12/27/13 – Grant F. Smith – The Scott Horton Show

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Next up is Grant F. Smith from the Institute for Research Middle East Policy.
That's I.R.M.E.P. dot org.
Dot org.
The Institute for Research Middle East Policy is also the author of a great many books about Israeli shenanigans in the United States, including divert new mech Zalman Shapiro and the diversion of U.S. weapons grade uranium into the Israeli nuclear weapons program.
Welcome back to the show, Grant.
How the hell are you?
Hey, Scott.
Great to be back.
Thanks for mentioning the books and my hugely long title.
I've got an article with an equally long title.
Well, you know, people need to know what diversion we're talking about there.
They might think you're trying to distract them from the real story.
Yeah.
Or diversion as in the carnival ride.
Although sometimes, you know, feel like I'm on a carnival ride.
You know, we go around and around in D.C. and finally, you know, in December, the press kind of folds up its pants and all the senators and congressmen go home.
And suddenly the Israel lobby is at work wrapping up a Christmas present to be put on greased skids in the form of a political appointee who's going to do some rather nasty things.
So I thought I'd write about that.
The Christmas present from AIPAC.
Yeah.
Well, this one's really something else, too.
I think there must have just been a lot of knowing glances and folded arms and nodding around libertarian circles and other ones, too.
AIPAC's Fed candidate Stanley Fisher.
Right.
I mean, it's just amazing that you have a dual citizen of any country running or helping to run the American Central Bank.
But in this case, I don't know.
I guess it was just ho-hum news for the major media, but pretty shocking for the rest of us.
This story is so full of question marks.
And I've heard you have many informed discussions about the Fed on your show.
But, you know, I do have to correct you, though, on one important point, because the nature of having a dual citizen a heartbeat away from Fed chairmanship.
Of course, there are Federal Reserve Acts and policies put into place about that.
They have one that reads, quote, because of the special nature of the supervisory function, the need to ensure confidentiality of information and the delegated nature of the function, unquote, they need to focus on filling slots with American citizens.
But, of course, they're only talking about bank examiners.
I mean, put whoever you want in in the top slot.
Right.
Yeah, the rules are for us little guys, even at the Fed.
I thought it was really ironic that they do have policies in place, but not for the very top slot.
Of course, the real questions that and I've seen pieces, you know, in The Wall Street Journal and now in The Guardian.
There's a big reprint of a public opinion piece saying that, hey, Stanley Fisher, Stanley Fisher, put him in.
You know, this is the guy for the job.
But then they don't look at anything that he's done in the last 10 years.
They don't explore at all the dual citizenship aspect of why this would be a major change in terms of having openly dual U.S.
Israeli citizens and top quasi governmental posts and barely even quote any of his critics.
One of them, who was the former chief economist at the IMF, Simon Johnson, who says he doesn't know what he stands for on regulation.
So here's this guy, a person who knows him quite well, one of his former students and worked at the IMF, as did Fisher, saying, what does this guy, he says, quote, what is the rationale for his candidacy?
So I tried to answer that question in terms of looking at what he's been doing all these years.
Yeah, and so the implication being it's all about who he knows and what he's willing to do for them rather than any real expertise that he brings to the fore.
As though any experts know how to run the American Central Bank correctly.
Right, right.
I mean, the guy obviously has experience.
He's run, you know, MIT's economics department.
He's obviously smart.
He wrote a textbook that everyone has to use basically to learn about macroeconomics.
But none of that really matters.
I mean, the real question is, what is it that he wants to do?
And do any of his policy prescriptions that he applies, are they universal?
Or is he actually an operative who has a special cause that he's been caring for all of these years?
And I would argue that he does.
And that special cause at this particular time could be quite dangerous for Americans.
All right, now you mentioned how he was a commissar at the IMF.
For how long and what did he do then?
Was there anything about Israel that we need to know that he did then?
Well, when he was at the IMF, he made a name for himself when he became first deputy managing director in 1994 in terms of going into economies like Mexico, developing economies, Thailand, Indonesia, Brazil, Russia, and Argentina and imposing austerity programs.
You know, when these countries were high growth, but suddenly they hit a wall of confidence that caused all of their investors to pull out, he was the kind of economic hitman who would go in there and say, okay, you've got to cut all your social spending programs.
You've got to close down these industries.
You've got to put yourself into this sort of mode of government spending.
And he acquired a lot of critics for kind of the unnecessary harshness in some cases in some of that and really paved the way for players like Venezuela to come in and say, you know what, we're not going to be as vicious in proposing bailouts in the future.
You can just borrow money for us.
So in some sense, he was kind of one of the reasons why a lot of these economies turned away from the IMF and really tanked its reputation.
But then he went to Citigroup, recruited directly by Sanford Sandy Will in 2002.
All right, now wait a minute.
Wait a minute, because I want to hear about the Citigroup thing.
Of course he went from the IMF to Citigroup.
Thousands of reward.
Of course.
Yeah, I mean, people, you know, it's worth dwelling on the point about the IMF for a little while there and especially during that era where, you know, I don't know, maybe one could argue that there's some good faith and bad economics that just really says strangling the hell out of everything is just, you know, it all makes good sense, like cutting government spending or whatever.
But really what they're doing in a lot of cases is straight gangsterism where they're taking what are basically public resources or at least up until that time publicly owned, government owned and controlled resources like water and electricity and just seizing them and turning them over to politically connected companies who oftentimes, you know, like they're liquidating the former Soviet Union or something.
They just destroy whatever it is, take the money and run, you know, liquidate all the assets and go, don't even operate it anymore.
Yeah, absolutely.
That triggers a lot of resentment and in some cases semi-revolutionary actions.
When they take, for example, a rural phone collective that people put money into to buy the copper and string the lines and then suddenly they come in, they make some legal changes of dubious nature, privatize it, hand it over to a group of foreign investors who are now going to assume 100% or majority ownership.
That's the kind of thing that not only, you know, makes people mad at the corruption involved, but it can trigger basically a revolutionary backlash.
And one of those I ever saw directly was in Bolivia when that happened.
So yeah, it's very, you know, that's why that book Economic Hitman is so good because it kind of describes a lot of the things that happen under the guise of a very sort of innocuous name in terms of just ripping ownership away and transferring it to other insiders in particular.
So yeah.
Right.
You know, you mentioned about Venezuela stepping into the breach there when everybody got so sick of the IMF.
Greg Pallast always pointed out that Hugo Chavez always got along with Houston.
You know, he could beat his chest all he wanted and whatever, but when it came time to meet with the guys from Shell and do business, he always did business just fine with them.
They never really had a problem.
It was the government that was angry at him because he had taken $20 billion out of the Federal Reserve and then, like you said, like you were talking about there, he turned around and used that to undercut the IMF and give loans to all the developing economies of Latin America only without all the gangsterism.
No, really, just pay me back a few percent when you get around to it, it's all right.
And so completely undercut the IMF because nobody wanted to do business with them at all and they didn't have any reason to at all anymore once he started doing that, and that was really what made him an enemy of the empire.
They never closed down Citgo, and Houston never retooled its heavy cruise refineries because they knew they had a constant, very welcome neighboring supplier.
It had nothing to do with oil, and the oil continues to flow.
And of course, if it had been the oil, Pallast would have been the first one to let us know exactly why it was the oil, you know?
That's kind of his speciality is big business hoisting and controlling of these, what he would consider, obviously, public resources, like Venezuelan oil, for example.
It had a lot to do with taking the hands of the very wealthy Cisneros family off the oil ticket in Venezuela and exiling them to New York where they could continue to launch intrigue.
Oh, see, I don't know enough about that.
These are the things that you won't see on the front page of the Wall Street Journal, but if you ever go to Venezuela and talk to people, which I have, that's front and center on a lot of their minds.
They understand who the families are and what the actual politics affecting all of these things are, including the coups and all the intrigue.
Yeah, I can see why the oil refineries don't really care about stuff like that, but that doesn't mean nobody does.
They should.
And here we have Fisher, who's been really kind of the grandfather to Ben Bernanke and to a lot of these key economics figures who circulated in, privatized Russia, all of that.
And the actual records are rarely examined in depth in terms of, you know, look at the numbers, look at the positions they held in groups and what came out of those groups.
And so one of the reasons I think that Fisher is an interesting figure to plug in straight from the Israeli Federal Bank or Central Bank is some of his activities back in the 80s, where this is before he was becoming sort of the king of austerity programs.
The first bailout that he engineered was as part of the U.S.-Israel Joint Economic Discussion Group in the Reagan administration, where he basically took the opposite approach because instead of, you know, some country that he didn't have any affinity with, of course the country in question, the country that came begging to the United States in 1984 for billions and billions of dollars in aid that basically, you know, added up to about $1,600 for every Israeli was the state of Israel.
And he comes in and basically, I think, shows his true colors in not only switching all U.S. aid to Israel from loans that had to be repaid, but also engineering the unilateral lowering of U.S. tariffs on just about every product Israel manufactures so that they could have duty-free access to the United States, which was a tremendous boost to their economy.
And if you go through all of the material about what was going on and who was lobbying, AIPAC was always pushing Fisher as the person who was the economic guru who would help the Israelis out and who would also help the United States.
And, of course, it was always one-sided.
It was always the United States with the cost and Israel with the benefits.
Well, and now what about Iran?
Because you talk about that specifically in your article.
Well, Iran has been, you know, basically, Iran has been his work over the almost past decade.
He was the landing spot in Israel for people like Stuart Levy of the Treasury Department's Office of Finance and Terrorism, a new spot that was created by heavy AIPAC lobbying.
He would be the one who would go over to Israel, meet with Fisher, meet with Mossad, meet with all of the top officials in Israel to try and use sanctions as a bat to beat up on China, Russia, and Europe.
He and Levy would be both running around all of these countries, ostensibly speaking, on behalf of the West, as they said, to get the last holdouts from trading with Iran, from doing anything that they construed as being in violation of these really Israel-centric sanctions that, of course, they claim to stop Iran from developing nuclear weapons, but, you know, there's no evidence that they've had a program in recent times.
So they would be running around doing pressure campaigns on European...
That's amazing.
Wait, so in other words, what they're doing is they're going through the letter of the law as issued by the Security Council and or the American Treasury Department, and then they're just taking it upon themselves to cold call every financial institution in the Western Hemisphere and threaten them and say, you better not be doing one penny of business with the Iranians because we're watching you and we'll turn you into the U.S. Treasury in a minute.
Absolutely, absolutely, and of course...
That's been his job this whole time as the head of the Israeli Central Bank.
That's basically, when you look at, not the U.S. reporting on it, but when you look at his statements on television in Israel, when you look at his work, basically where he's strategizing that they needed to take sanctions beyond what had already been passed in the Security Council and use this pressure campaign, you can see that they're using these sanctions and basically AIPAC's power in Congress as a bat that they can beat over the head of, you know, a country like India or China that wants to buy Iranian oil and trade with them.
Well, and every kind of shipping company...
I mean, this is the thing, too, that people really need to understand is any shipping company is terrified of doing any business with Iran, no matter what their cargo.
They'd rather just not.
And that's why we're having such a big problem, you know, with medicine imports and all these kinds of most important things that the people of Iran need is because it's almost completely choked off their international trade with the exception of the oil that they're still selling to our allies in the East.
Yeah, it's ironic that this person and later the Federal Reserve, which is so active in condemning the Arab League boycott of Israel, which would basically use their economic power to say, look, we don't want to do business with countries that are, you know, working with Israel because they've launched all of these wars in the region.
They're basically seeing the power that a boycott can have and trying to, you know, leverage it to the nth degree, except that there is really no basis for this boycott, other than the fact that it takes a lot of attention off Israel's own actions and unfinished business in terms of the Palestinians and puts it on a focus on a, you know, regional rival of theirs that supports a lot of groups that they don't like.
So it's, you know, it's ironic that, you know, after the Federal Reserve has been this primary anti-boycott instrument, that now under Fisher it could well become one of the even more robust in terms of the secondary boycott that you're talking about.
Right.
Well, and now I was actually surprised to read in your article here, Grant, and again, everybody, it's Grant Smith from IRMEP, I-R-M-E-P, irmep.org, Stanley Fisher, Apex Fed candidate on the Iran war path, and you have here, oh hell, I'm paging down trying to find it, I was surprised to see some, what, Chamber of Commerce types or something had done a study complaining, you know, concluding that these sanctions are costing the American economy a lot too, and complaining about that.
The Business Roundtable, Coalition for American Trade, right?
Right.
If, you know, if there were better reporting on this at all, we would already know this.
But of course, you know, Israel lobbying organizations and their friend in the media don't mention it.
But the U.S. Chamber of Commerce, the Business Roundtable, Coalition for American Trade, National Foreign Trade Council, and I didn't see this until fairly recently, but they wrote a letter to Nancy Pelosi basically saying, if you implement sanctions in the way that you're doing right now, you will cost the American economy $25 billion and 210,000 American jobs.
And that really rang a bell to me, because one of the big things that Fisher engineered back in the 80s was, again, this so-called free trade agreement, which is actually an aid package to Israel, which had a huge effect as well on jobs and exports.
And so they're basically making the case that if, you know, if they implemented these harsh sanctions and secondary boycotts, American businesses and jobs are going to be hurt.
Well, you know, a Fisher or an AIPAC or a lot of these so-called analysts in the media, they're not going to mention the cost.
All they do is mention the benefits, which are, you know, to them strangulating the Iranian economy.
And the thing to know about Fisher, the most important thing to know, which none of the news media outlets have looked at, is that he came to the conclusion relatively late in his boycott enforcement campaign that the Iranian economy was not going to collapse.
And he began staging exercises in Israel to prepare the economy for an inevitable war on Iran.
And so his last statement, again, picked up in the Israeli press, but not in the U.S. press, were that he was trying to make the economy as robust as possible to be able to transcend a war with Iran.
And so suddenly he's here, and suddenly he's going to enter a position in the U.S. banking system where he could do exactly the same thing, raising the question of whether this highly connected to the Israeli government person already knows that the Israelis plan on launching an attack and dragging the U.S. into it along with APEC's help.
Don't worry, Grant.
The Fed chairmanship and vice chairmanship, it's a professional position.
These guys leave all their personal feelings and connections and conflicts of interest out of it, and they do the right thing for the American economy, which is never, ever, ever, ever, ever stop printing money.
Everybody knows that.
And that's why they're independent from Congress.
Because if Congress controlled the money supply, they would print money all day long.
And so we need the Federal Reserve there so that they can print the money.
What is it, $4 trillion in assets they have on their balance sheet?
I heard a discussion on your show a while back about that.
They're still fighting over whether they're going to have a real audit or not, so I don't think we really know, do we?
That's the real, you know, the only thing that could stop this nomination, this sudden nomination launched while everyone's asleep from going through, is the audit the Fed that ran Paul once and that the House minority leaders said, yeah, we've got to debate that.
But, you know, they fixed it and announced it to everybody that there will be no debate on Stanley Fischer's nomination.
So what you say must be true.
He must be an angel because if there's no need to debate and the Wall Street Journal says so, then why even bother?
Well, yeah, you know, I wonder about why even have a chairman or a vice chairman or whatever, you could just let a Windows 2000 machine run the monetary policy, just print money.
What's so sophisticated about that?
What kind of arguments do they have at the Open Market Committee?
Should we print money or should we print money?
Let's print money.
All right, come on guys, we'll print money.
We'll buy bad debt with it.
Okay.
I don't think that's Fischer's concern.
I think he came rushing back to the United States with some good reasons for coming back.
And I just think that if there were a bona fide debate about everything that he brings to the table, there's absolutely no way that the Senate would confirm him if they were responding to any sort of informed input from the constituents.
But I don't think even the Business Roundtable has issued any sort of statement on this.
The most critical thing I've seen come out was reported by a former AIPAC lobbyist who was caught up in an espionage scandal.
So I tend to treat in the article his input as being suspect and mainly to assuage people on the left like Eric Alterman that the guy wants a piece.
So I did hear your little piece about that, how horrible a lot of the reporting is all over the place.
But this person, absent any scrutiny of input, is going to be the next undersecretary over there.
Well, I mean, and that's their idea of cushioning the economy during a war, too, if you accept their premise that they've got to have a war here.
And that's how they managed to get away with the Iraq thing for the first little while there, is they just sent everybody a $300 check in the mail leading people to believe that, oh, I guess war is good for the economy.
This is my dividend from that Iraq adventure I let the Republicans have or whatever.
They'll do the same thing again.
I mean, that's the only thing they could do is just keep printing money.
Well, Fisher gave a long interview to PBS in which he seemed to ascribe a lot of the ills of the economy to periods between major wars, and it made me wonder whether he actually sees the demand and supply and concentration of decision-making that happens during war as a positive thing.
Well, you know, you said that he wrote the macro textbook, right?
He must be wrong about everything.
And that sounds exactly like the kind of premise that I would expect somebody like him to bring to the table.
That's the same thing that George W. Bush said, right?
Remember the...
I forgot if it was the leader of Bolivia or Argentina or something quoted him to Oliver Stone saying that George Bush said, well, you know, everybody knows if you want a good economy, you've got to have a war.
Yeah, it's a sad state of affairs.
Keynesians left and right.
You know, the Chicago school, they're all just a bunch of Keynesians too.
They all believe the same stuff.
Remember?
Yeah, absolutely.
I guess, yeah, trade deficits don't either.
But actually, in reality, they do matter.
It's... well, you know, we're going to see.
I think we're going to find out the hard way that this person who's made so many pronouncements but has a real attachment to the key driver in terms of the key lobbyist for attacking Iran, I think he's come back to America for a reason.
Yeah, well, and as you point out here too, very important point here right at the end, about if you could have the vice chairman of the Fed be a dual citizen of Israel, well, why not the head of the FBI?
Why not the head of Homeland Security or any other agency, right?
Why not let Tel Aviv appoint all of our officials for us?
Indeed.
I mean, how much difference would it make from the people who have been vetted and put in there already?
Oh, man.
Welcome to the bottom of the slippery slope, everybody.
Thanks, Grant.
Appreciate it.
Thanks, Scott.
Appreciate it.
That's Grant F. Smith, IRMEP, I-R-M-E-P dot org, I-R-M-E-P dot org.
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