03/05/08 - Catherine Austin Fitts

Cultural Baggage Radio Show

Catherine Austin Fitts, former HUD asst sec discusses the economic nightmare of the drug war + Poppygate report & Drug War Facts

Audio file

Broadcasting on the Drug Truth Network, this is Cultural Baggage.

My name is Dean Becker. I don’t condone or encourage the use of any drugs, legal or illegal. I report the unvarnished truth about the phamaceutical, banking, prison, and judicial nightmare that feeds on eternal drug war.

Dean Becker:

The DEA’s the joker,
The FDA’s the joke.
The Joke is on the U.S.A.
So why not take a poke.

Glad you could be with us. Coming in here in just a few minutes we’ll hear from Catherine Austin Fitts, much beloved across this nation, appears on numerous radio shows each week I think, and we’re going to talk about the nightmare. The nightmare that’s coming down on our country, that’s stealing our economic possibilities, that is fooling us into believing that we will be protected from some unknown down-the-road.

You know it was the policy of drug war that was used as the example, as justification when they started up this war on terror. War of terror, because certainly there’s terror on both sides of this. And it’s up to us to recognize this deception that is glaringly obvious, right in front of our eyes. That the expenditure of hundreds of billions of dollars to protect us from some great unknown that lies out there in the weeds waiting to attack us on our way back from the shopping mall, I suppose. We have to realize we’ve been fed a bill of goods.

We have had politicians in bed, doing it, with these corporations for decades and it’s time for us to participate, to become full citizens of this nation, to force our elected officials, our district attorney, our sheriff, our governor, our president to recognize the obvious truth: that they have been supporting terror through this policy of drug prohibition and they have used the ramifications, the blowback, as justification to continue doing the same thing.

I believe we do have Catherine online and let’s go ahead and bring her into the discussion.

Catherine Austin Fitts: Hey, Dean.

Dean Becker: Hello Catherine. It’s so nice to talk with you again.

Catherine Austin Fitts: It’s so great to be on your show. I love doing your show.

Dean Becker: We got together some eight or so years ago on the pages of the New York Times drug policy forum.

Catherine Austin Fitts: (laughter) It was. I remember Milton Friedman got so upset he left in a huff early.

Dean Becker: Milton may be a genius but he’s not perfect, I’ll just say that.

Catherine Austin Fitts: No, but he can’t admit how things how really work.

Dean Becker: I was just talking about how these politicians are in bed with the corporations and fleecing us at every possibility, right? It’s just an eternal scam I suppose. Just to frighten people and make them believe that these expenditures are going to do some good, right?

Catherine Austin Fitts: What we’re watching is an economy that runs on force as opposed to value creation. And we’re watching a global economy, in fact, because it’s now being globalized that, depends on military force and extraction of value to keep it going. In other words, I call it ‘tapeworm economics.’ The way a tapeworm works in your body is it injects into you a chemical that make you crave what’s good for the tapeworm and bad for you and so you see the tapeworm and the tapeworm grows and gets stronger and stronger and you get weaker and weaker.

But you are complicit and you don’t realize what’s happening and so part of what we need to do is we need to see the system, we need to see the game, how it works. Oh, and it’s complicated. It took me years, you know I’m an investment banker and investment advisor, it took me years of following the money and tracking the money to understand the fundamental economics.

To a certain extent you can’t listen to what people say, I mean a lot of the experts know what’s in their little box but they don’t see the thing whole. The great economist who once said, Schumacher wrote ‘our goal is to see the world whole.’ So it’s complicated but if you can see it then you can say ‘I have a tapeworm. How can I stop feeding the tapeworm?’ I call it coming clean.

We have a big article on our website called ‘Coming Clean’ which is literally, how do you get the parasite that’s draining you out of your life and, of course, like anything, the more of us who start to do that the more power we have as a group and the more we can help each other come clean and the more options can open up.

So there is a way out of this thing but you have to be able to see the thing whole. I used to have a pastor in Washington who would say ‘if we can face it, God can fix it.’

Dean Becker: Right. And I think that’s the half of it, is that most people have caught the glimmer out of the corner of their eye, they understand the basic mechanisms, they see it in play and they realize it’s not doing what it was intended to do. But they don’t quite grasp the whole picture.

Catherine Austin Fitts: It is doing what it was intended to do.

Dean Becker: Well, OK. (laughter) Not for us, though.

Catherine Austin Fitts: When Milton Friedman left in a huff, let me take you back to where we started on the pages of the New York Times. As you know, I’ve said for years the war on drugs is unbelievably successful. It’s one of the most successful policies in the history of American politics because it has managed to achieve everything that was desired of it plus much more.

Dean Becker: Right.

Catherine Austin Fitts: So, it’s one thing to fight, you listen to a lot of people who are opposed to war on drugs will say ‘it’s a failure. We have to stop it.’ And the reality is it’s a success and the way you get a successful policy changed is different than the tactics than you use to get a failed policy changed.

So, step number one...have you seen this HBO series, The Wire?

Dean Becker: I have caught glimpses of it. Yes.

Catherine Austin Fitts: I don’t own a television. I haven’t owned a television since 1984. But you can get these things now from NetFlix so I got...and I must say it is pure genius. It is a work of art. It absolutely describes...here you have all these attorneys and cops and all these people and they’re being told they want to stop the drug flow into Baltimore.

Of course, the powers that be absolutely don’t want to stop the drug flow into Baltimore. They’re making a fortune and they’re depopulating exactly the groups they want to depopulate. So it’s a highly successful policy.

Anyway, there’s this great commander in the Baltimore cops who is trying to, and he’s a very ethical person, he’s a very competent person, he’s trying to navigate between this double bind of the system saying it wants something and really wanting the opposite. So at one point he gets up at a town meeting and he said ‘I don’t know what the solutions are but they all start with the truth.’

And that’s why what you’re doing is so important because unless we have media that allows us to have this conversation about what is really going on and what can we do about it, there are no solutions. It starts with saying ‘what’s the truth?’

Dean Becker: It’s international in it’s scope. The economic ramifications of this drug war. We bribe countries to participate. If they refuse to enforce the UN treaties on drugs then we take away funding to them, we somehow deny them economic...

Catherine Austin Fitts: Drugs and the war on drugs is a very classic way of taking control of an economy. And let me give you an example of it. Let’s look at a U.S., a small town in the U.S.A. Let’s say I’m a big retail box store and I look at your one million dollars of net income for your hundred little businesses and I say ‘Wow.

If I, you know they aren’t publicly traded but I am and so if I can get that million dollars running through my stock, my stock is trading at a multiple of twenty times, my stock will go up twenty million dollars.’ So let’s say we want to go into this community and we want to take over those businesses, well, how do we do it? We’ve got to get zoning permits, we’ve got to be able to buy a place, we’ve got to get people to shop there. So we’ve got to find a way to wipe them out economically that they will support. What would happen if we brought drugs in?

Dean Becker: Give us a chance to deprive certain groups that may own those other stores.

Catherine Austin Fitts: Well, everybody’s busy getting their kid out of jail or dealing with more fire alarms or...they’re overwhelmed by that process and meantime I’m now making enough money in that neighborhood to finance my bringing in a store. Now I’m grossly oversimplifying how it probably works but what you’re seeing is drugs used as a way of distracting, overwhelming or making money on a population in a way that then allows you to move in a take over the marketplace.

So, I’ll give you an example. About six years ago I used to drive...I live in Tennessee, I used to drive back to Washington for litigation, I’d drive up once a month and I would pass the same franchise stores, a very famous franchise store...I’d pass at least 25 going up and coming back on the interstates and there’s one in my hometown and, Dean, they were always empty.

And I drive at night, I drive during the day, I drive on weekdays and I drive on weekends...they were always empty. And I’d go, because I understand business very well, I’d go in and talk to the staff and get a handle on what their overhead must be and they were just empty, empty, empty.

And finally I picked up a wonderful book, if you want to understand money laundering it’s a wonderful book, ‘Black Money’ by Michael Thomas and he’s got this franchise store and they’re booking all these sales and doing sort-of stock market fraud. They’re booking all these sales because they’re laundering dirty money through the place.

And literally, for two years, morning, noon, and night 25 of these particular kind of stores on the way up and back to Washington was always empty. Always empty. And you’ll see all sorts of phenomena around the country like that.

So what we’ve got is, we’ve got an economy that is deeply, deeply intertwined with all these different sort-of tapeworm behaviors. They are making money for some groups and not for others.

Dean Becker: You are listening to the Cultural Baggage Show on the Drug Truth Network. We have with us Catherine Austin Fitts talking about the drug war economy and just the surreptitious goings-on in our general economy, I suppose. Catherine, it’s been my observation over the last few years that people are beginning to realize they’ve been duped. Or perhaps becoming a bit more willing, a bit more emboldened to do something about it.

Catherine Austin Fitts: I think people know, most people know something’s wrong. And they can’t put their fingers on it or they notice this anomaly or that anomaly but they know something’s wrong.

And if you look at the polls, the polls are very significant, that consumer confidence is at an all time low and tremendous polls on people saying something’s terribly wrong. There was one poll, you can find up on my blog, linked on top picks, it was a private survey for a business.

Ten percent of Americans are either leaving the country or making plans to create a backup outside of the country or investigating leaving the country.

Dean Becker: Or thinking about buying gold and silver because our dollar’s tanking so bad, right?

Catherine Austin Fitts: Oh absolutely. If they’re not leaving the country their money’s leaving the country. It’s a very high percentage and I think that most people I know don’t want to talk about it, they want to focus on ‘What can I do to protect my family or change things for the positive?’ but they don’t want to harp on the negatives and in many cases they’re smart enough to know, whether intuitively or explicitly, it’s dangerous.

It’s dangerous to kind of get into this stuff. It can cause you and your family bad politics wherever you are, so I think most people are smart, that it makes sense to be a little bit savvy about how you go about this.

Dean Becker: Catherine, I don’t pretend to understand this as well as you. I’ve spent decades as an auditor and a project analyst but, as you said, you have to focus, you have to delve right to the bottom of this thing to truly understand it.

I understand back in, I think it was the early and mid-nineties that many banks across America were caught laundering money directly, just bring it in the back door after business hours and they, perhaps, fixed most of that but I understand now it is the hedge funds because they’re basically invisible, that allows more of this money to be laundered.

Catherine Austin Fitts: I have to tell you I think it’s everybody, with very rare exceptions. I’ll give you an example: I was at a money laundering conference in Miami in 2003 and a lot of the people at the conference were from Latin America, there were new money-ordering rules and they had to be compliant and so I sat down at a table during lunch with three women from Latin America who were speaking Spanish and I was very informally dressed.

And I wasn’t saying anything and two bankers who were the head of compliance at two of the biggest banks, one bank in New York who had just admitted to being guilty of money laundering, money coming in from Russia, and I think they assumed that I was one of the Latin American women and they sat there and proceeded to discuss how they coordinated their laundering with the Agency.

And I just sat there and didn’t say a word and they had no idea they were sitting next to a former partner of a Wall Street firm and former Assistant Secretary of Housing who understood every word they were saying.

Dean: And they’re just laying it out there.

Catherine Austin Fitts: (laughter) Just laying it out there.

Dean: That’s confidence that the scam is just that good, I suppose.

Catherine Austin Fitts: So let me give you an example. You remember my old ‘Sam and Dave?”

Dean: I do. The sugar and the cocaine, was it?

Catherine Austin Fitts: So, let’s go through this. I’m Sam the Sugar Man and I grow a harvest and crop of sugar in Latin America and I put it in a boat and I sail it to New Orleans and I arrive at the docks in New Orleans and I want to sell my boatload of sugar and my boatload of sugar is worth X dollars, what is the profit I’m going to make on that boatload of sugar?

Dean: Not much.

Catherine Austin Fitts: Let’s say it ten percent. So after I pay all my different expenses and I pay my taxes and I take my wife for a weekend in New Orleans, what do I have left?

Dean: Maybe enough to get home?

Catherine Austin Fitts: (laughter) No, I’ve got some profits but, you know, it’s an honest profit but that’s all it is.
So I’m Dave the Drug Man. I do the same harvest, I grow a crop, I harvest, I put it in a boat, same size boat, I sail it to New Orleans. If Sam gets X what do I get?

Dean: I’ve heard as much as 17,000 percent profit.

Catherine Austin Fitts: Let’s say I get 10X and I get 30X or thirty percent of that. So it’s many multiples of what Sam gets. Now, how long is it going to take me to buy Sam’s company?

Dean: Tommorrow?

Catherine Austin Fitts: (laughter) How long is it going to take me before all the lawyers in town and the bankers in town want to know me and don’t care about Sam?

Dean: Yeah, they’re lining up.

Catherine Austin Fitts: So which politicians are going to represent me and work for my interest as opposed to Sam the Sugar Man?

Dean: That’s what I’ve been telling my listeners for years, that the contributions to these politicians...they don’t care whose money.…

Catherine Austin Fitts: Now I’m going to ask you the most important question and you have to answer this honestly. Who’s going to get the girls?

Dean: (laughter) Dave.

Catherine Austin Fitts: Dave. Now, did Global Elites do that?

Dean: It’s just a gangster.

Catherine Austin Fitts: No, no, no, no, no. No. Did Global Elites make the girls pick Dave?

Dean: Oh no, no. Of course not.

Catherine Austin Fitts: Who did that?

Dean: The girls.

Catherine Austin Fitts: Right. We did that. And until you change that one phenomenon as to who we prefer, we the people, are choosing Dave the Drug Dealer. And it’s not just in a poor, minority neighborhood, it’s all the way to the White House. And so we, as a society, we’re culturally...we honor and find attractive Organized Crime.

Dean: Well, we’ve got TV shows on everyday about it.

Catherine Austin Fitts: And the amazing thing, Dean, is the population still has the power to choose. Because if we vote with our time and our money we have...you know, if everybody woke up tomorrow and said ‘the American government is run by a bunch of big banks and defense contractors and we’re just not going to bank with those big banks anymore, we’re just going to pull our money out...’

Dean: Right. Stop them.

Catherine Austin Fitts: You have no idea (laughter). Overnight things would shift in amazing ways but part of it is, can we integrate what we’re doing in terms of how, what media we pay attention with and who we put our, which pocket we put our money into, whether it’s our purchases or our bank deposits or our investments.

I’ll give you another example. I have a wonderful, wonderful aunt who’s a peace activist and she’s always railing at me about the war and Halliburton, Hallibuton was the one she used to pick on, and one day I did an audio seminar called ‘Beyond Socially Responsible Investing’ and I was talking about a large, very prominent, socially responsible index fund that was invested in Halliburton, and she listened to the audio seminar and she called me and she said ‘This can’t be possible.

I’m an investor in that socially responsible investment fund’ and I said ‘Then you’re investing in Halliburton.’ Anyway, so I went over to her house at Thanksgiving and we went through her portfolio and, sure enough, she had three mutual funds all invested in Halliburton. And she was financing everything she said...

Dean: She was fighting.

Catherine Austin Fitts: ...she was fighting. Now I bet you that if I could sit down with a consolidated picture of all the 401-Ks and IRAs of all the people currently listening to this show I could prove to them, if they also gave me a list of the five things they most hated that our government and large corporations were doing, I could prove to them in a very relatively quick manner that they were financing it. Most 401-Ks, IRAs, retirement plans are financing the sub-prime mortgage crisis.

Dean: You told a story once about, I think you were at another seminar and you were asking people ‘If you could end the drug war but your stock portfolio would tumble, would you end the drug war?’

Catherine Austin Fitts: This is the red-button question. I was at a wonderful conference called Spiritual Frontiers Foundation International, it’s a wonderful group of people who get together to talk about how they can evolve our society spiritually. And a friend had asked me to give a speech called ‘How the Money Works’ on Organized Crime and we were focused on drugs.

And we were right at the section where we were talking about the South Central L.A. allegations and the testimony in congress and the Gary Webb allegations in 1998 and, at the time, the Department of Justice had told a reporter that I was working with, that the U.S. economy launders 500 billion to a trillion dollars of drug, and all other illegal and dirty money so I said to the audience, really wonderfully evolved spiritually people.

I said ‘What would happen if we stopped being the global leader in laundering this 500 billion to a trillion dollars a year?’ So we had a little interactive conversation and they said ‘Well, the stock market would go down and we would have trouble financing the government deficit and so our government checks might stop or our taxes might go up’

And I said, ‘OK. Let’s pretend there’s a big red-button up here on the lectern and if you push that button you can stop all hard narcotics trafficking in your community, your city, your town, your county tomorrow, thus offending the people who control 500 billion to a trillion dollars a year of all dirty money, who here will push the button?’

And out of a hundred people dedicated to evolving our society spiritually only one would push the button. So I said to the other 99, ‘Why would you not push the button?’ and they said ‘We don’t want our mutual funds to go down. We don’t want our government checks to stop. And we don’t want our taxes to go up.’

What I discovered that day was folks weren’t talking about it because they assumed there was no solution. There is a solution, there is a way to push the red-button in a way that makes you money. I call it ‘turning the red-button green’ but it requires a conversation. Within a place it requires a lot of collaboration. Now, here’s why that conversation has to happen. You just had primaries in Texas yesterday, correct?

Dean Becker: Yes.

Catherine Austin Fitts: Now here’s what you need to know. No matter which one of those candidates is elected President of the United States, they will walk into office on January 20th, their Secretary of the Treasury will tell them ‘To get the money you want to pay the bills for the next week I need to borrow more money from Mr. Global and Mr. Global controls 500 billions to a trillion dollars of all dirty money so we have to make sure that our neighborhoods are open for his drug business.’

Dean Becker: Catherine Austin Fitts, we certainly appreciate you being with us today on the Cultural Baggage Show. Please point folks to your website so they can learn.

Catherine Austin Fitts: It’s Solari.com.

Dean Becker: Catherine, thank you so much.

Catherine Austin Fitts: Thanks so much, Dean.

It’s time to play ‘Name that Drug by its Side-Effects.’

(horrible side-effects including including death)

Answer: The answer from Amylin Pharmaceuticals, Incorporated, Byetta for Diabetes.

Poppygate: Bizarre News about the U.S. Policy on Controlling Heroin, featuring Glenn Greenway.

The President of Afghanistan, Hamid Karzai, has been depicted as a staunch opponent of aerial eradication of the country's vast opium plantations while the U.S. administration has very publicly supported the extreme chemical option.

But this good cop/bad cop smoke and mirrors routine merely masks the misdirection. When the U.S. invaded Afghanistan in 2001 the country's annual contribution to the world's illegal heroin market was about 20 tons. Last year the country entered into the record books by producing 900 tons, a 4,200 percent increase under U.S. occupation.

Even as American prisons were inundated with new drug war casualties, the American Government chose repeatedly to do nothing to address the historic amount of heroin being produced by it's alleged 'first victory in the war on terror'.

The illegal narcotics trade is absolutely pivotal to the country's economic and political stability. By providing more than half of Afghanistan's GDP the narcotics trade means the difference between people being merely malnourished and dying wholesale from starvation.

The U.S. occupation of Afghanistan almost completely depends on the manufacture and sale of illegal narcotics in overt violation of federal and international law and in complete violation of, in fact treasonous to, the spirit of long standing U.S. anti-drug policy.

So make no mistake about it. As goes the U.S./Afghan narcotics trade so goes the country and Karzai is being set up as the fall guy. America has, and will, blame Karzai for failing to contain the narcotics trade via aerial eradication when actually the American administration, hypocritically yet ever so pragmatically, is the one who balks.

In October 2009, fall guy Karzai will face a presidential campaign. The Washington Post reported on January 18 that Zalmay Khalizad will be his likely opponent. Mr. Khalizad, one of the original neo-cons and architect of post 9/11 U.S./Afghan policy, currently serves as American Ambassador to the UN.

He has previously served as Counselor to Donald Rumsfeld at the Pentagon, U.S. Ambassador to Iraq, and special liaison between the Union Oil Company of California and Afghanistan's Taliban regime.

After all, Uncle Sam wants his heroin, wants his drug war, and most importantly, Uncle Sam wants you.

This is Glenn Greenway reporting for the Drug Truth Network.


Doug McVay: On March 5 the United Nations International Narcotics Control Board releases its annual report. These reports are typically litanies of prohibitionist complaints. According to their news releases, the INCB will urge UN member states to ‘widen the availability of and access to drug treatment and rehabilitation programs in custodial settings.’

It further asks governments to increase the range of custodial and non-custodial remedies and possible use of drug courts with an emphasis on those with a high probability of relapse into a high risk life style including, where appropriate, mandatory treatment as alternatives to imprisonment.

The report even expresses concern over a lack of access to adequate pain treatment medicine suffered by millions around the world. They note that ‘analyses undertaken by INCB and WHO have revealed the difficulties in ensuring access to opioid analgesics are due to diverse inter-related factors such as inadequate medical education of health professionals and lack of knowledge and skills in pain treatment, public attitude, regulatory impediments or economic constraints.’ INCB has requested governments to identify impediments in their countries and to take steps to improve the availability of these medicines.

Sadly, it’s not all good. The INCB talks about support for pain patients but in the context of rejecting calls for Afghan opium to be purchased for the legal market. The INCB relies on UN numbers, not surprising I suppose, which means they understate annual coca production by tens of thousands of hectares. The U.S. estimate for Colombia is about double the UN’s. The INCB even notes the explosive growth in cocaine availability in Europe and Africa.

For crying out loud, does anyone at the UN read this stuff and ever actually think about it? And, once again, they attack Canada for its evidence-based approach for reducing the risk to public and individual health posed by problem drug use, specifically the provision of safer smoking kits to crack addicts in Vancouver, Ottawa, and Toronto, in addition to the existence of Insite, the sanitary injection site project.

For the Drug Truth Network, this is Doug McVay, editor of Drug War Facts dot org.


Dean Becker: Alright, I hope you enjoyed this edition of Cultural Baggage and that you will remember that because of prohibition you don’t know what’s in that bag, do you? Please be careful.

To the Drug Truth Network listeners around the world, this is Dean Becker for Cultural Baggage and the unvarnished truth. This show produced at the Pacifica studios of KPFT, Houston.

Tap dancing on the edge on an abyss.

Transcript provided by Gee-Whiz Transcripts. Email: glenncg@zoominternet.net