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The first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. In fact, the history of the recent financial crisis, which doubles as a history of the rapid decline and fall of the suddenly swindled-dry American empire, reads like a Who's Who of Goldman Sachs graduates.IF AMERICA IS NOW CIRCLING THE DRAIN, GOLDMAN SACHS HAS FOUND A WAY TO BE THAT DRAIN.BUBBLE #1 - THE GREAT DEPRESSIONGoldman wasn't always a too-big-to-fail Wall Street behemoth, the ruthless face of kill-or-be-killed capitalism on steroids - just almost always. The bank was actually founded in 1869 by a German immigrant named Marcus Goldman, who built it up with his son-in-law Samuel Sachs. They were pioneers in the use of commercial paper, which is just a fancy way of saying they made money lending out short-term IOUs to small-time vendors in downtown Manhattan.You can probably guess the basic plotline of Goldman's first 100 years in business: plucky, immigrant-led investment bank beats the odds, pulls itself up by its bootstraps, makes shitloads of money. In that ancient history there's really only one episode that bears scrutiny now, in light of more recent events: Goldman's disastrous foray into the speculative mania of pre-crash Wall Street in the late 1920s.This great Hindenburg of financial history has a few features that might sound familiar. Back then, the main financial tool used to bilk investors was called an "investment trust." Similar to modern mutual funds, the trusts took the cash of investors large and small and (theoretically, at least) invested it in a smorgasbord of Wall Street securities, though the securities and amounts were often kept hidden from the public. So a regular guy could invest $10 or $100 in a trust and feel like he was a big player. Much as in the 1990s, when new vehicles like day trading and e-trading attracted reams of new suckers from the sticks who wanted to feel like big shots, investment trusts roped a new generation of regular-guy investors into the speculation game.Beginning a pattern that would repeat itself over and over again, Goldman got into the investment-trust game late, then jumped in with both feet and went hog-wild. The first effort was the Goldman Sachs Trading Corporation; the bank issued a million shares at $100 apiece, bought all those shares with its own money and then sold 90 percent of them to the hungry public at $104. The trading corporation then relentlessly bought shares in itself, bidding the price up further and further. Eventually it dumped part of its holdings and sponsored a new trust, the Shenandoah Corporation, issuing millions more in shares in that fund - which in turn sponsored yet another trust called the Blue Ridge Corporation. In this way, each investment trust served as a front for an endless investment pyramid: Goldman hiding behind Goldman hiding behind Goldman. Of the 7,250,000 initial shares of Blue Ridge, 6,250,000 were actually owned by Shenandoah - which, of course, was in large part owned by Goldman Trading.The end result (ask yourself if this sounds familiar) was a daisy chain of borrowed money, one exquisitely vulnerable to a decline in performance anywhere along the line ....BUBBLE #2 - TECH STOCKSFast-Forward about 65 years. Goldman not only survived the crash that wiped out so many of the investors it duped, it went on to become the chief underwriter to the country's wealthiest and most powerful corporations. Thanks to Sidney Weinberg, who rose from the rank of janitor's assistant to head the firm, Goldman became the pioneer of the initial public offering, one of the principal and most lucrative means by which companies raise money. During the 1970s and 1980s, Goldman may not have been the planet-eating Death Star of political influence it is today, but it was a top-drawer firm that had a reputation for attracting the very smartest talent on the Street.It also, oddly enough, had a reputation for relatively solid ethics and a patient approach to investment that shunned the fast buck; its executives were trained to adopt the firm's mantra, "long-term greedy." One former Goldman banker who left the firm in the early Nineties recalls seeing his superiors give up a very profitable deal on the grounds that it was a long-term loser. "We gave back money to 'grownup' corporate clients who had made bad deals with us," he says. "Everything we did was legal and fair - but 'long-term greedy' said we didn't want to make such a profit at the clients' collective expense that we spoiled the marketplace." ...But then, something happened. It's hard to say what it was exactly; it might have been the fact that Goldman's co-chairman in the early Nineties, Robert Rubin, followed Bill Clinton to the White House, where he directed the National Economic Council and eventually became Treasury secretary. ...Rubin was the prototypical Goldman banker. He was probably born in a $4,000 suit, he had a face that seemed permanently frozen just short of an apology for being so much smarter than you, and he exuded a Spock-like, emotion-neutral exterior; the only human feeling you could imagine him experiencing was a nightmare about being forced to fly coach. It became almost a national cliche that whatever Rubin thought was best for the economy - a phenomenon that reached its apex in 1999, when Rubin appeared on the cover of Time with his Treasury deputy, Larry Summers, and Fed chief Alan Greenspan under the headline THE COMMITTEE TO SAVE THE WORLD. And "what Rubin thought," mostly, was that the American economy, and in particular the financial markets, were over-regulated and needed to be set free. ...The basic scam in the Internet Age is pretty easy even for the financially illiterate to grasp. Companies that weren't much more than pot-fueled ideas scrawled on napkins by up-too-late bong-smokers were taken public via IPOs, hyped in the media and sold to the public for megamillions. It was as if banks like Goldman were wrapping ribbons around watermelons, tossing them out 50-story windows and opening the phones for bids. In this game you were a winner only if you took your money out before the melon hit the pavement.It sounds obvious now, but what the average investor didn't know at the time was that the banks had changed the rules of the game, making the deals look better than they actually were. They did this by setting up what was, in reality, a two-tiered investment system - one for the insiders who knew the real numbers, and another for the lay investor who was invited to chase soaring prices the banks themselves knew were irrational. While Goldman's later pattern would be to capitalize on changes in the regulatory environment, its key innovation in the Internet years was to abandon its own industry's standards of quality control.fund manager. "The company had to be in business for a minimum of five years, and it had to show profitability for three consecutive years. But Wall Street took these guidelines and threw them in the trash." Goldman completed the snow job by pumping up the sham stocks: "Their analysts were out there saying Just another WordPress site is worth $100 a share."The problem was, nobody told investors that the rules had changed. "Everyone on the inside knew," the manager says. "Bob Rubin sure as hell knew what the underwriting standards were. They'd been intact since the 1930s." ...Goldman has denied that it changed its underwriting standards during the Internet years, but its own statistics belie the claim. Just as it did with the investment trust in the 1920s, Goldman started slow and finished crazy in the Internet years. After it took a little-known company with weak financials called Yahoo! public in 1996, once the tech boom had already begun, Goldman quickly became the IPO king of the Internet era. Of the 24 companies it took public in 1997, a third were losing money at the time of the IPO. In 1999, at the height of the boom, it took 47 companies public, including stillborns like Webvan and eToys, investment offerings that were in many ways the modern equivalents of Blue Ridge and Shenandoah. The following year, it underwrote 18 companies in the first four months, 14 of which were money losers at the time. As a leading underwriter of Internet stocks during the boom, Goldman provided profits far more volatile than those of its competitors: In 1999, the average Goldman IPO leapt 281 percent above its offering price, compared to the Wall Street average of 181 percent.How did Goldman achieve such extraordinary results? One answer is that they used a practice called "laddering," which is just a fancy way of saying they manipulated the share price of new offerings. Here's how it works: Say you're Goldman Sachs, and Just another WordPress site comes to you and asks you to take their company public. You agree on the usual terms: You'll price the stock, determine how many shares should be released and take the Just another WordPress sitelet's say Just another WordPress sitea six percent fee of a $500 million IPO is serious money.Goldman was repeatedly sued by shareholders for engaging in laddering in a variety of Internet IPOs, including Webvan and NetZero. The deceptive practices also caught the attention of Nichol as Maier, the syndicate manager of Cramer & Co., the hedge fund run at the time by the now-famous chattering television rear end in a top hat Jim Cramer, himself a Goldman alum. ..."Goldman, from what I witnessed, they were the worst perpetrator," Maier said. "They totally fueled the bubble. And it's specifically that kind of behavior that has caused the market crash. They built these stocks upon an illegal foundation - manipulated up - and ultimately, it really was the small person who ended up buying in." In 2005, Goldman agreed to pay $40 million for its laddering violations - a puny penalty relative to the enormous profits it made. (Goldman, which has denied wrongdoing in all of the cases it has settled, refused to respond to questions for this story.)day rewards for the chosen few. So instead of Just another WordPress site opening at $20, the bank would approach the Just another WordPress siteeffectively robbing all of Bullshit's new shareholders by diverting cash that should have gone to the company's bottom line into the private bank account of the company's CEO. ...Such practices conspired to turn the Internet bubble into one of the greatest financial disasters in world history: Some $5 trillion of wealth was wiped out on the NASDAQ alone. But the real problem wasn't the money that was lost by shareholders, it was the money gained by investment bankers, who received hefty bonuses for tampering with the market. Instead of teaching Wall Street a lesson that bubbles always deflate, the Internet years demonstrated to bankers that in the age of freely flowing capital and publicly owned financial companies, bubbles are incredibly easy to inflate, and individual bonuses are actually bigger when the mania and the irrationality are greater.GOLDMAN SCAMMED HOUSING INVESTORS BY BETTING AGAINST ITS OWN CRAPPY MORTGAGES.Nowhere was this truer than at Goldman. Between 1999 and 2002, the firm paid out $28.5 billion in compensation and benefits - an average of roughly $350,000 a year per employee. Those numbers are important because the key legacy of the Internet boom is that the economy is now driven in large part by the pursuit of the enormous salaries and bonuses that such bubbles make possible. Goldman's mantra of "long-term greedy" vanished into thin air as the game became about getting your check before the melon hit the pavement.The market was no longer a rationally managed place to grow real, profitable businesses: It was a huge ocean of Someone Else's Money where bankers hauled in vast sums through whatever means necessary and tried to convert that money into bonuses and payouts as quickly as possible. If you laddered and spun 50 Internet IPOs that went bust within a year, so what? By the time the Securities and Exchange Commission got around to fining your firm $110 million, the yacht you bought with your IPO bonuses was already six years old. Besides, you were probably out of Goldman by then, running the U.S. Treasury or maybe the state of New Jersey. (One of the truly comic moments in the history of America's recent financial collapse came when Gov. Jon Corzine of New Jersey, who ran Goldman from 1994 to 1999 and left with $320 million in IPO-fattened stock, insisted in 2002 that "I've never even heard the term 'laddering' before.")For a bank that paid out $7 billion a year in salaries, $110 million fines issued half a decade late were something far less than a deterrent - they were a joke. Once the Internet bubble burst, Goldman had no incentive to reassess its new, profit-driven strategy; it just searched around for another bubble to inflate. As it turns out, it had one ready, thanks in large part to Rubin.BUBBLE #3 - THE HOUSING CRAZEGoldman's role in the sweeping disaster that was the housing bubble is not hard to trace. Here again, the basic trick was a decline in underwriting standards, although in this case the standards weren't in IPOs but in mortgages. ...None of that would have been possible without investment bankers like Goldman, who created vehicles to package those lovely mortgages and sell them en masse to unsuspecting insurance companies and pension funds. This created a mass market for toxic debt that would never have existed before; in the old days, no bank would have wanted to keep some addict ex-con's mortgage on its books, knowing how likely it was to fail. You can't write these mortgages, in other words, unless you can sell them to someone who doesn't know what they are.Goldman used two methods to hide the mess they were selling. First, they bundled hundreds of different mortgages into instruments called Collateralized Debt Obligations. Then they sold investors on the idea that, because a bunch of those mortgages would turn out to be OK, there was no reason to worry so much about the lovely ones: The CDO, as a whole, was sound. Thus, junk-rated mortgages were turned into AAA-rated investments. Second, to hedge its own bets, Goldman got companies like AIG to provide insurance - known as credit-default swaps - on the CDOs. The swaps were essentially a racetrack bet between AIG and Goldman: Goldman is betting the ex-cons will default, AIG is betting they won't.There was only one problem with the deals: All of the wheeling and dealing represented exactly the kind of dangerous speculation that federal regulators are supposed to rein in. Derivatives like CDOs and credit swaps had already caused a series of serious financial calamities: Procter & Gamble and Gibson Greetings both lost fortunes, and Orange County, California, was forced to default in 1994. A report that year by the Government Accountability Office recommended that such financial instruments be tightly regulated - and in 1998, the head of the Commodity Futures Trading Commission, a woman named Brooksley Born, agreed. That May, she circulated a letter to business leaders and the Clinton administration suggesting that banks be required to provide greater disclosure in derivatives trades, and maintain reserves to cushion against losses. ...Clinton's reigning economic foursome - "especially Rubin," according to Greenberger - called Born in for a meeting and pleaded their case. She refused to back down, however, and continued to push for more regulation of the derivatives. Then, in June 1998, Rubin went public to denounce her move, eventually recommending that Congress strip the CFTC of its regulatory authority. In 2000, on its last day in session, Congress passed the now-notorious Commodity Futures Modernization Act, which had been inserted into an 1l,000-page spending bill at the last minute, with almost no debate on the floor of the Senate. Banks were now free to trade default swaps with impunity.But the story didn't end there. AIG, a major purveyor of default swaps, approached the New York State Insurance Department in 2000 and asked whether default swaps would be regulated as insurance. At the time, the office was run by one Neil Levin, a former Goldman vice president, who decided against regulating the swaps. Now freed to underwrite as many housing-based securities and buy as much credit-default protection as it wanted, Goldman went berserk with lending lust. By the peak of the housing boom in 2006, Goldman was underwriting $76.5 billion worth of mortgage-backed securities - a third of which were subprime - much of it to institutional investors like pensions and insurance companies. And in these massive issues of real estate were vast swamps of crap.Take one $494 million issue that year, GSAMP Trust 2006-S3. Many of the mortgages belonged to second-mortgage borrowers, and the average equity they had in their homes was 0.71 percent. Moreover, 58 percent of the loans included little or no documentation - no names of the borrowers, no addresses of the homes, just zip codes. Yet both of the major ratings agencies, Moody's and Standard & Poor's, rated 93 percent of the issue as investment grade. Moody's projected that less than 10 percent of the loans would default. In reality, 18 percent of the mortgages were in default within 18 months.Not that Goldman was personally at any risk. The bank might be taking all these hideous, completely irresponsible mortgages from beneath-gangster-status firms like Countrywide and selling them off to municipalities and pensioners - old people, for God's sake - pretending the whole time that it wasn't grade-D horseshit. But even as it was doing so, it was taking short positions in the same market, in essence betting against the same crap it was selling. Even worse, Goldman bragged about it in public. "The mortgage sector continues to be challenged," David Viniar, the bank's chief financial officer, boasted in 2007. "As a result, we took significant markdowns on our long inventory positions .... However, our risk bias in that market was to be short, and that net short position was profitable." In other words, the mortgages it was selling were for chumps. The real money was in betting against those same mortgages."That's how audacious these assholes are," says one hedge-fund manager. "At least with other banks, you could say that they were just dumb - they believed what they were selling, and it blew them up. Goldman knew what it was doing." I ask the manager how it could be that selling something to customers that you're actually betting against - particularly when you know more about the weaknesses of those products than the customer - doesn't amount to securities fraud."It's exactly securities fraud," he says. "It's the heart of securities fraud."Eventually, lots of aggrieved investors agreed. In a virtual repeat of the Internet IPO craze, Goldman was hit with a wave of lawsuits after the collapse of the housing bubble, many of which accused the bank of withholding pertinent information about the quality of the mortgages it issued. .... But once again, Goldman got off virtually scot-free, staving off prosecution by agreeing to pay a paltry $60 million - about what the bank's CDO division made in a day and a half during the real estate boom.The effects of the housing bubble are well known - it led more or less directly to the collapse of Bear Stearns, Lehman Brothers and AIG, whose toxic portfolio of credit swaps was in significant part composed of the insurance that banks like Goldman bought against their own housing portfolios. In fact, at least $13 billion of the taxpayer money given to AIG in the bailout ultimately went to Goldman, meaning that the bank made out on the housing bubble twice: It hosed the investors who bought their horseshit CDOs by betting against its own crappy product, then it turned around and hosed the taxpayer by making him payoff those same bets.And once again, while the world was crashing down all around the bank, Goldman made sure it was doing just fine in the compensation department. In 2006, the firm's payroll jumped to $16.5 billion - an average of $622,000 per employee. As a Goldman spokesman explained, "We work very hard here."But the best was yet to come. While the collapse of the housing bubble sent most of the financial world fleeing for the exits, or to jail, Goldman boldly doubled down - and almost single-handedly created yet another bubble, one the world still barely knows the firm had anything to do with.BUBBLE #4 - $4 A GALLONBy the beginning of 2008, the financial world was in turmoil. Wall Street had spent the past two and a half decades producing one scandal after another, which didn't leave much to sell that wasn't tainted. The terms junk bond, IPO, subprime mortgage and other once-hot financial fare were now firmly associated in the public's mind with scams; the terms credit swaps and CDOs were about to join them. The credit markets were in crisis, and the mantra that had sustained the fantasy economy throughout the Bush years - the notion that housing prices never go down - was now a fully exploded myth, leaving the Street clamoring for a new bullshit paradigm to sling.Where to go? With the public reluctant to put money in anything that felt like a paper investment, the Street quietly moved the casino to the physical-commodities market - stuff you could touch: corn, coffee, cocoa, wheat and, above all, energy commodities, especially oil. In conjunction with a decline in the dollar, the credit crunch and the housing crash caused a "flight to commodities." Oil futures in particular skyrocketed, as the price of a single barrel went from around $60 in the middle of 2007 to a high of $147 in the summer of 2008.That summer, as the presidential campaign heated up, the accepted explanation for why gasoline had hit $4.11 a gallon was that there was a problem with the world oil supply. In a classic example of how Republicans and Democrats respond to crises by engaging in fierce exchanges of moronic irrelevancies, John McCain insisted that ending the moratorium on offshore drilling would be "very helpful in the short term," while Barack Obama in typical liberal-arts yuppie style argued that federal investment in hybrid cars was the way out.GOLDMAN TURNED A SLEEPY OIL MARKET INTO A GIANT BETTING PARLOR - SPIKING PRICES AT THE PUMP.But it was all a lie. While the global supply of oil will eventually dry up, the short-term flow has actually been increasing. In the six months before prices spiked, according to the U.S. Energy Information Administration, the world oil supply rose from 85.24 million barrels a day to 85.72 million. Over the same period, world oil demand dropped from 86.82 million barrels a day to 86.07 million. Not only was the short-term supply of oil rising, the demand for it was falling - which, in classic economic terms, should have brought prices at the pump down.So what caused the huge spike in oil prices? Take a wild guess. Obviously Goldman had help - there were other players in the physical-commodities market - but the root cause had almost everything to do with the behavior of a few powerful actors determined to turn the once-solid market into a speculative casino. Goldman did it by persuading pension funds and other large institutional investors to invest in oil futures - agreeing to buy oil at a certain price on a fixed date. The push transformed oil from a physical commodity, rigidly subject to supply and demand, into something to bet on, like a stock. Between 2003 and 2008, the amount of speculative money in commodities grew from $13 billion to $317 billion, an increase of 2,300 percent. By 2008, a barrel of oil was traded 27 times, on average, before it was actually delivered and consumed.As is so often the case, there had been a Depression-era law in place designed specifically to prevent this sort of thing. ... In 1936, Congress recognized that there should never be more speculators in the market than real producers and consumers. If that happened, prices would be affected by something other than supply and demand, and price manipulations would ensue. A new law empowered the Commodity Futures Trading Commission - the very same body that would later try and fail to regulate credit swaps - to place limits on speculative trades in commodities. As a result of the CFTC's oversight, peace and harmony reigned in the commodities markets for more than 50 years.All that changed in 1991 when, unbeknownst to almost everyone in the world, a Goldman-owned commodities-trading subsidiary called J. Aron wrote to the CFTC and made an unusual argument. Farmers with big stores of corn, Goldman argued, weren't the only ones who needed to hedge their risk against future price drops - Wall Street dealers who made big bets on oil prices also needed to hedge their risk, because, well, they stood to lose a lot too.This was complete and utter crap - the 1936 law, remember, was specifically designed to maintain distinctions between people who were buying and selling real tangible stuff and people who were trading in paper alone. But the CFTC, amazingly, bought Goldman's argument. It issued the bank a free pass, called the "Bona Fide Hedging" exemption, allowing Goldman's subsidiary to call itself a physical hedger and escape virtually all limits placed on speculators. In the years that followed, the commission would quietly issue 14 similar exemptions to other companies.Now Goldman and other banks were free to drive more investors into the commodities markets, enabling speculators to place increasingly big bets. That 1991 letter from Goldman more or less directly led to the oil bubble in 2008, when the number of speculators in the market - driven there by fear of the falling dollar and the housing crash - finally overwhelmed the real physical suppliers and consumers. By 2008, at least three quarters of the activity on the commodity exchanges was speculative, according to a congressional staffer who studied the numbers - and that's likely a conservative estimate. By the middle of last summer, despite rising supply and a drop in demand, we were paying $4 a gallon every time we pulled up to the pump.What is even more amazing is that the letter to Goldman, along with most of the other trading exemptions, was handed out more or less in secret. "I was the head of the division of trading and markets, and Brooksley Born was the chair of the CFTC," says Greenberger, "and neither of us knew this letter was out there." In fact, the letters only came to light by accident. Last year, a staffer for the House Energy and Commerce Committee just happened to be at a briefing when officials from the CFTC made an offhand reference to the exemptions."1 had been invited to a briefing the commission was holding on energy," the staffer recounts. "And suddenly in the middle of it, they start saying, 'Yeah, we've been issuing these letters for years now.' I raised my hand and said, 'Really? You issued a letter? Can I see it?' And they were like, 'Duh, duh.' So we went back and forth, and finally they said, 'We have to clear it with Goldman Sachs.' I'm like, 'What do you mean, you have to clear it with Goldman Sachs?'" ... [I]n a classic example of how complete Goldman's capture of government is, the CFTC waited until it got clearance from the bank before it turned the letter over.Armed with the semi-secret government exemption, Goldman had become the chief designer of a giant commodities betting parlor. Its Goldman Sachs Commodities Index - which tracks the prices of 24 major commodities but is overwhelmingly weighted toward oil - became the place where pension funds and insurance companies and other institutional investors could make massive long-term bets on commodity prices. Which was all well and good, except for a couple of things. One was that index speculators are mostly "long only" bettors, who seldom if ever take short positions - meaning they only bet on prices to rise. While this kind of behavior is good for a stock market, it's terrible for commodities, because it continually forces prices upward. "If index speculators took short positions as well as long ones, you'd see them pushing prices both up and down," says Michael Masters, a hedge-fund manager who has helped expose the role of investment banks in the manipulation of oil prices. "But they only push prices in one direction: up."Complicating matters even further was the fact that Goldman itself was cheerleading with all its might for an increase in oil prices. In the beginning of 2008, Arjun Murti, a Goldman analyst, hailed as an "oracle of oil" by The New York Times, predicted a "super spike" in oil prices, forecasting a rise to $200 a barrel. At the time Goldman was heavily invested in oil through its commodities-trading subsidiary, J. Aron; it also owned a stake in a major oil refinery in Kansas, where it warehoused the crude it bought and sold. Even though the supply of oil was keeping pace with demand, Murti continually warned of disruptions to the world oil supply, going so far as to broadcast the fact that he owned two hybrid cars. High prices, the bank insisted, were somehow the fault of the piggish American consumer; in 2005, Goldman analysts insisted that we wouldn't know when oil prices would fall until we knew "when American consumers will stop buying gas-guzzling sport utility vehicles and instead seek fuel-efficient alternatives."But it wasn't the consumption of real oil that was driving up prices - it was the trade in paper oil. By the summer of2008, in fact, commodities speculators had bought and stockpiled enough oil futures to fill 1.1 billion barrels of crude, which meant that speculators owned more future oil on paper than there was real, physical oil stored in all of the country's commercial storage tanks and the Strategic Petroleum Reserve combined. It was a repeat of both the Internet craze and the housing bubble, when Wall Street jacked up present-day profits by selling suckers shares of a fictional fantasy future of endlessly rising prices.In what was by now a painfully familiar pattern, the oil-commodities melon hit the pavement hard in the summer of 2008, causing a massive loss of wealth; crude prices plunged from $147 to $33. Once again the big losers were ordinary people. The pensioners whose funds invested in this crap got massacred: CalPERS, the California Public Employees' Retirement System, had $1.1 billion in commodities when the crash came. And the damage didn't just come from oil. Soaring food prices driven by the commodities bubble led to catastrophes across the planet, forcing an estimated 100 million people into hunger and sparking food riots throughout the Third World. ...BUBBLE #5 - RIGGING THE BAILOUTAfter the oil bubble collapsed last fall, there was no new bubble to keep things humming - this time, the money seems to be really gone, like worldwide-depression gone. So the financial safari has moved elsewhere, and the big game in the hunt has become the only remaining pool of dumb, unguarded capital left to feed upon: taxpayer money. Here, in the biggest bailout in history, is where Goldman Sachs really started to flex its muscle.It began in September of last year, when then-Treasury secretary Paulson made a momentous series of decisions. Although he had already engineered a rescue of Bear Stearns a few months before and helped bail out quasi-private lenders Fannie Mae and Freddie Mac, Paulson elected to let Lehman Brothers - one of Goldman's last real competitors - collapse without intervention. ("Goldman's superhero status was left intact," says market analyst Eric Salzman, "and an investment-banking competitor, Lehman, goes away.") The very next day, Paulson greenlighted a massive, $85 billion bailout of AIG, which promptly turned around and repaid $13 billion it owed to Goldman. Thanks to the rescue effort, the bank ended up getting paid in full for its bad bets: By contrast, retired auto workers awaiting the Chrysler bailout will be lucky to receive 50 cents for every dollar they are owed.Immediately after the AIG bailout, Paulson announced his federal bailout for the financial industry, a $700 billion plan called the Troubled Asset Relief Program, and put a heretofore unknown 35-year-old Goldman banker named Neel Kashkari in charge of administering the funds. In order to qualify for bailout monies, Goldman announced that it would convert from an investment bank to a bankholding company, a move that allows it access not only to $10 billion in TARP funds, but to a whole galaxy of less conspicuous, publicly backed funding - most notably, lending from the discount window of the Federal Reserve. By the end of March, the Fed will have lent or guaranteed at least $8.7 trillion under a series of new bailout programs - and thanks to an obscure law allowing the Fed to block most congressional audits, both the amounts and the recipients of the monies remain almost entirely secret.Converting to a bank-holding company has other benefits as well: Goldman's primary supervisor is now the New York Fed, whose chairman at the time of its announcement was Stephen Friedman, a former co-chairman of Goldman Sachs. Friedman was technically in violation of Federal Reserve policy by remaining on the board of Goldman even as he was supposedly regulating the bank; in order to rectify the problem, he applied for, and got, a conflict-of-interest waiver from the government. Friedman was also supposed to divest himself of his Goldman stock after Goldman became a bank-holding company, but thanks to the waiver, he was allowed to go out and buy 52,000 additional shares in his old bank, leaving him $3 million richer. Friedman stepped down in May, but the man now in charge of supervising Goldman - New York Fed president William Dudley - is yet another former Goldmanite.The collective message of all this - the AIG bailout, the swift approval for its bank-holding conversion, the TARP funds - is that when it comes to Goldman Sachs, there isn't a free market at all. The government might let other players on the market die, but it simply will not allow Goldman to fail under any circumstances. Its edge in the market has suddenly become an open declaration of supreme privilege. "In the past it was an implicit advantage," says Simon Johnson, an economics professor at MIT and former official at the International Monetary Fund, who compares the bailout to the crony capitalism he has seen in Third World countries. "Now it's more of an explicit advantage." ...And here's the real punch line. After playing an intimate role in four historic bubble catastrophes, after helping $5 trillion in wealth disappear from the NASDAQ, after pawning off thousands of toxic mortgages on pensioners and cities, after helping to drive the price of gas up to $4 a gallon and to push 100 million people around the world into hunger, after securing tens of billions of taxpayer dollars through a series of bailouts overseen by its former CEO, what did Goldman Sachs give back to the people of the United States in 2008?Fourteen million dollars.That is what the firm paid in taxes in 2008, an effective tax rate of exactly one, read it, one percent. The bank paid out $10 billion in compensation and benefits that same year and made a profit of more than $2 billion - yet it paid the Treasury less than a third of what it forked over to CEO Lloyd Blankfein, who made $42.9 million last year.How is this possible? According to Goldman's annual report, the low taxes are due in large part to changes in the bank's "geographic earnings mix." In other words, the bank moved its money around so that most of its earnings took place in foreign countries with low tax rates. Thanks to our completely hosed corporate tax system, companies like Goldman can ship their revenues offshore and defer taxes on those revenues indefinitely, even while they claim deductions upfront on that same untaxed income. This is why any corporation with an at least occasionally sober accountant can usually find a way to zero out its taxes. A GAO report, in fact, found that between 1998 and 2005, roughly two-thirds of all corporations operating in the U.S. paid no taxes at all.This should be a pitchfork-level outrage - but somehow, when Goldman released its post-bailout tax profile, hardly anyone said a word. One of the few to remark on the obscenity was Rep. Lloyd Doggett, a Democrat from Texas who serves on the House Ways and Means Committee. "With the right hand out begging for bailout money," he said, "the left is hiding it offshore."BUBBLE #6 - GLOBAL WARMINGFast-Forward to today. It's early June in Washington, D.C. Barack Obama, a popular young politician whose leading private campaign donor was an investment bank called Goldman Sachs - its employees paid some $981,000 to his campaign - sits in the White House. Having seamlessly navigated the political minefield of the bailout era, Goldman is once again back to its old business, scouting out loopholes in a new government-created market with the aid of a new set of alumni occupying key government jobs.AS ENVISIONED BY GOLDMAN, THE FIGHT TO STOP GLOBAL WARMING WILL BECOME A "CARBON MARKET" WORTH $1 TRILLION A YEAR.Gone are Hank Paulson and Neel Kashkari; in their place are Treasury chief of staff Mark Patterson and CFTC chief Gary Gensler, both former Goldmanites. (Gensler was the firm's co-head of finance) And instead of credit derivatives or oil futures or mortgage-backed CDOs, the new game in town, the next bubble, is in carbon credits - a booming trillion-dollar market that barely even exists yet, but will if the Democratic Party that it gave $4,452,585 to in the last election manages to push into existence a groundbreaking new commodities bubble, disguised as an "environmental plan," called cap-and-trade.The new carbon-credit market is a virtual repeat of the commodities-market casino that's been kind to Goldman, except it has one delicious new wrinkle: If the plan goes forward as expected, the rise in prices will be government-mandated. Goldman won't even have to rig the game. It will be rigged in advance.Here's how it works: If the bill passes; there will be limits for coal plants, utilities, natural-gas distributors and numerous other industries on the amount of carbon emissions (a.k.a. greenhouse gases) they can produce per year. If the companies go over their allotment, they will be able to buy "allocations" or credits from other companies that have managed to produce fewer emissions. President Obama conservatively estimates that about $646 billions worth of carbon credits will be auctioned in the first seven years; one of his top economic aides speculates that the real number might be twice or even three times that amount.The feature of this plan that has special appeal to speculators is that the "cap" on carbon will be continually lowered by the government, which means that carbon credits will become more and more scarce with each passing year. Which means that this is a brand-new commodities market where the main commodity to be traded is guaranteed to rise in price over time. The volume of this new market will be upwards of a trillion dollars annually; for comparison's sake, the annual combined revenues of an electricity suppliers in the U.S. total $320 billion.Goldman wants this bill. The plan is (1) to get in on the ground floor of paradigm-shifting legislation, (2) make sure that they're the profit-making slice of that paradigm and (3) make sure the slice is a big slice. Goldman started pushing hard for cap-and-trade long ago, but things really ramped up last year when the firm spent $3.5 million to lobby climate issues. (One of their lobbyists at the time was none other than Patterson, now Treasury chief of staff.) Back in 2005, when Hank Paulson was chief of Goldman, he personally helped author the bank's environmental policy, a document that contains some surprising elements for a firm that in all other areas has been consistently opposed to any sort of government regulation. Paulson's report argued that "voluntary action alone cannot solve the climate-change problem." A few years later, the bank's carbon chief, Ken Newcombe, insisted that cap-and-trade alone won't be enough to fix the climate problem and called for further public investments in research and development. Which is convenient, considering that 'Goldman made early investments in wind power (it bought a subsidiary called Horizon Wind Energy), renewable diesel (it is an investor in a firm called Changing World Technologies) and solar power (it partnered with BP Solar), exactly the kind of deals that will prosper if the government forces energy producers to use cleaner energy. As Paulson said at the time, "We're not making those investments to lose money."The bank owns a 10 percent stake in the Chicago Climate Exchange, where the carbon credits will be traded. Moreover, Goldman owns a minority stake in Blue Source LLC, a Utah-based firm that sells carbon credits of the type that will be in great demand if the bill passes. Nobel Prize winner Al Gore, who is intimately involved with the planning of cap-and-trade, started up a company called Generation Investment Management with three former bigwigs from Goldman Sachs Asset Management, David Blood, Mark Ferguson and Peter Harris. Their business? Investing in carbon offsets. There's also a $500 million Green Growth Fund set up by a Goldmanite to invest in green-tech ... the list goes on and on. Goldman is ahead of the headlines again, just waiting for someone to make it rain in the right spot. Will this market be bigger than the energy-futures market?"Oh, it'll dwarf it," says a former staffer on the House energy committee. ...."If it's going to be a tax, I would prefer that Washington set the tax and collect it," says Michael Masters, the hedge fund director who spoke out against oil-futures speculation. "But we're saying that Wall Street can set the tax, and Wall Street can collect the tax. That's the last thing in the world I want. It's just asinine."Cap-and-trade is going to happen. Or, if it doesn't, something like it will. The moral is the same as for all the other bubbles that Goldman helped create, from 1929 to 2009. In almost every case, the very same bank that behaved recklessly for years, weighing down the system with toxic loans and predatory debt, and accomplishing nothing but massive bonuses for a few bosses, has been rewarded with mountains of virtually free money and government guarantees - while the actual victims in this mess, ordinary taxpayers, are the ones paying for it.It's not always easy to accept the reality of what we now routinely allow these people to get away with; there's a kind of collective denial that kicks in when a country goes through what America has gone through lately, when a people lose as much prestige and status as we have in the past few years. You can't really register the fact that you're no longer a citizen of a thriving first-world democracy, that you're no longer above getting robbed in broad daylight, because like an amputee, you can still sort of feel things that are no longer there.But this is it. This is the world we live in now. And in this world, some of us have to play by the rules, while others get a note from the principal excusing them from homework till the end of time, plus 10 billion free dollars in a paper bag to buy lunch. It's a gangster state, running on gangster economics, and even prices can't be trusted anymore; there are hidden taxes in every buck you pay. And maybe we can't stop it, but we should at least know where it's all going.The bubbles don't come 'til the end of the program... Turn off the bubbles... Turn off the bubble machine!EDIT: This text copied from the below link. I am not the writer for this -- although I wish I was. :)The Great American Bubble Machine

Yesterday, in answer to differently-worded questions that basically ask for the same information as this question does, I posted a long and documented answer, to which here I simply refer, without re-posting it yet again.As I mentioned at the end of my answer a few days ago concerning “Sherlock Holmes’” (author Conan Doyle’s) 1892 statement wishing for a united country of the British Empire and the United States, whenever I come to a question on Quora that concerns the principles animating the Americans in the American Revolution, invariably I find that there are already two short answers that just insult the Americans.I have spent ten years using our marvelous internet, enriched as it is by the forward-thinking generosity of governments, universities, and nonprofits, to fill it with scans of the original pages of the original documents from the libraries of hundreds of college and universities, that make it possible for anyone, for free, to do better and faster and more accurate research than has ever before been available to even the most prestigious scholars.Prior to undertaking this effort, I was an associate and then partner at Arnold & Porter law firm in Washington D.C., maintaining a large pro bono docket, in addition to being immersed in huge “document” cases brought against the United States government by more than 100 banks and bank investors. I have ten years’ experience researching through thousands of documents, and from them, building arguments that had to stand-up to challenge not from PhD review committees, but by the elite lawyers of the U.S. Department of Justice, motivated to protect the U.S. Treasury from claims that in aggregate constituted $100 billion, claims that the audited financial statements of the U.S. government noted were the only litigations facing the U.S. that, if lost, represented a material adverse threat to the balance-sheet of the United States. I was, as usual, “second chair” to the lead counsel in each case, as the central coordinator of all the 65-some law firms for all the different plaintiffs.In December 1997, the trial judge in the case issued a decision on the “contract liability” phase of the case (calculation of damages would come later) agreeing with the positions I had documented through this research, and castigating the Justice Department for borderline frivolous resistance. I was in Paris, France at the time, visiting my parents with my wife and children, and we all saw the decision reported in the International Herald Tribune. This was affirmed on appeal in 2001. See California Federal Bank, et al., v. U.S., 39 Fed. Cl. 753 (1197), aff’d, 245 F.3d 1342 (Fed. Cir. 2001).The position I took was that in the 1980s, to persuade new investors to come-in with their investment capital to rescue banks ruined in the 1980s by their cowboy managers, the government had made a binding contract deal with each of the banks and investor-groups (using a common form of contract with each bank or investor), and that in 1989 the government had enacted a federal statute that broke the contract deal, for which the government had to pay damages, providing that the banks could prove their individual losses (which turned out to be pretty hard to do; most banks got no award at the damages phase).The effect of the 1989 change in law was that in many cases, the government seized the money invested into the banks by the new investors based on the contract promises of freedom from government interference in the management of the banks, and threatened to seize the rest of the banks unless the new investors poured-in more of their own money into the banks - where that additional investment would be vulnerable to government seizure by any new change in the law.The government in the 1990s took the position that what the government had said in the 1980s was no contract deal; the government could ignore it and change the rules at-will. We resisted with documented arguments. We won.This, as it turns out, is the same kind of conflict that led to the American Revolution. The Americans said that they had received binding contract promises, in the form of charters, from all the kings and queens from James I through George II, promising elected representative law-making assemblies in each of the colonies, and that the Parliament of Great Britain, backed by King George III, was breaking the contracts, by asserting that no lawmaking by any of these elected assemblies was of any effect at all. The Parliament of Great Britain asserted a power to override everything done by all the elected assemblies, and even asserted a power to order the elected assemblies what laws they must enact, even if the people of the colonies did not want those to be their laws.The ministers of George III denied that any of the kings before George III had had the power to bind the government in contract in the future. They said that the Parliament of Great Britain was the “supreme legislature” and had all lawmaking power in America, despite all the elected representative law-making assemblies in all the colonies, promised the lawmaking powers, by the earlier kings and queens, in the charters.We will see this very clearly in the words of the Colony Minister, Lord Hillsborough, in February 1768, in a discussion with a future U.S. Senator in the First Congress, who then was an agent for the colony of Connecticut, visiting in London.This ties-in directly with my pro bono legal work. One of my pro bono matters was aiding The National Endowment for Democracy. The purpose of the NED is to promote democratic self-government in countries that do not have it. For some seven years I was “second chair” to partner Ken Juster of A&P, a former State Dept. appointee, who is now the U.S. Ambassador to India. The NED board is comprised of sitting U.S. Senators and Representatives, former Executive Branch policy appointees, and experts in democracy.One of the experts who sat on that board while I was there was Francis Fukuyama, author of a famous book that indicated that the administrative welfare state of the European model was the culmination of centuries of arguments concerning what is the best form of government.After I left the practice of law and began to do the research, I discovered what appears to me to be a fundamental problem with the Fukuyama position: it fails to take into account the irresistible element inside each person to be free to make his or her own decisions about the laws and the shape of government, and to be free to make decisions about how the individual will live his or her own life. There is an element in the conception of the administrative welfare state that seems to see the people as a kind of animal-herd that has to be managed, and whose highest goal is bodily health (medical care) and satisfaction of bodily needs and desires. If these can be but managed and provided reliably, government has done what it must do. Encouragement of the free, individual, inventive mind is an after-thought in this; it is treated as a detail whose effects have to be managed.This I found quite offensive, particularly as my prior-to-law career was being a producer of experimental, avant-garde live performance based in San Francisco in the 1980s, for ten years. Here were the quintessential inventive individual minds - and I was dedicated to seeing that their visions achieved reality. I had success here, too; we toured the U.S. and Europe to prestigious festivals, culminating in an invitation from the U.S. State Department - with it paying our expenses - to represent United States creativity and innovation behind the Iron Curtain in 1987, just as the movements that would bring that curtain down were growing. My last production in June 1988 played the Kennedy Center Opera House - but by that point I attended the show I had produced merely as a spectator, because I would be entering Georgetown University Law Center just a few months later. I had decided to move-on from theater to law, after seeing the unhappiness of the young and inventive persons who lived behind the Iron Curtain, at the festivals we had performed in. It was the oppressive, all-controlling nature of the governments that they lived under that was crushing their spirits and rendering them hopeless and depressed. I saw it and heard it from them, personally.Lately, Fukuyama’s position has been challenged by those who say the more controlling Chinese model is the true best form of government. But I think the flaw in Fukuyama’s vision comes from the opposite side: a fundamental misunderstanding of human nature. We are not just bodies, but minds; and the Fukuyama vision fails to accommodate the power of this.That is certainly what occurred to cause the American Revolution - as I have found repeatedly and without contradiction in all the original source documents.But this is an understanding of the American Revolution that discredits the increase of power in governments; and thus encounters a reluctance to report it or to teach it, because such a high percentage of our teachers, from the kindergarten level all the way up through the top-levels of post-graduate education, rely on government for their career-long income, and for the security of their pensions to the end of their lives. This is an unexpected consequence of the argument that all people have a “right” to education that must be delivered by the government.Of course it is best if everyone is well-educated.But the consequence is that almost all teachers, at all levels, are either directly paid by government, or rely on government subsidies - state-guaranteed tuitions, and government research grants. None of these people will be inclined to see merit in teaching that in the past, some very intelligent, very well-informed and well-educated people - indeed, almost all of the intelligent, well-educated Americans - rejected the increase in power of government. To teach this today would tend to lead to a weakening of the power of government today, and thus, to increase the risk that governments will not be able to deliver the cash promised to them in today’s paychecks and tomorrows pensions. When government is so much in debt as ours in, everyone who depends on government for their life-sustaining income is rightfully very nervous that the government might suddenly fail to meet its financial promises. In a time of threatening debt, ensuring that the government has ever-more money-collecting power is vital to everyone who lives on the government.Until the development of the internet, it has been impossible for anyone except those dependent on government income (directly paid or by guarantees of payments by others) to see the original documents. But now it is possible for persons outside the financial incentives of the system to see these materials.It then remains for someone competent in research to take the vast amount of time necessary to search out all the relevant material, and for someone competent in analytical writing to present the results of that research, with a competence that withstands the most challenging inquiry. Such a person I propose myself to be, having in the past withstood the challenge of elite Department of Justice lawyers, as confirmed by both a federal U.S. trial judge in 1997, and of the appellate U.S. judges in 2001.My works are very lengthy, because I include all the research to back-up what I say, and I note repeatedly that anyone can check my work. The results of my first five years of research, 2009 to 2014, are on amazon kindle in a massive unedited data-dump, basically, which no one else appears to find useful, but which I already know, and use to locate relevant material for questions such as this.In 2016–2017 I decided to focus on the reasons for the American Revolution, specifically by looking at those who later became officials in the federal government, and on what they did in relation to firearms in the period before the Declaration of Independence. This has been on SSRN since September 2017. Subsequently I have found and corrected many typographical errors, in an updated pdf that anyone may request from me.Now: as regards this specific answer, I will not re-post everything that I just posted twice on Quora yesterday. In summary, I established that beginning with Queen Elizabeth I, the Crown of England, and later the combined Crown of England and Scotland, established a policy unique among European monarchs, of making contract deals of the Crown with its own subjects. A key step in the process had been in 1215 with the Magna Charta, and then with the establishment of the House of Commons, which permitted those subjects who had money in the kingdom to intercept all Crown demands for money, treat them as mere requests, insist on explanations for the use of the money, and, if freely judging the uses to be good, and if freely judging that the money would be well-managed and thus applied to the stated purpose, they would “give and grant” their money.When James I succeeded Elizabeth, he inherited and adopted this long-established practice, that the Crown could make binding contracts with the subjects. Technology of ocean-sailing and economic developments coincidentally had progressed to the point that establishing colonies of English settlers in North America was not only feasible, but desirable.But, there not having been any traces of gold or silver discovered in North America, the British king had no incentive to send soldiers over to seize the gold; and thus, no incentive to send soldiers over at all. The gold and silver that motivated the King of Spain to send military missions into South America answerable to him did not exist in Britain regarding North America.And thus, beginning with King James I, the practice in Britain developed, that groups of subjects would conceive a colonization plan, either for economics or to serve as a religious refuge for dissenters, and they would come to him to seek a charter - which, by its own written terms, was a binding contract enforceable against future kings and queens.The settlers proposed to put their bodies and lives on the line in a wilderness, to develop it; but they insisted on having their own self-government, sot hat if they generated wealth through their efforts, they would have the power to protect it, more than the power that they would have in England or in Scotland. They were not going to leave civilization, risk death on the seas or in the wilderness of North America, then, having survived that, labor to build a wealthy land, only to have it all then taken-away by the government in London. They would not go unless they had a binding promise of self-government that would provide protection.And beginning with King James I, consistently through King George II, that is just what the kings promised.The settlers, in reliance on those contract promises, went out, and were successful. Or more substantially, their descendants were successful. The colonists were always thinking about their descendants; their documents are filled with their concern for “out posterity,” which was their term for their children, grandchildren, great-grandchildren, etc. The king’s promises were perpetual, so as to protect “our posterity.”What developed was what the British Commonwealth is today: a collection of states, each independent of all others, but united by having one King or Queen. No one elected assembly or parliament, no one set of ministers, had any role in advising the king on what laws to make in any other state.The only exception to this was ocean-trade, which was managed from London; but the writ of power arising from this extended only to the landward-side door of the customs-house in each port, and along the coasts only as needed to ensure “no smuggling,” so that every product that was supposed to go through a customs-house did indeed go through customs-house.In 1760, with the death of King George II, his grandson ascended the throne as King George III. He was young and inexperienced, only 22 years old. Sensitive to the fact that his grandfather and great-grandfather had been German in birth and culture, he volunteered in his accession speech (otherwise drafted by ministers) “Born and educated in this country, I glory in the name of Britain.”In his first act of law, he designated virtually all of his independent income to Parliament, in exchange for an annual “civil list” payment from Parliament - and thus the king put himself solely financially under the control of the Parliament of Great Britain, apart from any connection he had to any other elected legislature in any colony. That property today is managed by an entity called, since 1955, “The Crown Estate,” and its website, on it history page, accessed today, says“Since 1760, the net income of The Crown Estate has been surrendered to the Exchequer by the Monarch under successive Civil List Acts, passed at the beginning of each reign.”In 1761, there was a national election for the House of Commons, which wikipedia today calls “one of the most undemocratic in British history.” There would not be another national election until May 1768.In 1760, the Parliament of Great Britain had taken-over control of the king, a naive young man seeking emotional acceptance from Britain, by means of monopolizing the king’s money; and then a year later a group of rich insiders took-over control of the Parliament of Great Britain. Thus these rich and greed-driven insiders now had control of the king.That is the reality of the situation.In 1763, with Britain’s spectacular victory over France and Spain simultaneously in the Seven Years War, North America was freed of French and Spanish troops and claims of power.In 1764, the ministers and the Parliament of Great Britain - without any legal-analysis forethought so far as I have found - announced that in 1765 it would enact a law disqualifying all the American colonial governments from issuing court decisions, enacting statutory laws, registering land-title changes, etc., unless these government actions were written on paper imported from Britain. The price of this paper would include a sales-tax, payable to the government in London, and symbolized by a stamp printed or impressed upon the paper.The basic concept was to turn the internal lawmaking of each colony into a matter of the ocean-trade - because everything internal to government in the colonies now would have to be done on an import product - the paper - and thus, within the power of London to rule.Each colony would have a government-appointed agent, known as the stamp-agent, who would manage the import and distribution of this paper.Colonial leaders in London, such as Benjamin Franklin, and such as a brother of Virginian Richard Henry Lee, official representatives of the colonies as registered agents, spoke against this law on policy grounds, but they lost, and in 1765 the Parliament of Great Britain enacted, and King George III assented, and this became law.Benjamin Franklin and Richard Henry Lee, and others, who had opposed the law on policy but had lost, then began to strategize how they or their friends could get the lucrative and powerful posts as the colonial stamp-agents.But to their surprise, a massive, continent-wide explosion of opposition to this Stamp Act occurred all over America.Because if this could be done with paper, it could be done with any tangible object. Imagine, for example, clothing. Parliament could announce that no judge could issue a decision, unless wearing clothing imported from Britain; no lawyer could argue a case, unless wearing clothing imported from Britain; no witness could take the stand and testify, unless wearing clothing imported from Britain; no legislator in any assembly could have his vote on a bill counted, or have his words in debate recorded, unless he was wearing clothing imported from Britain at the moment he voted or spoke; and even, that no one could register a complaint of crime of robbery or battery, unless, when the person suffered this bodily attack, the person had been wearing clothing imported from Britain - such that it was British-made cloth that the criminal’s knife or bullet penetrated, before penetrating the flesh of the victim.This is what one answer to this question refers to merely as better-management of the colonies, colonies that, according to that answer, heretofore had experienced the “benign neglect” of Parliament.In 1766 Parliament resentfully backed-down, but in so doing, enacted a sweeping assertion of power to all lawmaking in North America, known as the Declaratory Act.New ministers came in, whose attitude was that no colonial government was anything to be regarded in any way. In response to the American resistance, they then developed a legal theory, a conception of what government was, that said in any government, there had to be one supreme source of power, able to override all other supposed sources of power.One of those ministers, who came into the office of Secretary of State for the Colonies in January 1768, was born Wills Hill, son of the first Viscount Hillsborough, an Irish peerage. Unlike English or Scottish peers, Irish peers could sit in the House of Commons. In 1742, his father’s death made him second Viscount Hillsborough, but he kept his seat in the Commons (elected in 1741) until in 1756 he was made a Baron in the English peerage (Baron of Harwich) which moved him into the House of Lords. Later, in 1772, after his service as Colony Secretary, he would be rewarded for his conduct of that office - rewarded for the treatment that we are about to see that he gave the colonies - by being made Earl of Hillsborough in the English peerage. In 1789 he would be made Marquess of Downshire in the Irish peerage. Marquess being the highest title he earned (the next highest is Duke), this is how he is labeled on wikipedia today.In the documents of the time, he is always referred to as Lord Hillsborough (sometimes with one “l”).Wills Hill’s very first act on becoming Colony Secretary was to assert that there was then, and had always been from the beginning of time, a power in the government in London to veto every law made by any American colony, regardless of the language any king or queen had ever signed in any charter, an inherent power of government which had - until he obtained government power as Colony Secretary - been left unasserted due to what a prior answer here calls “benign neglect.”One of America’s best-educated and most respected lawyers, William Samuel Johnson of Connecticut, happened to be in London on Connecticut business (a long-running lawsuit over borders and Indian claims) and he had become Connecticut’s official representative in London on general matters.Johnson - later to become a U.S. Senator in the 1st U.S. federal Congress - promptly called on Lord Hillsborough to make the case that Hillsborough’s assertion of veto power violated the Connecticut Charter, and thus, that Hillsborough’s demand was unenforceable.Here is what Lord Hillsborough wrote, and then Johnson’s report to the Connecticut Governor of his meeting with Hillsborough, as reported in my September 2017 SSRN paper:>On 23 January 1768, in London, the new Colony Minister, Lord Hillsborough, addressed a circular letter to each of the governors of the American colonies (the copy I review is to John Penn of Pennsylvania, in the Pennsylvania Archives, but I presume the same letter went to each governor):“His Majesty having been graciously pleased to appoint me to be one of his principal Secretaries of State, and to commit to my care the dispatch of all such business relative to his Majesty’s colonies in America … your dispatches be for the future addressed to me. …“[A]ll possible facility & dispatch should be given to the business of his colonies, and as nothing can more effectually contribute to this salutary purpose than a frequent and full communication of all occurrences that may happen, and a regular and punctual transmission of all acts and proceedings of government, and legislature, and of such papers as have any relation thereto;“I have it in command from his Majesty to recommend this to your particular attention, his Majesty having observed with concern, that this essential part of the duty of his officers in America has scarcely any where been duly attended to, and in several colonies, particularly the Charter and Proprietary governments, almost entirely neglected.”>On 13 February 1768, in London, future 1stUS Congress Senator William Samuel Johnson wrote Connecticut Governor William Pitkin III in Connecticut at Hartford, to report in detail on his recent meeting with the new Colony Minister, Lord Hillsborough (Wills Hill). Governor Pitkin received this on April 18, 1768:“As soon as Lord Hilsborough publicly entered upon his office of Secretary of State for the American department [officially appointed February 27], I thought it my duty to wait upon his lordship and congratulate him upon his appointment to that important office, and to recommend the Colony of Connecticut to his lordship’s favor and protection. …“[H]e said, we were a very free Colony … we were very deficient in our correspondence, seldom writing to his Majesty’s Ministers … they were often quite in the dark about us, and seemed to have too little connection with that Colony.“I assured him, in answer, that I believed he might depend upon it that everything was communicated which the government there could imagine it fit to trouble the King’s Ministers with … from the nature of our constitution, his lordship would see that fewer occasions would occur of troubling the King’s Ministers with our affairs than in those governments immediately under the Crown, which must necessarily be, in some sort, actually administered by the Ministers themselves; and if in any cases real delays had happened [various excuses justified the delays].“He seemed pretty well satisfied with this apology, but then proceeded to a much more interesting subject. He had, he said, in his circular letter, requested that a copy or our colony laws should be sent him …. I told him, I believed the colony had several times sent over the printed law book; that I thought there was one or more at the Plantation Office, and imagined they might even be had in England.“He replied, however that might be, as his was a new office, it would be necessary that a copy should be lodged there; and he thought it the duty of government to send it, and transmit from time to time, not only the laws that should pass, but all the minutes of the proceedings of Council and Assembly, that they might know what we were about, how government was administered, and rectify whatever might be amiss.“I said, if his Lordship wanted a copy of our laws for his private perusal, or to remain in his office for the information of his secretary and clerks, or to be referee to whenever any affairs of the colony were under consideration, I did not doubt the colony would send him one of their law books … but if his Lordship meant to have the laws now in force there, and those which should hereafter pass, transmitted (as from the colonies immediately under the Crown) for the inspection of the Ministry as such, and for the purpose of approbation or disapprobation by his Majesty in Council, (which I saw very plainly was what he was driving at,) it was what the colony had never done, nor thought themselves obliged to do, and I was persuaded would never submit to; and if his Lordship would be pleased to attend to the charter granted us by King Charles II., I did not doubt he would be clearly of the opinion, that the colony were thereby vested with a complete power of legislation, and that their acts needed no farther approbation, nor were subject to any revision; and in point of fact, his Lordship well knew that those laws had never been re-examined here, that the colony had been for more than a century in the full exercise of these powers, under the eye and with the approbation of government here, without any the least check or interruption, except in a single instance [referring to actions by an agent, Edmund Andros, of about-to-be-deposed King James II, in 1687], in such times, and under such circumstances, as I believed his Lordship would not mention but with detestation, much less consider as a precedent.“He said, he had read our charter with some attention, and he knew what powers we had exercised under it; that it was very full and expressive, but there were such things as extravagant grants, which were therefore void; and however great a latitude of expression was made use of in it, still there might be a doubt, perhaps, what would really pass by it in legal construction; that he believed I would admit there were many things which the King could not grant, as the inseparable incidents of the Crown, &c.; and it might deserve consideration whether some things which King Charles had pretended to grant to the Colony of Connecticut were not of that nature, particularly the power of absolute legislation, which tended to the absurdity of introducing imperium in imperio, and to create an independent state.“I replied, that, for the purpose of his argument, I apprehended it was not necessary either to admit or deny that there were some prerogatives of the Crown so inseparably incident or annexed to it that they could not be granted away, (upon which subject some lawyers had, however, refined so much as to render themselves very unintelligible,) since nobody had ever reckoned the power of legislation among those inseparable incidents of the Crown; all lawyers were agreed, that it was a peculiar and undisputed prerogative of the Crown to create corporations, and that the power of law-making was incident to every corporation, at least in some degree … founded in the reason of things … that every corporation in England enjoyed it as really, though not so extensively, as the Colony of Connecticut, they to their particular purposes for which they were created, we to ours ….“That the colony charters were in several respects of a higher nature, and founded upon a better title than even those of the corporations of England, particularly that those here were mere acts of grace and favor, whereas those in America were granted in consideration of very valuable services done, or to be performed, which having been abundantly executed, at immense expense by the grantees, by the peopling and cultivation of a fine country, to the vast extension of his Majesty’s dominions, and the prodigious increase of the trade and revenues of the Empire, they must now be considered as grants upon valuable consideration, sacred and most inviolable. …“Parliament, as well as the Crown, having for more than a century acquiesced in the exercise of the powers claimed by it [the Connecticut government], this would amount to an approbation, so that the colony had now a Parliamentary sanction, as well as a title by prescription, added to the royal grant; by all which they must be effectually secured in the full possession and exercise of all their charter rights.“His Lordship endeavored to distinguish between the ordinary corporation powers (in which he would admit the power of making by-laws was included) and that legislative power exercised in the charter colonies, upon which he was pretty full; and I still endeavored to avail myself of those distinctions in favor of my argument, upon this principle, that the very creating of a corporation for the purpose of establishing a colony included in its idea the full power of legislation, the government of a colony being a more extensive and complicated object than that of a single city or town, and necessarily requiring more full and absolute powers, which it must therefore be injudicious to limit by comparing them strictly with those of corporations for inferior purposes.“Finally, upon this point, his Lordship said, these were matters of nice and curious disquisition, and required a longer time for full discussion than he could then well spare; he seemed, however, to yield the necessity of any royal approbation as requisite to the validity of our laws, but still insisted that (admitting the validity of King Charles’s grant) they ought to be regularly transmitted for the inspection of the Privy Council, and for disapprobation, if found within the saving of the charter, ‘repugnant to the laws of England;’ that those who claimed under the charter must admit the force of that limitation of their legislative powers, at least, and that alone would render it necessary that their laws should be transmitted and inspected here.“Upon which I begged leave to observe to his Lordship, that the colony did not apprehend that any extrajudicial opinion of his Majesty’s Ministers, or even of the King’s Privy Council, could determine whether any particular act was within that proviso or not; that this could only be decided by a court of law, having jurisdiction of the matter about which the law in question was conversant; that though perhaps we should not contend, but that, if the General Assembly [of Connecticut] should make a law repugnant to a statute of Great Britain, (not in the sense of diverse form [from], but flatly, and in terms contradictory to it,) such law, by the saving in the charter, might be void, yet a declaration of the King in Council would still make it neither more nor less so, but be as void as the law itself; because its being void or not depended merely upon the restraining clause in the charter, not upon any authority reserved to the Crown, or the Privy Council, to decide about it, from which they were by other words in the same charter clearly and expressly excluded; that therefore the only method which could be taken in such case must be for the persons aggrieved by such act to bring their action at law, in such manner as to bring in question the validity of such act of Assembly, when the court before whom the trial should be, could fairly and legally determine upon it; that this might be done in the courts of law in the colony, and I doubted not would be very fairly decided there, and leave no room for an application here, or, if the contrary should ever happen, the interposition here (if any) I conceived must be in the judicial only, not by any means in the official way.“As against the Crown, especially, the charter grant was completely, and to all intents and purposes, conclusive; King Charles II. had, for himself and his successors, absolutely granted all their power, by which the Crown must be bound, and forever estopped to say that there was any ground for the Privy Council, or any of the King’s Ministers, who were still but the delegates of the Crown, and acting in behalf of it, and by authority derived only from thence, to interpose in confirming or disannulling the laws of that colony, and consequently there could be no manner of [or] occasion for transmitting our acts to his Majesty’s Ministers, or for their giving themselves any trouble about them.“The judicial power of the Privy Council … his Lordship did not mention, nor indeed, as he had stated it, did it properly belong to the argument ….“As to the minutes of Council and Assembly … I told his Lordship that there were none kept, but only in short notes … perfectly unintelligible unless the colony sent their Secretary, after every session, to explain them ….“His Lordship said that we had a very particular method of doing business; that he had not seen these things quite in the light which I had endeavored to place them in, and he feared we were in danger of being too much a separate independent state, and of having too little connection with or subordination to this country, upon which our security and well-being depended; that, however, these things merited a farther consideration; he hoped, at least, the colony would send him their laws, and we might perhaps talk farther upon these subjects, upon some future occasion ….“[I] left him not well to find that he had entertained such ideas, and was in danger of such opinions, as you see, from the tenor of his conversation … [ideas which had] been revolving in his mind ever since he was at the Board of Trade… as this nobleman is now at the head of all American affairs… I imagined it might be of some use to acquaint you … to see what loose, mistaken notions those who are esteemed very great men (and really are so in many respects) are capable of entertaining of colony rights ….”When Lord Hillsborough asserted that the promises of King Charles the Second in the Connecticut charter were “extravagant grants, which were therefore void,” he effectively said that the promises in the charter were lies, and that Parliament and the ministers and the king could act as if those promises never existed, despite the truth of what Johnson asserted, that the promises “were granted in consideration of very valuable services done, or to be performed, which having been abundantly executed, at immense expense by the grantees, by the peopling and cultivation of a fine country, to the vast extension of his Majesty’s dominions, and the prodigious increase of the trade and revenues of the Empire.”It is true that Lord Hillsborough concluded this discussion by saying that “these things merited a farther consideration,” which might mean that he had not finally concluded that the charter promises were “extravagant grants, which were therefore void.” However, as we will see, and as Johnson wrote, there never was a “farther consideration” – Lord Hillsborough always spoke and acted as a man who had unshakably decided that the charter promises were “extravagant grants, which were therefore void.”There had never been a duty to send “a regular and punctual transmission of all acts and proceedings of government” from each colony for review by ministers chosen by the Parliament of yet another of the governments all under the same king. In the colonies in which the governor was appointed by the king (chosen by the ministers), the king might direct his governor to do this, but that would be a personal obligation of the individual, not of the colony itself as a legal entity. In the proprietary and charter governments of Connecticut and Rhode Island, there was no such individual in existence (the governors there not being appointed by the king) and thus no such duty attached even to specific individuals.Colony Minister Lord Hillsborough thus asserted a duty applicable to colonies as legal entities that did not exist and had never existed. On this false foundation, he then made a complaint that the supposed pre-existing duty “has scarcely any where been duly attended to, and in several colonies, particularly the Charter and Proprietary governments, almost entirely neglected.” Hillsborough thus made a basis of complaint about bad conduct by colony leaders that was a false complaint, because there had never been any such duty, and thus there was no neglect of duty.Making a complaint of bad performance of duties in the past is the usual path by which someone who wants to fire the current officials, and replace them with his own favorites, seeks to build the case for firing. And that is what Colony Minister Hillsborough was doing here.Concoct a new duty; assert that the duty had always existed; criticism the current office-holders for having failed to perform their duty in the past; and castigate and denounce them if they fail to begin now to perform that duty in the present or into the future; and then fire them. This is a standard manipulation technique, in which the subject of discussion is always the targeted person, and never the person who is trying to control and dominate that person.More fundamentally, when Colony Minister Lord Hillsborough spoke of the colonies as “his Majesty’s colonies,” he meant something far more significant than merely the polite formulations of words that are used when a democracy operates within the forms of royal government. When people referred to the Parliament of Great Britain as “his Majesty’s Parliament,” they did not mean thereby that the king owned Parliament and that he had a right to give unlimited orders to Parliament or to its individual members. The king could not command the individuals in the House of Commons or in the House of Lords how to vote on particular bills, or what to say about particular matters of public concern.Not so with the American colonies. When Colony Minister Lord Hillsborough used the words “his Majesty’s colonies,” he meant ownership and control – the right to give orders to the colonies as governments, and to the individuals within each colony government, and to all the individuals living within the colonies.The ministers in London would never have dared to speak and act in this fashion so long as the French and the Spanish had large armed forces on the continent of North America – and in fact they did not, except briefly during the reign of King James the Second, who by applying the same attitude within Britain itself, got himself overthrown and exiled. So long as France and Spain held large portions of North America, the leaders in London needed the active aid and support of the Americans, and thus, treated the Americans with respect.It was only after the expulsion of the French and the Spanish from Canada and from Florida in 1763 that the leaders in London began to feel that they could now command and order the Americans.In essence, what Lord Hillsborough asserted over America was the kind of power that William the Conqueror had asserted over England in 1066.The entire British history over 700 years, of limitations upon the sovereign, of rights of the subjects enforceable against the sovereign, and of the sovereign as a deal-maker with subjects, who honored the deals - all this, the London ministers and the Parliament of Great Britain threw-away in 1764, just as stated by Lord Hillsborough in January and February 1768, as quoted above.The American descendants of the original British colonists would have no more claim to that 700 years of British constitutional history than would the Natives of India, or the Natives of Africa.To stop this is the “main reason for the American Revolution” that this question asks for.

Junk food is unhealthy food that is high in calories from sugar or fat, with little dietary fiber, protein, vitamins, minerals, or other important forms of nutritional value.[1][2][3]Precise definitions vary by purpose and over time. Some high-protein foods, like meat prepared with saturated fat, may be considered junk food.[4] The term HFSS foods (high in fat, salt and sugar) is used synonymously.[5][6] Fast food and fast food restaurants are often equated with junk food, although fast foods cannot be categorically described as junk food.[7][8][9] Most junk food is highly processed food.Concerns about the negative health effects resulting from a junk food-heavy diet, especially obesity, have resulted in public health awareness campaigns, and restrictions on advertising and sale in several countries.[10][11][12]Junk food is a pejorative dating back at least to the 1950s.[13]Contents1 Origin of the term2 Definitions3 History4 Popularity and appeal5 Health effects6 Anti-junk food measures6.1 Taxation6.2 Restricting advertising to children6.3 Restricting sales to minors7 See also8 References9 Further reading10 External linksOrigin of the termThe term junk food dates back at least to the early 1950s, although its coinage has been credited to Michael F. Jacobson of the Center for Science in the Public Interest, in 1972.[3] In 1952, the phrase appeared in a headline in the Lima, Ohio, News, "'Junk Foods' Cause Serious Malnutrition", over a reprint of a 1948 article from the Ogden, Utah, Standard-Examiner, originally titled, "Dr. Brady’s Health Column: More Junk Than Food". In the article, Dr. Brady writes, "What Mrs. H calls 'junk' I call cheat food. That is anything made principally of (1) white flour and or (2) refined white sugar or syrup. For example, white bread, crackers, cake, candy, ice cream soda, chocolate malted, sundaes, sweetened carbonated beverages."[14] The term cheat food can be traced back in newspaper mentions to at least 1916.[15]DefinitionsA homemade vegetarian pizza on whole-grain bread with multiple types of vegetablesWhether foods such as pizza are considered junk food depends upon how they are made.In Andrew F. Smith's Encyclopedia of Junk Food and Fast Food, junk food is defined as "those commercial products, including candy, bakery goods, ice cream, salty snacks and soft drinks, which have little or no nutritional value but do have plenty of calories, salt, and fats. While not all fast foods are junk foods, most are. Fast foods are ready-to-eat foods served promptly after ordering. Some fast foods are high in calories and low in nutritional value, while other fast foods, such as salads, may be low in calories and high in nutritional value."[7]Junk food provides empty calories, supplying little or none of the protein, vitamins, or minerals required for a nutritious diet.[16] Many foods, such as hamburgers, pizza, and tacos, can be considered either healthy or junk food, depending on their ingredients and preparation methods.[17] The more highly processed items usually fall under the junk food category,[18] including breakfast cereals that are mostly sugar or high fructose corn syrup and white flour or milled corn.[19]The United Kingdom's Advertising Standards Authority, the self-regulatory agency for the UK ad industry, uses nutrient profiling to define junk food. Foods are scored for "A" nutrients (energy, saturated fat, total sugar and sodium) and "C" nutrients (fruit, vegetable and nut content, fiber and protein). The difference between A and C scores determines whether a food or beverage is categorized as HFSS (high in fat, salt and sugar; a term synonymous with junk food).[20][5][6]In Panic Nation: Unpicking the Myths We're Told About Food and Health, the junk food label is described as nutritionally meaningless: food is food, and if there is zero nutritional value, then it isn't a food.[21] Co-editor Vincent Marks explains, "To label a food as 'junk' is just another way of saying, 'I disapprove of it.' There are bad diets - that is, bad mixtures and quantities of food - but there are no 'bad foods' except those that have become bad through contamination or deterioration."[22]HistoryAccording to an article in the New York Times, "Let Us Now Praise the Great Men of Junk Food", "The history of junk food is a largely American tale: It has been around for hundreds of years, in many parts of the world, but no one has done a better job inventing so many varieties of it, branding it, mass-producing it, making people rich off it and, of course, eating it."[23] Cracker Jack, the candy-coated popcorn-and-peanuts confection, is credited as the first popular name-brand junk food; it was created in Chicago, registered in 1896, and became the best-selling candy in the world 20 years later.[24][25]Popularity and appealJunk food in its various forms is extremely popular, and an integral part of modern popular culture. In the US, annual fast food sales are in the area of $160 billion,[26] compared to supermarket sales of $620 billion[27] (a figure which also includes junk food in the form of convenience foods, snack foods, and candy). In 1976, "Junk Food Junkie", a US Top 10 pop song, described a junk food addict who pretends to follow a healthy diet by day, while at night gorges on Hostess Twinkies and Fritos corn chips, McDonald's and KFC.[28] Thirty-six years later, Time placed the Twinkie at #1 in an article titled, "Top 10 Iconic Junk Foods": "Not only...a mainstay on our supermarket shelves and in our bellies, they've been a staple in our popular culture and, above all, in our hearts. Often criticized for its lack of any nutritional value whatsoever, the Twinkie has managed to persevere as a cultural and gastronomical icon."[29]America also celebrates an annual National Junk Food Day on July 21. Origins are unclear; it is one of around 175 US food and drink days, most created by "people who want to sell more food", at times aided by elected officials at the request of a trade association or commodity group.[30] "In honor of the day," Time in 2014 published, "5 Crazy Junk Food Combinations". Headlines from other national and local media coverage include: "Celebrate National Junk Food Day With… Beer-Flavored Oreos?" (MTV);[31] "National Junk Food Day: Pick your favorite unhealthy treats in this poll" (Baltimore);[32] "Celebrities' favorite junk food" (Los Angeles);[33] "A Nutritionist's Guide to National Junk Food Day" with "Rules for Splurging" (Huffington Post);[34] and "It's National Junk Food Day: Got snacks?" (Kansas City).[35]As for the source of junk food's appeal, there is no definitive scientific answer, both physiological and psychological factors are cited. Food manufacturers spend billions of dollars on research and development to create flavor profiles that trigger the human affinity for sugar, salt, and fat. Consumption results in pleasurable, likely addictive, effects in the brain. At the same time, massive marketing efforts are deployed, creating powerful brand loyalties that studies have shown can trump taste.[36]It is well-established that the poor eat more junk food overall than the more affluent, but the reasons for this are not clear.[37] Few studies have focused on variations in food perception according to socio-economic status (SES); some studies that have differentiated based on SES suggest that the economically challenged don't perceive healthy food much differently than any other segment of the population.[38] Recent research into scarcity, combining behavioral science and economics, suggests that, faced with extreme economic uncertainty, where even the next meal may not be a sure thing, judgment is impaired and the drive is to the instant gratification of junk food, rather than to making the necessary investment in the longer-term benefits of a healthier diet.[39][40]Health effectsWhen junk food is consumed very often, the excess fat, simple carbohydrates, and processed sugar found in junk food contributes to an increased risk of obesity, cardiovascular disease, and many other chronic health conditions.[41] A case study on consumption of fast foods in Ghana suggested a direct correlation between consumption of junk food and obesity rates. The report asserts that obesity resulted in related complex health concerns such as an upsurge in the rate of heart attacks.[42] Studies reveal that as early as the age of 30, arteries could begin clogging and lay the groundwork for future heart attacks.[43] Consumers also tend to eat too much in one sitting,[44] and those who have satisfied their appetite with junk food are less likely to eat healthy foods like fruit or vegetables.[45]Testing on rats has indicated negative effects of junk food that may manifest likewise in people. A Scripps Research Institute study in 2008 suggested that junk food consumption alters brain activity in a manner similar to addictive drugs like cocaine and heroin. After many weeks with unlimited access to junk food, the pleasure centers of rat brains became desensitized, requiring more food for pleasure; after the junk food was taken away and replaced with a healthy diet, the rats starved for two weeks instead of eating nutritious fare.[46][47] A 2007 study in the British Journal of Nutrition found that female rats who eat junk food during pregnancy increased the likelihood of unhealthy eating habits in their offspring.[48]Other research has been done on the impact of sugary foods on emotional health in humans, and has suggested that consumption of junk food can negatively impact energy levels and emotional well-being.[49]In a study published in the European Journal of Clinical Nutrition, the frequency of consumption of 57 foods/drinks of 4000 children at the age of four and a half were collected by maternal report. At age seven, the 4000 children were given the Strengths and Difficulties Questionnaire (SDQ), with five scales: hyperactivity, conduct problems, peer problems, emotional symptoms and pro-social behavior. A one standard deviation increase in junk food was then linked to excessive hyperactivity in 33% of the subjects, leading to the conclusion that children consuming excess junk food at the age of seven are more likely to be in the top third of the hyperactivity scale. There was no significant correlation between junk food and the other scales.[50]Anti-junk food measuresA number of countries have taken, or are considering, various forms of legislative action to curb junk food consumption. In 2014, United Nations Special Rapporteur on the right to health, Anand Grover, released his report, "Unhealthy foods, non-communicable diseases and the right to health", and called for governments to "take measures, such as developing food and nutrition guidelines for healthy diets, regulating marketing and advertising of junk food, adopting consumer-friendly labeling of food products, and establishing accountability mechanisms for violations of the right to health."[51]An early, high-profile and controversial attempt to identify and curb junk food in the American diet was undertaken by the McGovern Committee (United States Senate Select Committee on Nutrition and Human Needs, chaired by Senator George McGovern) between 1968 and 1977. Initially formed to investigate malnutrition and hunger in the US, the committee's scope progressively expanded to include environmental conditions that affected eating habits, such as urban decay,[52] then focused on the diet and nutritional habits of the American public. The committee took issue with the use of salt, sugar and fat in processed foods, noted problems with overeating and the high percentage of ads for junk food on TV, and stated that bad eating habits could be as deadly as smoking. The findings were heavily criticized and rebutted from many directions, including the food industry, the American Medical Association, and within the committee itself. In 1977, the committee issued public guidelines under the title, Dietary Goals for the United States, which became the predecessor to Dietary Guidelines for Americans, published every five years beginning in 1980 by the US Department of Health and Human Services.[53][54]TaxationSee also: Fat tax and Soda taxIn an attempt to reduce junk food consumption through price control, sin taxes have been implemented. Targeting saturated fat consumption, Denmark introduced the world's first fat-food tax in October, 2011, by imposing a surcharge on all foods, including those made from natural ingredients, that contain more than 2.3 percent saturated fat, an unpopular measure that lasted a little over a year.[55][56][57] Hungary has imposed taxes on foods and beverages high in added sugar, fat, and salt.[58] Norway taxes refined sugar, and Mexico has various excises on unhealthy food.[59] On April 1, 2015, the first fat tax in the US, the Navajo Nation's Healthy Diné Nation Act of 2014, mandating a 2% junk food tax, came into effect, covering the 27,000 sq mi (70,000 km2) Navajo reservation; the Act targeted problems with obesity and diabetes among the Navajo population.[60]Restricting advertising to childrenJunk food lines both sides of tall shelves at a grocery storeSome governments have considered taxes and limits on advertising or displaying junk food for sale.Junk food that is targeted at children is a contentious issue. In "The Impact of Advertising on Childhood obesity", the American Psychological Association reports: "Research has found strong associations between increases in advertising for non-nutritious foods and rates of childhood obesity."[61] The World Health Organization recommends that governments take action to limit children's exposure to food marketing, stating, "Many advertisements promote foods high in fats, sugar and salt, consumption of which should be limited as part of a healthy diet. ... Food advertising and other forms of marketing have been shown to influence children’s food preferences, purchasing behaviour and overall dietary behaviour. Marketing has also been associated with an increased risk of overweight and obesity in children. The habits children develop early in life may encourage them to adopt unhealthy dietary practices which persist into adulthood, increasing the likelihood of overweight, obesity and associated health problems such as diabetes and cardiovascular diseases."[10]In the UK, efforts to increasingly limit or eliminate advertising of foods high in sugar, salt or fat at any time when children may be viewing are ongoing.[62] The UK government has been criticized for failing to do enough to stop advertising and promotion of junk food aimed at children.[63] A UK parliamentary select committee recommended that cartoon characters advertising unhealthy food to children should be banned, supermarkets should have to remove unhealthy sweets and snacks from ends of aisles and checkout areas, local authorities should be able to limit the number of fast food outlets in their area, brands associated with unhealthy foods should be banned from sponsoring sports clubs, youth leagues and tournaments, and social media like Facebook should cut down junk food advertising to children—all are currently just recommendations.[64]In Australia, a Wollongong University study in 2015 showed that junk food sponsors were mentioned over 1,000 times in a single Australian cricket match broadcast, which included ads, and branding worn on players' uniforms and on the scoreboard and pitch. A coalition of Australian obesity, cancer and diabetes organizations called on Cricket Australia, the sport's governing body, to "phase out sponsorships with unhealthy brands", emphasizing that cricket is a "healthy, family-oriented sport" with children in the audience.[65]Restricting sales to minorsSeveral states in Mexico banned sales of junk food to minors, starting in August 2020.[66]See alsoicon Food portalObesityComfort foodDude foodGlutamic acid (flavor), common flavoring compounds and their synthetic versions, which may be added to some processed foods, to boost their savorinessHealth food, foods that tend to be nutrient rich, and may be eaten for their potential benefits to healthList of food additivesNutrient profilingUltra-processed foodReferences"junk food". Merriam-Webster Dictionary. Retrieved 13 March 2015."junk food". Macmillan Dictionary. Retrieved 13 March 2015.O'Neill, Brendon (November 30, 2006). "Is this what you call junk food?". BBC News. Retrieved June 29, 2010.Scott, Caitlin (May 2018). "Sustainably Sourced Junk Food? Big Food and the Challenge of Sustainable Diets". Global Environmental Politics. 18 (2): 93–113. doi:10.1162/glep_a_00458. ISSN 1526-3800. S2CID 57559050.Parks, Troy (16 Dec 2016). "WHO warns on kids' digital exposure to junk-food ads". American Medical Association.Snowdon, Christopher (6 Jun 2018). "The proposed 'junk food' advertising ban is aimed at you, not your children". The Spectator.Smith, Andrew F. (5 September 2000). Encyclopedia of Junk Food and Fast Food. Greenwood Press. p. x. ISBN 978-0313335273.Specter, Michael (2 November 2015). "Freedom from Fries". New Yorker. Retrieved 2019-01-01.Smith, Rene. "Fast Food Facts". Science Kids. Retrieved 2019-01-01."Food Marketing to Kids". Public Health Law Center (William Mitchell College of Law). 2010. Retrieved 13 March 2015."Protecting children from the harmful effects of food and drink marketing". World Health Organization. September 2014. Retrieved 13 March 2015."Food Marketing in Other Countries" (PDF).Zimmer, Ben (30 Dec 2010). "On Language: Junk". New York Times. Retrieved 19 March 2015.Popik, Barry (26 December 2008). "Junk Food". Barry Popik. Archived from the original on 18 March 2015. Retrieved 19 March 2015. "Barry Popik is a contributor to the Oxford English Dictionary, Dictionary of American Regional English, Historical Dictionary of American Slang, Yale Book of Quotations and Dictionary of Modern Proverbs. Since 1990 he has also been a regular contributor to Gerald Cohen's Comments on Etymology. He is recognized as an expert on the origins of the terms Big Apple, Windy City, hot dog, hamburger and many other food terms, and he is an editor of the Oxford Companion to American Food and Drink." - The Big Apple: AboutO’Conner, Patricia T. and Stewart Kellerman (15 February 2011). "Don't touch my junk food". Grammaphobia. Archived from the original on 24 September 2015.Larsen, Joanne. "Can you give me a list of junk foods?". Ask the Dietitian. Retrieved 2019-02-12.University of Glasgow (31 October 2013). "Pizza perfect! A nutritional overhaul of 'junk food,' ready-meals is possible". ScienceDaily. Retrieved 14 November 2014."What Makes a Food Junk?". Huffington Post. 4 August 2010.Magee, Elaine. "Junk-Food Facts". WebMD."Food: HFSS Nutrient Profiling". ASA. 29 Jun 2017. Retrieved 2019-02-10.Feldman, Stanely; Vincent Marks (2005). Panic Nation: Unpicking the Myths We're Told About Food and Health. London: John Blake Publishing. ISBN 9781844541225.O'Neill, Brendan (3 October 2005). "Is junk food a myth?". BBC News. London: BBC. Retrieved 10 February 2015. Vincent Marks is an Emeritus Professor of Clinical Biochemistry at the University of Surrey.Frenandez, Manny (7 Aug 2010). "Let Us Now Praise the Great Men of Junk Food". New York Times. Retrieved 2018-12-31.Petri, Alexandra E. (February 17, 2015). "Where Did Junk Food Come From?". The Daily Meal. Retrieved 2019-04-23.Parsons, Russ (Jun 4, 2013). "Cracker Jack: 120-year-old junk food gets new flavors, 'enhanced' prizes". Los Angeles Times. Retrieved 2019-04-23.Sena, Matt. "Fast Food Industry Analysis 2015 - Cost & Trends". FranchiseHelp. Retrieved 27 March 2015."Supermarket Facts". Food Marketing Institute. Retrieved 27 March 2015."Larry Groce "Junk Food Junkie"". K-tel International. Retrieved 20 March 2015.Grossman, Samantha (16 Nov 2012). "Top 10 Iconic Junk Foods". Time. Retrieved 28 March 2015.Severson, Kim (30 May 2007). "Having a Snack? Make It a Holiday". New York Times. Retrieved 8 April 2015.Valia, Anu (21 July 2014). "Celebrate National Junk Food Day With… Beer-Flavored Oreos?". MTV (Viacom). Retrieved 8 April 2015.Pfahler, Eric (21 July 2014). "National Junk Food Day: Pick your favorite unhealthy treats in this poll". WMAR-TV ABC 2 News (Scripps TV Station Group). Retrieved 8 April 2015."Celebrities' favorite junk food". ABC Inc., KABC-TV. 21 July 2014. Retrieved 8 April 2015.Reinagel, Monica (21 July 2014). "A Nutritionist's Guide to National Junk Food Day". The Huffington Post. Retrieved 8 April 2015.Thompson, Jadiann (21 July 2014). "It's National Junk Food Day: Got snacks?". KSHB (Scripps TV Station Group). Retrieved 8 April 2015.Ault, Alicia (26 Mar 2015). "Ask Smithsonian: Why Do We Love Junk Food So Much?". http://Smithsonian.com. Retrieved 2018-12-30.Darmon, Nicole; Adam Drewnowski (May 2008). "Does social class predict diet quality?". American Journal of Clinical Nutrition. 87 (5): 1107–1117. doi:10.1093/ajcn/87.5.1107. PMID 18469226. "A large body of epidemiologic data show that diet quality follows a socioeconomic gradient. Whereas higher-quality diets are associated with greater affluence, energy-dense diets that are nutrient-poor are preferentially consumed by persons of lower socioeconomic status (SES) and of more limited economic means. ... However, a convincing causal relation between SES indicators and diet quality still remains to be established."Paquette, Marie-Claude (July–August 2005). "Perceptions of healthy eating: state of knowledge and research gaps". Canadian Journal of Public Health. 96 (Supplement 3): S15-9, S16-21. PMID 16042159. "This article’s aim is to review and summarize the literature on the perceptions of healthy eating ... Databases, the worldwide web, selected journals and reference lists were searched for relevant papers from the last 20 years. Reviewed articles suggest relative homogeneity in the perceptions of healthy eating despite the studies being conducted in different countries and involving different age groups, sexes and socio-economic status." Also, "...the small number of studies that focused on variations in perceptions according to socio-economic status..."Adams, Tim (7 September 2013). "Scarcity: Why Having Too Little Means So Much". The Guardian (Guardian News and Media). Retrieved 3 April 2015.McWilliams, James (4 Aug 2014). "Why Are So Many Low-Income People So Overweight?". Pacific Standard (Miller-McCune Center for Research, Media and Public Policy). Retrieved 3 April 2015.Roizman, Tracey. "Reasons Eating Junk Food Is Not Good". SFGate (Demand Media). Retrieved 29 March 2015.Searcey, Dionne; Richtel, Matt (2017-10-02). "Obesity Was Rising as Ghana Embraced Fast Food. Then Came KFC". The New York Times. ISSN 0362-4331. Retrieved 2017-10-19."effects of junk food & Beverages on Adolescent's health-A review article".Hall, Kevin D.; Ayuketah, Alexis; Brychta, Robert; Cai, Hongyi; Cassimatis, Thomas; Chen, Kong Y.; Chung, Stephanie T.; Costa, Elise; Courville, Amber; Darcey, Valerie; Fletcher, Laura A. (2019-07-02). "Ultra-Processed Diets Cause Excess Calorie Intake and Weight Gain: An Inpatient Randomized Controlled Trial of Ad Libitum Food Intake". Cell Metabolism. 30 (1): 67–77.e3. doi:10.1016/j.cmet.2019.05.008. ISSN 1932-7420. PMC 7946062. PMID 31105044.Junk-Food FactsJohnson, Paul M.; Kenny, Paul J. (2010). "Addiction-like reward dysfunction and compulsive eating in obese rats: Role for dopamine D2 receptors". Nature Neuroscience. 13 (5): 635–41. doi:10.1038/nn.2519. PMC 2947358. PMID 20348917.Goodwin, Jennifer (March 29, 2010). "Junk Food 'Addiction' May Be Real". Bloomberg Business Week. BLOOMBERG L.P. Archived from the original on 19 April 2012.Craving for junk food 'inherited' Mothers who eat junk food during pregnancy may be condemning their children to crave the same diet, according to animal tests. BBC News. 14 August 2007. Study title: "A maternal ‘junk food’ diet in pregnancy and lactation promotes an exacerbated taste for ‘junk food’ and a greater propensity for obesity in rat offspring."Bullen, James (2017-06-10). "The foods making you feel sad, mad or 'high on life'". ABC News. Retrieved 2017-10-19.Wiles, N. J.; Northstone, K.; Emmett, P.; Lewis, G. (2007-12-05). "'Junk food' diet and childhood behavioural problems: results from the ALSPAC cohort". European Journal of Clinical Nutrition. 63 (4): 491–498. doi:10.1038/sj.ejcn.1602967. ISSN 0954-3007. PMC 2664919. PMID 18059416.Saez, Catherine (11 June 2014). "UN Advisor Denounces Junk Food As 'Culprit' In Rising NCDs, Calls For Change". Intellectual Property Watch. Retrieved 27 March 2015.Anson, Robert Sam (1972). McGovern: A Biography. New York: Holt, Rinehart and Winston. pp. 218–242. ISBN 978-0-03-091345-7.Warren Belasco (1989) Appetite for Change: how the counterculture took on the food industry 1966 — 1988, page 148-153, Pantheon Books ISBN 0394543998"History of Dietary Guidelines for Americans". US Department of Health and Human Services. Retrieved 5 April 2015."Denmark scraps its infamous fat tax after only one year". EurActiv. 14 November 2012. Retrieved 27 March 2015.Kliff, Sarah (13 November 2012). "Denmark scraps world's first fat tax". Washington Post. Retrieved 27 March 2015.Bomsdorf, Clemens. "Denmark Scraps Much-Maligned 'Fat Tax' After a Year". The Wall Street Journal. Retrieved 2012-11-14.Wright, Alexandra (19 Jun 2017). "Policy lessons from health taxes: a systematic review of empirical studies". BMC Public Health. 17 (1): 583. doi:10.1186/s12889-017-4497-z. PMC 5477308. PMID 28629470.Figueroa-Alcantara, Héctor (28 October 2013). "Mexican Senate approves tax scheme for 2014, (in Spanish)". Excelsior. Retrieved 31 October 2013.Toppa, Sabrina (30 March 2015). "This Place Just Became the First Part of the U.S. to Impose a Tax on Junk Food". TIME. Retrieved 6 April 2015."The Impact of Advertising on Childhood Obesity". American Psychological Association. Retrieved 17 March 2015.Campbell, Denis (21 March 2014). "Children are being 'bombarded' by junk food ads, research has found". The Guardian. Retrieved 17 March 2015.Supermarkets must stop discounting unhealthy foods to tackle child obesity, say MPs The Guardian'Ban cartoon characters' on unhealthy food, MPs say BBCHagan, Kate (27 January 2015). "Junk food ads saturate cricket". The Sydney Morning Herald. Retrieved 27 January 2015."'We Had To Take Action': States In Mexico Move To Ban Junk Food Sales To Minors". 14 September 2020.Further readingAnsel, Karen. "30 Surprisingly Healthy Fast Foods". Fitness Magazine (Meredith Corporation). Retrieved 20 March 2015.Anthony, Mark (1 Apr 2014). "Understanding Satiation and Satiety". Food Processing. Retrieved 5 April 2015."Junk food is more expensive than healthy food: study, says Dept. of Agriculture study". NY Daily News. Associated Press. May 16, 2012. Retrieved 19 March 2015.Center for Public Health Nutrition (University of Washington). "Nutrient Profiling". Center for Public Health Nutrition (University of Washington). Retrieved 24 March 2015.Fernandez, Manny (7 August 2010). "Let Us Now Praise the Great Men of Junk Food". New York Times. Retrieved 20 March 2015.Freedman, David H. (19 Jun 2013). "How Junk Food Can End Obesity". The Atlantic. Retrieved 20 March 2015.Lehman, Shereen (1 November 2014). "Why Is Junk Food So Popular? Here Are Three Reasons". http://About.com. Retrieved 27 March 2015.Moss, Michael (20 Feb 2013). "The Extraordinary Science of Addictive Junk Food". New York Times. Retrieved 20 March 2015.Parker-Pope, Tara (5 Dec 2007). "A High Price for Healthy Food". New York Times. Retrieved 19 March 2015.Poti, Jennifer M; Kiyah J Duffey; Barry M Popkin (23 Oct 2013). "The association of fast food consumption with poor dietary outcomes and obesity among children: is it the fast food or the remainder of the diet?". American Journal of Clinical Nutrition. Retrieved 20 March 2015.Saez, Catherine (11 June 2014). "UN Advisor Denounces Junk Food As 'Culprit' In Rising NCDs, Calls For Change". Intellectual Property Watch. Retrieved 24 August 2014.ScienceDaily (15 January 2014). "Fast food not the major cause of rising childhood obesity rates, study finds". ScienceDaily. Retrieved 20 March 2015."Empty Calories: What are empty calories?". EnergyFirst. Retrieved 19 March 2015.