Asset forfeiture, espionage & The Sting

Google maintains a transparency page to report on entities pressuring them to not let you see stuff on the Internet. The thing is chock full of interesting data you can load into Google spreadsheets, sort, manipulate and make into graphs. Even more interesting is the background behind the shifts in censorship.

The idea came to Google when things were heating up in 2009. Someone was evidently worried about WikiLeaks. Sure enough, Bradley Manning was arrested and, the cat being out of the bag, there wasn’t much point to doing anything other than crucify the whistleblower. But what was so important about the leaks? Everybody knew that the US military industrial complex was burning women, kids, houses and villages just like in 1969. But there was something else going on at the time.

Securities markets had been in free-fall, and very large businesses operating the way banks operate have been losing a fantastic amount of money. The official story is that mortgage-backed securities––securities made by slicing up mortgage loans and sorting them into risk categories––we’re failing because the borrowers had no credit or money and the variable interest rates have been artificially lowered to get the suckers on board. Where there is some truth to that, but it leaves a lot unsaid. It takes more than a surprise in interest rates to knock over the worlds largest economy. Derivative markets have been full of these products since 1992–about the time George H.W. Bush began pushing asset forfeiture. Adam Smith observed in 1775 that only a government has the power it takes to ruin a nation. The political state when the spaghetti hit the fan was the fanatically prohibitionist George W. Bush Administration.

Besides war, Republican administrations are heavily into prohibition. With its black markets, prohibition is the perfect scenario for cheap mortgages to turn into grow houses producing marijuana. The federal government was having legal problems using  military helicopters and infrared detectors against its own citizens. So the Bush Administrations made a deal with State and municipal police forces  that they would enforce marijuana prohibition, and in exchange get to steal and confiscate property and money under criminal and civil asset forfeiture procedures. This caught on like wildfire.

 

What you see here for California is about the same thing that happened after Herbert Hoover was elected president and serving as lame-duck incumbent. State governments were repealing their prohibition laws, and the federal government was pressuring the states to enforce the Five & Ten Law making beer a major felony. The resulting financial disaster caused state governments to get cold feet, so the feds proceeded to help them out with a little incentive plan.

This is what the Bush administration was doing behind the scenes. Asset-forfeiture-for-prohibition is the root cause of the enormous crash that wiped out mortgage values all over the United States. The losses were measured in trillions of dollars, and the federal government had to find a way to transfer that disaster overseas. At the time of the Great Depression, the Hoover administration was pressuring the League of Nations and foreign governments to expand prohibitionist confiscation overseas.

The State Department memoranda that Bradley/Chelsea Manning transferred to WikiLeaks may have contained information on how the State Department did that very same thing. Through the mechanism of international treaties and cooperative enforcement conferences, prohibition and asset forfeiture were made to look like good ways for foreign governments to rob their own citizens. As long as none of those governments realized that their security prices would plummet to the point of crippling their economies, their loss could become Uncle Sam’s gain with just a wee bit of insider trading. The State Department was worried that the Manning and Snowden leaks would tip off the suckers to the Set-up before The Sting could drain away their wealth through The Big Short 2.

Learn how republican Herbert Hoover used the IRS to swat beer, and crushed the U.S. economy instead. Prohibition and The Crash–Cause and Effect in 1929, is live at Amazon Kindle for the price of a pint.