all politicians from each party are a farce, with the "same party" remark, not just Democrats. I'll agree.
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Are you arguing the fact that we have a law that treats expats the same as Nazis.

Yes, I am. We also have laws that prohibit convicted felons and underage children from buying guns, but it would be ridiculous to argue that the law treats children like felons.
:goodposting:pVVned
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fightingduck knows his stuff. thanks for posting.

Thanks. I've now gone back and further bolded the original post to focus the conversation. The whole thing is so good in context to Greece and the curtain imagry, but I've realized that the part that I like the most is the term Farcism. I just have a had time even talking politics anymore, since the whole thing seems like such a bad dream and reality is completely turned on its head.

We've argued on these boards about what to call Obama - a socialist, statist, Liberal, etc. I love the term Farcist. I encourage those on the left to find good examples of the GOP Farcists. They are the same party. Getting back the article, I'd agree that Barney Frank is the poster-child from Farcism.

1. Everyone from the Bush Administration

Do I really need to post links or give examples?

:bag: , if you mean Bush, Cheney, Wolfowitz, etc. . . .
I think you guys need to do better with the examples. Just bashing a party you don't like can be done in any thread. Let me help:

"The War on Terror" is a farce. How do you have a war against a tactic? Clearly the phrase is a successful marketing campaign used in previous initiatives for a larger government. (ie, see War on Poverty and War on Drugs).

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Those damn farcists.

Tax hikes = farcism

You're not quite getting it.... Tax hikes are just bad policy, regardless of your farcist tendencies. Finding the farcist requires studying the terminology used to grow the government:

The Farcist says: "Tax Cuts for the Middle Class." The reality is income transfer payments sent as refundable tax credits.

The Farcist says: "Cut Taxes to Revive the Economy" The reality is the government can only transfer or kill economic activity. The GOP farcist still likes to communicate to its subjects that the Federal Government can be used to help you. Just trust us with its power.

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Part II of a multi-part series on the global rise of Farcism.

More, More, More.... Yippee!!!!

Great history, as always, but I'll save my bolds for the current Farcism.

As a profession, divining the intentions of third parties has a long and somewhat ignominious history. One need but train the dim spotlight of memory on the personages of Grigori Rasputin, Arthur Neville Chamberlain, the Iranian Desk at the Central Intelligence Agency in 1978 and those Jewish voters in the United States who cast their ballots for the current administration to come to the conclusion that such predictions can be dangerous- and for more than the just the prognosticators. Against this backdrop- or perhaps even despite it- it may well be constructive to project the potential consequences implied by a somewhat hyperventilating article by Marie Woolf and Jonathan Oliver that appeared on the Times Online website today, dramatically entitled "Labour Hid 'Scorched Earth' Debts With Billions." Sayth Woolf and Oliver:

Billions of pounds in public money was committed in the run-up to the [british] election campaign in a deliberate strategy to boost Labour’s chances at the ballot box and sabotage the next government.

One former Labour minister told The Sunday Times: “There was collusion between ministers and civil servants to get as many contracts signed off as possible before the election was called.”

One former adviser to the schools department said there was a deliberate policy of “scorched earth”. “The atmosphere was ‘pull up all the railways, burn the grain stores, leave nothing for the Tories’,” he added.

Putting aside for a moment the Churchillian tone of the Times' declarations, they outline some very interesting implications for the study of Farcism as a political strategy. One is tempted to invoke a quote often (and apparently erroneously) attributed to Alexander Tytler:1

A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largess from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years.

As it turns out, this is hardly the worst of it. It would appear that a sort of "poison pill" for austerity can be planted by a departing party sufficiently dedicated to purchasing the good will of the electorate with a structured program of profligate spending on social programs. Properly laid, the financial satchel charges placed by professional political sappers may well assure that an incoming leadership with aspirations to fiscal responsibility will be greeted with, not just displeasure, but violent opposition. (See e.g., Greece). More concerning, there may literally be no way out of a dangerous fiscal path with a sufficiently tainted budget structure.

Even beginning from less than complete cynicism, as one examines these issues one begins to feel that a deeper stratagem may well underlie what I will call simple "largess leverage" (the buying of votes via federal spending). One further discovers that, far from being novel, the method itself goes back at least as far as (and actually, quite obviously much further than) 146 BC in the form of the "Land Act," cunningly (and, as it happens, fatally) dreamed up by the Roman Tribune-to-be Tiberius Gracchus.

The Land Act proposed to cap the amount of land an individual could own and give away wide swaths of the remainder, generally owned by the wealthiest and oldest families in Rome or (after the death of King Attalus III, who bequeathed his entire and rather extensive kingdom to "the Senate and the People of Rome,") the state, to a long list of veterans of the Roman Legions who found themselves now somewhat idle after the conclusion of the Fourth Macedonian and Third Punic wars.

Of course, permitting a large population of armed, well-trained men with a demonstrated propensity for violence to wander about aimlessly without financial security or some sort of concrete (and less than destructive) personal aspirations to pursue is never a good idea. (See: Iraqi Army). Add a sudden influx to the capital of idle workers formerly expanding the glory of Rome abroad and the consequent unemployment and the matter becomes critical. Even so, a deeper and more complex group of interrelated effects beyond mere unemployment mitigation can be sketched with a bit of gentle analysis.

Creating for one's self a new constituency, indebted to you from the start and, suddenly, newly empowered as landholders, is never a bad idea. To the extent one can give these new constituents a deeper, and more permanent voice in politics, one has created a near permanent power base that is likely to endure even beyond the government that created it.

The prospect of the Act so horrified the Roman aristocracy along with the older elements of the Senate (a Venn diagram of these two bodies would actually still overlap significantly in this time) that the Senators took up arms and killed Tiberius along with a few hundred of his followers in broad daylight in the middle of the forum.

Admittedly, Tiberius was not an entirely innocent victim here. His very public murder followed some rather dubious political maneuvering both personally and by his supporters, including the forcible abduction of a Tribune mid-speech from behind no less a pulpit than the Senate podium before he could utter the word that would have killed the Land Act (that word, of course, was "Veto"). He also stood, somewhat unprecedentedly at the time, for a second term as Tribune. The Senate was not amused.

Several scholars focused on this period in Roman history mark this abduction as the first act of violence that sparked the beginning of the fall of the Roman Republic and describe it as one link in the chain that eventually permitted Gaius Julius Caesar to assume power.

Interestingly, it was Caesar's acquisition of censorial powers that permitted him to pack the Senate with cronies and further dilute its power, before, when that was not quite enough, simply and overtly expanding the Senate's size to almost totally thin the influence of the aristocracy on the body. As with Tiberius, these acts so enraged certain elements of the Senate as to, once again, inspire a dramatically public and bloody assassination. One is almost reminded of the sorts of redistricting wars that occasionally dominate American politics, or the urge of the Executive Branch to control (as it now appears to) the Census. (Though, for good or for ill, knifings on the floor of the Senate are somewhat rarer today).

Without, for the moment, going so far as to assert any sort of deliberate scheme underlying these actions, it will be seen that these strategies (as they are clearly too long-term in their apparent effect to be relegated to the rank of "tactics") have aligned themselves into a keen symbiosis improbably well in recent years. The fact that the United States is now a mere three percentage points away from an electorate defined by a majority that pays no income tax at all is a remarkable development. Likewise, the literally massive expansion of employees on the federal payroll, along with the dramatic inflation of their salaries bears notice. Innumerable examples of similar measures will doubtless readily present themselves to the astute Zero Hedge reader.

Of course, one expects resistance from opposition parties to such overt power shifts in either direction. Blanket immunity and citizenship for immigrants in the United States illegally, for instance, consistently faces dramatic and spirited resistance when proposed. Republicans obviously fear the sudden enfranchisement of some 12 million new voters probably disposed to vote democratic. Efforts as direct as the appointment of Supreme Court Justices see significant scrutiny and attention (actually packing the court no longer seems as viable as it did in 1937). Occasionally, however, there comes along an issue that bears at least casually beneficial prospects for both parties. Enabling widespread home ownership, for example, may create a legion of grateful democrats, or it may create a new group of land owners with newly conservative leanings that might push them to vote republican. It will be noticed that, for more than fifteen years, no one in either party opposed the American Dream of Home Ownership™ with any sort of volume. These, of course, are the most dangerous of largess leverage programs. No one wants to vote against Roman Veterans, after all. There are, suddenly, strong incentives to use any means necessary, no matter how strange or absurd, to concoct any excuse, to weave any political web, to continue to spend, spend, spend and then spend. Farcism defined.

Like taking candy from small children, once installed these entitlements are neigh impossible to revoke. The tantrums likely to confront Britain and the United States may not reach Greek proportions, but one finds it difficult to imagine that the next party to navigate the fiscal event horizon of the federal budget will not be violently sucked in. Consider what it might be like facing the sort of numbers outlined in Edmund Conway's review of the IMF's recent cross-country Fiscal Monitor report:

...note how the US needs a 12pc of GDP chunk chopped out of its structural deficit (ie adjusted for the economic cycle). That’s $1.7 trillion. Wow – that’s not far off Britain’s total annual economic output.

Now imagine that the prior administration systematically concealed large expenditures in byzantine accounting mazes, and as the newly coronated opposition party leverages the well developed human tendency for envy to call for "fairness" and "income equality." "Farcism" almost leaps to the lips.

One of the more elegant critiques to "Starve the Beast" fiscal theory is that a reduction in taxes without immediate spending reductions actually makes existing programs and social spending cheaper to the current tax base- which is now paying less to get the same government services. In effect, this is an increase in the degree to which these programs are subsidized for existing taxpayers. This, in turn, makes it actually more difficult to remove or cut these programs politically. This may explain why William Niskanen finds that tax cuts without simultaneous spending cuts generally result in spending increases in the next year.

Combine with this the fact that highly progressive tax structures, such as that in the United States, tend to reduce the political backlash caused by tax raises, given that these hikes falls predominantly on a small and unsympathetic fraction of the electorate, and it becomes exceedingly difficult to imagine how even the best intentioned, fiscally conservative administration could lower taxes or reduce federal spending. This effect is significantly augmented by increases in the size and scope of federal programs- and the cheaper these are the more impact they have.

Highly progressive tax structures also exacerbate the volatility of tax receipts in times of economic downturn. This has the perverse effect of encouraging tax hikes, which disproportionately impact the small population on the far right side of the income curve, to smooth the volatility. The potential feedback loop boggles the mind.

Taking in the picture of what seems to be an almost politically suicidal path towards spending increases by Congress and the present administration and laying it aside these structural elements of the Federal budget it is just possible to imagine that even the retirement of several prominent democratic legislators and sweep of both houses of Congress by some fictitious fiscally responsible party will have little real effect on the fiscal death spiral that now threatens to grip the United States.

Even a casual exploration of the similarities between the later years of the Roman Republic and the political machinations that destroyed it and led, eventually, to decay and collapse, gives one cause to wonder: Are Farcism's contemporary practitioners simply acting out an inevitable progression of democracies or republics, or are they shrewd students of ancient history?

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fightingduck knows his stuff. thanks for posting.

Thanks. I've now gone back and further bolded the original post to focus the conversation. The whole thing is so good in context to Greece and the curtain imagry, but I've realized that the part that I like the most is the term Farcism. I just have a had time even talking politics anymore, since the whole thing seems like such a bad dream and reality is completely turned on its head.

We've argued on these boards about what to call Obama - a socialist, statist, Liberal, etc. I love the term Farcist. I encourage those on the left to find good examples of the GOP Farcists. They are the same party. Getting back the article, I'd agree that Barney Frank is the poster-child from Farcism.

1. Everyone from the Bush Administration

Do I really need to post links or give examples?

:goodposting: , if you mean Bush, Cheney, Wolfowitz, etc. . . .
I think you guys need to do better with the examples. Just bashing a party you don't like can be done in any thread. Let me help:

"The War on Terror" is a farce. How do you have a war against a tactic? Clearly the phrase is a successful marketing campaign used in previous initiatives for a larger government. (ie, see War on Poverty and War on Drugs).

I wouldn't call Bush I or Reagan administrations farcist.

The regime under W seemed to fit the definition to a "T." You asked for examples, those guys came to mind. Wouldn't necessarily throw the whole lot in there, but certain Cheney, Wolfowitz and Rumsfield.

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fightingduck knows his stuff. thanks for posting.

Thanks. I've now gone back and further bolded the original post to focus the conversation. The whole thing is so good in context to Greece and the curtain imagry, but I've realized that the part that I like the most is the term Farcism. I just have a had time even talking politics anymore, since the whole thing seems like such a bad dream and reality is completely turned on its head.

We've argued on these boards about what to call Obama - a socialist, statist, Liberal, etc. I love the term Farcist. I encourage those on the left to find good examples of the GOP Farcists. They are the same party. Getting back the article, I'd agree that Barney Frank is the poster-child from Farcism.

1. Everyone from the Bush Administration

Do I really need to post links or give examples?

:angry: , if you mean Bush, Cheney, Wolfowitz, etc. . . .
I think you guys need to do better with the examples. Just bashing a party you don't like can be done in any thread. Let me help:

"The War on Terror" is a farce. How do you have a war against a tactic? Clearly the phrase is a successful marketing campaign used in previous initiatives for a larger government. (ie, see War on Poverty and War on Drugs).

Freedom isn't free. It costs like $50 trillion and half a million lives. If marshmellows like you ran this country, every alley would be flooded with homeless families and Al Qaeda would be on every corner pushing dope.
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The regime under W seemed to fit the definition to a "T." You asked for examples, those guys came to mind. Wouldn't necessarily throw the whole lot in there, but certain Cheney, Wolfowitz and Rumsfield.

Whoever came up with "winning the hearts and minds of the Iraqi people." Or, "Democracy in the heart of the Middle East." This is the sort of policy that forces a long term committment that, by its nature, must span administrations. I think that's Farcist.
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Here's a great simple example of Farcism: "Cash for Clunkers."

Think about the words being used, in the context of a heavily regulated, heavily unionized, oligarchal industry. After the government sucks all of the blood out of its investors (first indirectly via regs, then directly through handing ownership to Labor and itself), it then subsidizes a select few people (those needing a car anyway), at the expense of the many, while destroying perfectly good assets (by tarnishing them with the word Clunker). And the final step to institutionalizing this insanity - it calls the program a success and increases its funding, solely because people used "free" money.

Who's against helping this American Industry?

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  • 2 weeks later...

I'm going to try something different for Part III. The author covers a variety of topics at once, uses very large words, has enormous sentances, and assumes a lot of pre-knowledge. So, I took some liberties with this and paraphrased. Hopefully, I didn't change it too much, because again it's very good:

One of the central tenants of Farcism is using of layers complexity to empower regulators. These regulates can reduce red tape and compliance costs for the politically favored. Then, they hide this power by promoting something that sounds good to the population, such as the "American Dream of Home Ownership." It will be seen that Farcism has enhanced regulatory power, particularly in financial services, for decades. This realization impacts the prospects for a financial reform bill that puts more power in the hands of these parties.

In November of 2009, we explored the "foreign regulatory capital" portion of AIG’s credit default swaps. We pointed out that

• $172 billion in notional remained outstanding

• deteriorating credit markets may force AIG to recognize additional losses

• Also, the implicit backing of the Federal Reserve might be the only reason that these swaps can perform their function.

The Function of these swaps is to allow European banks a way to reduce their regulatory capital requirements and increase their leverage.

At the time, that seemed like a big number. Until Fannie Mae actually lost $145 billion in eleven consecutive quarterly losses, wiping out its combined profits for the prior 35 years and still leaving about $80 billion in red ink to spare.

We had several questions last year. Including:

• If the European banks that bought swap protection from AIG are still relying on this protection to meet their capital requirements, and AIG might be unable to make good on the agreements, are these banks actually out of regulatory compliance?

Are the banks still able to use swap protection to reduce their collateral requirements because of the implicit or explicit backing of AIG by the Federal Reserve?

• Since it doesn't seem likely that a teetering AIG could make good on these agreements without substantial assistance - is the Fed is currently the ultimate backstop for AIG?

• Does this mean that the Fed is effectively underwriting these swap agreements?

• What if European banks are hit with more losses? (Dubai, Greece)

• Could it be that the Fed, once again, might have to bail out the world?

So what became of these issues?

Well, it seems most banks managed to skate by, but those were the days of the $1.50 Euro. With nearly a 20% EUR slide since then, perhaps we should revisit the ticking time bomb of AIG "foreign regulatory capital" swap portfolio.

The purpose of "foreign regulatory capital credit default swaps" is to structurally rig the markets to support a housing market bubble and encourage foreign financial institutions to be among the greater fools when the music stops in the United States. Key to understanding this perverse dynamic is the realization that regulators rarely manipulate bank behavior through the direct prohibition or mandate of certain behavior. Instead, banks are rewarded, somewhat nefariously, via policies that amount to massive subsidies. Arguably the two most substantial, and damaging, of these are:

1. The implied and/or explicit guarantee against loss by the United States government.

2. Deliberate rigging of capital requirements to manipulate banks to hold assets favored by policy makers.

In the first case, government guarantees can be seen as a combination of price fixing and subsidies. Price fixing in that the intent of the guarantee is to pull the perceived risk out of the asset and lower its price. Subsidies in that the government does not extract a fee from the investor in exchange for assuming the risk. The government is assuming (swapping) the risk of loss or default in the instrument. In this context it is beyond comic to watch Congress (the biggest salesmen of government guarantees) denounce the sinister and evil nature of credit default swaps.

No one expects to pay a guarantee when it is made. That's why it is made. It is a bit of "free" political payoff for loyal supporters. Worse, there is a maturity mismatch between guarantees and their potential implosions (political capital right now, outsized loss in many decades time after elected official has retired to the private sector). But this is the siren song of taxpayer funded subsidies. They look "free."

A guarantee against loss is valuable, and that when such guarantees are made without compensation the recipient is getting a subsidy and taxpayers get to carry the risk. They have given something (the security of risk mitigation) for nothing.

The situation is identical when the FDIC so radically underprices deposit insurance premiums to member banks that it chronically bankrupts the Fund and regularly has to go to the taxpayer well to make up the difference. This, of course, is a subsidy from taxpayers to banks in the form of underpriced insurance. How free do those subsidies look now?

In the second case, the power to reduce the capital requirements for financial institutions permits a small and mostly obscure group of regulators to wield control over literally trillions of dollars. Lowering capital requirements on banks has the immediate and naturally consequent effect of boosting their available leverage. This, of course, permits banks to boost their profits and thereby looks like a bit of "free" graft. Of course, to the extent these banks are insured by underfunded depository insurance schemes designed to keep premiums low rather than to build appropriate reserves for resolution, taxpayers are footing the subsidy bill, even before any failures crash the scheme.

Add failures in a "too big to fail" environment and the subsidy looks larger still. With Frannie Mae, Freddie Mac, and FHA now backing 96.5% of all mortgages in the United States (that's not a typo... and the figure approaches 100% of US 2009 GDP- let that sink in for a minute) sketching out the nature of this subsidy is left as an exercise for the reader.

Foreign banks investing in United States treasuries and certain (favored) mortgage backed securities (guess which ones) received favorable treatment with respect to the capital requirements (read: allowed leverage) imposed on them. European banks in particular (but also US banks with international presence) could use provisions of Basel I regulations to duck certain capital requirements by using credit default swaps to insure against MBS and other securities against loss. Using this method, banks could reduce their effective capital requirement to below 2% of risk weighted assets, provided they held the right assets.

Obviously, being able to control the list of "favored assets" entitled to preferential treatment permits regulators to funnel massive amounts of capital into risky assets out of all proportion to their actual economic value. AIG's "foreign regulatory capital" portfolio of credit default swaps served exactly this market by writing billions of dollars in notional credit default swaps that created trillions of dollars in additional leverage. Suddenly, the foreign appetite for U.S. MBS securities seems just a bit less a consequence of the "invisible hand" and a bit more related to the "political handout."

Worse (as of right now) the foreign regulatory capital simply isn't shrinking as fast as AIG hoped, due to the fact that regulators in all countries are delaying the implementation of stricter capital requirements. Also, the only input to their model valuing the instruments in this portfolio seems to be the early cancellation of swaps, which is simply not happening at the rosy pace AIG predicted.

Another otherwise obscure detail caught our attention. AIG must deliver US Dollar cash to some counterparties if these debts go bad and all it gets in return are increasingly worthless debt instruments denominated in the crashing EUR currency.

Then remember that AIG is only one of these Farcist enablers that we are fortunate enough to have discovered. What other nastiness lurks beneath CDO^3 structures and SPVs?

The reality is that until transparency of the sort that casts the brightest sunlight on earmarks, guarantee giveaways, accounting games, dumbed down capital requirements and the kind of legal structure that expects subjects to comply with 150,000 pages of federal regulations on top of state and local statutes, effectively causing the average citizen to unwittingly commit three felonies per day, the Wages of Obfuscation (read: Farcism) will drive the United States.

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