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Personal Reflections on the Crisis in America- Carter White House and Monetary Reform - Part1

Politics / US Politics Jun 06, 2008 - 12:06 AM GMT

By: Richard_C_Cook

Politics Best Financial Markets Analysis Article I moved back to Williamsburg a year ago, after retiring from the federal government, in order to live write at the home of my elderly mother. She resides near the Restored Area, a half-mile from the reconstructed colonial Capitol. At this site on May 15, 1776 , the Second Virginia Convention voted 112-0 to instruct its delegates in Philadelphia to enter a motion for independence. If the U.S. was born in Philadelphia , it was conceived here.


My mother's name is Marjorie Cook, and she is an 85-year old retired interpreter for Colonial Williamsburg. Also living in the house are my sister Sandy, an R.N., and her daughter Cathryn, about to graduate from high school.

My mother lives in the house that she and my father, Dick Cook, built in 1963, three years after we moved from Michigan . He was a chemist for Dow Chemical, which had opened a nearby textile processing plant along with Badische, a German company. Later my parents divorced, and he now lives in Newport News , about 20 miles away.

My mother's house cost $21,000, is paid for, and she has no debt. While real estate assessments have gone up, the tax rate in Williamsburg is lower than in any of the surrounding communities. So it is a good place for an elderly person with a pension to live in a country where local governments routinely tax the elderly and the poor out of their homes.

Since childhood I had a passion for history, with many men in my family being involved in historic events. My father served with the Seabees on Attu Island in the Aleutians during World War II. My grandfather on my mother's side was a sailor on the World War I troop transports traveling to and from France from the Brooklyn Navy Yard. Also during that war, my grandmother's brother was a member of the Army Air Corps.

On my father's side, my great-grandfather Hill acquired land by taking part in the Arapaho land rush of 1892 in Oklahoma 's Indian Territory . Back in the Civil War, my great-great grandfather William Forster, who'd landed at Ellis Island during the Irish potato famine, was a Union artillery sergeant. His unit was with General Grant at the surrender of General Robert E. Lee at Appomattox Court House in 1865.

Education

My family voted Democratic going back to New Deal days. The fall after we moved to Williamsburg in 1960, I worked with a friend handing out literature on behalf of John F. Kennedy's campaign. One night Bobby Kennedy came to Williamsburg to speak on behalf of his brother's candidacy on the dimly-lit steps of the Williamsburg courthouse. He gave a fervent speech, without notes, saying it was time for a new era of achievement and optimism in America after the tensions of the Cold War.

When President Kennedy was assassinated on November 22, 1963 , I was a senior at James Blair High School . I wrote for the school newspaper, The Blarion , and worked weekends as a disk jockey for WBCI, the local radio station.

That Thursday afternoon, a teacher told me to go to the office to listen to the news coming in over the radio. I was numb with disbelief when I heard Kennedy was dead. At WBCI we played funeral music all weekend, along with the news bulletins. I was working when a listener called and said Lee Harvey Oswald had just been shot in the basement of the Dallas police headquarters. I ran to the news ticker, yanked the story, and read it on the air.

I wrote an editorial for the The Blarion , saying that the killing was a sign of a deranged society, with more troubles surely on the way. The U.S. military commitment in Vietnam was escalating, and by March 1965 we would have combat troops on the ground. The struggle for civil rights in the American South would also turn violent.

I was named “Most Likely to Succeed” and in September 1964 entered Yale University as a scholarship student. I was in the same freshman class as a young man named George W. Bush. But I had been shaken to my depths by the Kennedy assassination and had been affected by the turmoil in our home with my parents drifting apart.

At Yale I was more interested in reading existential writers like Albert Camus than attending classes on political science that were obviously intended to prepare us to become part of the American ruling elite. Scholarship students were required to wash dishes in the Yale dining halls, which I resented.

I read Mark Lane 's Rush to Judgment, which questioned the Warren Commission's conclusion that Lee Harvey Oswald was the lone gunman who shot Kennedy. One night a professor from the Yale Law School was speaking about the Warren Commission. When I brought up Lane's objections to the “magic bullet” theory, the professor answered me with vehement contempt.

Years later I read a book by Professor Donald Gibson of the University of Pittsburg entitled The Kennedy Assassination Cover-Up . Gibson concluded that the cover-up was a project of figures in the Eastern establishment who pressured President Lyndon Johnson to hurry and form the high-level commission that Chief Justice Earl Warren would head. The commission tried to put to rest any suspicion that figures other than Oswald had been involved. According to Gibson, the leading institutional affiliations of the persons bringing the pressure to bear on Johnson were The New York Times , The Washington Post , and the Yale Law School .

I resigned from Yale after six weeks. Regrettably, George W. Bush and I would now be treading separate paths. I then attended the College of William and Mary in my hometown of Williamsburg for a semester until I left town and spent a few months traveling around the country by bus and hitchhiking, making side-trips to Canada and Peru . I ended up flat broke in a room at the Mapes Hotel in Reno , Nevada , where I wrote a postcard to the Dean of Students at William and Mary asking to be allowed to return.

Once I was back, I was admitted to the humanities honors program, studied relentlessly, wrote for the William and Mary Review , and was elected to Phi Beta Kappa. I also took part in the 1969 March on Washington against the Vietnam War.

The most famous alumnus of William and Mary was Thomas Jefferson, whose “presence” played a key role in my becoming the person I am today. Jefferson abhorred war. In my opinion, he was the president who, more than any other, favored the right of hard-working ordinary people to a decent and prosperous life.

As President George Washington's Secretary of State, Jefferson opposed Secretary of the Treasury Alexander Hamilton's plan to put the finances of the new nation in the hands of the private financiers who bought stock in the First Bank of the United States . When Jefferson became president in 1800, he put a stop to the use of deficit financing to build a military establishment by his action in balancing the federal budget for eight consecutive years.

Jefferson has been vilified for trying to steer a course of neutrality during the endless wars between Britain and France , even though his policy of restraint lay the groundwork for a century of federal budget discipline, with the exception of the Civil War. Critics who would rather bestow praise on Hamilton, John Adams, and the Federalists in general as forerunners of today's military imperial state find fault with Jefferson under such pretexts as his ownership of slaves, his relationship with Sally Hemmings, or his “vendettas” against Vice President Aaron Burr and Chief Justice John Marshall who presided over Burr's 1807 trial for treason.

Today, back in Williamsburg , I can see even more clearly that Jefferson was one of the great men of history. He wrote in the Declaration of Independence the now-familiar words, “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty , and the pursuit of Happiness.”

This statement has never been surpassed as a summary of democratic principles or in expressing our God-given right to freedom, whether from governments, tyrants, or the brutal financial oppression we see everywhere in the world today emanating from global finance capitalism.

Ever since he wrote it, Jefferson 's formulation has resonated with those who love liberty, both for themselves and others, as has the clarity with which the Declaration of Independence expressed the right to choose our own form of government. Later Jefferson wrote, “I have no fear that the result of our experiment will be that men may be trusted to govern themselves without a master.” He also wrote, “Every generation needs a new revolution.”

I should point out that I never saw Jefferson 's ideals as promoting “license” vs. “liberty,” or as supporting the idea of viewing any action of government as ipso facto evil. Jefferson favored a limited government elected by “We the People” and served in positions of public responsibility for most of his life. He saw government as a servant of the public, not its master. He saw the human individual as God's highest creation, not some social, economic, or governmental collective. He also knew that constructive government actions, such as the peaceable acquisition of the Louisiana Territory , promoted freedom, whereas policies based on warfare and violence destroyed it.

Going to Work in Washington

In 1970, at the height of the Vietnam War, I graduated from William and Mary and went to work for the U.S. Civil Service Commission in Washington , D.C. I was soon working on policy-level assignments, such as drafting a regulation that authorized federal agencies to pay for college-level courses for lower-graded employees. It was part of the federal upward mobility program.

After two years at the Commission, I resigned from the government and taught high school history, English, and phys. ed. at the Field School , a newly-founded private secondary school in northwest Washington . There I taught the children of such notables as Senator James Abourezk and Washington attorney Max Kampelman, later President Reagan's arms negotiator.

After two years of teaching I returned to the U.S. Civil Service Commission where I was put in charge of conducting evaluations of Bureau of Training regional training centers. Just after I went back to work for the government, President Richard Nixon resigned from the presidency on August 8, 1974. On April 30, 1975 came the fall of Saigon , which ended the Vietnam War.

One time my wife and I were invited to a dinner at the home of Ray Borntraeger, a Bureau of Training manager with political connections, where the guest of honor was Zulfikar Ali Bhutto, prime minister of Pakistan . Educated in the U.S. and Great Britain , Bhutto was determined to modernize Pakistan and acquire nuclear energy technology.

This was beyond what the Western powers would tolerate, and Bhutto was threatened by Henry Kissinger, who said, according to Bhutto's autobiography, If I am Assassinated , “We can destabilize your government and make a horrible example out of you.” In 1977, Bhutto was overthrown by General Zia-ul-Haq, then tried and executed on trumped-up charges.

Borntraeger's dinner party took place in the dining room of his modest middle-class home in Northern Virginia , where Bhutto captivated the guests with his quiet brilliance and piercing expressing. After his death, his daughter Benazir, also educated in the U.S. , was twice prime minister of Pakistan . Her assassination on December 27, 2007, was excruciatingly painful to me, having once met her father. It was a family beset by tragedy.

In 1976, I transferred to the Food and Drug Administration, where I worked at their headquarters in Rockville , Maryland , as a policy analyst on the staff of Commissioner Donald Kennedy. From there I was brought into the Jimmy Carter White House as an aide to Esther Peterson, the president's special assistant for consumer affairs.

The Carter White House and Monetary Reform

Once at the White House Office, I worked mainly on Executive Order 11280, signed by President Carter, which required each federal agency to establish a new consumer affairs program giving the public more opportunity to participate in federal decision-making and acquire information on governmental activities. Carter signed the order after the defeat by Congress of White House-proposed legislation for a Consumer Protection Agency.

While working for Esther Peterson at the Old Executive Office Building next to the White House West Wing, I discovered a remarkable series of essays from the 1920s by British writer A.O. Orage, editor of the New Age. Orage wrote about the ideas of a British engineer named C.H. Douglas, who had published a book entitled Economic Democracy in 1918.

Douglas was the founder of the Social Credit movement, which later became a political force in Great Britain, Canada, Australia, and New Zealand, but which never had an impact in the U.S. Douglas's central idea was that in a modern industrial economy the need for a business firm to hold back some of its earnings for future investment meant there would always be a “gap” between the prices companies must charge for goods and services and the net purchasing power available to a nation's population to purchase that output.

This gap, said Douglas , was the cause of economic recessions and depressions. He also pointed out that under existing political conditions, it's the financiers of a nation who benefit, because they fill the gap between prices and purchasing power with bank lending at interest. This lending for consumption was apart from the ordinary types of financing which banks routinely extend to businesses as liquidity for day-to-day operations under what has traditionally been called the “real bills” doctrine.

The gap, Douglas said, was a primary cause of war, because another way to fill it, besides bank lending, is for a nation to maintain a positive trade balance. Since each nation has a need to maintain a trade advantage, they obviously end up fighting each other for markets as did Great Britain and Germany in World War I.

I immediately saw the applicability of Douglas 's ideas to the economic circumstances of the 1970s, where the “business cycle” of inflation, followed afterwards by recession, was recurring in a manner similar to the 1920s and 30s. What Douglas was explaining, I realized, was the “poverty in the midst of plenty” syndrome of modern economic life.

Douglas advocated filling the gap by monetizing what he saw as the de facto appreciation of the economy over time and issuing to citizens a periodic “National Dividend” that would supplement purchasing power with stipends paid by the government but without recourse to taxation or borrowing. It was “giving away money,” but for sound economic reasons and according to a measured calculation of value backed by actual industrial output.

Douglas 's analysis was brilliant and was clearly a pathway to real economic freedom. I saw that it was a National Dividend that could make Jefferson 's ideas of political democracy possible by making economic democracy a reality. It would result in the elusive “leisure dividend” that was supposed to have accompanied the modern industrial economy but never has. Later I discovered that this was the thinking behind the experiment on a smaller scale of the resource dividend enacted by the state of Alaska through the Alaska Permanent Fund established in 1976, amounting today to almost $2,000 per resident annually.

I also saw how the deficit spending notions of John Maynard Keynes were actually an attempt to eliminate Douglas 's “gap” through governmental rather than private sector debt but which in the end would be just as unfair and self-defeating. Later I learned that Keynes know about Douglas 's ideas but had decided to propose a solution that would not appear so threatening to the financiers. It was “Keynesian economics” that would eventually lead to today's un-payable U.S. national debt of almost $10 trillion and a foreign policy based on conquest to support worldwide trade and dollar hegemony.

Excited by what I was learning from my study of Douglas, I convened a meeting of friends and associates which we held in the Old Executive Office Building in the summer of 1980. But soon my early interest in monetary reform was overtaken by other events.

I was at the White House when Jimmy Carter was defeated by Ronald Reagan in the 1980 presidential election. It had been evident that Carter might lose the election because the Federal Reserve under Chairman Paul Volcker was raising interest rates to combat the inflation from the oil price shocks of the 1970s. Later I learned that Carter had not been told that the Federal Reserve would be taking this type of drastic action that led to the worst recession since the Great Depression.

Carter's reelection campaign was also damaged by the drawn-out negotiations involving the release of 52 U.S. government employees from the takeover of our embassy in Tehran by Iranian revolutionaries. The negotiations dragged on through the fall of 1980. The release of the hostages finally took place six minutes after Ronald Reagan took the oath of office on January 20, 1981, leading to speculation that Reagan's campaign operatives had meddled to cause delays in order to make Carter look inept.

I also remember how shocked we were when Reagan's aides stole President Carter's briefing book and used it to prep their candidate before the TV debates. What kind of people were these, we wondered? All things considered, it became clear that Carter's second term had been stolen from him.

One aspect of Carter's presidency with harmful long-term consequences was his abolishment of the U.S. Civil Service Commission and its replacement with the Office of Personnel Management within the Executive Office of the President. The emblem of the Commission had been the North Star, which symbolized the independence and integrity of a civil service based on merit rather than politics.

This idea was lost under Carter in order to make the career workforce more “responsive.” The Senior Executive Service was set up for similar purposes, with democracy the loser. Under the onerous bureaucratic system for admitting civil servants into the executive ranks and evaluating their performance, independent judgment has been virtually eliminated in favor of a rigid and heavily politicized top-down system of control.

Carter had been a member of the Trilateral Commission, which was set up by U.S. financier David Rockefeller with the help of Professor Zbigniew Brzezinski, a native of Poland . As we now know, the Trilateral Commission has the aim of promoting a world government of the financial and technical elite known later, in the words of President George H.W. Bush, as the “New World Order.” But Carter was evidently not cooperating fully enough, so, seemingly, found himself dumped.

Today, as a prolific author and head of the Carter Center in Atlanta , Georgia , he is a voice in the wilderness in promoting a just peace between Israel and the Palestinians. Carter had been working toward this goal since he hosted talks at Camp David in 1978 between Egyptian President Anwar Sadat and Israeli Prime Minister Menachem Begin that led to the 1979 Israel-Egypt Peace Treaty.

By Richard C. Cook
http:// www.richardccook.com

Copyright 2008 by Richard C. Cook

Richard C. Cook is a former U.S. federal government analyst, whose career included service with the U.S. Civil Service Commission, the Food and Drug Administration, the Carter White House, NASA, and the U.S. Treasury Department. His articles on economics, politics, and space policy have appeared on numerous websites. His book on monetary reform entitled We Hold These Truths: The Hope of Monetary Reform will be published soon by Tendril Press. He is also the author of Challenger Revealed: An Insider's Account of How the Reagan Administration Caused the Greatest Tragedy of the Space Age , called by one reviewer, “the most important spaceflight book of the last twenty years . ” His Challenger website is at www.richardccook.com . A new economics website at www.RealSustainableLiving.com is upcoming with partner/author Susan Boskey. To get on his mailing list, for questions and comments, or to pre-purchase copies of his new book, please write EconomicSanity@gmail.com .

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