“If it ain’t broke, don’t fix it!” These are words of wisdom often heard from capitalists, who urge everyone to harken to and abide by their judgement. Considering the, er, ‘opposition’ to financial reform, the capitalists among us apparently think the financial markets are not in need of fixing.
Um, dictatorship, masquerading as ‘communism’ failed. What do you suppose the odds are that two decades after the, er, ‘passing’ of Soviet Communism, Western Capitalism would ‘fail’ as well? (Leaving Chinese Communism, which has ‘morphed’ into ‘State Capitalism’, a system that is frighteningly similar to the economics of Nazism) as the ‘last man standing’.
The ‘reality’ is that capitalism failed out of the box BUT it was the only way to abandon monarchy while retaining the ‘essence of royalty’, the ‘absolute power of the owner’.
For those that this works for, it works very well, but alas, like monarchy, the number of opportunities are, sadly, ‘limited’.
Is this really “the best we can do?”
The crowd currently in charge wants you to believe that. All they’re asking for is ‘enough time’ to ‘straighten things out’.
Guess how long that will be?
You have to go all the way back to the Washington presidency for the answer to that one.
Now matter how many times they, er, ‘try’, they ALWAYS fail…which should tell you something all by itself.
So, IS this the BEST we can do?
There’s little point in fighting a revolution if nothing is going to change, is there?
Although I have already told you that the ‘price’ of doing nothing is a Banana Republic, a land where the rich stay rich and everyone else shudders in constant fear as they make the best of abject poverty. (While constant ‘low level’ warfare rages all around you as the victims of government outrages wreak revenge upon the traitors living among them. This sort of redefines the term ‘the long war’ as well as ‘terrorism’ itself.)
So it’s time to ask yourself a very fundamental question good citizen and that question is, ‘is this really ‘as good as it gets?’
Nobody (except the marauding rich) is ‘happy’ with the way things are…but without a clear, viable alternative, revolution is pointless.
That is why I created A Simple Plan , Without something to revolt ‘for’ a revolt is unlikely to happen…even under ‘Banana Republic’ like conditions.
Yes good citizen, without a ‘light at the end of the tunnel’ a clearly defined ‘better place’ to fight for, even totalitarian oppression will remain unopposed…and that’s just what the capitalists are counting on.
You are NOT ‘free’ good citizen, you only enjoy the ‘illusion of freedom’, provided by the ‘illusion of participation’. You have no say about the laws you live under and no input regarding the circumstances you are forced to endure.
It truly is a land ruled BY some people FOR the rest of us.
Understand that ruthless capitalists have ‘Zero Tolerance’ for incompetence (and even less for ‘insubordination’) within their organizations YET they expect/demand that YOU accept repeated ‘failure’ on the part of your elected representatives as ‘the price of an ‘imperfect’ system…
Is this the ‘Best we can do?’
If you think what we have can’t be improved upon then our species is doomed to extinction…and good riddance to it!
Moving on to a totally unrelated topic we arrive at tonight’s offering.
The Economic Policy Error Behind the Stock Market Rally
"The 20th century has been characterized by three developments of great political importance: The growth of democracy, the growth of corporate power, and the growth of corporate propaganda as a means of protecting corporate power against democracy."
Alex Carey
The strategy of the Bernanke Federal Reserve and of the Obama Administration's economic team is fairly clear: prevent the bank failures of the 1930's by propping up the biggest banks with huge infusions of publicly subsidized capital, and hope that they start lending again as the economy recovers. [Naturally, this begs two questions, who can take on more debt (at usurious interest rates) and are they ‘creditworthy’? Understand good citizen, this is NOT a stable foundation to base a civilization upon!]
Failure number one of course is that the banks that they chose to support are not responsible banks engaged primarily in lending to small business and localized activity. Those banks are the local and regional banks and they are failing in record numbers. The banks they chose to save are those who have heavily contributed to the campaign coffers and job prospects of Washington politicians. Goldman Sachs, for example, is a glorified hedge fund dedicated to speculation and enormous amounts of leverage. One only has to look at the source of their profits to understand what it is that they do. [It’s all about ‘money’ good citizen UNTIL it becomes all about survival, which is a totally different game.]
Bernanke has (so he thinks) cleverly tied up much of the liquidity with which he has infused the banks as reserves which are paying riskless returns thanks to his innovation in sustained a floor under the ZIRP. But if you look at what he is doing, all Bernanke has done, even in his buying a trillion dollars of bad mortgage debt, is rescue creditors who engaged in reckless speculation during a housing mania that the Greenspan Federal Reserve had fostered. [Which, as Jesse points out, has done us zero good. (Beyond keeping the banksters mollified…which was indeed Benber’s sole intent.)]
The lack of productive investment and genuine stimulus for the real economy is appalling. Bernanke and his colleagues Larry Summers and Tim Geithner would have us believe that they had no choice. But informed and experienced commentators such as William K. Black have told us how they have misrepresented their choices. Their current path seems to lead to a 'zombie economy' at best, in which the Banks are doing well, but almost everyone else suffers, particularly the lower and middle classes who obtain their income from the real economy. At worst, the bubble bursts again, and there is another leg down, with greater damage done. [Here Jesse invokes a Banana Republic without using the actual term…]
So what would have worked? The Fed and Treasury could have backed the public instead of the banks. They could have increased the FDIC coverage to much higher levels, and then started dismantling the Wall Street banks through orderly liquidations. They needed no new laws or tools to do this. And financial reform and higher taxes on those who obtain outsized wealth without productive work would have curtailed a recurrence. [How ironic is it that Wall Street is holding the nation’s ‘retirement savings’ (such as they are) ‘hostage’ so ‘shutting down’ Wall Street investment banks isn’t going to happen…]
So why did they do what they did? Are they in league with the banks? Was this some sort of conspiracy? No, I doubt this, although there are far too many secretive aspects to completely dismiss it. [Um, it is a mistake/error to dismiss ‘conspiracies’ out of hand, this whole meltdown is not an ‘accident’ by any stretch of the imagination!]
None of these men have ever held a real economy productive job in their entire lives. They were always the pampered products of the academy, Wall Street, and the government.
So they took care of their own, because that is their world view. It has been said that the Federal Reserve is the worst place to locate certain aspects of banking regulation, because they have a complete aversion to ever allowing a bank to fail. It runs against their nature. And couple this with a career experience in which the world is viewed through the lens of cost plus management, and privileged power, and their inability to make the tough decisions seems more understandable.
And the promise of future positions, and large amounts of lobbying money to their friends and mentors and sponsors, and the policy error that is ruining the country seems more understandable. [In case you don’t recognize it good citizen, he’s talking about rampant corruption that bridges the political/economic divide…]
So now we have another asset bubble in the making, a new Ponzi scheme in the US equity market fomented by the Wall Street Banks packed with public funds, seeking to drive prices higher, for the apparent reason of obtaining confidence from the public, but with the effect of selling assets at inflated prices to public institutions yet again, with the inevitable collapse to follow when the reality of their value is discovered.
What a shame. What a disappointing performance for a reform government that promised change that the people could believe in.
"...surveys show that the usual investors in major rallies – pension funds, hedge funds and retail investors – have not been net buyers of equities. And he says the most likely explanation for this anomaly in the biggest stock market rally since the 1930s is that major investment banks are the anxious buyers. [So it’s ‘scam-a-rama’ good citizen, hurry and pile on before its gone!]
“Their buying would appear to be for one of two reasons. Firstly because they think the authorities will prevail in their (so far unsuccessful) efforts to inflate their way out of debt liquidation; or secondly because they are too big to fail and so can afford to take a huge gamble that enough buying will convince others to rush in and buy their inventory of risk assets at even higher prices." [And sadly, this ‘greater fool’ shit usually works…but there’s hell to pay in the long run.]
Financial Times, Equity Rally Not Driven by the Usual Investors, Financial Times, April 28
And it should be noted that the Wall Street demimonde, the financial media, the financial commentators regulators and legislators, are widely supportive of this, because they draw their pay and employment prospects from an enlarged financial sector. So they are natural enthusiasts.
And of course there is the mainstream media, which is generally silent, or simply pleads confusion and ignorance, when things financial are discussed out of deference to their corporate owners, and the difficulties of actually engaging in investigative journalism, rather than acting as a guest host to a competitive debate among lobbyists and ideologues. It is the path of least resistance, and greatest returns. And it leads to an economy that consists of little else besides usury, propaganda, and fraud.
Why be negative? Better to be playing safe while the New Rome burns.
Again, Jesse may be using the term ‘burns’ as a ‘figure of speech’ but in reality it could be a ‘long ‘hot’ summer’…
There is a very real danger that we will soon find ourselves faced with ‘the long emergency’ with martial law being declared in hard to police urban areas and, er, ‘random patrols’ monitoring the situation in the troubled suburbs.
This is how it begins good citizen. The troops are called up to ‘maintain order’ and then the government starts ‘cracking down’.
Um, this is a logistics nightmare and a ‘deserter’s’ dream…as things turn to shit, the soldiers charged with ‘watching you’ will begin to worry who is watching their loved ones…and as the violence escalates, so does the ‘rate of attrition’.
Left to our collective imagination is whether or not instituting a draft is effective when it comes to occupying your own country?
Bizarrely, Banana Republics seem to be heavily reliant on mercenaries…
Thanks for letting me inside your head,
Gegner
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