Tuesday, November 12, 2013

631 AIPAC's Fed candidate Stanley Fischer (Dual-citizen) on a Warpath against Iran

AIPAC's Fed candidate Stanley Fischer (Dual-citizen) on a Warpath
against Iran

Newsletter published on 28 December 2013

(1) Stanley Fischer will be #2 at the Fed? ('a dual national'), by Col.
Pat Lang
(2) Israel's Fischer picked to be next Fed vice chair
(3) AIPAC's Fed candidate Stanley Fischer (Dual-citizen) on a Warpath
against Iran
(4) Stanley Fischer on Israel's Inflation in 1980s, caused by military
spending (25% of GNP)
(5) Failings of California’s anti-usury laws

(1) Stanley Fischer will be #2 at the Fed? ('a dual national'), by Col.
Pat Lang


Date: Fri, 27 Dec 2013 02:41:33 +0900
Subject: Stanley Fischer will be #2 at the Fed? ('a dual national') by
Col.Pat Lang
From: chris lancenet <chrislancenet@gmail.com>

http://turcopolier.typepad.com/sic_semper_tyrannis/2013/12/the-sudden-rushed-campaign-to-insert-stanley-fischer-straight-from-his-post-leading-israels-central-bank-into-the-number.html

Stanley Fischer will be #2 at the Fed?

The sudden, rushed campaign to insert Stanley Fischer straight from his
post leading Israel's central bank into the number two spot at the
Federal Reserve has allowed little time for research into the
appointee's controversial achievements or for informed public debate
about his record. That may be the point.

http://www.IRmep.org/fischer_aipac.htm

During his long career working indirectly and directly on behalf of
Israel, Fischer has:

1. Overseen the transformation of U.S. aid to Israel from repayable
loans to outright grants.

2. Pushed unilateral trade concessions that benefit only Israel, but not
America.

3. Exempted Israel from the very same conditions and controls he imposed
on Mexico, Argentina, Russia and Brazil.

4. Become an Israeli citizen in order to impose additional sanctions on
Iran from Israel's central bank, despite their growing harm to American
jobs and exports.

5. Benefitted from a long series of deceptive AIPAC PR campaigns about
his record.

The Fed policies that discourage the employment of non-citizens as Fed
bank examiners are based on valid considerations that should apply to
Fischer. While AIPAC may view his rushed insertion into the Fed as a
"wedge" toward increased flows of openly dual Israeli nationals working
in top American government and quasi-governmental posts, American voters
should immediately contact their senators and oppose Fischer's
appointment with the same energy they exhibited in their opposition to
the rushed AIPAC campaign to attack Syria based on deceptive premises.

Please feel free to circulate and post IRmep's copyright-free analysis
of Fischer's AIPAC-powered career "AIPAC's Fed Candidate Stanley Fsicher
on Warpath Against Iran: Dual-Citizen nominee's lifetime beneift to
Israel comes at a heavy cost to America"

(2) Israel's Fischer picked to be next Fed vice chair

From: "Sadanand, Nanjundiah (Physics Earth Sciences)"
<sadanand@mail.ccsu.edu>
Date: Wed, 18 Dec 2013 13:26:39 -0500

December 11, 2013

By Steven Scheer and Jonathan Spicer

http://www.reuters.com/article/2013/12/11/usa-fed-fischer-idUSL1N0JQ1HQ20131211

(Reuters) - Stanley Fischer, who led the Bank of Israel for eight years
until he stepped down in June, has been asked to be the Federal
Reserve's next vice chair once Janet Yellen takes over as chief of the
U.S. central bank, a source familiar with the issue said on Wednesday.

Fischer, 70, is widely respected as one of the world's top monetary
economists. He is seen as a pragmatic policymaker and has praised the
Fed's extraordinary steps to boost the U.S. economy. At the
Massachusetts Institute of Technology, he once taught current Fed
Chairman Ben Bernanke and Mario Draghi, the European Central Bank president.

Yellen, the Fed's vice chair, is expected to win approval from the U.S.
Senate next week to take the reins from Bernanke, whose term ends in
January.

Fischer, who was born in Zambia and has Israeli and U.S. dual
citizenship, would also need Senate approval if he accepts the offer
from the White House. "He's been offered the job" said the source, who
declined to be named.

The White House declined to comment. A Fed spokeswoman said the White
House was responsible for nominations.

Fischer, who could not immediately be reached, has held top-level posts
at the World Bank and the International Monetary Fund, and was credited
with guiding Israel through the global economic crisis with minimal
damage. For the Fed, he would bring the fresh perspective of an
outsider, especially on communications, yet offer some continuity too.

He is "difficult to characterize with a term as obtuse as 'hawk' or
'dove' because he takes a balanced, academic approach to various topics
of debate," said Thomas Simons, an economist at brokerage Jefferies.

"However, given that he played an instrumental role in helping Ben
Bernanke form his views on monetary economics, his presence at the Fed
would represent some consistency in this time of transition."

Fischer would arrive at a U.S. central bank starting to navigate a
return to normalcy after taking dramatic and unprecedented steps to
emerge from the Great Recession of 2007-2009.

The Fed is now wrestling with the decision of when to scale back its
huge bond-buying program that sought to drive down long-term borrowing
costs and swelled its balance sheet to some $4 trillion. It buys
$85-billion a month in Treasuries and mortgage bonds in its current,
third round of "quantitative easing," or QE3.

At an IMF economic forum on November 8, held in Fischer's honor, he
suggested he is a strong believer in the effectiveness of the Fed's
unconventional policies.

"It's very hard to reach the conclusion that the unorthodox measures are
ineffective," Fischer said of the bond buying, acknowledging the policy
is controversial.

"They appear to be effective and they essentially do that by working off
either the provision of liquidity in markets where liquidity has
effectively dried up, or by changing interest rates other than the
central bank interest rate," he said on a panel seated next to Bernanke.

As Fed vice chair, Fischer would have a strong hand in shaping policy.
Yellen, who has held the post since 2010, was a driving force behind the
Fed's adoption last year of an inflation target, an important policy
milestone for the bank.

One possible source of tension may be how to telegraph the Fed's policy
intentions. While Yellen and Bernanke have tied a rate rise to future
levels of unemployment and inflation, Fischer has publicly warned about
central banks giving so-called forward guidance that is too precise.

"He's going to think outside of the box, he's going to push the Fed a
little bit, and that's not a bad thing," said Diane Swonk, chief
economist at Mesirow Financial in Chicago.

Fischer "is very cognizant of what you can and can't communicate, and
I'm not sure the Fed is always so sensitive about that."

Bloomberg News and Israel's Channel 2 earlier reported Fischer as the
front runner for Fed vice chair.

If he takes the job, it would be the second time this year a major
central bank made a high-profile hire from abroad. The Bank of Canada's
chief Mark Carney earlier this year became the first foreigner to lead
the Bank of England.

'NEARING A DECISION'

The Fed's seven-member board is depleted and risks thinning further.
Elizabeth Duke stepped down in August, Sarah Raskin is set to leave for
a job at the U.S. Treasury, and Bernanke is expected to depart when his
term as chair expires January 31.

With Yellen set to become the first woman to take the helm, some
economists and investors had speculated that Jeremy Stein, a
well-respected Fed governor and former Harvard professor, would be
tapped to replace her. Some observers expect that he too could leave and
return to Harvard if Fischer steps in.

Next week, the Fed holds a highly-anticipated policy meeting at which
officials could announce the beginning of the end of QE3, given the
improvement in the U.S. labor market. It will be Bernanke's second-last
as chair.

Fischer "is a very qualified and very solid vice chair candidate, and I
don't see on what grounds his nomination would fail," said Roberto
Perli, a partner at economic research firm Cornerstone Macro and a
former senior Fed official.

"He seems to complement and balance Yellen pretty well ... and he is
probably more sensitive than Yellen to financial stability issues, and
that is a good thing."

Fischer, a naturalized American citizen, quit his job as head of
Israel's central bank on June 30, three years into his second five-year
term.

Asked about his next job at a conference in Tel Aviv on Monday, he said:
"The advice I received was not to accept a position until I had waited
at least six months, which is in three weeks, so it seems like I am
nearing a decision."

Once chief economist at the World Bank and then first deputy managing
director of the IMF from 1994 to 2001, Fischer was a key figure in the
IMF's Mexican bailout after the peso crashed in the mid-1990s and the
fund's main firefighter as it sought to douse the flames of the Asian
financial crisis.

At the time, he negotiated repeatedly with troubled countries, jetting
from one to the next as a financial storm swept through the world's
emerging markets. Robert Rubin, the influential former U.S. Treasury
secretary, once described Fischer as the "unsung hero" of the crises.

During his tenure in Israel, the country's economy performed better than
most. Despite a focus on fighting inflation, Fischer slashed rates and
went against his own policy of staying out of financial markets by
buying up tens of billions of dollars to weaken the shekel and help prop
up local exporters.

While he began cutting rates in 2008 before other major central banks in
a bid to head off the worst of the recession, he also was among the
first to raise them, a year later.

He "was very proactive with a dovish bias when necessary," said Benoit
Anne, head of emerging-market strategy at Societe Generale. "Fischer
will bring a valuable awareness of the impact of Fed policies on the
outside world, including emerging markets (meaning) the process of Fed
policy exit may be better managed from a collateral damage perspective."

Fischer was a vice chairman of Citigroup prior to joining the Bank of
Israel. He had sought the top job at the IMF in 2011 but was
disqualified due to his age.

(3) AIPAC's Fed candidate Stanley Fischer (Dual-citizen) on a Warpath
against Iran


http://www.IRmep.org/fischer_aipac.htm

AIPAC's Fed Candidate Stanley Fischer on a Warpath against Iran
Dual-citizen nominee's lifetime benefit to Israel comes at a heavy cost
to America

By Grant F. Smith, Director of Research, IRmep

The rushed campaign to insert Stanley Fischer straight from his position
leading Israel's central bank into the number two spot at the Federal
Reserve has allowed little time for research into the appointee's career
or for informed public debate about his record.  Like the failed recent
Obama administration-Israel lobby pincer move to ram approval for U.S.
military strikes on Syria through Congress, avoiding such due diligence
through velocity may actually be the only means for successful Senate
confirmation.

Some of Fischer's accomplishments—from co-authoring a seminal textbook
on macroeconomics to handling economic crisis at the IMF have—not
surprisingly—been recalled by his many supporters.  Other doings that
shed light on Fischer's controversial attributes—such as overhauling how
U.S. aid and trade packages are delivered to Israel—have been mostly
ignored.  Appointing an openly dual Israeli-American citizen into the
most important central bank in the world could be a watershed moment.
While the doors of federal government have long swung open for
Israel-lobby appointees focusing most—if not all—their energies on
advancing the interests of a foreign state, any who were actually
Israeli dual citizens have traditionally kept that a closely-guarded
secret. Fischer's long-term boosters, including the American Israel
Public Affairs Committee (AIPAC), likely want to accustom Americans to
openly dual citizens circulating between top roles in the U.S. and
Israeli governments.  A closer examination of Fischer reveals that
average Americans have good reason to oppose his appointment, because
his lifelong achievements for Israel have imposed high costs and few
benefits to the United States while making peace more difficult to achieve.

Economics

Stanley Fischer was born in Northern Rhodesia in 1943. He studied at
London School of Economics and received a PhD in economics from MIT.  He
taught and chaired the MIT economics department and co-authored a
leading macroeconomics textbook with Rudiger Dornbusch. Fischer joined
the World Bank in 1988 and became the first deputy managing director of
the International Monetary Fund (IMF) in 1994. He oversaw emergency
bailout lending and austerity programs over Mexico, Thailand, Indonesia,
Russia, Brazil and Argentina. High flying Citigroup—under the helm of
Sanford "Sandy" Weill—recruited Fischer in 2002. There he rose to become
vice president with a seven-figure pay package.

Israel

Fischer has not only been an ardent supporter of Israel, his
professional efforts began when he took sabbatical leave to Israel in
1972 and 1976-1977.  He was a visiting scholar at the Bank of Israel in
1980.  More importantly for Israel, Stanley Fischer won an appointment
to the Reagan administration's U.S.-Israel Joint Economic Discussion
Group that dealt with Israel's 1984-1985 economic crisis.  In October of
1984, Israeli Prime Minister Shimon Peres arrived in Washington asking
an initially reluctant Reagan Administration for an additional $1.5
billion in U.S. emergency funding—over and above the already-promised
aid $5.6 billion aid package.[i]

The help amounted to U.S. taxpayers funding each Israeli citizen $1,650.
  Another key component of the plan called for a largely unilateral
lowering of U.S. tariffs and trade barriers to Israel, a program
initially called "Duty Free Treatment for U.S. Imports from Israel" but
later repackaged and sold as America's first "free trade" agreement.
Over time the FTA reversed a previously balanced U.S.-Israel trading
relationship for one that has produced a
<http://www.globalresearch.ca/israel-a-huge-liability-on-american-foreign-policy-balance-sheet-indyk-aipac-secret-theft-from-american-industry-reaches-100-billion/5344479>
cumulative deficit to the U.S. that passed $100 billion in 2013.
Seventy American industry groups opposed to the give-away in 1984 were
disenfranchised when Israeli Economics Minister Dan Halpern and AIPAC
illegally obtained a classified compendium of their industry, market and
trade secrets to use against them in lobbying and public relations.  An
FBI espionage and theft of government property investigation was quashed
before it could narrow in on those inside the U.S. government who
delivered the secrets to Halpern.

The U.S.-Israel Joint Economic Discussion Group fundamentally
transformed U.S. aid to Israel forever.  Before the Reagan
administration, most U.S. aid to Israel took the form of loans that had
to be repaid with interest.  After the input of Fischer's team,
subsequent U.S. aid was delivered in the form of outright grants paid
directly from the U.S. Treasury—never to be repaid or conditioned when
Israel took actions the U.S. opposed.

  Like many of Fischer's later IMF austerity programs, the Joint
Discussion Group initially announced that strings attached to the aid
would make it temporary.  Secretary of State George Shultz insisted
during a 1985 address to AIPAC that "Israel must pull itself out of its
present economic trauma . . . . No one can do it for them . . .our help
will be of little avail if Israel does not take the necessary steps to
cut government spending, improve productivity, open up its economy and
strengthen the mechanisms of economic policy. Israel and its government
must make the hard decisions."
<http://www.irmep.org/fischer_aipac.htm#_edn2>[ii]

Shultz wanted to make the huge American cash transfer conditional on
major Israeli economic reforms, but intense AIPAC lobbying in Congress
threatened to make the State Department influence irrelevant.  In the
end, Congress delivered aid without Israeli sacrifices, such as selling
off bloated state-owned industries and spending belt-tightening.  The
proposed privatization of $5 billion in state enterprises threatened too
much bureaucratic "turf" and too many jobs, so Israel put them on hold.
  Fischer apologetically characterized the Likud years as a "wasted
opportunity by a government that should have known
better."<http://www.irmep.org/fischer_aipac.htm#_edn3>[iii]

Not until 1996 were Fischer's proscribed economic remedies adopted by
American neoconservative consultants to Benjamin Netanyahu as minor
points in the "Clean
Break"<http://www.irmep.org/policy_briefs/3_27_2003_clean_break_or_dirty_war.html>
manifesto for Israeli regional hegemony. They remain among the few
unimplemented tasks in a plan that called for military action against
Iraq, Syria, and Lebanon.

<http://www.irmep.org/ila/AIPAC/awarchive.pdf> Despite the absence of
any real economic reforms that would take Israel off the American
taxpayer dole, Fischer co-wrote a blustering 1986 article for the Wall
Street Journal called "Israel Has Made Aid Work" that AIPAC circulated
widely as <http://www.irmep.org/ila/aipac/awarchive.pdf> an official
memorandum of its achievements.  "Israel is the largest single recipient
of economic aid from the U.S.  This is partly because the economic
stability of Israel is uncertain and is important to U.S. national
interests.  Therefore a report on the progress of the Israeli economy is
relevant to policy decisions to be made here."

Fischer never bothered to substantiate his premise, that U.S. national
interests were somehow served by the bailout or that any aid given to
Israel produced tangible benefits.  Instead Fischer delivered a
fusillade of dry and all but unreadable statistics about Israel's
temporary economic performance.  Issues of long-term importance to most
Americans, such as returning U.S. aid to the traditional format of loans
to be repaid and the likely impact of the FTA on U.S. jobs went
unaddressed by Fischer.  Fischer's core achievement—that the
transformation of aid from loans to outright taxpayer give-aways—has
been unchanged since 1986.  The premises behind this ever-increasing
entitlement and one-sided FTA performance are likewise never reexamined
by Congress—despite the fact that a majority of polled Americans have
come to oppose aid increases to Israel.  Fischer's rare admonitions that
Israel be held to account, unlike the economies he transformed through
biting IMF austerity programs, have remained nothing more than lip service.

At the end of 2004 Israel's U.N. ambassador recruited Fischer to become
the head of Israel's central bank, asking, "Why not be our
governor?"<http://www.irmep.org/fischer_aipac.htm#_edn4>[iv]

Fischer accepted and initially provided endless amusement to reporters
by insisting on speaking Hebrew during press conferences and refusing to
speak English.  Initial concerns that Fischer's global stature and
experience would overshadow and chafe the relevant players in Israel
proved unfounded as Fischer moved energetically into his new role. AIPAC
continued to trumpet Fischer's accomplishments steering Israel through
the global financial crisis, though beneath the surface hewas performing
far more serious tasks for Israel and its global lobby.

Iran Sanctions

As Bank of Israel governor, Stanley Fischer played a central role in
coordinating the implementation of AIPAC-generated sanctions against
Iran—ostensibly over its nuclear program.  Stuart Levey, the head of the
U.S. Treasury Department's division for "Terrorism and Financial
Intelligence," an office
<http://dissidentvoice.org/2008/09/from-irgun-to-aipac-israel-lobbys-us-treasury-follies-hurt/>
created after heavy AIPAC lobbying, met often with Fischer in Israel
alongside the Prime Minister, Foreign Minister and chiefs of both the
Mossad and Shin Bet to explore how to "supplement" UN sanctions and
end-run Russian and Chinese
opposition.<http://www.irmep.org/fischer_aipac.htm#_edn5>[v]

The Levey-Fischer strategy was "to work outside the context of the
Security Council to engage the private sector and let it know about the
risks of doing business with Tehran" particularly against European banks
that had only partially drawn back their business dealings with Iran.
In 2010, Israel dispatched Fischer to meet with Chinese and Russian
"counterparts" in order to financially isolate Iran.
<http://www.irmep.org/fischer_aipac.htm#_edn6>[vi]

Fischer's final official duties for the Israeli government included
drilling for "big crisis" scenarios—specifically, Fischer told an
Israeli television station—the unavoidable financial fallout of a
military attack on
Iran.<http://www.irmep.org/fischer_aipac.htm#_edn7>[vii]  "We do plans,
we do scenarios, we do exercises about how the central [bank] will work
in various situations."
<http://www.irmep.org/fischer_aipac.htm#_edn8>[viii]

After years targeting Iran, Fischer became convinced in his final months
in Israel that sanctions alone were not enough to collapse its economy.
  Fischer reluctantly concluded that even as Iranian economic prospects
"continue to go down" the country would likely "find a way to continue
to keep economic life going."
<http://www.irmep.org/fischer_aipac.htm#_edn9>[ix]

Fischer suddenly resigned and left the Bank of Israel on June 30, before
completing his second five-year term.

Israelis into the Fed and then where?

The last time Fischer's name was floated to lead a major organization
was during a rushed Bush administration attempt at damage control.  In
2007, the controversial architect of the Iraq invasion and later World
Bank President Paul Wolfowitz was engulfed in an ethics scandal over his
pay and promotion package for Shaha Ali Riza.  In two short years
leading the institution, Wolfowitz catalyzed the alienation of most
divisions within the bank and the distrust of economics ministries
around the world.  Fischer, along with Robert Zoellick and Robert
Kimmitt and a handful of others, was considered as an emergency
replacement while the administration and stakeholders strategized on how
to ease Wolfowitz out with a minimum of scandal.
<http://www.irmep.org/fischer_aipac.htm#_edn10>[x]  In the end, Fischer
stayed put in Israel.

It came as a surprise to many when The Wall Street Journal and Israel's
Channel 2 news simultaneously reported in early December 2013 that the
White House was "close to nominating" Fischer to be appointee Janet
Yellen's second-in-command at the U.S. central
bank.<http://www.irmep.org/fischer_aipac.htm#_edn11>[xi] Media reports
initially indicated that Fischer's candidacy-to-Senate-confirmation
would proceed on greased skids—with no Senate debate—taking only a week
so that the pair could quickly take over the Fed in January.  However,
the Senate concluded its 2013 business without taking up the matter.
The earliest date the measure could be put up for a vote is January 6,
2014.  Even that date might slip since Senator Rand Paul and Minority
Leader Mitch McConnell plan to delay the vote unless a long-languishing
measure to
"<http://www.politico.com/story/2013/12/rand-paul-janet-yellen-101241.html>
Audit the Fed" is also put up for a vote.

This rushed approach has meant relatively little reporting on the deeper
implications of having an openly dual Israeli-American citizen a
heartbeat away from Fed chairmanship.  That is unfortunate, since Israel
and its U.S. supporters have many hidden reasons for wanting stronger
influence at the Fed that they wouldlikely prefer not to discuss.

  That the Fed is a key player in Iran sanctions implementation is
certainly no secret.  The Fed has been an equal partner in levying
hundreds of millions in fines against foreign banks such as R.B.S,
Barclays, Standard and Chartered and H.S.B.C. which were charged with
violating the Iran sanctions regime.  Although AIPAC never mentions it,
American exporters have been seriously hurt by sanctions on Iran and the
punitive secondary boycott.  A coalition representing the US Chamber of
Commerce, the Business Roundtable, Coalition for American Trade, the
National Foreign Trade Council and others urged Congress not to enact
sanctions provisions they estimated would cost
<http://www.nam.org/~/media/0997C854147F4B2DA1689FE151E7D9B3/Iran_Sanctions_Study_and_letter.pdf>
$25 billion and 210,000 American jobs.  (PDF)  Keeping such a costly
regime in place despite thawing relations and any hard evidence of an
Iranian nuclear weaponization program has therefore required immense
ongoing efforts by Israel lobbying groups.

An equally important target for Fischer and Israel may be—somewhat
ironically given their pro-boycott programs—anti-boycott activities.  In
the 1970-80s the Federal Reserve played an active "moral suasion" role
chastising and corralling U.S. banks away from any activity that Israel
construed as compliant with the Arab League economic boycott.  An expert
with deep experience enforcing the international boycott of Iran,
Fischer is likely aware of the many active American grass-roots
campaigns aimed at ending the Israeli occupation of Palestinians through
targeted boycotts.  These boycotts range from efforts to get retailers
to stop carrying manufactured goods produced in the occupied West Bank
(Ahava and Soda Stream), to overturning contracts with firms providing
services in occupied territories (Veolia), to academic boycotts and even
efforts to get labor union pensions to divest from Israel bonds.
Working more closely with Israel and AIPAC, the Fed could become a vital
node for reinterpreting and enforcing old or new laws aimed at outlawing
and punishing groups organizing such grass-roots activities by targeting
U.S. bank accounts and freezing their financial flows.

Fischer may also want to launch "exercises" to prepare the U.S.
financial system for the fallout of Israeli military attacks on Iran.
New bills in Congress drafted by AIPAC call not only for additional
sanctions aimed at thwarting a fledgling deal on Iran's nuclear program
(favored 2-to-1 by Americans). AIPAC's bill forces the U.S. to
"<http://www.lobelog.com/kirk-menendez-schumer-wag-the-dog-act-of-2014/>have
Israel's back" in the event of a unilateral Israeli strike.  If Israel
has already decided to attack Iran, it would benefit immensely from
having Fischer inside the Fed, protecting the financial flows Israel now
regards as all but a birthright from its primary global underwriter.
Less well-known is the Fed's authority to authorize foreign bank
acquisitions.  Any future Israeli campaign to further entwine its banks
into the U.S. financial system through acquisitions would likely find a
much more welcoming regulator in Fischer.

<http://www.irmep.org/ila/AIPAC/AIPAC_Vital_Assistance.pdf> Whatever the
real motivation for Fischer's sudden, inexplicably rushed insertion into
the Federal Reserve, it is also worthwhile to note longstanding Fed
policies have correctly considered U.S. citizenship to be preferable for
at least one key position, "because of the special nature of the
supervisory function, the need to ensure confidentiality of information,
and the delegated nature of the function."  Unfortunately, that policy
preference covers only Fed
<http://www.federalreserve.gov/boarddocs/srletters/1994/SR9440.HTM>bank
examiners rather than top leadership—the
<http://www.federalreserve.gov/aboutthefed/fract.htm>Federal Reserve Act
is silent on the wisdom of installing a revolving door forreturning U.S.
citizens who took on dual citizenship as a condition of serving a
foreign government.

AIPAC, Fischer's co-author of harmful U.S. economic policies on behalf
of Israel, likely sees the Fischer appointment as an important test case
to assess American tolerance for openly dual Israeli-American citizens
running key U.S. federal agencies.  In 2009 former AIPAC research
director Martin Indyk, who was at the center of AIPAC's research
division during the FTA push,
<http://original.antiwar.com/smith-grant/2012/10/05/spy-crisis-launched-aipacs-think-tank/>said
that "the US-Israel Free Trade Agreement served as a wedge that opened
up the Congress to free trade agreements across the world, including the
NAFTA agreement."   Likewise, if Fischer can be "wedged" into the Fed,
it begs the question of why former Israeli ambassador to the U.S. and
historian Michael Oren could not someday lead the Near East division of
the State Department.  From AIPAC's perspective, having qualified
Israelis directly run key divisions of the U.S. Treasury such as
Terrorism and Financial Intelligence, rather than indirectly through
<http://dissidentvoice.org/2008/09/from-irgun-to-aipac-israel-lobbys-us-treasury-follies-hurt/>
AIPAC-vetted appointees such as Stuart Levey and his hand-picked
successor David Cohen, could probably boost the volume of taxpayer
give-aways while improving coordination with Israel. Given AIPAC and
Israel's overly large influence on U.S. military initiatives in the
region, the lobby may now feel the moment is right for appointing
Israeli generals into the Joint Chiefs at the Department of Defense.
This, AIPAC may well reason, would be much more convenient than
constantly arranging visiting Israeli military and intelligence
delegations that increasingly serve as sole briefers (rather than DoD or
the American intelligence community) of members of the US Congress.

Soon after word of his Fed nomination spread, Fischer again made
uncharacteristically harsh statements about Israel at an NYU Law School
forum.  As reported in
<http://www.thejewishweek.com/blogs/political-insider/fischer-israel-not-doing-enough-find-peace>The
Jewish Week, Fischer told the audience that Israel is not seeking peace
"to the extent that it should" and that it is "divided between those who
want to settle the West Bank and those who seek peace."  Fischer—who had
every chance to pull U.S. and Israeli financial levers that could have
forced Israel out of occupied territories or forced compliance with
International law—never did.  Adding to suspicion that the statement was
simply more empty "lip service" aimed at building popular support among
Americans tired of war, was the reporter of the quote—former AIPAC
lobbyist Douglas Bloomfield.  In
<http://irmep.org/ila/economy/02131986DB.pdf> 1986 Bloomfield was
grilled as a key suspect (PDF) in the 1985 FBI investigation of AIPAC
for espionage during the FTA negations

If Americans were ever polled on it—and they never are—the majority who
now object to increasing aid to Israel would also likely object to
quasi-governmental and governmental positions being staffed by people
who—by citizenship or sheer strength of identity politics—are primarily
occupied with advancing Israeli interests rather than those of the
United States.  It is obvious that the real reason AIPAC and its
economic luminaries such as Fischer never substantiate any of the
<http://www.irmep.org/ila/reagan/>advertised benefits the U.S.-Israel
"special relationship" delivers to America in return for all of the
costs is simple—there simply aren't any.  As greater numbers of
Americans become aware that the entire "special relationship" framework
is sustained by nothing more than Israel lobby campaign-finance and
propaganda networks, the harder the lobby will have to work to forcibly
wedge operatives like Fischer into positions where they can thwart
growing public opposition—whether it takes the form of boycotts or
grassroots opposition to the U.S. fighting more wars for Israel.  In the
very short term, Americans can only fight such undue Israel lobby
influence by again—like during the drive to attack Syria—staging a mass
action to demand their senators reject Stanley Fischer's nomination.

[i] Oberdorfer, Don "Will U.S. Dollars Fix Israel's Economy?" The
Washington Post, June 9 1985

[ii] Oberdorfer, Don "Will U.S. Dollars Fix Israel's Economy?" The
Washington Post, June 9 1985

[iii] Passell, Peter "Need Zionism Equal Socialism?" The New York Times,
July 2, 1992

[iv] Maital, Shlomo "Stanley Fischer: the man and the plan," The
Jerusalem Report, February 7, 2005

[v] BBC Monitoring Middle East, March 5, 2007

[vi] Keinon, Herb "Russia won't back crippling sanctions." Comment comes
day before high-level US-Israel meeting on Iran" The Jerusalem Post,
February 25, 2010

[vii] Williams, Dan "Iran Stepping Up Its Atomic Efforts" - The Gazette,
August 13, 2012

[viii] "Bank of Israel governor: Sanctions won't collapse Iran economy.
Islamic Republic will likely find way to 'keep economic life going,'
says Fischer in interview with CNBC" The Jerusalem Post, October 24, 2012.

[ix] "Bank of Israel governor: Sanctions won't collapse Iran economy.
Islamic Republic will likely find way to 'keep economic life going,'
says Fischer in interview with CNBC" The Jerusalem Post, October 24, 2012.

[x] Weisman, Steven R. "Wolfowitz Said to Push for Deal to Let Him Quit"
The New York Times, May 17, 2007

[xi] "Fischer set to be tapped as vice chair of US Federal Reserve" the
Times of Israel, December 11, 2013

(4) Stanley Fischer on Israel's Inflation in 1980s, caused by military
spending (25% of GNP)


http://digitalcollections.library.cmu.edu/awweb/awarchive?type=file&item=486097

{Jews are prominent in the financial sectors of other countries, where
they are a small minority. This article is interesting because it shows
how the economy of a Jewish state worked}

AIPAC Memorandum 500 North Capitol Street, N.W. Suite 300 Washington,
D.C. 20001 . (202) 638-2256

The Wall Street Journal
Wednesday. February 26. 1986

Israel Has Made Aid Work

By Stanley Fischer and Herbert Stein

Israel is the largest single recipient of economic aid from the U.S.
This is partly because the economic stability of Israel is uncertain and
is important to U.S. national Interests. Therefore a report on the pro
gress of the Israeli economy is relevant to policy decisions to be made
here.

A common view, supported by some experience, is that the availability of
foreign aid prevents the recipient country* from taking the steps
required for its own economic health. The story of Israel suggests that
there may be exceptions to this dismal lesson. . On July 1.1985. Israel
introduced a radical stabilization program designed to bring the
inflation rate down from 1000% to 20% a year or less. Success was swift.
Within two months Inflation was down to less than 4% a month; in
November and December 1985 it averaged only 1% a month. But there Is
still a long way to go before success is assured.

The Israeli inflation rate rose by stages from 2% per annum In 1967-70
to the 1000%-per-annum area at the end of 1984. The pattern was for an
inflationary shock to kick the inflation rate up to a new plateau, at
which it stabilized before the next shock.Underlying the Israeli
Inflation were massive budget deficits averaging 15% of gross national
product for more than a decade, fueling, and fueled by. a fast-growing
national debt and rapid monetary growth. At the heart of the
government's budget problem is defense spending of 25% of GNP. Despite
large-scale U.S. aid. the government found it increasingly difficult to
borrow at home or abroad in 1984 and 1985. and was forced instead to
print money.

More than anything else, it was the difficulty of borrowing that forced
the government to undertake the stabilization program.

Three Policy Positions Argued

Widespread indexation of assets and of wages made living with inflation
tolerable. As Inflation persisted from 1979 to 1983 in the 100%-130%
range. Israelis explained to foreigners that they had found a way of
living with high but non-exploding inflation.

Three policy positions were argued during this period. A first group was
willing to live with Inflation. Another group wanted steady disinflation
through gradual reductions in the budget deficit and money growth. A
third, shock-treatment group argued that only a comprehensive program
designed to move the economy immediately to a sustalnable low inflation
equilibrium could succeed.

The livlng-with-lnflation group evaporated as inflation hit the
20%-a-month range In 1984.

Tough anti-inflationary policy was widely expected from whichever party
won the July 1984 election. But it failed to materialize. The
election-led to a coalition government that took nearly three months to
form.

The first stabilization program of the new government was a package deal
with the Histadrut (national trade union organization) and employers
whereby wages and prices would be frozen for three months. However,
devaluation continued. The planned 1985/86 budget had sharply cut the
deficit, but with the government spending Increasing amounts to maintain
the prices of subsidized goods, the deficit did not fall. Nor were other
planned cuts in government spending implemented.

By April and May of 1985 the package deal had fallen apart and Inflation
was back to the 400%-per-annum area. The balance-of-payments deficit had
been reduced from its 1983 level, but foreign-exchange reserves were
falling rapidly as Israelis switched Into dollars. The government budget
deficit was at an unsustainable level and the need for action was clear.

By this stage the comprehensive approach was the only choice. The aim
would be to move the government budget, monetary and exchange-rate
policy, and wages and prices all at once to a new, sustalnable level.

The essential requirement for the stabilization was a sharp reduction in
the budget deficit. Without that, no amount of wage and price controls,
sophisticated exchange-rate management or clever monetary policy could
do more than temporarily slow the Inflation.

The program had three main ingredients:

• A cut in the budget deficit from 17% to 8% of GNP. The cut came mainly
through subsidy reductions.

• A large devaluation to be followed by a stable (though not formally
fixed) exchange rate against the dollar.

• Introduction of wage and price controls and suspension of wage
indexation and other elements of existing labor contracts by emergency
decree.

In support of the program, monetary policy would control the growth of
credit.

The devaluation and lifting of subsidies caused a 28% jump in the price
level In July. Wage earners were not compensated for most of the July
inflation, with the result that the real wage fell about 20%.

The government's main fear about the program had been that it would
create massive unemployment. Economists argued that a reduction In the
real wage and devaluation would prevent unemployment and allow a switch
of production into exports. The knowledge that a requested supplementary
U.S. aid package of $1.5 billion over the next two years was likely to
be granted within a few months encouraged the government to act
decisively. In the belief that it would have a safety net of reserves
and resources to use to Increase employment if things went badly wrong.

Immediate results of the plan have been positive. The data show the
inflation rate coming down fast In January 1986 the consumer price index
declined 1.5%. The budget Is doing even better than expected as the
reduced inflation increases real tax revenue (tax receipts previously
lost much of their value by the time they were collected). The trade
balance has maintained the Improvement that began with the
maxi-devaluaUon at the end of 1983. The black-market exchange rate,
which had been at a premium of 25%, has fallen to 5%. Price controls
have not yet produced serious shortages.

Although labor objected bitterly to the use of emergency decrees to
suspend contract terms, a new voluntary wage agreement was reached after
remarkably little strife. The agreement allowed the real wage reduction
of July to go through, but maintained partial indexation and provided
for nominal wage Increases of 4% a month from December 1985 to February
1986.

Monetary policy during the first months of the stabilization was
strongly contractionary. The nominal interest even in October was still
13% a month. Implying an annual real interest rate of more than 100%.
Several large firms are in financial difficulties. The nominal Interest
rate was brought down rapidly in November and is now 5% a month.

Contrary to fears, unemployment rose only briefly in July and August,
and has started back down again.

So far, then, the plan is a total success. Public approval for the
economic policy, despite the immediate hardships it has caused, is
widespread.

Prospect of Inflation-Rate Rise

Nonetheless, serious difficulties remain. The first is that the
government budget deficit Is still too high. At 8% of GNP. it cannot be
financed without increasing debt or printing money too rapidly. Yet the
government finds it increasingly difficult to cut spending. Because
government revenue in Israel Is near 50% of GNP, the tax burden Is too
high and taxes should be cut But without further spending cuts, taxes
cannot be cut. Further spending cuts are thus a high priority.

The wage agreement will raise nominal wages at least 17% over the next
three months. Unless the government finds a way of neutralizing that
increase, the price level will rise as business costs increase. Price
controls cannot contain such pressure, and in any event cannot be
success fully maintained over long periods.

The prospect Is that the inflation rate will rise back to the
3%-4%-a-month rate by the end of April, unless the government finds a
way of dealing with the effects of the planned wage increases. There is
no way of doing so without further budget-deficit reductions. From 3%-4%
a month inflation, the trip to 10% a month is easy, especially for an
economy that has been that way before.

Budget decisions of the next few weeks will show whether the coalition
government can bring Itself to the measures now needed to protect the
gains achieved by its decisive action of last July.

Mr. Fischer is an economics professor at MIT and Mr. Stein is a senior
fellow at the American Enterprise Institute and a member of the
Journal's board of contributors. Both are consultants to the U.S. State
Department on the economy of Israel.

(5) Failings of California’s anti-usury laws

Date: Mon, 23 Dec 2013 11:24:50 -0800 (PST)
From: Archer Frey <archerc@sbcglobal.net>
Subject: Failings of California’s anti-usury laws

In this morning's Sacramento Bee print copy, page A9

"Nice Work If You Can Get It"* Notice how they hide in the Indian
reservation. Then say that they are exempt from Federal Law, charging
annual percentage rates ranged from 89.7 percent to 342.9 percent.
Check out Neil Barofsky on Wikipedia:
http://en.wikipedia.org/wiki/Neil_Barofsky

*"Nice Work If You Can Get It" A popular song, music was written by
George Gershwin, the lyrics by Ira Gershwin.

Speculation: I wonder if the Barofsky family knew the Gershwin family
back in the day?

-30-
Archer

Editorial: High-interest lenders fight any regulation hard, understandably

By  the Editorial Board

Published: Monday, Dec. 23, 2013 - 12:00 am

http://www.sacbee.com/2013/12/23/6020651/editorial-high-interest-lenders.html

In yet another reminder of the failings of California’s anti-usury laws,
the federal Consumer Financial Protection Bureau – and not California –
has sued an Anaheim-based lender that charges borrowers annual interest
of as much as 343 percent.

The Consumer Financial Protection Bureau, created by President Barack
Obama and Congress in the wake of the 2008 crash, sued CashCall Inc.,
alleging that the online lender engaged in unfair practices, including
debiting consumer checking accounts for loans that were void.

The suit names CashCall and a subsidiary, WS Funding LLC, and a Nevada
collection agency, Delbert Services Corporation, a Nevada collection
agency.

The suit says the loans violated anti-usury laws in at least eight
states: Arizona, Arkansas, Colorado, Indiana, Massachusetts, New
Hampshire, New York and North Carolina.

California is not one of the eight.

In 2009, CashCall entered into an arrangement with a South Dakota-based
online lender, Western Sky Financial, which was based on an Indian
reservation and owned by a Cheyenne River Sioux tribal member. Western
Sky claimed its status as a tribal business exempted its loans from
state laws – a claim the feds contest.

CashCall and Western Sky made hundreds of thousands of loans nationwide
in amounts of between $850 and $10,000. The annual percentage rates
ranged from 89.7 percent to 342.9 percent.

California law limits interest on loans of $300 or less. But the state’s
law imposes no interest-rate cap on loans by licensed lenders of $2,500
or more, a result of lenders’ shrewd lobbying and
<http://topics.sacbee.com/campaign+donations/>campaign donations.

In an indication of the industry’s clout, one of CashCall’s lawyers is
Neil Barofsky, a former federal prosecutor.

Barofsky went through the revolving door to a Manhattan law firm in
September, after serving as the Treasury Department’s inspector general
for the Troubled Asset Relief Program from 2008 to 2011. Barofsky says
the suit violates a provision of the Dodd-Frank law that created the
Consumer Financial Protection Bureau.

The industry fights any regulation. It’s not hard to see why.

The federal lawsuit points out that a consumer borrowing $2,600 would
pay $13,840 over a 47-month term of the loan. A consumer borrowing
$10,000 would pay $62,453 over the 84-month term.

The eight states cited in the suit limit high-interest loans in one way
or another. Arkansas, for example, has a constitutional provision
barring all contracts with interest rates of more than 17 percent.
California leads the nation in many areas. On the question of usury,
however, California could take a lesson from Arkansas.

No comments:

Post a Comment