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Chapter 10. The Noble Lie – By Consensus

Draft of November 30, 2018

Total: 4,428

At the core of today’s systemic corruption are found neoconservatives who endorse Plato’s concept of the “Noble Lie”—a moral rationalization that the wise must conceal their true motives from an “ignorant public” that may otherwise seek reprisals. Neocons share a belief in duplicity as a necessary evil to advance the greater good—as they see it.

Leo Strauss, from the Hesse region of Germany (1899-1973), served as their inspiration and mentor at the University of Chicago. An advocate of hidden meanings in the writings of ancient philosophers, Strauss taught the art of deceit to induce conflicts that advance a hidden agenda—behind the pretense of informed consent. Their fraud not only imposes a hidden tax on humanity, it also poses an existential threat to liberty. Either this lie is addressed or freedom dies.

My father, then serving his second of four terms as Governor of New York, recognized that education would be liberty’s last line of defense against these duplicitous few with their “tireless genius for crisis.” The crisis of 9/11 served its purpose as a Pearl Harbor-like provocation. Its emotionally wrenching impact induced us to war by displacing critical thinking—and facts—with false intelligence (remember Iraqi WMD?) and a pre-staged storyline (The Clash of Civilizations). With the help of a complicit media, an ignorant public was deceived to believe the intelligence and embrace the narrative.

No treachery is more ancient than the displacement of facts with manipulated beliefs. No threat is more perilous to a system of governance reliant on informed consent to protect liberty. The greatest enemies of freedom are those with the means, motivation and opportunity to wage such warfare. General Valery Gerasimov, chief of Russia’s general staff, describes this as “nonlinear war.”[1] Nobel Lie strategists target the public’s faith in institutions of governance and the legitimacy of law. Undermine informed choice and confidence in the rule of law and who emerges victorious? Those chronicled in this account.

Following the presidential inaugural of George W. Bush, Glenn Olds wrote out for me a personal note of congratulations that he had earlier sent to George H.W. Bush whose son campaigned on a platform promising to unite the two political parties. Glenn’s letter describes how the parties twice switched their positions on the two-fold challenge facing democracy: (1) how to maintain order without oppression, and (2) how to ensure personal liberty without the lawlessness that endangers the health of community.[2]

The Founders sought to balance personal freedom with the shared need for law and order. In the minds of those who see themselves as Chosen, the Noble Lie grants them license to provoke crises that create insecurity along with a demand for oppressive laws—to restore security. Thus the pre-staging—well prior to 9/11—of The Clash narrative as a plausible source of insecurity and the Patriot Act as a plausible source of security. [See Chapter 8. The People in Between]

As my life experience proves, the serial insecurities we now see did not emerge organically as a natural evolution of human history. Instead we were induced to gradually forfeit our freedoms for the perception of security. Serial crises were produced with timelines that divide into ten-year, 30-year and 100-year increments. The very idea of trans-generational intent defies how we’ve been taught to think about criminality. Under linear law, accountability is personal and directly attributable to those with criminal intent, what the law calls an “evil mind.”

With nonlinear criminality—as with nonlinear war—intent is imbedded over time in a shared mindset that takes on a life of its own as a widely shared consensus. For those profiled, the battlefield is the shared field of consciousness. In the case of warfare, that intent requires the production and marketing of a serial Evil Doers. Thus the hate mongering common among those with a “tireless genius for crisis.” Step-by-step, a widely shared consensus finds its way into policy and law. Systemic criminality (e.g., Nazism) can appear rational even as its results are enabled by an institutionalized psychopathy.

psychopathy n. A mental disorder roughly equivalent to antisocial personality disorder, but with emphasis on affective and interpersonal traits such as superficial charm, pathological lying, egocentricity, lack of remorse, and callousness that have traditionally been regarded by clinicians as characteristic of psychopaths.

Market Fundamentalism to Finance Fundamentalism

Much of today’s global “order” traces its origins to the freedom granted by law to the forces of finance. At the prompting of academics, finance emerged as a primary lens through which we were educated to see our world. Like trying to see your own eyes or bite your teeth, it’s difficult to see a problem when the problem is the frame through which we’ve been persuaded do our seeing. With the publication in 1776 of Adam Smith’s The Wealth of Nations, the pursuit of self-interest—portrayed as the invisible hand—became over time the consensus means best able to generate real wealth (wellbeing). Free markets offered the promise of dispersed control without a centralized authority. That appealing notion of personal choice was slowly transformed.

At the urging of 20th century academics, self-interest became “financial-ized.” Wellbeing (wealth) could best be achieved by treating financial freedom as a proxy for personal freedom. Financial markets gradually became a proxy for Smith’s markets composed of the butchers, bakers and candlestick makers that he saw responding to the needs of community in 18th Century England. Our Declaration of Independence, also published in 1776, promised the freedom to pursue happiness. Two centuries later, a consensus emerged that our happiness was best achieved by our freedom to pursue financial returns—as a proxy for happiness. Finance became both the means and the end with money the metric for measuring success.

Step-by-step, financial values were granted not just deference but outright dominance—backed by the force of law. And by a consensus belief that the proxy domain of financial freedom offered a means to protect personal freedom and liberty more generally. This is why the Founders are also known as Framers. On, in this case, re-Framers.

Though the results within that narrow frame were foreseeable to financial sophisticates, an ignorant public remained clueless. Rather then becoming captains of their own destiny, people’s lives gradually became dominated by financial forces beyond their control. Though freedom served as the rationale, subservience was the result. Globally, the World Bank/IMF championed legislation that conformed local law to this growing consensus. As political colonies became the exception, financial colonization and oligarchies emerged as the norm.

By consensus, this narrowed perspective became enshrined in law even as—foreseeably—it concentrated wealth—undermining democracies—and income, undermining markets. Branded worldwide as the “Washington consensus,” this worldview typifies a Noble Lie. As specialists in nonlinear warfare fully understand, it’s difficult to defeat an enemy imbedded in your head. By imbedding this idea “upstream” in a shared mindset, the “downstream” results became inevitable—yet appear freely chosen.

For the ignorant public, finance remains invisible, intangible and largely inscrutable. Its costs are imposed on everyone while its benefits are captured largely by a financially sophisticated few. People know they’re being screwed. But how, by whom and why?

Though the origins of this consensus can be traced to those long skilled at finance and trade, its modern-day embrace relied on advocates such as Ayn Rand (né Russian Alysa Rosenbaum). Rand glorified free markets as a reliable source of knowledge and even wisdom. To sell her message and brand the messenger, she wore a large silver broach crafted as a dollar sign. Alan Greenspan, appointed in 1987 to chair the Federal Reserve by asset Ronald Reagan, became a Rand devotee in the 1950s and served on her board of editors at The Objectivist. Viewing his world through her money-myopic lens, Greenspan oversaw for 18-1/2 years the most rapid concentration of wealth and income in U.S. history. His Rand-inspired policies pre-staged and enabled the subprime mortgage fraud, triggering the Great Recession.[3] Her funeral in 1982 featured a six-foot floral arrangement in the shape of a dollar sign.

It’s difficult to overstate how imbedded this mindset has become. Wisconsin Congressman Paul Ryan, Republican Speaker of the House (2015-2019), credits her writings as his inspiration entering politics. In 2012, Ryan campaigned as the vice-presidential nominee with Mormon presidential candidate Mitt Romney. In 2008, asset John McCain, the Republican presidential nominee, conceded: “The issue of economics is not something I have understood as well as I should. I’ve got Greenspan’s book.”[4]

This internalization of a worldview—regardless how flawed—explains how nonlinear war is waged by those with the means, motive and opportunity to create and sustain a shared mindset. Those who specialize in waging war “by way of deception” (the motto of the Israel intelligence services), know that downstream outcomes will continue unimpeded until the mindset is changed. Thus the role played in this duplicity by academia, media, policymakers and others who comprise “the people in between” as chronicled in Chapter 8.

Finance-Assured Social Fracturing

Why dwell on this? Because this Noble Lie is concentrating wealth and income at such a pace that Credit Suisse projects we’ll see 11 trillionaires within two generations. In terms of game theory warfare, this society-fracturing outcome was “probabilistic” and mathematically model-able decades ago.[5] The only missing ingredient: a critical mass of True Believers in what was initially called the “Chicago” worldview. This narrow perspective found its way from academia to legislation through the “law and economics” movement.

Its intellectual center of gravity remains the University of Chicago where Professor Leo Strauss described for his students how educated ancient elites manipulated the beliefs of the masses for subordination and service. In the course of serving the narrow interests of finance, the Chicago model continues to fracture civil society at an accelerating rate while systematically undermining the prospects for healthy communities and nations.

In May 2016, the Federal Reserve published its Report on the Economic Well-Being of U.S. Households. The report found that, if faced with emergency expenses of $400, almost half the 5,600 respondents said they either would not be able to cover the expense or would be forced to sell something or borrow to do so. Meanwhile the U.S. recorded the fastest rise in inequality among the seven leading high-income economies. Between 1980 and 2015, the share of pre-tax income for the top 1 percent jumped from 10 percent to 18 percent. Even after tax, it grew from 8 percent to 12 percent. While the topmost prospered, the total increase in median earnings since 1979 was only 1.2 percent, 0.03 percent per year.[6]

When people fail to see themselves and their peers progressing over a lifetime, they tend to become angry and resentful. This growing disparity is also seen in a fast-widening longevity gap. Life expectancy for the bottom 10 percent of U.S. wage earners improved by just 3 percent for men born in 1950 while the top 10 percent saw their lifespans jump 28 percent.[7]

These results trace to the economic model that we (the U.S.) exported worldwide as the Washington consensus. Two-thirds of the world’s adults now have wealth of less than $10,000; the wealthiest 0.7 percent hold 41 percent of all wealth.[8] In 2015, the world’s richest 80 people now have as much wealth as the poorest 3.5 billion.[9] By 2017, the world’s richest six people had as much wealth as the poorest half of humanity. Societies this divided against themselves are not modern but medieval. This outcome was attained by an induced consensus that is itself a form of nonlinear warfare.

Which brings me to asset Ronald Reagan, a Hollywood friend of my Uncle Bobby, the Rothschild operative given access to my home when his brother married my mother in 1956. I was four years old. The actor Reagan was cast as the friendly “Morning in America” face put on the rich-get-richer policy mix known as “Reaganomics.” Those who produced his political career accelerated the rich-poor divide at a record pace while his presidency put the U.S. on the path to a fiscal meltdown and vastly increased profitable Pentagon spending that—like the war in Iraq—we now know was unnecessary. But first a word about how Reagan was cast for the greatest role he ever played.

Pre-Staging the Great Communicator

The same criminal syndicate stalking me also produced the Reagan phenomenon. He first gained an electable public profile when Sidney Korshak, consigliore for the Chicago Outfit, installed this B-list actor as president of the Screen Actors Guild. With actress Nancy Davis Reagan a board member, SAG President Reagan granted a “blanket waiver” to Music Corporation of America (MCA) enabling this talent agency to produce movies and T.V. shows while also representing the actors. Founded in Chicago by Jules Stein and later led by Lew Wasserman from Cleveland, that 1952 exception approved by Reagan (an MCA client) provided MCA a huge competitive edge at the dawn of the television age. That financial advantage was parlayed into an industry-leading position in records (Decca) and cinema (Universal Studios).

The name recognition essential to Reagan’s electoral success as Governor of California and then President dates from his seven one-year terms as SAG president, 1947-59. Known as the Chicago Outfit’s man in Los Angeles, the F.B.I. described Korshak as the “most powerful lawyer in the world” as Jewish organized crime dominated the film industry. He and Lew Wasserman spoke a half-dozen times each day. Neither took notes that could later incriminate them. Variety described Wasserman as “Hollywood’s ultimate mover and shaker.”

Reagan first became SAG president in March 1947 as he helped shift attention away from organized crime’s infiltration of Hollywood. Instead he drew attention to the “Red Scare” and the alleged infiltration of Hollywood by communists, a narrative that destroyed hundreds of careers in the film industry while also marketing what became the highly profitable Cold War.[10] In October 1947, as an F.B.I. informant and a friendly witness before the U.S. House Un-American Activities Committee, Reagan proved he would perform as a pliable and reliable asset. His lengthy tenure as SAG president pre-staged his two greatest performances as Governor of California and a two-term President.

Originally from Chicago, Korshak was the son of an arsonist (dubbed King of the Firebugs by the Chicago Daily Journal) who operated as part of an arson-for-hire outfit that defrauded insurance companies in Chicago, New York and several other large cities. Wasserman became a fixture in Los Angeles where he reigned as a pop culture don for a half-century at MCA, Decca Records and Universal Studios until his death in June 2002 at age 89.

In 1961, Wasserman founded the West Coast “President’s Club” offering $1,000/person meet-and-greet dinners with the president, commencing with John F. Kennedy. As chairman of the finance committee for the Democratic Party, United Artists President Arthur Krim formed an East Coast counterpart. After buying property near the LBJ Ranch in Texas, Krim’s wife, former Israeli Irgun operative Mathilde Krim, struck up an affair with neighbor Lyndon B. Johnson. Their affair enabled her to schedule a “sleepover” in the White House with the U.S. Commander-in-Chief the same June 1967 night that Tel Aviv began its massive land grab—since marketed as the heroic “Six Day War.” That preemptive attack—planned since 1951 according to an Israeli general—set in motion a region-wide provocation that remains a reliable “crisis-on-cue venue” for catalyzing well-timed crises.

In 1973, an attempt to recover land that the Zionist founders of Israel assured U.S. leaders they would never take triggered the Yom Kippur War. President Richard Nixon’s approval of support for Israel triggered an Arab oil embargo that led to the creation of OPEC, transforming the dynamics of global energy markets. Seven years later, Republican Ronald Reagan was elected president. Riding on his electoral coattails, control of the U.S. Senate shifted into Republican hands.

The Rise of Reaganomics

Reagan’s November 1980 victory was enabled by the twin crises of the Iran hostage crisis and Jimmy Carter-era stagflation, combining high unemployment and high inflation to create the “misery index.”[11] Reagan performed as a classic asset who my step-uncle Robert King Cunningham knew well. As a psychological pay-off for stalking me, my Uncle Bobby was given bit parts in movies. At the heart of Reaganomics was “supply-side” economics. Though he campaigned for president as a fiscal conservative, a Reagan-proposed tax bill approved by a Republican-controlled Senate Finance Committee pledged the nation’s “full faith and credit” to borrow $872 billion to fund tax subsidies sought by those who produced his candidacy. At the time, the federal debt was barely $900 billion.

Martin Feldstein, Reagan’s top economic adviser, was its chief salesman. Budget Director David Stockman, a former Michigan Congressman, conceded that massive debt was intended to make it impossible to afford social programs that—due to their popularity—could not be cut directly.[12] The fiscal burden of Reaganomics was meant to crowd those programs out of the budget—enacting by financial and fiscal stealth what could not be accomplished with informed consent.

Due to the Boston Tea Party of 1773, the principle of “no taxation without representation” ensures that tax legislation must originate in the House of Representatives.[13] In 1981, Chicago Democrat Dan Rostenkowski chaired the tax-writing House Ways & Means Committee. When he sent a bill to the Senate for the duty-free import of eight carillon bells for St. Mary’s Cathedral, the Senate Finance Committee, chaired by Kansas Republican Bob Dole, attached as an amendment Reagan’s $872 billion supply-side tax cut and called for a conference with Ways & Means to negotiate a final bill. Only then did Rostenkowski convene the Committee to “mark up” (approve) a House version of Reaganomics. Senior members of the two committees reconciled the differences and the actor/asset signed Reaganomics into law.

Model-able Outcomes

The impact was 100 percent foreseeable. The primary financial feature was “ACRS” (accelerated cost recovery system). The rationale: to enable business to recover the cost of their capital outlays when Jimmy Carter-era stagflation eroded the value of depreciation deductions geared to the “useful life” of an asset. Instead of “writing off” (deducting from taxable income) the cost of a commercial building over, say, the 45 years of its useful life, Reaganomics allowed recovery of its cost over 15 years with much of that cost deductible in the first few years (“accelerated”).[14]

That change also boosted the “free cash flow” that fuels leveraged buyouts. Those self-financed transactions became a profit center for bonds engineered by Drexel Burnham Lambert whose Michael Milken took home $550 million in 1987 compensation ($1 billion over four years). High interest junk bonds took off after ACRS became law. When a firm leverages up with debt for an LBO, it often cuts “G&A” (general and administrative costs) and then labor costs, particularly health and pension benefits, to free up more cash to repay debt. That cost-cutting has a contagion effect on other firms, requiring that they cut costs to remain competitive. The combination of ACRS, junk bonds and LBOs became a major contributor to stagnating incomes while increasing inequality.

Start that debt-fueled ball rolling and enact trade deals such as the North American Free Trade Agreement—as Bill Clinton did in 1994 over the objections of his own party—and the leakage of jobs and purchasing power abroad was certain to become a flood. In the U.S., a consensus soon emerged that executives were incompetent if they failed to maintain an optimum amount of debt. Any gap attracted an LBO and their removal due to “underperforming assets”—financial assets. With Reaganomics, financial performance became the dominant benchmark of economic performance.

Why tell this story? Because the Reagan era directed vast deficit-financed subsidies into the finance fundamentalist model promoted by Ayn Rand and the “Chicago” school. Supply-side economics (and ACRS) marked a clean break in the policy domain from the physical to the financial (useful life vs. cost recovery). This steady shift from the real to the financial lies at the core of the Noble Lie. And at the core of what’s required to correct its defects. [See Chapter 12.]

By boosting tax write-offs for the cost of commercial real estate, ACRS ensured a boom in construction. During the 1980s, skyscrapers popped up nationwide as Reaganomics leveraged and looted the nation’s tax base for those with the financial savvy to take advantage of the new rules. That change in tax law enabled the success of real estate developer Donald Trump and financed the trophy properties that bear his name. That’s why he pays so few—if any—taxes even 37 years after Reaganomics was enacted in 1981.

Reaganomics also marks when the U.S. began its slide into systemic debt—led by legislation championed by a political product of those I profiled. His electability relied on his image as a fiscal conservative. Yet it was clear from the outset that taxpayers would get the mortgage—the public debt backed by our full faith and credit. It was also clear how few would get the house—the private wealth financed with the aid of that public debt. Among those who most benefitted: Donald Trump. His real estate attorney, David Friedman, is now U.S. Ambassador to Israel. Jason Greenblatt, his chief legal counsel at the Trump Organization, is now his chief international negotiator.

At year-end 2017, the debt was $21 trillion. When Stockman became Budget Director with Reagan’s election in November 1980, the debt was $909 billion ($2.7 trillion in 2018 dollars). The debt is on-track to top $33 trillion by 2024 in an economy whose GDP will be lucky to reach $24 trillion. That means a perpetual fiscal crisis as the Reagan-era “crowding out” of popular programs becomes the norm even as consensus model rich-get-richer finance continues to gain momentum.

Boosting the ownership of income-producing assets for the few to the exclusion of the many—while exposing their jobs to the combined effects of labor-saving technology and global trade—guaranteed a steady erosion of the broad-based purchasing power required to sustain the markets that Adam Smith envisioned. The consensus “invisible hand” model is not only at odds with sensible social and fiscal policy, it also systematically kills off the customers required for market economies to thrive. Reaganomics accelerated that trend.

Aligning Interests

Meanwhile, Mormon Senator Jake Garn of Utah, chairman of the Senate Banking Committee, led the loosening of restrictions on savings and loans. The result divorced S&Ls from the communities they were created to serve and assured the conversion of home mortgages into widely tradable financial securities.[15] That Adam Smith/Ayn Rand-inspired free-market framework also kicked into high gear a real estate boom already financially fueled by ACRS. The Garn-led changes were similar to pouring gasoline on a forest fire.[16]

At the outset, S&L mortgages represented real assets. Local lenders could “kick the tires” and were motivated to oversee their collateral—homes in the community. As mortgages morphed into financial vs. physical assets (remember ACRS vs. useful life), those debts were securitized and sold to investors. Mortgages became a financial abstraction as S&L lenders forfeited their oversight of real assets. Two decades later, as the subprime mortgage fraud unwound, regulators couldn’t even match the unpayable loans to the properties financed with the loans. Real assets had become financial-ized, a trend that began in earnest with Reagan.

Aided by laws inspired by a well-placed cadres of finance fundamentalists, the interests shifted from home mortgages, real assets and healthy communities to fee-generating loan origination and securitization in remote financial markets. Essential to that fraud was the complicity of risk-rating firms that competed to give Triple A ratings to bundles of these junk loans—making them appear equivalent in risk to government-guaranteed debt secured by our full faith and credit. At every stage of the transaction, everyone skimmed a bit of value, leaving no one either responsible or accountable. By aligning interests, including premium fees collected by the Big Three bond-rating firms, the emergence of the Great Recession was made to appear “natural.” In truth, as my life experience can prove, this was yet another mega-fraud pre-staged years beforehand by the same trans-generational criminal syndicate stalking me.

Control Fraud Central

In the 1980s, Arizona-based Lincoln Savings & Loan emerged as a “control fraud” overseen by Michael “junk bond king” Milken who directed Lincoln CEO Charles Keating each night which of his bonds to acquire. By citing Lincoln’s purchases as a seal of approval, Milken was able to sell his financial junk to others. Could the systemic fraud really this bad? No, it’s worse. Far worse.

Keating previously served as counsel to Carl Lindner, a mentor to Milken. A Lindner-controlled firm financed the Jerome Corsi-orchestrated fraud against me in 1995. [See Chapter 5.] Agents in the Minneapolis office of the FBI sought to pin that fraud on me—though only after my return from Iraq in February 1997 with evidence of no WMD and a credible in-country offer to remove Saddam Hussein without a war. [See Chapters 2 and 3.]

As a government litigator, Bill Black coined the term “control fraud” as he brought cases against Keating and hundreds of others. Accountability remains absent in the 2008 subprime fraud due to the inability to prove criminal intent in a consensus-model legal environment that enabled the fraud without the need for intent. Of the $153 billion cost of the S&L fraud, taxpayers paid $125 billion. That was just a warm-up. A Dallas Federal Reserve study of the 2008 fraud put the cost at $58 trillion.[17] That pales in comparison to what may now be emerging on the global financial horizon. Any of a number of potential crises are poised to be the catalyst: war with Iran, a trade war with China, a crisis in the derivatives market, a highly destructive weather event, etc.

As the U.S. became populated by a critical mass of True Believers in today’s consensus, concentrated wealth and income became predictable requiring only policy support from pliable and reliable assets. Ronald Reagan was a classic case and Reaganomics a classic example of how policy can enable systemic piracy yet without the conscious intent required for culpability under traditional linear law. Reagan allowed himself to be used by those who led us deeply into debt to enrich the few and endanger everyone else. Admiral Mike Mullen, former chairman of the Joint Chiefs (2007-2011), cited indebtedness as the greatest threat to our national security.

The S&L fraud pre-staged the subprime mortgage fraud. Led by John McCain, the “Keating 5” Senators delayed S&L reform long enough to add $50 billion to the bailout costs. Those who produced McCain’s political career “rehabilitated” him with McCain-Feingold campaign finance “reform.” By championing that legislation, McCain worsened an already corrupt political climate. In effect, McCain enabled today’s systemic corruption by increasing the nationwide political influence of the Israel lobby with its national network of campaign finance “bundlers” who solicit contributors for candidates favoring Israeli policies.[18] As my life experience can prove, those policies provide cover for those waging the nonlinear warfare described in this book.

Financial Frauds—At Scale

It’s no coincidence I was drawn into the circles of those pre-staging the S&L fraud, the dotcom crash of 2000 (a classic financial “pump-and-dump”) and the 2001 Enron fraud—as well as the pre-staging of two unwinnable wars in Afghanistan and Iraq. None of these frauds “just happened.” Those unnecessary and fiscally ruinous wars were also pre-staged frauds.

In July 2005, I was invited to a briefing at the offices of Dean Bill Powers at the University of Texas-Austin School of Law to discuss a conference on corporate governance. Dean Powers oversaw the Powers Commission Report, the definitive study of the Enron fraud. He was surprised to find that I encountered Katherine Hapka, the founder of Rhythmns NetConnections, the first stock acquired by the “special purpose vehicles” that Enron executives used to perpetrate that fraud. As the meeting broke up, I was asked to comment on corporate governance. I assured them that, based on the current consensus, we would see a far larger fraud and they were merely putting lipstick on a pig.

Attendees later conceded I was correct. Emerging trends suggest the subprime mortgage fraud was just a warm-up act for the main event. What we now see emerging is a financial version of arson (aka “Jewish lightning”) that could set the world ablaze as a series of crises see debt-inflated financial values burn to the ground along with the consensus-model economies that produced them. The economies that fare best will be those that shift from financial to real assets. And those that seed the change away from economies that are totally transactional to become far more relational. More on that below.

As I explained to Dean Powers, senior executives can no longer manage their firms consistent with values other than financial. Regardless of the firm’s impact on the community, the consensus mindset penalizes executives who make decisions that conflict with the return-maximizing interests of remote shareholders—whose interests are solely financial. Executives may believe they’re managing a company. They show up each day at the office where they interact with employees and oversee plant and equipment. But they soon discover that this physical capital is merely a proxy for financial capital. If they fail to generate competitive financial returns, they’re out of a job.

Mindset-enabled Corruption

The power of a mindset, regardless how flawed, was on display in the 1990s when the World Bank oversaw privatization programs in some 92 former Marxist economies. Without exception, those nations segued directly from the unworkable Marxist consensus to the Washington consensus—despite its many known dysfunctions. With the collapse of the Soviet Union, assets Margaret Thatcher and Ronald Reagan promoted a rallying cry of “TINA” (There Is No Alternative—to the consensus). Post-Marxist economies are now typified by oligarchies, Russia was among the first.[19]

There is a way out though not within the dominant mindset with its top-down and exclusive version of finance and its sharp divide between the public and private sectors. These systemic flaws—traceable to a flawed mindset—fuel the serial crises, conflicts and wars from which those I profiled have long profited—dating back to no later than 1850. See Timeline.

It’s no coincidence that I was drawn in 1973 to Arizona, long a center of systemic corruption, including the production of asset John McCain and the presence of Lincoln S&L. That corruption includes a sizeable presence by the Lost Tribe of Israel (Mormons) who settled in Arizona after President Buchanan dispatched federal troops to Zion (Utah) in 1857 to break up their polygamous communities. Mormons fled both north into Idaho and Alberta, Canada and south into Arizona and Mexico. That’s why Michigan Governor George Romney was born in Mexico. That’s also why Romney and the Michigan Mormon community are responsible for much of the stalking I endured while living in Michigan from age four until I departed for Arizona at age 21.

When I moved into my apartment complex in Scottsdale, the grandson of Parry Thomas also moved in. Known as the “Mormon banker to Vegas,” the elder Thomas banked Mormon tithings that he lent to organized crime to build America’s gambling mecca. Those stalking me moved Andy Smith in next door. A beautiful blonde, Andy served as the “beard” for Merv Griffin when he wanted to appear heterosexual. Griffin was Nancy Reagan’s best friend and confidante (they shared a July 6 birthday). According to Nancy, Walter Annenberg was “Ronnie’s best friend for 50 years.” Annenberg was the son of Chicago mobster Moses (“Moe”) Annenberg who fled to Florida to seek the protection of Meyer Lansky, the “chairman” of the National Crime Syndicate, before relocating to Philadelphia where the son would “go legit” as a publisher of The Philadelphia Inquirer, a mainstay publication for the Republican Party.

What I encountered while living in Arizona is reserved for another time when the more personal components of my life are made public. I mention this here only to confirm how, at every turn, I found myself interacting with (Jewish/Mormon/Zionist) organized crime due to who was stalking me. The motivation to silence me remains ongoing because my life experience proves beyond any reasonable doubt the common source of trans-generational criminality and treason. Discrediting portrayals of me have long been common along with nonstop financial stalking. The facts confirm clear complicity by my late Uncle David and other family members who, over the past 25 years, have been papered into a corner by me and Ron Burd, my attorney since 1992.

Imbedded in a Mindset

Anyone working in business, finance, accounting or law was educated in the same consensus. By the 1960s, the Chicago model dominated curriculum worldwide. In 1969, a Nobel Prize was established for economic science. Those advancing the Noble Lie knew that an ignorant public would associate the prize with those given for science, literature, medicine and peace that have been awarded since 1901. The Nobel prize for economic science was created not by the Swedish dynamite tycoon, Alfred Nobel, who died in 1895 but by the Central Bank of Sweden as part of its 300th anniversary and a desire to promote the Swedish government’s free market policies.[20]

Those policies included the very “Chicago” notion of granting the Central Bank independence from the political process.[21] In a credibility-by-association ploy long favored by practitioners of the Noble Lie, the prize allowed the Bank to influence the choice of recipients and validate its TINA mindset. By “correspondence,” an ignorant public could be induced to grant laureates in economics the same deference and respect given genuine Nobel laureates.

The facts suggest that the political careers of both Margaret Thatcher and Ronald Reagan were produced to sell a trusting public on a flawed formula for assuring freedom from the abuses of centralized authority—as in the Soviet Union. How do I know this? From the perspective of congruences,[22] what’s the probability I would interact with the top economic adviser to the Iron Lady and the (Jewish) casino owner who lived next to her in London? Add to that the friendship between Reagan and my Rothschild operative step-uncle and my interaction in Tucson with those who initially groomed him for office. Write this off to coincidence if you like. Then note the frequency of my interactions with them and many others as I allowed myself to be drawn into situations that the perpetrators staged. While they stalked me, I profiled them.

Based on the congruences I encountered throughout my life, it should come as no surprise that I was drawn into the circles that included the granddaughter of German Chancellor Otto von Bismarck along with Mohamed Khashoggi, son of Saudi arms dealer Adnan Khashoggi at the heart of the Reagan era arms-for-hostages deal—with Israel the middleman working both sides. My meeting them was as “coincidental” as being invited to meet George W. Bush sibling Neil Bush (I declined), meeting the son of Vice-President Dan Quayle, and numerous others who, like me, were being stalked by this same syndicate because they were children (or siblings) of well-to-do or politically influential people.

Internalized Corruption

The earliest recipients of the Nobel for economic science were among the most committed TINA devotees. The first U.S. recipient was M.I.T. Professor Paul Samuelson (1970) whose textbook, Economics, first published in 1948, was the best-selling textbook nationwide for almost thirty years. In the 1930s, he argued that people seek to maximize their self-interest by maximizing money. “I don’t care who writes a nation’s laws—or crafts its advanced treatises—if I can write its economics textbooks,” Professor Samuelson said. Early honorees included University of Chicago Professor Milton Friedman (1976). The enduring impact of these and other laureates is unknown to an ignorant public.

For instance, antitrust law defers to “Chicago” when evaluating mega-mergers. Competition is assessed by the impact on consumer prices, a test embedded in antitrust guidelines during the Reagan era. As framed by University of Chicago Law School professor Richard Posner, acclaimed Dean of the “law and economics” movement, public benefit is reflected in price competition. Omitted is the impact of concentrating so much wealth and influence in so few hands. To address that perilous outcome is too “political” for economists.

With the industrial age receding into history and the Information Age upon us, the competition is for attention spans. How many “clicks” does a site attract? How does the public benefit by combining telecom, media and pop culture firms (as with the merger of AT&T with Time-Warner)? Even if consumer prices trend lower, what’s the impact on informed choice when subjected to programming—and profiling—by those sharing a pro-Israeli bias? [See Chapter 8 re “The People in Between.”]

To limit analysis to the financial (consumer prices) required decades of mental preconditioning to imbed this narrow perspective in policy and law and grow it to scale. Thus the agenda-advancing impact of awarding the credibility-by-association “Nobel prize” to consensus model advocates. With sustained, multi-decade marketing, the TINA mindset emerged dominant. With the Fall of the (Berlin) Wall in 1989, its advocates became triumphant with Margaret Thatcher the most outspoken.

Over decades, this internalized worldview became less conscious than conditioned, enabling the perpetrators to exploit holes in a system designed to be exploited by those pursuing their self-interest. Thus the rationalization cited by Ayn Rand, Alan Greenspan and those enamored of Adam Smith’s “invisible hand” of free markets as a reliable guide to optimize outcomes. To an ignorant public, this core assumption appears rational, even desirable. For those educated at our finest universities, the invisible hand is accepted as the One True Faith even though its results are foreseeably inequitable, unworkable, immoral and unsustainable—with minds educated not to see the true costs.

This internalized blindness itself became the source of a hidden tax as we were educated to impose on ourselves this narrow financial-ized version of freedom. Egged on by academia, lawmakers were induced to brand the U.S. as a salesman for the “Washington” consensus even as blind faith in this mindset became a subtle form of self-imposed domination by the forces of finance. Servitude is a key goal of the Noble Lie. Inducing people to voluntarily subjugate themselves requires persuading them that there is no alternative. The rallying cry of TINA is part of the Noble Lie.

The Real Depression

Yet backed by the force of law, this finance-fixated mindset gained global dominance even as it created results that no one would freely choose—if given the choice. Meanwhile an ignorant public was left to contend with policies that preclude them from making sense of their world. Our brains are wired for stories that help us cope with our environment. Those stories, in turn, draw on metaphors that structure how we think. For centuries, we’ve been taught to get a job and earn a salary—from the Latin for salt. The Roman legions were paid in salt for their exertions. A shirker is described as “a man not worth his salt.” The word implies hard physical exertion to earn one’s pay.

After two centuries-plus of labor-saving productivity, this transactional metaphor requires a tune-up to match the times and meet peoples’ aspirations. The research is clear: when society deprives people of dignity, self-control and a connection to something larger than themselves, suicide rates soar. The hidden tax imposed for lack of a sensible economic theory is fast coming into focus. Suicides for Americans 45 to 64 have jumped more than 30 percent in the last decade. Among white, middle-aged men, the rate has jumped more than 50 percent (60 percent for white, middle-aged women). Suicide is now the leading cause of death for U.S. women in their 30s and men in their 40s.[23]

Throughout the developing world, self-harm is the leading cause of death for people 15 to 49, more than heart disease and all cancers. With the disappearance of blue-collar jobs, a feeling of uselessness is particularly strong among middle-age white males with less education. In a culture of honor where people are expected to earn their own way (compensation comes from the Greek for “a balancing of accounts”), it’s noteworthy that in the past two decades there’s been a 37 percent rise in the years of life lost to clinical depression, anxiety, alcohol and drug abuse and other disorders of the mind. Americans now lead the world in depression as our most debilitating condition.

For a nation committed to the pursuit of happiness, how did the U.S. veer so dramatically off-track? Here’s a clue from the clinicians: The life-saving power of belonging may explain why, in America, Hispanics and African-Americans have long had much lower suicide rates than white people.[24] What do sociologists and psychologists identify as the key distinction? A sense of relationship often traced to social solidarity and the bonds of family and faith. A storyline that is solely, even brutally transactional, leaves people adrift with suicide among the only major threats to significantly worsen in this century. Chapter 12 describes how to seed the transition to a more relational economy.

Framing the Fraud

In the 2008 subprime mortgage fraud, five predatory lenders were enabled by the Federal Reserve to unload their securitized junk mortgages as “quantitative easing” (QE) shored up bank balance sheets. Rather than receiving pennies on the dollar (their true worth), the banks received face value, invested the cash in risk-free bonds, paid bonuses to executives, allowed these executives to keep their stock options—and then set about buying smaller banks.

As QE drove interest rates to record lows (even negative), retirees were deprived of interest on their savings for eight years (so far), requiring many to draw down their savings, ensuring their heirs will be left with little, if any, inheritance. Pension plan sponsors in both the private and the public sector saw their funding go deeply into red ink. In a desperate search for returns, they turned to riskier hedge funds and private equity. With taxpayers on the hook for funding public sector plans, retirees could see their pension income fall even as their taxes rise.

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  1. “FT Big Read. US Election,” Financial Times, November 5-6, 2016, p. 7.
  2. Glenn titled his brief paper, “The Conflict Within the American System of Government.” He sent a handwritten version to G.H.W. Bush congratulating him on his son’s election and urging that he share the paper with his son to assist him in reconciling the similar goals of the two primary political parties noting that the parties had twice switched positions on how best to achieve those shared goals. The paper is posted on the Hidden Tax on Humanity website.
  3. During the savings and loan fraud of the 1980s, Alan Greenspan helped Arizonan Charles Keating, Chairman and CEO of Lincoln Savings and Loan, recruit “the Keating Five” (led by Senator John McCain) whose delay of needed reforms helped increase the cost to taxpayers by an estimated $50 billion. In the lead up to Lincoln’s collapse, Keating hired a law firm that retained Alan Greenspan, then a consultant, to certify the financial soundness and prudence with which Keating was managing Lincoln S&L. Then head of an economic forecasting firm, Townsend-Greenspan & Company, Greenspan was retained by the New York law firm of Paul Weiss Rifkind, Wharton & Garrison to conduct a study of the thrift industry and make a recommendation concerning the scope of direct investments made by Lincoln Savings and Loan. Nathaniel C. Nash, “Greenspan’s Lincoln Savings Regret,” New York Times, November 29, 1989. [See Chapter 4 for the role played by Paul, Weiss, et.al. in China in 2000.]
  4. See Chapter 5 of Guilt By Association—How Deception and Self-Deceit Took America to War (2008) titled, “Money, Democracy and the Great Divide.”
  5. For game theory warfare, see Chapter 1 of Guilt By Association (2008) posted on www.hiddentaxonhumanity.com
  6. Figures sourced from the U.S. Bureau of Labor Statistics. In BLS language, “median usual weekly earnings—in constant (1982-84) dollars (employed full time)” has hardly grown in a generation. Robert J. Shiller, “Weak Economies Foment Ethnic Nationalism,” The New York Times, October 16, 2016, p. BU3.
  7. Sabrina Tavernese, “Life Spans of the Rich Leave the Poor Behind,” The New York Times, February 13, 2016, p. A11.
  8. Credit Suisse, “World likely to have 11 trillionaires within two generations,” October 10, 2013.
  9. Oxfam, January 2015.
  10. See the explanation of “double blind cover” in Chapter 7, A Primer on Duplicity.
  11. See Chapter 6 (“The Iran Connection”) re the key role played by Israel and pro-Israelis in staging that well-timed crisis.
  12. Stockman created a firestorm of controversy when he spoke too freely of his reservations about the Administration’s policies. He was, in his words, “taken to the woodshed” by the president. William Greider, “The Education of David Stockman,” The Atlantic, December 1981.
  13. Bob Shapiro was then serving as the long-time chief of staff for the Joint Committee on Taxation, technical advisers to the two tax-writing committees. Bob Lighthizer was then chief of staff for the majority (Republican) staff of the Finance Committee and Mike Stern was staff director for the minority Democrats. After working with me for several years, Jeff pointed out an anomaly that emerged during his seven years as counsel to the Finance Committee, 1980-87. During that period, reportedly the most intense era of tax legislation since the income tax was established in 1916, Don Susswein came to work on the majority staff where he appeared to have the luxury of working primarily on one subject, a noticeable rarity. That subject: ensuring that federal tax law supported mortgage-backed securities.
  14. Roughly $160-$180 billion in projected lost revenue (aka “tax expenditure”) was due just to ACRS.
  15. Enacted December 1982, the Garn-St. Germaine Depository Institutions Act of 1982 gave expanded powers to federally chartered S&Ls and enabled them to diversify their activities to increase their profits. Major provisions included: elimination of deposit interest rate ceilings; elimination of the previous statutory limit on loan to value ratios; and expansion of the asset powers of federal S&Ls by permitting up to 40% of assets in commercial mortgages, up to 30% of assets in consumer loans, up to 10% of assets in commercial loans, and up to 10% in commercial leases.
  16. ## Add FDIC comment re adding fuel to fire.
  17. Research report by the U.S. Federal Reserve Bank of Dallas, September 2013
  18. The simple math behind this reform-augmented influence is chronicled in the introduction to Guilt By Association—How Deception and Self-Deceit Took America to War (2008) posted on the Hidden Tax on Humanity site.
  19. Numerous analyses were provided to successive chairmen of the Joint Chiefs, including Admiral Mike Mullen and General Martin Dempsey.
  20. The full name of the economics prize is the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. Nathan Reiff, “Is the Nobel Prize in Economics Bogus?,” Investopedia.com, October 7, 2016.
  21. That policy dates back to the impact Warburg brothers Paul and Felix. Paul served as a primary adviser on the establishment of the U.S. Federal Reserve, including its independence from the political process. With enactment of the Federal Reserve Act in 1913, Warburg was appointed Vice-Chairman by President Woodrow Wilson. Meanwhile brother Felix (son-in-law of Jacob Schiff), a specialist in foundations and tax-exempt organizations, advised on creation of the federal income tax system.
  22. See Chapter 9.
  23. Center for Disease Control figures reported by Tony Dokoupil, “Why Suicide Has Become an Epidemic—And What We Can Do To Help,” Newsweek, May 23, 2013.
  24. Ibid.