unification of clearing systems, consistent margins, and the installation of circuit breaker
mechanisms. That, at least, was the public content of the report.
The real purpose of the Brady report was to create a series of drugged and manipulated
markets using funds from the Federal Reserve and other sources. The Brady group
realized that if the Chicago futures price of a stock or stock index could be artifically
inflated, this would be of great assistance in propping up the value of the underlying
stock in New York. The Brady group focussed on the Major Market Index of 20 stock
futures traded on the Chicago Board of Trade, which roughly corresponded to the
principal stocks of the Dow Jones Industrial Average. As long as the MMI was trading at
a higher price than the DJIA, the program traders and index arbitrageurs would tend to
sell the MMI and buy the underlying stock in New York in order to lock in their
stockjobbing profits. The great advantage of this system was first of all that some tens of
millions of dollars in Chicago could generate some hundreds of millions of dollars of
demand in New York. In addition, the margin requirements for borrowing money for use
to buy futures in Chicago were much less stringent than the requirements for margin
buying of stocks in New York. Liquidity for this operation could be drawn from banks
and other institutions loyal to the Bush-Baker-Brady power cartel, with full backup and
assistance from the district banks of the Federal Reserve.
The Brady "drugged market" mechanisms, with the refinements they have acquired since
1988, are a key factor behind the Dow Jones Industrials' seeming defiance of the law of
gravity in attainting a new all time high well above the 3000 mark during 1991.
Brady's exercise was nothing new: during the collapse of the Earl of Oxford's South Sea
bubble in 1720, the South Sea Company attemp]ted to support the astronomically inflated
price of its shares by becoming a buyer of its own stock until its cash and credit reserves
were exhausted. Such manuevers can indeed delay the onset of the final collapse for
some period of time, but they guarantee that when the panic, crash and bankruptcy finally
become overwhelming, the aggregate damage to society will be far greater than if the
crash had been allowed to occur according to its own spontaneous dynamic. For this
reason, a large part of the fearful price that is being exacted from the American people as
the depression unfolds in its full fury is a result of the Bush-Brady measures to postpone
the inevitable reckoning beyond the 1988 election.
One important case study of the impact of Bush's Task Force on Regulatory Relief is the
meat-packing industry. In February 1981, when Reagan gave Bush "line" authority for
deregulation, he promulgated Executive Order 12291, which established the principle that
federal regulations "be based upon adequate evidence that their potential benefits to
society are greater than their potential costs to society." In practice, that meant that Bush
threw health and safety standards out the window in order to ingratiate himself with
entrepreneurs. In March 1981, Bush wrote to businessmen and invited them to enumerate
the 10 areas they wanted to see deregulated, with specific recommendations on what they
wanted done. By the end of the year Bush's office issued a self-congratulatory report
boasting of a "significant reduction in the cost of federal regulation." In the meatpacking
industry, this translated into production line speedup as jobs were eliminated, with a