The year was 1917. Embroiled in WWI, Russia was now facing food, fuel, and housing shortages as well as inflation as sons of the middle class were lost on the battle field. Money had lost most of its value. The wealthy had begun to hoard food supplies. Class struggle emerged between the wealthy and the working classes. Strikes and public protests including violent encounters between protesters and authorities increased.
On February 23rd, the women of the city of Petrograd staged a demonstration for bread and peace. The next day, their husbands joined them as a spontaneous demonstration turned violent when the police were no longer able to control the crowds of several hundred thousand protesters.
Russia’s leader, Tsar Nicholas, ordered his troops to quell the crowd but as bullets fired, the troops disbanded and 80,000 crossed lines to join the protesters. As the weeks progressed, a weak provisional government was formed by the banking class, industrialists, land owners, and capitalists who promised democracy and an end to the war. When they did not deliver on their promises in the few months of restless anticipation, Lenin returned to Russia promising bread, land, and a withdrawal of troops, took control of the Bolsheviks and organized a revolutionary coup that swept the Bolsheviks to power.
How could Tsar Nicholas have let Russia that had been ruled by imperialist tsars for the past 300 years, erupt into protest and civil war in 1917 to end forever the rule of Tsars? The answer seemed to foreshadow the edge of the abyss on which America finds itself today. Toward the end of WWI, The ruling capitalist class was intent on continuing its hold of wealth, autocracy, and land ownership. Yet the war strained the imperialist system’s ability to provide the working class a way to feed themselves or to provide fuel to heat their homes. Soldiers meanwhile were kept in battle without provisions to sustain them. Wanting land ownership as a solution, workers struck.
In 1915, two years prior to the collapse of the ruling elite, Tsar Nicholas was influenced by his counsel, Gregory Rasputin, to leave governance to his wife, Tsarina Alexandra, and to go to the war front to take command of his troops. Tsarina Alexandra, Nicholas’s wife, was a strong believer in autocracy and had resisted reform in the years leading up to the war. She now kept at her side, a sinister advisor, Gregory Rasputin, who had acquired through his mystical and hypnotic prowess, complete control of the hysterical Empress.
Through his influence in appointments of ministers, and meetings with hundreds of political patrons on a daily basis, Rasputin kept the tsarist system intact while the middle class suffered immensely. At the height of his influence, the middle class even believed that Rasputin was conspiring with foreign powers to bring down Russia during the war. Rasputin did manage to embezzle massive government funds and divert money to elite of Russia. His influence led to a bitter divide within all classes of the Russian society. The communist opposition led by Lenin claimed that Rasputin turned the Russian Tsar into a wimp.
Ultimately, but too late, the elites of Russia recognized that as a public figure, Rasputin was a detriment to their continued power and they conspired to murder Rasputin to try to stop the tide of middle class resentment. In the end, after Rasputin was murdered, the middle class was spurred to join the communist revolution, and the Tsar’s family was assassinated.
In 2007, the Obama Administration has its own Rasputin in the public figure of Timothy Geithner. His influence over the President has allowed Mr. Geithner to pander to America’s banking class in trade for trashing President Obama’s financial credibility with the American middle class. Yet somehow, President Obama seems hypnotized by this man who refuses to wield his power to save the American economy.
At the pinnacle of the banking class elites’ concentration of wealth in 2007, Mr. Geithner was the President and Chief Executive of the Federal Reserve Bank of New York. As the credit crisis erupted, Mr. Geithner influenced Treasury Secretary Henry Paulson and Ben Bernanke, chairman of the Federal Reserve, to save Bear Stearns, American International Group and Citigroup. Interestingly, as part of the deal, he gave Goldman Sachs, of which treasury Secretary Henry Paulson had just been CEO, a $30 billion interest free loan.
At his confirmation hearing, it was revealed that Geithner allegedly accidently evaded $34 thousand in taxes when his tax software misinterpreted his income. Similarly to Rasputin, Mr. Geithner entered the court of the Obama administration with illicit interpretations of his character.
After taking office in 2009, like Rasputin, Geithner became a trusted advisor to the Obama administration and its chief architect in stabilizing the banking system. Under his influence, Citigroup and the Bank of America were salvaged with billions in no strings attached aid. Mr. Geithner fought David Axelrod who had wanted tougher conditions imposed on Geithner’s former comrade banking institutions.
In March 2009, Geithner announced his rescue plan to buy toxic assets and to provide banks with capital, which eventually became widely unpopular, although it was credited with stopping a banking panic that could have created widespread banking defaults. Some claim that Geithner disparaged the administration when AIG paid out $165 million in bonuses to its employees. Wall Street responded to Geithner’s vague plan by plummeting five percent upon its announcement.
Meanwhile, Suskind’s book, “Confidence Men”, indicates that Geithner stalled when President Obama asked him to prepare a plan to wind down Citibank, similarly to how banks were dismantled in the 1930s. If allegations are true, it would seem that Geithner undermined the President’s authority and protected “too big to fail” bank comrades as an overriding strategy.
As the banking elites returned to financial stability, Mr. Geithner became one of President Obama’s most trusted advisors. Similarly to Rasputin, Geithner’s influence grew as other senior advisors with whom he had clashed left the administration.
In 2010, Geithner argued briefly for the elimination of the tax cut for the rich, only to settle for an extension of benefits for the long term unemployed, results which neither increased employment nor improved the deficit, both of which would have supported the middle class. In the same time period, he lauded over a $2 trillion stimulus and quantitative easing plan that attempted to fix the investments of America’s elite even as the world’s credit imploded to ten times the amount of QE and swallowed it whole.
In January 2011, Mr. Geithner asked the Chinese government to stop doing what it had successfully done for thirty years that is to stop managing its economy through currency controls and tariffs. Knowing that China would not bend is will to his words, he also asked China to do what was in its best interest and that of America’s elite, to raise the value of its currency.
Doing so ultimately would harm the American middle class further. Certainly, it would make some American goods more competitive but those goods would be more than offset by the loss of America’s purchasing power. China’s internal demand for commodities and their own finished goods would increase the cost of goods to the American middle class without a material increase in American jobs. However, the move would stabilize investments made by the banking class in China’s factories. Interestingly, Geithner’s father was on the board of the National Committee on U.S.-China Relations.
On June 22nd, 2011, Treasury Secretary Geithner told the House Small Business Committee that the Obama administration believed taxes on small business must increase so the administration would not have to “shrink the overall size of government programs.” In a government that borrows 43 cents for every dollar that it spends and that has been growing at seven percent per year without fail, that spends more on our military than all other governments on earth combined, and that spends twice that of any other nation on healthcare per person, whose social net is borrowed, and whose retirement programs are quickly facing insolvency, Mr. Geithner’s solution was to tax the middle class small businesses so that they have even less to hire the 30 million underemployed in our country.
On January 6th, 2011, Mr. Geithner began the spectacle of the debt ceiling with a letter to Congress. As the politics played out in front of the world, Mr. Geithner made the announcement that the government would shut down on August 2nd, 2011, leading to the now infamous brinkmanship politics over the debt ceiling. Without a cogent solution going forward proposed by the administration or agreed to by Congress, Geithner watched America suffer its first credit rating downgrade ever on August 5th.
Now we hear that Mr.Geithner intends to spend more of the Middle Class’s money to prop up the banks of Europe in conjunction with the IMF and the European Central Bank. Geithner allegedly envisions that U.S. financial commitment will be open ended. The EU plan is similar to that used by the U.S. during the financial meltdown of 2008, unlimited lending to prevent the sovereign default of insolvent EU Banks. Mr. Geithner returned from Europe stating that he “scared the crap” out of the EU’s leaders. Understandably, expanding the EU’s lending with support from the U.S. would protect more of the West’s bankers at the expense of the American middle class. However, where does the patience of America’s middle class end?
The middle class of Russia’s patience ended when they could not find employment. Their patience ended as their soldiers were left unattended on the battlefield. Their patience ended when the heating oil for their homes was no longer available. Their patience ended when they no longer could buy bread as their money hyper-inflated. How much more money printing will be required for America’s money to hyper-inflate?
Rasputin controlled Russia’s domestic economy as the Tsar and Tsarina bent to his will to keep extreme capitalism in place even as it collapsed Russia’s middle class. Rasputin was expended too late to save Russia’s capitalists. Mr. Geithner seems bent on filling Rasputin’s modern day shoes.