(WMR)—A one-time economics adviser to the Obama White House let WMR in on some of the conversations percolating at last week’s annual meetings of the International Monetary Fund (IMF) and World Bank in Washington, DC. The news about the foreseeable future of the U.S. economy is bleak.
The U.S. economy can be summed up in two words: “Stagnation Nation,” according to our ears inside the meetings in the nation’s capital. One thing is for certain. The world’s central bankers, including IMF managing director Christine Lagarde, agree that the “papering” of the U.S. economy by the Federal Reserve, a policy maintained by outgoing Fed Chairman Ben Bernanke in order to stem inflation, must come to an end. Incoming Fed Chair Janet Yellen has signaled an intention to drastically change Bernanke’s policy of giving $80 to $90 billion in cash to U.S. banks per month to keep Treasury bond prices high and the stock market in a bullish condition. The Bernanke program, called Quantitative Easing II or QEII, has seen banks purchasing stocks with their glut of cash in record fashion.
The other two word heard at the IMF and World Bank meetings are “taper off.” Lagarde, backed by Yellen, say it is time for QEII to be “tapered off” and the pumping of cash from the Fed to the banks and stock market must end at its current pace.
That means the Bernanke policy of pumping hundreds of billions of dollars into the1.S. economy in order to pump up the stock market and hedge funds may stop. The glut of Fed money on Wall Street has resulted in hedge finds buying up as many assets from companies as is possible. With nothing more to extract from companies, hedge funds have started investing in one another.
None of the money being pumped into the banks, the stock market, and the hedge funds is reaching the American people, according to our source. Lagarde and Yellen want that to change by forcing companies to invest their money in quality job-creating ventures and the government beefing up infrastructure modernization projects.
The other word heard at the IMF and World bank conferences is “austerity.” Although the twin U.S. debt ceiling and shutdown crises have resulted in public warnings from Lagarde and World Bank President Jim Yong Kim for the U.S. to get its financial house in order, austerity has somewhat become a problematic word.
Lagarde told delegates and bankers that the previous IMF policy of imposing stark austerity regimes on countries like Greece, Ireland, Spain, Portugal, and others was ill-conceived and did more damage than necessary.
WMR asked our source about the rumor circulating around Washington that the Tea Party’s forcing of a U.S. government shutdown was done with the acquiescence of the Obama administration and congressional Democratic and Republican leadership to prime the American public for the imposition of Greece-style austerity programs. The response was that the U.S. remains the number one donor to the IMF and World Bank so it could never be ordered by the two institutions to adopt the same measures that were imposed on Greece. However, that is not to say that there will not be severe belt tightening by cities and counties to avoid the fate of Detroit and Stockton.
Although the IMF and World Bank don’t have the massive sell-off of U.S. government assets in their crystal balls, that does not mean the Tea party is not looking at a mass divestment of U.S. government assets. A number of Tea Party congressmen, all of whom have been financed by the anti-government Koch brothers, have called for the selling off of national parks, national forests, national seashores, national marine reserves, national wildlife refuges, and other land managed by the Bureau of Land Management. These congressmen include Representatives Jason Chaffetz of Utah who has introduced the Disposal of Excess Federal Lands Act of 2013 to sell off public lands to the highest bidder.
The highest bidders in such a case would be Charles and David Koch whose business empire includes paper product manufacturing. To buy up the government’s “green gold”—forests—in the Rocky Mountain West would be a dream-come-true for the Kochs and their compatriots. The Kochs have funded the American Legislative Exchange Council (ALEC) to draw up model bills in state legislatures that would sell off state-operated parks, forests, wildlife refuges, and other public land.
The closing of public parks and lands to the American people, therefore, serves as a useful psychological “shock and awe” tactic to give the public a taste for future austerity plans.
Previously published in the Wayne Madsen Report.
Copyright © 2013 WayneMadenReport.com
Wayne Madsen is a Washington, DC-based investigative journalist and nationally-distributed columnist. He is the editor and publisher of the Wayne Madsen Report (subscription required).
