Archive for October 14th, 2011
Today, someone sent me a link to a recent Pajama’s Media article, which I believe embodies the erroneous perception of many on the right and perpetuates the outright lie that banks are innocent victims in our current economic situation.
Almost everyone who believes in the Constitution and free markets properly considers October 3, 2008, one of the darkest days in U.S. history. It was on that day that the “Emergency Economic Stabilization Act” creating the Troubled Asset Relief Program (TARP) became law. A day later, I wrote that law’s passage, accompanied by tactics and threats which amounted to orchestrated blackmail, over the strident objections of over 150 economists from across the political spectrum, only days after its initial voter-driven failure, proved that Washington’s politicians and elites “don’t care what we think.”
Abhorrent as it was, the sickening saga of TARP’s enactment was nothing compared to what transpired less than two weeks later.
I agree that October 3, 2008 was a horrible day for this country. It was essentially when the very last bit of capitalism that remained in this country was destroyed. It was not, however, because of the extortion of the BANKS by Henry Paulson, it was his extortion of CONGRESS.
On October 14, Paulson, with President George W. Bush’s shameful capitalism-betraying acquiescence, morphed the program into a hostile government takeover of the banking system. If there’s one thing the ignoramuses in the Occupy Wall Street crowd and the American people in general need to understand, it’s this: Hank Paulson didn’t ask.
Instead, as the New York Times reported, Treasury’s Godfather called big bank executives into a meeting with no pre-announced agenda, made them an offer they couldn’t refuse, and created the unmistakable impression that every one else below them in the pecking order would have to fall in line:
Wait. What? ‘Hostile takeover of our banking system.’ First of all, there has to BE a banking system in existence before it can be taken over. If a bunch of insolvent banks are a ‘banking system,’ that hardly qualifies as something that can be ‘taken over.’ Secondly, I’d like to know how a banker (that would be Henry Paulson, former CEO of Goldman Sachs), can in a hostile manner, take over that of which he already has control.
Beyond those two missed points, Pajama’s Media also fails to mention the REST of the story. BEFORE Hank Paulson ever held a gun to the heads of the banks, he was wielding that gun and pointing it directly at Congress. As evidenced here in Congressional testimony given by Brad Sherman, the threats delivered to Congress by Hank Paulson, with his co-hort in crime, Ben Bernanke were nothing less than a promise of Armageddon if the banks were not rescued.
Brad Sherman was not alone in sounding the alarm. There were politicians from both sides of the aisle that talked to the media (however briefly) immediately following this act of treason. Paulson and Bernane did not just issue threats, but promises of ‘tanks in the streets’ and mass rioting if Hank didn’t receive his taxpayer money-filled ‘bazooka.’ Congress may be many things, but well-versed in the finer points of the financial system, they are NOT. It was for good reason that they panicked. Remember, never let a good crisis go to waste. Congress is not the only entity that puts that old adage to good use.
So, Paulson didn’t just wield that gun once, he wielded it twice, and the FIRST time that bazooka was aimed directly at Congress and he did so with the help of the ‘chief banker’ himself, Ben Bernanke. While some banks certainly didn’t like the idea of the stigma attached to the bailouts, they liked the idea of their insolvency being exposed to the world even LESS and moreover, the bankers were rather opposed to losing their very lucrative monopoly on the control of the quantity of money in our economic system. First and foremost, Hank Paulson and Ben Bernanke were not about to allow the control of the money supply be in any way handed back to Congress by admitting the complete failure of our monetary system. THIS is what really happened in October of 2008. If some of the banks balked later, it was merely for show, as not a single one of them even attempted to decline the money – because that would have been impossible for any of them to do — and still exist.
THE BANKS REMAIN INSOLVENT TO THIS DAY. NOTHING HAS CHANGED. CONGRESS KEEPS DOLING OUT MONEY IN THE FORM OF TAXPAYER FUNDS EXTORTED OR BLATANTLY STOLEN THROUGH QEAND HIDDEN INFLATION AND THE BANKS REMAIN INSOLVENT. HOW LONG WILL TAXPAYERS WHO ARE LOSING THEIR JOBS IN DROVES CONTINUE TO SUPPORT THE BIGGEST WELFAREE ENTITLEMENT PROGRAM IN THE HISTORY OF THIS COUNTRY? WELFARE FOR BANKERS IS NO MORE VALID AN EXAMPLE OF CAPITALISM THAN WELFARE FOR INDIVIDUALS.
This is what much of our right-leaning media pundits have become, apologists for the banker welfare state. And it is this banker welfare state that is EXACTLY what is destroying our economy and our country.
A year ago, her business was evenly split between home- purchase loans and refinancings that reduce interest rates on existing mortgages. That’s changed as a slowing U.S. economy curtails buying demand and encourages current owners to save cash by locking in near-record-low borrowing costs, she said.
“People are deciding to stay in place until the economy turns around,” Haenner said. “That same concern for the economy is causing buyers to take a wait-and-see attitude.”
This is stupid.
Look folks, when economic stress is high your best defense is to be nimble. That means being able to pick up and move if you have to for economic reasons.
During the Depression, even in a time of 25% unemployment, three-quarters of the people had jobs.
During the 08/09 time period there were jobs available, and there are today. There may not be jobs available in your town, but there are jobs.
In a time when your ability and willingness to labor may not match with demand for labor where you are today, being tied to real estate is a major impediment to your survival, say much less “financial success.” You’re far better off being able to blow off where you are and go somewhere else – mobility is a huge asset.
This of course goes counter to the entire “housing industry” and the BS paraded by Bush and others about the “American Dream.” That harkening to a bygone era where most people lived in the country and could literally live off their land – farming for food in the raising of edibles of various sorts, from grains to protein, is now only practiced by a tiny minority of the population. Anyone living in a city literally can’t do this, despite desire or ability, simply due to population density.
Face facts folks – the best asset one has in tough economic times is versatility. I’ve faced it myself; I have moved for economic reasons. There was a time when I was literally $100 from being economically bust – literally on the last $100 I possessed in the world. I found a job hundreds of miles away and immediately packed up my crap and moved there, rented an apartment, and in doing so saved myself from otherwise-certain destitution!
Don’t listen to the idiots in the media. They’re not interested in “community stability” as they claim — they want serfs. Your best asset is being able to take your abilities, whatever they may be, to where someone has demand for those abilities and will exchange purchasing power (in the form of a paycheck) for your ability to produce something for them, whether tangible or intangible.
European officials are outlining a rescue plan that may include deeper investor losses on Greek bonds, higher bank capital levels and increased firepower for bailouts and the International Monetary Fund.
The plan’s elements emerged as finance ministers and central bankers from the Group of 20 began talks in Paris, seeking ways to end Europe’s two-year sovereign debt crisis. Underscoring the need for action, Standard & Poor’s yesterday cut Spain’s credit rating for the third time in three years and new data showed the eight largest U.S. money-market funds almost halved their lending to French banks last month.
I love these sorts of statements. Recapitalization of banks eh? You mean that if I walk into a casino and gamble away all my money, someone will “recapitalize” me? Who would that be?
Well, that would be me. But wait – I’m broke. I lost all my money. So now I’m going to bail myself out? How’s that going to work again?
This is the paradox of these “bailouts” and “recapitalizations”, as I listen to Geithner run his pie hole this morning on CNBS. The fact of the matter is that such “recapitalizations” are in fact nothing more than a circle-jerk, as the government is simply pulling forward tax receipts and handling them to banks “on the come” that productivity and incomes will advance, making it possible to cover the bet.
This, of course, has been the game in the US and elsewhere for the three decades. But let us remember that it is precisely the fact that we ran this crap for three decades that led us to the place we’re at now, where the housing market has effectively folded back, the consumer is being crunched under the weight of all their debt and we have been narrowing the base of those able to accept the additional leverage, with the largest remaining group over the last two years being student loans!
Yet there is still no acceptance of what happened, that it’s unsustainable — that neither government or any other sector of the economy can in fact spend on a sustainable basis more than it has available in economic surplus!