by Geoff Olson

While unloading my backpack from a float plane on Salt Spring Island, the pilot asks me why I’ve flown out on such a rainy, dismal day. I explain that I’m a writer and I’ve come to hear a talk from someone by the name of Catherine Austin Fitts. “Oh, Catherine,” he says with a smile. As we enter the airline office, the pilot animatedly explains the reason for my trip to the staff. “Catherine’s an amazing woman,” responds a woman at the desk. “I wish I could accomplish in my life half of what’s she’s done in hers.”
I’m only five minutes on Salt Spring, and the financial wiz Catherine Austin Fitts, whose name gets 72,000 hits on Google, is already highly recommended. Her CV is impressive to be sure, and clearly she is someone who knows how money works. And that’s why she’s here: to share her smarts with the Salt Spring Monetary Fund, a group of residents who are rethinking how money works in their community.
At a local theatre, Fitts appears with a blue-suited, casual, business look. She might be the good natured, middle-aged woman writing up your mortgage application, yet when this former insider from Washington and Wall Street talks about money, it’s like nothing you’ll ever read in Report on Business or hear on MSNBC.
Fitts’ first inkling of the darker side of the political economy came during her tenure in Washington, under the first Bush administration, when she was assigned by HUD’s then secretary Jack Kemp to clean up the agency’s books. When she arrived at her office, she asked the controller to see audit figures. He responded they were only audited every couple of years. She learned that HUD didn’t have the habit of tracking its financial results on a location specific basis, so each field office had no clue how the money worked in its jurisdiction.
With the documentation she had access to, there was no way of knowing if each field office was making or losing money. Under the law, the agency was required to be self-supporting, so who had that information? The accounts department did, but Fitts was told that they reported to a different assistant secretary and weren’t allowed to talk to her. After some intradepartmental lobbying, two months later she discovered figures indicating the agency was losing $11 million a day. She later discovered that a major US defence contractor managed the systems and accounts at HUD. This was the beginning of her descent down the rabbit hole of the so-called “black budget” and the US covert economy.
Through the course of several administrations, including that of Bill Clinton, a massive amount of money has been siphoned out of public agencies in the US, Fitts says. “Four secretaries of the treasury refused to produce audited financial statements and reported a total of $4 trillion in undocumentable adjustments.”
The vast majority of government officials were completely in the dark on the mechanics behind this, and where the money was going, yet it appeared to be no simple matter of bureaucratic incompetence. “I can’t tell you how many able and competent people I’ve met in government,” she says.
Fired after 18 months in office, Fitts says she witnessed firsthand the rot at the core of Empire, far beyond the apple polishing games of partisan politics. For her, choosing Democrats over Republicans is simply flipping the coin of the realm to the other side.
“I happen to believe what’s going on is really spiritual in nature, and solutions have to start with a spiritual foundation,” Fitts tells her audience. She harkens back to a talk she had given a few years earlier, before a “wonderful group of people” from something called the Spiritual Frontiers Foundation. She gave her usual shtick, explaining how the entire economy and culture are financially dependent upon too many things that harm people and the environment. She told them the global economy is now inextricably bound to financial fraud, planet-plundering trade agreements and laundered drug money.
“So I asked this wonderful group of spiritually evolved people what would happen if we stopped being the global leader in dirty money. Let’s pretend there’s a big button and if you push that button you can stop all narcotics trafficking in your town or city tomorrow. Who here would push the button? And out of 100 of these spiritual people, how many do you think would push the button?” The room is silent. “Only one.” The reason most people balk at such a thought experiment, Fitts learned, is that they don’t want their mutual funds to go down, and they don’t want their taxes to go up.
“In community after community, people are saying they’re so angry at George W. Bush, but what they don’t understand is that they’re financing all the things they hate. If 99 percent of the most spiritually evolved people in America do not want the red button pushed, if you’re George W. Bush, can you push the red button?” The question hangs in the air, unanswered. As a government official, one of the things Fitts constantly witnessed was how policies were engineered to promote higher stocks for corporations. “There was tremendous synergy between how policies are designed and what drove the New York Stock Exchange up,” she says.
As an illustration, Fitts cites a 1999 report by journalist Kelly O’Meara on the single common denominator found in cases of high school shootings in the US. O’Meara claims the shooters were on Ritalin or other prescribed psychotropic drugs. Pointing to an overhead slide, Fitts shows a profit breakdown of the nine million American children on Ritalin, with the profit per child to the maker at an estimated $54 per annum.
“I have a close family member who was a teacher in the Tennessee school system who was constantly pressured by parents to sign something that said their kids need to be put on Ritalin, because if your kid was disabled you could get a social security cheque,” she adds.
To Fitts, this is a perfect example of how government and corporations cooperate to extract both financial and living capital from communities, through mechanisms that promote a wide range of unhealthy dependencies – fiscal, pharmaceutical, electronic and beyond. She calls this deeply pathological system “the economic tapeworm.”
In an article for New Zealand’s Scoop media, Fitts wrote that she hit upon the term one day when a natural healing practitioner explained the strategy used by a tapeworm to prosper. A tapeworm injects a chemical that triggers a craving by the host for what the tapeworm wishes for its dinner. “By managing its host’s desire, a tapeworm manipulated its host to set aside self-interest and please its parasite. And so the tapeworm proceeded to consume its host’s energy and health, with the host doing most of the work,” Fitts notes.
Her concept of an “economic tapeworm” is metaphorical shorthand to explain a financial system that relies on economic and military warfare to finance and subsidize itself. It gives a negative return on investment by centralizing wealth and power.
“The tapeworm, a parasite that over time eats its host, can more accurately describe the demonic patterns of stripping places of intellectual capital that come with American imperial conquest. The dumbing down so often complained about within America’s borders is a phenomenon that our military appears to be implementing globally. We seem intent on removing spiritual power and intellectual IQ as we depopulate globally, moving out the honest and competent and putting the corrupt and bureaucratic in charge,” Fitts explains.
One of the things that Fitts finds most disturbing about the tapeworm is that it has organized its leadership around private banks and defence contractors and its governance and intellectual air cover around think tanks and private universities and their tax-exempt endowments. According to Fitts, the tapeworm model has been about 500 years of central banking and warfare, but its invasive powers have been considerably amplified by shapeshifting powers of electronic capital, and surveillance/data-mining technologies.
The tapeworm is a crafty beast. In her talk on Salt Spring, Fitts provides the example of ethical investing, noting that today’s form of socially responsible investment, “… in the liquid part, is generally promoting large corporations.” Her aunt, a dyed-in-the-wool peace activist, invested in an ethical investment fund that caught Fitts’ attention. After going through screen after screen on her monitor, Fitts discovered a line for Halliburton, the US defence contractor formerly headed by vice president Dick Cheney. “My aunt calls me up and says I can’t possibly be invested in this company. And sure enough, she was in a state of shock, she was invested in Halliburton.
“We’ve got 100 percent of our money invested in one thing; it’s called the tapeworm and it’s completely dependent on warfare, organized crime and all these other things. And our money is safe as long as we bet the tapeworm is going to win. It’s crazy to make money from the stock market over here then go take that money and buy fresh water or healthy food over here.”
The audience is dead quiet at this point. But Fitts has hope. She doesn’t think the tapeworm is going to win. “If the history of mankind shows anything, it’s that highly centralized systems get really perverted and evil and they just don’t hang together.”And the former HUD official claims to have plenty of exposure to the system’s dark side.
After her efforts to address high-level corruption in Washington, she quickly fell off her colleagues’ speed-dial, only to elicit a more disturbing kind of attention. In her interview on the nationwide radio show Coast to Coast, she asked George Noory if he had ever seen the movie Enemy of the State. “I played Will Smith for 10 years,” she told the host. She recalled a perpetual harassment campaign that included stalking and break-ins. “I went through extraordinary danger, and many, many times I was sure I was dead,” she tells her Salt Spring audience. (On Coast to Coast, she credited former LAPD police officer Mike Ruppert, founder of the peak oil website www.fromthewilderness.com, for saving her life.)
Her approach now to high-level corruption is summed up by one of the titles in her slide show: “Don’t worry if there’s a conspiracy; if you’re not in one, you need to start one.” Considering the “pro-centralization team” has a highly effective agenda, the “pro-decentralization team” needs one of its own.
The tapeworm itself is too big to take on, Fitts says. You cannot fight and win against something with as many resources and capital at its command, and so thoroughly integrated into the investment, corporate, political and intelligence infrastructure of North America. But there is one thing you can do, she insists. You can starve the tapeworm by rebuilding financial and human capital closer to home, investing wisely and locally as much as possible.
Much of the remainder of Fitts’ talk touched on equities, the bond market and other arcane financial mechanisms, before she got to her “Popsicle Index.” She defines this as the percentage of people in your community who can leave home, go to the nearest place to buy a Popsicle and come home safely.
Fitts explains the Popsicle Index is a subjective measurement for how people feel, particularly kids and their parents, about their community, adding, “It’s a rule of thumb, which expresses the human capital in its place.” Fitts recalls when she was a little girl growing up in Philadelphia, the Dow Jones index was 1,500, but the Popsicle Index for her neighbourhood was about a 100 percent. “It was a poor neighbourhood, but it was unthinkable a child couldn’t go down the street to the store. In my lifetime, the Dow Jones has gone up 6,000 percent and the Popsicle Index in my old neighbourhood is probably about 10 percent.” This Hobbesian state of affairs, she believes, is the result of the tapeworm’s activities at the local level.
In relative terms, Salt Spring has a high Popsicle Index, she says, in part because of its strong community businesses, and the fact that islands have a natural geographical buffer of water from the centres of power; they are that much more removed, if only in a small part, from the tapeworm. “I think were going into a time where the only financial networks we can depend on are each other,” Fitts says.
The real estate bubble is about to go, and the middle class is facing diminishing prospects for getting ahead. We are all on the Titanic, but we can start building our own lifeboats now. Lending networks among small groups of friends and family, and investing in real things, such as precious metals, are a good start. Investment in sustainable technologies is also a wise move.
Fitts insists that part of reaching an environmentally sustainable world is getting our financial system to operate by place in a way that there’s harmony between the living equity of a place and a rational growth model.
Envisaging decentralized communities that are united globally in the local exercise of economic autonomy, Fitts conducts seminars around the world on how to go about this, through her idea of the “Solari Circle,” which she defines as “… a cross between an investment club and a French resistance cell.”
The former Wall Street/Washington insider closes her talk with an anecdote attributed to the Swiss psychoanalyst Carl Gustav Jung. A young woman suffering from a nervous breakdown came to Jung for therapy. She had married a much older, wealthier man and then found a younger lover. She confessed to Jung that she killed her husband to be with him. The murderer had escaped detection, but believed that from the time she had killed her husband, everywhere she went the birds stopped singing. Fitts finds this anecdote relevant to our entropic times.
She believes we live in a system that is rapidly exhausting the living capital of the planet, yet we tacitly prop up it up with our purchasing and investing habits, spending our lives chasing after strips of paper emblazoned with dead politicians. In our half-conscious complicity with business-as-usual, we are the assassins in the garden, who bring silence in our wake.
The first step, she insists, is coming clean on what our lives are really about and what they should be about. “Imagine that all creation knew that you were trying to solve the problem,” Fitts says, alluding to her belief in an invisible means of support. And that is what keeps her going in her quest to rebuild happier, healthier communities that leave a lighter footprint on the Earth.
“I want to make the birds sing again,” she says.
For a further exploration of Catherine Austin Fitts’ ideas, visit (www.solari.com). An archive of her columns for Scoop media can be found at (www.scoop.co.nz/features/RealDeal.html).

mwiseguise@yahoo.com