Audio: Webster Tarpley – House of Representatives REJECTS $700 Billion Bailout. America wakes up for the first time in 35 years. The time has come to nationalize the US Federal Reserve

If there is one post you should read on this blog, it’s this one.

September 29, 2008 was a historic day for America and getting out from underneath Wall Street oppression.. the first of many, i hope.  Forget what the talking heads are saying, yesterday was a Victory of Populism. The only thing the market lost yesterday was a bunch of numbers in an accounting book. God didn’t come down and take $1.2 trillion worth of property from the world. Factories didn’t disappear, only paper. And paper “assets” are NOT real.

Expect the oligarchy to try every scare tactic in the world to try and extort money from America… but do NOT submit and they will collapse into their own derivatives black holes. BE STRONG and invest in sustainable production, local communities, things in the REAL world.  Real commodities, real production. NOT futures.  NOT indexes.  NOT paper gambling.

They will NOT tell you the people are winning.  DOWN WITH OLIGARCHY!

Audio mp3:

1. 2008.09.29 Tarpley, Webster – Rense – 1 of 2
2. 2008.09.29 Tarpley, Webster – Rense – 2 of 2

Transcript PDF:

• Tarpley, Webster (2008.09.29) America Wakes Up – Rense

Transcript HTML:

JEFF RENSE, radio host: Welcome back! It is an historic day, to put it mildly, the 29th of September, the year 2008. In case you were asleep – oh, I’m not gonna spend too much time on it – In case you were asleep, go to Rense.com and you’ll wake up in a hurry. Stocks were crushed on the House vote to tell the criminals to take a hike. The extraordinary action of the House of Representatives gave millions of Americans hope that actually – in some way, shape, or form – their minds, their votes, their opinions, their care still matters. Or, on the other side of the coin, it shows you that an awful amount of members of the House are running scared. In either case, we won today. They are not going to go away. They will be back. They don’t like to take no for an answer.

This, of course, opens the door for all kinds of potentialities that are not particularly good to contemplate – or pleasant to contemplate – such as a false-flag attack on the United States to drive the public completely over the edge in terms of fear, further pounding of the economy to make people start lining up for food – in, certainly, some instances – or worry about same, a gas price squeeze, an invasion or attack on Iran. All kinds of “fun” things could be unleashed on this public to get even, as it were, to gain a measure of revenge to force subservience and compliance to the will of the – well, somewhat current – masters of this country of ours.

778 points today the Dow Jones Industrials dove, surpassing the 684 by nearly 100 that the market dove on September the 17th after the September 11th attacks. It’s an extraordinary – September the 17th was the first trading day after the September 11th attacks, in case you wondered – So, 778 points today and only 684 – well, only – on September 17th, after the 9/11 attacks. So, to give you an idea of what’s happened here the asian markets have opened and are diving over there as well.

With us to talk about all this and to make sense of it, to give us a clarity that few other human beings can provide is Webster Tarpley. Welcome back, Webster!

WEBSTER GRIFFIN TARPLEY, historian, political/financial analyst, peace activist: Thank you, Jeff! Let me just point out though that those points today, the 777, may seem impressive but in terms of percentage, of course, that’s far less than what occurred after 9/11. When you realize that you’re starting from something over 12,000.

JR: Yeah.

WGT: Let me also hasten to point out – and this gets to my main theme of the evening – that the price of oil also went down by $11.

JR: Yep.

WGT: So you’ve got a 10% potential saving at the pump for the real economy compared to a paper loss on the other side. In other words, the one thing you’re gonna know is that you’ve gotta buy gas and if that keeps going down, that will be a boon. Now, the thing I think is at work is Goldman Sachs and Morgan Stanley – we know – are responsible for about 30-40% of the increase in the price of oil. So, oil has doubled and Morgan Stanley and Goldman Sachs, between them, account for almost half of that.

JR: Uh-huh.

WGT: So let’s say 25% of what you pay at the pump is a direct subsidy to Goldman Sachs and Morgan Stanley, their speculative operations..

JR: That’s a very important way to look at this.

WGT: ..through this London I.C.E. – right? – Inter-Continental Exchange. Now, what happened today? You’ll notice when a big hedge fund – or bank or investment bank – is about to blow the price of oil goes down. What could it be? It means that they have speculative futures and options..

JR: Uh-huh

WGT: They’re gouging you. They’re speculating against your life.

JR: That’s right.

WGT: And when they’re about to blow they’ve gotta dump all that. They’ve gotta sell it off to raise cash and that drives the price down. Today we’re hearing people on CNBC saying, “Well, the markets are factoring in that there’s gonna be a – uh – decline, right? A global economic contraction and therefore there’s gonna be less oil needed.” I don’t think that’s it at all, I don’t – I think that’s a bunch of mularkey. What it is is – and they’ll never tell you this on CNBC – is that when the hedge funds and the banks approach bankruptcy they’ve gotta dump all that stuff in a hurry. Now, over the weekend these same hedge funds thought that they had John Q. Public where they wanted him. In other words, that they were masters of the situation. They could force through the bailout and they could get back to their “business” which is to loot and to sack and to – you know – suck the blood of the real economy and they were back into driving the price of oil up..

JR: Uh-huh

WGT: ..as fast as they could..

JR: Sure

WGT: So, what you’re being asked to do with this bailout is you should be taxed so that Goldman Sachs and Morgan Stanley can go on looting you, foreclosing on you, and generally, you know, robbing you blind, left and right. And I think that’s a real interesting example.

Now, to step back just a minute. I think this is the best thing that has happened in the United States in about 30 or 35 years.

JR: Been a long time. I agree.

WGT: I’m trying to think of the last time something really good happened..

(laughs)

And it’s been a long, long time. I can think of things of somewhat lesser magnitude but I can’t think of anything as encouraging as this. And, above all, because it teaches people the lesson they need to learn: political mobilization is possible. It does work! And I have to say the writings of Milton Friedman and the general approach of – I guess we have to call them – the Libertarians, they say that the goal is to get government out of your life. I’ve always thought that was absolutely absurd! The goal is to get the citizen back into government, as the boss! That you take over the government. Not that you drive the government away from you or that you think that the government is bad or you can’t influence it or it’s demonic or whatever it is. Government can be whatever you make it.

JR: To reclaim the government and make it the servant of the people.

WGT: Absolutely! That the – think of those prairie populists back in Omaha in the 1890s. God knows they had less in the way of the tools to fight with than we have today and their idea was simply: takeover the national government and use it against the Wall Street finance oligarchs. And that is absolutely valid today, as it was for those populists. Now, along comes Milton Friedman of the Rockefeller funded University of Chicago, the darling of the Mont Pelerin Society – one of the worst gaggles of reactionaries and corporate banking ideologues and oligarchs and elitists that the world has ever seen, meeting there in Switzerland above Lake Geneva. And Milton Friedman pontificates – and, of course, with von Hayek and the rest of the Austrian School – government is always bad! Government is always bad! Wrong!

JR: Um-hmm.

WGT: If you’re going to make a generalization about history, the accurate generalization is that banking power unchecked is always evil.

JR: Always has been.

WGT: Unchecked banking.. Governments can be good or bad depending on whether the citizen is apathetic, resigned, fatalistic..

JR: And when this government turned over to the private Federal Reserve the control of its money in 1913, this government – basically at that point in time – began to be the adversary of the people.

WGT: And let’s take it back a little further because what you have in 1913 is the formalization and legalization of power relations that had been established earlier.

JR: The 1890s..

WGT: They had been established in 1895, when Grover Cleveland, who was a Democrat – and he’s similar to Obama in many ways – Grover Cleveland capitulated to JP Morgan and London in the Great Attack on the US Dollar by the British, by the City of London, by the Bank of England and the consortium lead by Morgan was allowed to takeover the public debt of the United States. I think this is one of the biggest defeats that they’ve ever had in that since those days. It shows that the situation is very volatile. Let me just say a few more things. I believe it shows that the American people remain anti-fascist in their majority. Because if there ever was a fascist law or bill it was this.

And, of course, Hanky-Panky Paulson, when you see him he’s a strange hybrid. He’s a thug and a gangster. He talks like a mafioso. But he’s also – you can see that he’s a borderline psychotic, constantly on the verge of losing control of himself. He can’t sit still. He can’t look in one direction for more than about 3 seconds. He seems to have a visual attention span that is measured..

JR: Eye-contact problems..

WGT: Yeah, a really – you know – a prize specimen that they’ve sent up there and naturally he wants to be made into a juridical vacuum, he’s above the law. I suppose it means that he can go kill his mother and they can’t do anything to him because he’s got this special status. It’s like the emperor of the Byzantine empire.

JR: Webster, Webster.. that was a magnificent statement! He wants to be made into a juridical vacuum.

WGT: Yeah, that no laws apply to him.

JR: A lot of people missed that. That is priceless!

(laughter)

WGT: That there’s no law. That he’s above the law.

JR: I understand.

WGT: It’s the first time in the US government that you’ve had anyone formally declared to be above the law. So, he, of course, came with this extravagant program with this lunatic size and his presentation – he’s only willing to answer 3 questions?! If you want $700 billion you should be able to answer every question in the house. But..

JR: Yeah.. (laughs)

WGT: ..he won’t do that. He should resign. Pelosi should resign.

JR: No, they should be removed. They should be removed. Whatever it takes remove them.

WGT: Right.

JR: They’re not gonna resign.

WGT: Right.

JR: They need to be voted out. In fact, every single representative in the House that votes Yea today – in favor of the bailout – needs..

WGT: And especially, there’s one who voted against the bailout but then tried to change his vote, Joe Barton of Texas, we’ll get to him in a minute.

JR: Ok, all of those people, ladies and gentlemen – all of them – if you happen to live in their district you must vote them out. You must. They are traitors to the entire history of this Republic.

[break #1]

JR: I invite you to go to Rense.com, look under the World Financial Crisis featured story box, you’ll find the list of House members who voted for and against. If you can find your Representative in there who voted for it, get em out!

WGT: Get em out.

JR: Out! No talking! No town hall debates! Get em out! That’s it! Done!

WGT: No, no, they’re radically evil. They’re unqualified. They should not be in government. Let me also point to Joe Barton of Texas. If you were watching this vote, as I was, at a certain point there were a couple of votes from the Pro-bailout column that, at the very end, drifted into the anti-bailout column. That is a parliamentary maneuver. In the Congress – the Senate is the same – the only way that you can launch a motion to reconsider is if you voted against it. See? So with Joe Barton, this is real treachery so it shows, I think he’s still on the list. If you look him up he’s gonna show as someone who voted against it. Joe Barton votes against it so that he could make a motion to reconsider. In other words, to try to breathe new life into it by getting a second vote and he tried to get the floor. And he said, “I would like to have a motion to reconsider.” And he asked the pro tiem speaker – right, whoever was subbing for Pelosi – to say, “uh, wait a minute, uh, when would we do this vote?” And she said we’d do it basically now, right away. And then Barney Frank was running around the floor saying, “Close the vote! Close the vote! Close the vote!” Barney Frank had lost control of himself. A lot of these people are on the verge of nervous breakdowns, namely Pelosi and Frank and Paulson. So, Joe Barton may show up as a good guy. But the only reason he voted against it was because he was for it and he wanted to give it a second go ‘round.

JR: He is a snake, alright.

WGT: A snake. Now, let me push ahead. I actually have a very important policy proposal which is – it’s being made here actually for the 2nd time. But, this is the biggest broadcast that it’s gonna be on today, as far as I can see. And it goes something like this – If you saw the line coming out of CNBC business news, the so-called bubble-vision, after the vote, they’re screaming, “Oh, those guys on Main Street, they don’t understand anything! Main Street hates Wall Street. Main Street thinks that they’re separate from Wall Street but they’re not! Main Street and Wall Street are the same thing, they’re inextricable. And now that Wall Street is going down, Main Street will pay the price.” And they start saying, “You’ve gotta realize that it’s not a bailout of the rich Wall Street investment bankers, hedge fund jackals, hyenas, and all the rest of them. Oh no, oh no, it’s none of that. It’s really bailing out yourself.” In other words, you’ve just happened to give $700 billion to the Wall Street jackals and hyenas but that will all pass through, it will all trickle down to you, ultimately. And they start saying, “Look, if the credit markets remain frozen, ” And I believe they are, to some degree, frozen today. “There will soon be no credit to move merchandise.” These people know, right? Commercial paper and bills of lading are interest bearing instruments and without these things you can’t move commodities, right? You can’t. “There will be no credit to sell cars. There will be no – new or used. You will not have sufficient merchandise in the stores, right? It will be impossible for the stores to buy the winter clothing lines.

JR: That’s right.

WGT: Oil may not be available, other fuels. You won’t be able to get a mortgage. You won’t be able to get a student loan. You won’t be able to get a bigger credit card line, and so forth.

JR: By the way, I was told today – a real quickie, Webster – that a friend of mine called, said he knows someone worth about $2-3 million. He wanted to get a fully secured loan for 30 days, fairly large amount not $300 million. I don’t know how much it was, it was $1 million or something. And nobody would talk to him. Nobody would talk to him. Not at all.

WGT: Ok.

JR: AAA. Highest quality related borrower. Totally secured. No money.

WGT: This is what I’d like to address now. I wanna defeat this blackmail line that’s coming out of Wall Street. Because, we’re not at the point where we – there will be a counter attack now by the bailout Wall Street jackals and hyenas.

JR: They’re not gonna go away. I told ya.

WGT: forces, right? We’ve gotta keep up the pressure but you’ve also gotta have an answer. Where will credit come from? And this brings us back to the question of the Federal Reserve. Now, the Federal Reserve – as we know, right? There’s no argument, you know, in these circles that it’s illegal, it’s unconstitutional, it’s never been audited, it’s probably got tremendous crimes of embezzlement and other things in there. And again, it goes back to this 1895-1913 period where the House of Morgan and its various allies – Mellon, Rockefeller and the rest of them – take over the public debt and finances of the United States. We can look at the history of this sometime. It’s very, very interesting the way they did it.

But now, if you look say at the last depression or in the 50s or into the 1990s, the Federal Reserve was exclusively concerned with its own member banks. Not just any bank but only a Federal Reserve member bank. Now this is important because the Federal Reserve is the main engine of credit. However, we don’t need the Federal Reserve. In other words, this system has always been inherently unworkable. We have a – if you just look at the prices of today – The Federal Reserve lends money overnight to JP Morgan Chase for 2% and JP Morgan Chase turns around and lends that money back to the Treasury – Say, in a 30 year Treasury note – for 4.5% or something like that. Today it may be closer to 5%, because there’s been a flight to quality. In other words, there’s a 3% arbitrage that goes to these private banks. Why do we need them? You know, we could save hundreds of billions of dollars a year by saving that 3%. In other words, if the Federal Reserve was part of the Treasury, the government lends to itself. We don’t need to subsidize JP Morgan and Citibank in the process. That’s for starters.

JR: Standby.

WGT: That’s just for starters, though. That’s not the proposal. That’s just setting the situation.

JR: I know, you’re setting the ground work. We’ll come right back with Webster Tarpley in just a couple minutes. We’re giving you analysis that you’ll hear nowhere else and glad to do it. Back in a minute.

[break #2]

JR: OK and we’re back. We apologize for the slight interruption on the internet portion of the feed but we apparently have it fixed now. So, hopefully it will stay fixed.

We’re talking with Webster Tarpley about September the 29th, 2008, a day that will go down in history. Although, we might add with a quick caveat, tomorrow might be worse. Now, interestingly enough, I don’t know if the House of Representatives does this for Ash Wednesday, but they are out of business now. It’s shut down for 2 days because of a jewish holiday. The Senate will vote on something tomorrow but we don’t know what..

WGT: I don’t think tomorrow, I think it’s wednesday.

JR: I beg your pardon, you’re quite right. Quite right.

WGT: Let me say happy new year to people who are observing this holiday.

JR: Let’s see – let’s see all holidays observed. This is basically a christian nation, but whatever.

WGT: Sure, why not?  Look, if you watch the television news they’re telling you “OH! Australia’s down 3%! Oh! oh! oh! You should cut your throat! Australia’s down 3%!”

(laughter)

JR: Yeah. Uh-huh.

WGT: And, you know, these exchanges in the orient are down 4-5%. Well, that’s about par for a bad day, right? So..

JR: That’s right. That’s true.

WGT: What’s the big deal? And then, of course, we do have the 10% decrease in the price of oil which is a nice consolation. Let’s get back to the question of credit though because – The argument now is: “You’ve got to capitulate to the bailout because otherwise there will be no credit. And remember that Wall Street is the friend of Main Street.”

JR: You watch, Webster is hitting a huge truth here. They are going to ratchet the fear factor up and the threats, you just watch.

WGT: Right. They may even stage a bear raid.

JR: That’s true.

WGT: In other words, they’re capable of driving the market down 1000 points tomorrow. Suppose they put the PPT (Working Group on Financial Markets – created by Executive Order #12631 – aka the Plunge Protection Team) in reverse and drive it down to try to scare everybody.

JR: That’s very good. I was just going to mention that. That’s right. the PPT.. I think the PPT is out of bullets anyway.

WGT: They’ll try to stampede you with a bear raid. They’re perfectly capable.

JR: Yeah, right.

WGT: So, and you mentioned terrorism before that’s also a very definite possibility. I dont think against Iran but against the enemies of today. Against Russia, something – you know – something in Poland, something in Ukraine. This kind of business.

JR: Easy to do any time. Easy to do.

WGT: So let’s look at the Federal Reserve. Now, the goal, of course, is to nationalize the Federal Reserve. In other words, seize it, audit it, and incorporate it back into the Treasury where it should have been. In other words, you want to get back to the Lincoln system. In other words, the Greenbacks, where you have a controlled currency. And where the government determines through a vote of the House and the Senate – you know, with the kind of drama we’ve had today – and the President signs it, what the size of the money supply should be and what the interest rates are. What else can we do under our system? You can either have the current system which is groups of unelected unaccountable bankers – I was looking at the Federal Reserve website today. They put a new director on the Board of Governors in the past couple of weeks. They do things that nobody notices.

JR: By the way, they’ve been short staffed in Directors for quite some time so it’s not a surprise.

WGT: Well, you know, these are basically anonymous people, right? They’re a bunch of anonymous oligarchs in a room, unelected, unaccountable. Don’t have to account for themselves in any way. There’s no penalty for them if they, you know, make a very bad mess, as they’ve done. And that’s, I guess, the other argument. The big argument against the Federal Reserve in addition to the illegality, unconstitutionality, criminality is that it’s a failure.

When this – you can look in Herbert Hoover’s memoirs, he says – look, when the Federal Reserve was established, the line was that “if you put this up you’ll never have another financial panic again because they will stop it.” Well, it didn’t stop the stock market crash of 1929. It did not stop – much more seriously – the banking panic of 1932-33, and now it has not stopped the current slide into world depression.

So, we’ve got to think now about junking the Federal Reserve in the old form. Let me point out, this is not the same as what Ron Paul says. Ron Paul says, “Abolish it.” I don’t agree with that at all. That would mean going to a situation where what states issue money? Or private companies issue money?

JR: Right, now be real clear on this, Webster, so people don’t start throwing things at you.

WGT: (laughter)

JR: I’m not joking. You want the Federal Reserve to remain operable but..

WGT: As a bureau of the Treasury under the political control of the House, the Senate, and the President.

JR: Under the political control of the people of the United States.

WGT: Yes. In other words, you vote for it. In other words, get interested in politics because if you want to lower the interest rate, vote for the low interest rate candidate and a little bit of inflation will help you get rid of your debts. Right?

(laughs)

So a mild inflation would be a good thing. So, that’s the goal. Now, the sort of maximalist ideological demand “Nationalize the Fed” is what you need. Again, not abolish it, right? We’re not going back to wampum, please. Not clam shells.

JR: In a way, we can say abolish it in its current incarnation but keep the mechanism around as a servant of the American people.

WGT: Yeah, but you don’t – it can’t be controlled by private bankers. Because – that’s the main issue.

JR: No, hell no! That’s been the main issue and the biggest problem in this country for nearly a century.

WGT: Right, and we can get into the distortions this produces. So, you want to get it back under the Treasury and under the control of the people through elected representatives. That’s the system we have. So the question is..

JR: The real control, ladies and gentlemen, real control.

WGT: Yeah, but that depends on whether people are apathetic and stupid and watch football games on Sundays or whether they get out and vote.

JR: And it also depends upon on whether or not the people will actually go out and vote the criminals out who voted for the bailout. If they lay back and let that slide..

WGT: Yes, of course. Of course. This is bipartisan by the way, its 100 – almost 100 democrats and 150 republicans. That’s great and remember that they would have been more democrats if you haven’t had Obama. I mean, Obama sticking in the middle of this is the deployment of finance capital to sort of muddy up the whole situation with the Obama issue which is basically an irrelevancy when you get down to the real interesting..

JR: Yeah, you saw the big news today, didn’t you? That Rezko is apparently striking a deal.

WGT: Yes, but let me try to stick to the Federal Reserve and we’ll do that later. That’s in the 2nd hour.

Now, the only president who controlled the Federal Reserve was, of course, Franklin D Roosevelt. And he knew that he had the power to abolish the Fed which is what he should have done. I would say the biggest mistake of Roosevelt’s career was his failure to nationalize the Federal Reserve system when he could have. He preferred to use his political capital elsewhere. But under his administrations he would call the head of the Federal Reserve and he would say, “The Treasury is bringing a bond issue and you will buy it at a price which will give us a coupon rate of 1/2 of 1%” In other words, he dictated monetary policy and interest rates to the Federal Reserve and they had to like it or lump it because he could have wiped them out.

JR: Yeah, he forced compliance and it worked.

WGT: But now we can see how we can do this today. And that’s my next point.

JR: Very good. And we’ll hear that next point in just a few minutes with Webster as we continue. Thanks for being here it’s been quite a day. Tomorrow may be at least as interesting. I think his comments about the asian markets bear very close scrutiny. It’s not happening over there like it happened here today. And one would love to be a fly on the wall at the Plunge Protection Team meeting tonight.

WGT: (laughter)

JR: Wow. Back in a minute.

[break #3]

JR: OK, right back. Bloomberg has a 3rd update already on a story about the Fed and what they’re going to do now. Just FYI – keep all of you up to speed. The Federal Reserve will pump an additional – they’re not saying where they’re getting it – $630 billion into the global financial system flooding banks with cash to alleviate the worst banking crisis since the Great Depression. The Fed increased its existing currency swaps with foreign central banks by $330 billion to $620 billion to make more dollars available worldwide. The Term Auction Facility. The Term Auction Facility..

WGT: Right.

JR: ..the Fed’s emergency loan program will expand by $300 billion to $450 billion. The European Central Bank, the Bank of England, and the Bank of Japan among the participating authorities – expansion of liquidity, the biggest since credit markets seized up last year – as they termed it – came hours before the US House of Representatives rejected that $700 billion bailout for the financial industry. The crisis is reverberating throughout the global economy causing stocks to plunge and causing european governments to rescue 4 banks over the past 2 days alone, etc.

WGT: This is – It’s wonderful that you bring this up. This is precisely what I want to talk about. The goal is, in terms of function, to force the Federal Reserve to issue cheap credit for productive activity. In other words, interest rates of 1/2 of 1% to 1%, maturities that can be 2 years, 3 years, 5 years, 10 up to 40 or 50, but for production. And when I mean production, I mean manufacturing, mining, energy production, infrastructure building, commerce, moving goods, housing, creating infrastructure of all kinds. But, the notion of industrial production, the producers. Now, what the Fed has done since December – So, in something less than a year – They’ve created these things that you’ve said: the Term Auction Facility, TAF. Taffy, think of it as taffy. Created last December, right? It was created when things got bad just before Christmas. This was that banks don’t wanna go the Federal Reserve discount window because everybody finds out that they’re there and thinks they’re about to blow. So they don’t like it because it leads to a panic run. The Term Auction Facility is auctions where you can go and bid to get loans at cheaper than discount window rates. So, I guess its below 3.5% or 3% or whatever the discount window is. I think in practice you can actually get money cheaper here than you can at the Fed funds rate. So..

JR: Webster, Webster, where do I apply for this? Where do I..

WGT: Yeah, this is the point. This is what we’re gonna get to. I just want – I want people to know what’s going on and then why they should get a piece of the action. And that’s our next goal. So, we have the Term Auction Facility which is only (for) banks.

Now there’s another one: the Term Security Lending Facilities. So we had TAF, now we’ve got TSLF. Term Securities Lending Facility. This is in the New York Fed, Timothy Geithner, and this goes to primary dealers of in Treasury Bonds. So, that would have been the 5 investment banks on Wall Street – right? Which are all gone now – Goldman, and Lehman, and well Goldman and Morgan Stanley remain. Lehman blew up. Bear Stearns blew up. And Merrill Lynch has been absorbed. But I think some of these functions as primary dealers remain with Goldman and with Morgan Stanley and with Merrill Lynch. The 2 bankrupt ones, I guess, are gone. So they can have 28 day loans against collateral from the New York Federal Reserve. It’s the 2nd one.

Now there’s a 3rd one: Primary Dealer Credit Facility. This is the PDCF, the Primary Dealer Credit Facility. This provides funding to primary dealers in exchange for collateral. Now, what collateral now means has gone beyond investment grade corporate bonds to include shares of stock, any kind of stock. You can give that to the Federal Reserve and say there’s your collateral.

Now, don’t stop here.  There’s a 4th one: Asset Backed Commercial Paper Money Market Mutual Fund Liquidity Facility. The ABCPMMMFLF. OK?

JR: (laughs) I see. Clear as – It’s all very clear now. Uh-huh. Uh-huh.

WGT: So, and as you say, today they announced $620 billion in swaps with foreign central banks. Now this means, if I’m a foreign central bank, I can be the Bank of Georgia and Ukraine. I’m sure they’re there. You can go and borrow from the Fed. If you’re a stockbroker you can borrow from the Fed, provided you’re a big one and you deal in Treasury Bonds. You can be a bond salesman of just about any kind. You can use common sock as a collateral. Now, what this means is the line between member banks of the Federal Reserve – which used to be the only thing that counted..

JR: Uh-huh.

WGT: ..and a whole range of brokers, mutual funds, bond salesmen, and all the rest of this stuff. This is now completely blurred. So they’ve got 5 or 6 different facilities going.

JR: Uh-huh. Uh-huh.

WGT: Now, your response is exactly the right one. How about a lending facility for the rest of us? How about the producers? How about Main Street? How about the small businessman? How about the guy whose got an auto repair shop? Or a dry cleaner? Or a supermarket? And he needs credit to fill his shelves.

JR: And he needs it now. That’s right.

WGT: Or a small department store? Here’s what I propose. The mobilization should be not the maximalist stuff immediately of let’s nationalize the Fed and end this monstrosity because, of course, that’s what it is. I suggest, rather than the ideological approach, to conduct a struggle based on issues as they arise organically from events and from the unfolding of the crisis. So they’re telling us today, “Wall Street and Main Street are the same. And the only way to get credit to Main Street is to give $700 billion to Wall Street and then it will pass through and trickle down.” But it won’t. Because, remember, those Wall Street institutions are all black holes.

JR: They’re gonna skim it all off. It’s – c’mon..

WGT: Precisely, but any – so any money you put into Wall Street will stay there. Therefore, let’s campaign for a Federal Law that directs, orders the Federal Reserve. It basically overrides all this stuff about the independent Fed and it says, “Boys at the Fed you’ve got special lending facilities for everybody and his brother as long as they’re an oligarch, a banker, a bond salesman, a mutual fund hoaxster, or god knows what else.” Now, you’re gonna put up $500 billion, for starters, for producers, for businessmen, for people who hire workers and manufacture goods.

JR: Right.

WGT: Small and medium industry. We can save Detroit, right? Let’s give Detroit a part of this. Now notice, this is a way to generate credit without taxing anybody. This is not taxation. This is not Federal spending in the usual sense. It is Federal Lending. As a matter of fact, now that we’ve said lending, think of the Lend-Lease program. The Lend-Lease program was that if you had a war contract – in 1941 before the US was in any war – you could take that to your local bank and it was guaranteed a discount with the Federal Reserve if you were producing something that was needed for the Lend-Lease programs. So let’s have, in effect, a domestic Lend-Lease. Force the Federal Reserve. And you’d have to say to them, “Look, do you guys at the Fed think that your only mission is bankers? Is the economy made up of bankers? Are there anybody – are there any other elements of the economy that are not bankers that deserve to be supported?” Now, what you can get out of this is, this is a nationwide alliance. In other words, this unites small business, workers, rural america, farmers, it’s a national coalition. In other words, who needs credit from the special facility at the Federal Reserve? All of us. All of us. Not Wall Street. Forget them. Let them stew in their own juice. Let them figure out their derivatives. Let them contemplate their own black hole. Let’s force the Federal Reserve – since they’re making this arguement, they’re saying, “Oh! Uh, you know, Wall Street cares about Main Street – of course! Give us the $700 billion” No! Go directly to the Fed. You can call this nationalizing the Fed step by step. Nationalizing the Fed on the installment plan.

JR: Uh-huh.

WGT: This is a direct step towards nationalization. It’s to force them to do something that they would not do, to pay attention to producers that they scorn, to turn away from the bankers which control them, and it breaks the control of the Federal Reserve Board and the regional boards over the bank because of a national emergency. So you’re saying, we can restart the economy without taxing anybody. We don’t need to tax. It’s Federal Lending not Federal spending.

JR: Got it.

WGT: I think this is really important because it allows you to say we still don’t want your bailout. We don’t want your bailout because we have a way to do this and we’re demanding that the Federal Reserve open up. We’ll have to think of a catchy name for it, maybe you’ll help me. A producer’s only lending facility, POLF.

(laughs)

I don’t know what to call it. The POLF. The Producer’s Only Lending Facility. And this allows you to get the guts of the Republican party, who voted against this today are small business

JR: mm-hmm.

WGT: Unfortunately, they’re low wage employers. Those 150 votes on the Republican side, that is small business and low wage employers. They don’t wanna be taxed for Wall Street. Great, they shouldn’t be. They should, obviously, they should reform themselves in many ways but they’ve gotta be around to do that. So, let’s coerce the Federal Reserve. Let’s actually take a piece out of the Federal Reserve, right? Let’s grab part of their power and nationalize it.

JR: How do we do it, Webster? Who does it? How do we do it? What’s the mechanism?

WGT: I’ve gotta write this up tonight as a proposal and basically as a law, a simple law.

JR: OK, I’ll post it as soon as it’s ready. This needs to be introduced by Ron Paul or someone who may agree..

WGT: No, he would never do it..

JR: Although, he wants to abolish the Federal Reserve. He won’t stand it..

WGT: He’s the wrong person because he doesn’t believe in this. He believes in the market, the market, the market.

JR: OK, somebody like a Ron Paul, though, who is a clear thinker. At least in his own right.

WGT: Well, you know, I’ll try anything but I think he’s one of the least likely people to do this.

JR: OK, I understand.

WGT: You’re probably better off with one of these Democrats

JR: You’ll never get a Barney Frank to do it.

WGT: No. No. No. Kucinich, somebody like this.

JR: Oh, alright. And some people, I was one of them..

WGT: Kucinich gave a passionate speech against the bailout. It was one of his better moments.

JR: It’s too bad about Dennis. He coulda been.

WGT: By the way, this violates the Austrian School that Ron Paul endorsed in the Congress.

JR: I see. OK, Barney Frank’s in the news, by the way, his male lover apparently has some rather salty Fannie Mae connections. I don’t know what’s going on here.

WGT: The fanny fund.

JR: I didn’t want to go there.

WGT: (laughter)

JR: Be right back.

end of part 1.. stay tuned