Rich Dad's Conspiracy of the Rich. Роберт Кийосаки

Rubin, Summers, and Geithner succeeded in repealing Glass-Steagall in order to legitimize the formation of Citigroup, the biggest “financial supermarket” in U.S. history. Many people do not know this, but at the time of its formation, Citigroup was in violation of the Glass-Steagall Act.

      The following is a comment by Kenneth Guenther, CEO of Independent Community Bankers of America (the small bankers of America), made to PBS in 2003 about the formation of Citigroup:

      Who do they think they are? Other people, firms, cannot act like this… Citicorp and Travelers were so big that they were able to pull this off. They were able to pull off the largest financial conglomeration—the largest financial coming together of banking, insurance, and securities—when legislation was still on the books saying this was illegal. And they pulled this off with the blessings of the president of the United States, President Clinton; the chairman of the Federal Reserve system, Alan Greenspan; and the secretary of the treasury, Robert Rubin. And then, when it’s all over, what happens? The secretary of the treasury becomes the vice chairman of the emerging Citigroup.

      The most telling line is the last one: “The secretary of the treasury [Robert Rubin] becomes the vice chairman of the emerging Citigroup.” As we’ve discussed, Robert Rubin was Obama’s advisor during the presidential campaign.

      President Obama’s current secretary of the treasury is Timothy Geithner. He was undersecretary of the treasury from 1998 to 2001 under Treasury Secretaries Robert Rubin and Lawrence Summers. Summers is Geithner’s mentor, and many call Geithner a Robert Rubin protégé. Oh, what a tangled web we weave.

      In other words, these same men are partially responsible for triggering this financial crisis. By allowing the combining of savings banks with investment banks, these guys accelerated the sale of the exotic financial derivatives that Warren Buffett called “weapons of mass financial destruction” and that have helped bring the entire global economy to its knees. How can there be change if the same people who expanded this financial mess remain in charge? What does President Obama mean when he promises change we can believe in?

       Republicans, Democrats, and Bankers

      One reason why Presidents Bush, Sr., and Bush, Jr., said almost the same words, that a bailout would save the economy and never happen again, is because they were elected to protect the system—not fix it. Could one reason that President Obama hired virtually the same financial team from the Clinton administration be because he was interested in protecting the same system—a system designed to make the rich get even richer? Only time will tell. Although President Obama was proud of the fact that he did not accept campaign money from lobbyists, the truth remains that his financial team is full of insiders who helped usher in the crisis they are now charged with fixing.

      The only candidate who consistently mentioned the economy and the growing financial crisis during the early part of the 2008 presidential campaign was Representative Ron Paul of Texas, a true maverick Republican. Writing for Forbes.com on March 4, 2008, he stated, “Unless we embrace fundamental reforms, we will be caught in a financial storm that will humble this great country as no foreign enemy ever could.” Unfortunately, not enough voters cared to listen.

       Reader Comment

       I voted for Obama because I believe he is a sincere and compassionate leader. And, no matter how intelligent he may be, or anyone working with him, you, Robert, have taught me to see that financial education in this country is scarce! I worry that the folks in charge simply do not have a very high financial IQ.

      —virtualdeb

       Reader Comment

       It seems that President Obama and his team are focused more on short-term tactical Band-Aids rather than long-term strategic goals. To date, all the “actions” taken by the new administration have been to plug the holes in the dike and shore it up a bit. There seems to be no attention to determining the underlying root cause and changing the foundation flaws that led to the current financial crisis.

      —egrannan

       The Roots of the Crisis

      It is said that Mayer Amschel Rothschild, founder of one of the most powerful banking families of Europe, once observed, “Give me control of a nation’s money supply and I care not who makes the laws.” To understand today’s financial crisis, it is important to understand the relationship between the U.S. government, the Federal Reserve System, and some of the most powerful people in the world. This relationship is depicted in the overly simple diagram below:

      In 1913, the creation of the Federal Reserve System granted the very rich of the world the power to control the money supply of the United States and fulfilled the spirit of Rothschild’s sentiments. Many people don’t know or understand that the Federal Reserve System is not a government institution or a bank, nor does it have any reserves. Rather, it is a banking cartel run by some of the most powerful men in the financial world. The creation of the Fed was basically a license to print money.

      Another reason the Federal Reserve System was created was to protect the biggest banks from failing by providing liquidity to those banks when they were in financial trouble, which protected the wealth of the rich, not of the taxpayers.

      We see this in action even to this day. In 2008, when President Bush authorized $700 billion in bailout money, Secretary of the Treasury Henry Paulson, formerly of Goldman Sachs, in conjunction with the Federal Reserve, immediately handed out billions of dollars in TARP (Troubled Asset Relief Program) money to the biggest banks in the country, his friends, no questions asked.

      The reality of the situation is that the TARP bailout money went straight from our pockets—taxpayers’ pockets—into the pockets of the banks and corporations that helped create our financial mess in the first place. We were told the money was given to the banks with a mandate to lend it out, but our government was either unable or unwilling to enforce that mandate—or both.

      In mid-December 2008, when USA Today asked banks what they were doing with the bailout money, JPMorgan Chase, a bank that received $25 billion in taxpayer money, replied, “We have not disclosed that to the public. We’re declining to.” Morgan Stanley, a bank that received $10 billion, replied, “We are going to decline to comment on your story.” The Bank of New York Mellon responded, “We’re choosing not to disclose that.” The bank bailout money was really just a rich friend bailout, employed to cover those friends’ mistakes and obvious fraud, not to save the economy.

      The proof is in the pudding. As the Wall Street Journal reported on January 26, 2009, in an article entitled “Lending Drops at Big U.S. Banks,” “Ten of the 13 big beneficiaries of the Treasury Department’s Troubled Asset Relief Program, or TARP, saw their outstanding loan balances decline by a total of about $46 billion, or 1.4%, between the third and fourth quarters of 2008, according to a Wall Street Journal analysis of banks that recently announced their quarterly results.” This is even as they scooped up $148 billion in taxpayer TARP funds intended to stimulate lending.

      If President Obama really wants to make changes in Washington, he needs to change this cozy relationship between the Federal Reserve System, the U.S. government, and the rich and powerful. And maybe he will. But by putting President Clinton’s financial team in his administration, it does not seem likely. It seems he will do as past presidents since Woodrow Wilson have done—protect the system, not change it.

       Reader Comments

       I must say that reading your first chapter has opened my eyes. I am only 23 years old and never fully understood what the Federal Reserve System was or what it did for our country. I have to say that it does not shock me; I am truly grateful that you have been honest and are not afraid to give the truthful definition of what a lot of things mean and stand for. It is however truly sad that taxpayers are affected by this and a lot of them do not even know or understand it!