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Obama in the Bunker as Cities and States Collapse

With passage of the Obama financial reform bill on July 15, the champagne bottles were uncorked on Wall Street and in the City of London. Contrary to the illusions of most Europeans, the financial community had nothing more to fear, once the White House had made sure that all measures against derivatives trading and for effective regulation were eliminated.

As the New York Times reported on July 15, major banks and others are already "building up their derivatives brokerage operations. Their goal is to make up any lost profits - and perhaps make even more money than before." And with typical British understatement, the Financial Times noted that the "financial services sector... should now feel mightily relieved."

The fact that Goldman Sachs got a mere slap on the wrist for huge fraud on the exact same day, added to the merriment. Instead of sending the top management to jail as a Pecora Committee hearing would have accomplished, Goldman Sachs merely has to pay a $300 million fine to the SEC and $250 million in restitution to investors, who lost at least $1 billion. The total of $550 million amounts to less than 4 % of Goldman's bonus pool in 2009.

Meanwhile, city and state governments are facing a nightmare situation, with vital services being cut, including police forces and firefighters, and foreclosures, bankruptcies and unemployment soaring. One example singled out by LaRouche Congressional candidate Summer Shields, is the city of Oakland, California, just next to his district, where "the city government is paying an interest rate swap bond payment to Goldman 'Sucks', while cutting 80 police officers, with 120 to go! This, in a city with one of the highest crime rates in the nation."

At the National Governors convention on July 10-11, state leaders were told they had no choice but to slash the social safety nets for the poor and the elderly. Erskine Bowles, the co-chairman of Obama's hand-picked commission, which is empowered to dictate the cuts to be made rather than Congress, stated matter-of-factly: "No matter how much our plan succeeds, states can't anticipate any help from the Federal government for 10 years...".

In response, LaRouche candidate Rachel Brown again denounced the so-called National Commission on Fiscal Responsibility and Reform: "The premise on which this commission was established, and on which their recommendations are based, is a fraud. There is another option besides budget-cutting or raising taxes; namely, increasing physical production and productive employment. The restoration of Glass-Steagall will allow us to write off the worthless derivative obligations of investment banks, while freeing up newly-separated commercial banks to extend credit to the real economy."

Another case in point is the health-care czar authorized by Obama while the Senate was in recess, Sir Donald Berwick, who is a staunch defender of the British system, which he helped shape, in particular the sinister "end of life pathways" to an early death.

That, and much more, explains Obama's plunging in the polls, with a strong approval rate of merely 26%, and only 13% in terms of economic policy. As LaRouche notes, he is reacting in a typical "Hitler in the Bunker" mode, by refusing to face reality, obsessed as he is with his 2012 reelection. As Democrats are coming to realize, Obama's reelection strategy is to have the Democrats take humiliating defeats in the November elections, and then attack the Republicans for obstructing the rest of his legislative agenda.

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