ORGANIZATION :ECONOMIC AND POLITICAL MANAGEMENT : DEEP STATE PART 2

The CIA is the state department for unfriendly countries-Allen Dulles ,spymaster

Managerial Deep state (continued)

How the managerial deep state collaborated with successive US presidents is noteworthy. It was president Truman in 1947 who created the CIA under National security act in 1947. Under the influence of oil oligarchs the CIA assassinated PM Mossadeq of Iran when he tried to nationalise British oil. President Eisenhower was elected with funds raised by the oil cartels. He was the first to warn about the military industrial complex  in USA which was now propagating a permanent war economy for profits for arms manufacturers.The exception for a time was president John Kennedy.Kennedy was sympathetic to third world nationalism. However before his accession Congolese president Lubumba was assassinated . His assassination was previous approved by Eisenhower and was carried out by combined forces of Belgium,Britain, Americaand multiple corporate interests.Kennedy resisted advise of his military to start hot wars in Cuba,Vietnam,Berlin and Laos. Just before his assassination he gave a speech to end the Cold War.

Kennedy before his death had put Lyndon Johnson under watch for his involvement with his protege Baker for a myriad of crimes.After kennedies assassination the Baker investigation was dropped and Johnson became president. Johnson authorised overt CIA operations in Vietnam. This was followed by nationalist overthrow in Ghana ,Indonesia and Brazil. When JFKs brother who believed in involvement of the deep state in his murder was himself assassinated the RFK investigation was never completed properly.

President Nixon followed a middle path with Vietnam,detente with Soviet Union and recognition of China.This angered the deep state and militarists.Nixon had to ultimately go in the watergate scandal which was secretly supported by extreme right wing elements against Nixon..President Carter initiated the war in Afganistan as well faced hostage crisis in Iran. The shah of Iran was a noted customer of American banks and establishment. However Carters championing of Human rights antagonised the deep state. The Iran hostage crisis was managed in a way by the CIA that Carter lost his re-election.

 Imperial American deep state

By 1970 the  labour unions in western economies had strong bargaining power and this decreased the profitability of capital. Now the share of capital had again risen to 40% and this made workers unable to buy factory goods. To teach a lesson to workers financial globalization was started by the American Deep state. The foremost actor in this was the Federal reserve which had insulated itself from democratic control by the congress.First was the breakdown of Bretton  Woods agreement which was the foundation of post war international finance.Here every country pegged their currencies value to the dollar and the dollar was replaceable by gold kept in American reserve. President Nixon abolished the Bretton  woods when he refused to replace gold for dollars to France. Now the FED printed dollars to cover fiscal deficit and sell govt bonds. With excess dollars its value diminished and inflation occuredthus increasing the debt of nations who secured loans from America in dollars . Thus the world started paying for American debts which its government used to finance arms manufacturing and numerous wars.

   A result of excess dollars in the financial system was the globalization annd free movement of finance annd  investment  by American corporates in low cost manufacturing in China and other developing nations. This also kept the worker in western economies with a handicap as manufacturing  jobs shifted to other nations. Gradually the labour unions lost bargaining power. The third consequence of state supported finance was the support to the short term money market of mortgages which was backed by govt guarantees and also short term loans using these mortgages as collateral ,called repo market ,which was not secured by govt. In 2008 the repo market failed leading to massive short term loan defaults. The original mortgages guaranteed by Fanny mae and other public organizations had used fake customers to create unsustainable mortgages. The Federal reserve now massively printed dollars to rescue failed hedge fund,investment banks in the crisis. 

 Post financial cries the imperial state has innovated a new form of finacialization. The surplus dollar economy has led to massive funds such as pension fund. These funds are contributed by labour and not used by banks for loans but by fund managers in the stock market for returns.While in classical financialization  bank loans to firms were used to create financial empires now the same  occurs through stocks in these companies. While loans can be repaid stocks give permanent ownership. Today the three largest funds ,BlackRock, Vanguard and market own 40%stocks of all S and P index companies. But they  cannot now use stocks for determining profitability of firms as selling the firms stocks diminishes their total investment. So fund managers sit on the boards of these firms and determine the administrative policies to make them profitable. The stock prices today bear no relation to company value due to policy of buy back of shares by firms. After buy back the shares in open market are less in number and highly priced. Moreover just like short term money market the share market gives today guaranteed index based stock  prices which rise continuously as it is backed by federal reserve surplus dollars. However only the top capitalists and firm managers can buy expensive shares and become wealthy. The vast majority of workers have very few share ,less than 10% ,with them. The fund managers have also invested heavily in housing market leading to rising housing prices and scarcity.                                                                                                                 The strategy of incurring debt to create dollars means borrowing from future generations to finance current consumption when inequality has decimated the purchasing power of workers. However it has it’s limits as when govt has to repay ever increasing interest accrued due to loans in the annual budget it becomes unsustainable. Moreever dependant nations on America would withdraw from dollar economy and shift to gold purchase if dollar appears to be defaulting.

Indian Deep state