Ilargi over at Automatic Earth has an excellent article today. Here are some of the high points, but I recommend reading it all.
You may think by now that Geithner and Bernanke and Larry Summers and Bob Rubin and all the rest of the pack are miserable failures and two sheets to the wind and all that, but you’d do better to give them a lot more credit than that.
QE2 is here, despite the gigantic failures and behemoth losses of its predecessors, because QE works like a Mother Mary statue in tears’ bleeding charm. Of course these guys all know that no proof of a QE ever reviving an economy exists. But they can pretend it does, and so they do: $900 billion, even for them, is real money.
Thing is, they never meant QE2 to do what they publicly claim they intended it for. This is nothing but another move to bail out lethally wounded banks.
These are America’s largest financial institutions, and finance over the past 10-20 years has become a disproportionally huge chunk of the US economy. And its politics. And that’s where the crux is.
I don’t know about you, but I have completely lost interest in trying to figure out which candidate in the midterm elections got how much from Wall Street. They all need their campaign contributions from bankrupt institutions such as BofA and Citi if they want to have a shot at being elected.
For now, please understand that QE2 was never intended to jump-start the American economy. It was meant to prolong Wile E.’s 15 minutes of fame, to keep banks like BofA and Citi above water long enough to allow anyone who has some skin in it to get the hell out without triggering any alarm bells.
There is money being handed out in QE2, which in the end is awfully simply yours, and which is thrown overboard in a way that makes you believe it’s in your best interest. Some people see it as a hidden tax, but that’s a far too gentle view. Daylight stand-and-deliver robbery or Grand Theft Auto are much more accurate denominations.
Is it that hard to understand, simple calculus? That every dollar spent ostensibly “on your behalf” will have to be paid back by you, even if not a penny of this, your own, money, went towards making your life better?
If that is really so, then QE2 works exactly the way it was meant to work. They’re not all that dumb, and they’re not making the grand mistakes some folks claim they do. They’re robbing you blind in plain daylight, and, as they go along, make you believe that’s in your best interest. It’s all nothing but a high-stakes game of pick-pocketing.
I think that’s about all anyone needs to know about how the looting operation works.