Wednesday, December 01, 2010

The 'Bailouts' were Frauds and Shakedowns

by Len Hart, The Existentialist Cowboy

The wrong people got the bailouts. One can find daily confirmation of that. Most recently, according to the L.A. Times, the Fed predicted that higher jobless rates, may become a long-term fixture, perhaps a permanent characteristic of the U.S. economy. This bad news follows the Commerce Department's revised estimate of third-quarter growth, up half a percentage point from 2 percent --nothing to write home about.
In fact, some Fed policymakers on Tuesday raised the specter of a permanently higher jobless rate for the U.S. economy, suggesting that many more workers will struggle to get back on their feet even as the economy continues to grow.

The Fed's forecast is an acknowledgment that the "healing process in the economy has slowed to a crawl," said Ethan Harris, an economist at Bank of America Merrill Lynch.

The central bank's predictions were released Tuesday as part of the minutes of its early November meeting, when the institution also approved its controversial bond-buying program to spur economic growth.

The nation's unemployment rate has been stuck at 9.6% since August.

Just a few months ago, Fed officials were more optimistic about the road ahead — for jobs and the overall economy. But now they see the economy growing by about 2.5% this year, not enough to make a dent in unemployment.

--Gloomy Fed employment forecast overshadows upbeat GDP data
To be expected, consumer spending will drop. People who have less money or, worse, no job at all, will cut spending. They have no choice. The very, very rich i.e, the ruling 1 percent, are just fine, thank you for asking! You made it possible. But --the party is over.

The wrong people got the bailouts! By 'wrong people' I mean the big banks, insiders, fat cats and leeches. By wrong people, I mean those who game the system, make a living by moving funny money around or --even worse --your money! In passing, I must ask: do you really think it a good idea to literally 'give' these shysters the monies that you have paid in to the Social Security Trust Fund? My quick response: not a chance!

An effective bailout would have put money into the hands of real people --not legal abstractions or Wall Street insiders. An effective bailout would have increased the supply of real money in circulation. A real bailout would have created jobs and stimulated real industries --not money changers, Wall Street shysters, insiders or funny money men!
Confidence remains low, and unemployment benefits, which have helped prop up spending, probably won't be extended by lawmakers, given the new political sensitivity to big government deficits. Hundreds of thousands of jobless workers will see their benefits expire this month.

But the biggest single drag on growth may be the state of the labor market. Even the more optimistic independent economists say unemployment will decline slowly, starting most likely in the second half of next year.

--Los Angeles Times, Gloomy Fed employment forecast
This is the 'ruling elite' so favored of late by bailouts and Wall Street. We should have driven the money changers from the Temple! Instead, we bailed out this 'New World Order', patted the money changers on their heads as we greased their extended palms.
So help me, I can perceive nothing but a conspiracy of rich men procuring their commodities in the name and title of the commonwealth

--St. Thomas More, Utopia
This is not an isolated case. This is not a temporary screw-up. This is a fundamental flaw in the system. This is a flaw that favors crooks and fast-buck artists, latter-day 'Enrons', money changers, the 'new world order'. The entire financial system of the United States is a Ponzi scheme, a scam: 'You give me real money and I will give you a worthless piece of paper in exchange'.
In a sad reminder of the sorry state of our country and in particular the sorry, heartless state of the modern Republican Party today Unemployment Insurance will end for hundreds of thousands of workers left out in the cold by Republican policies that crashed the economy. Yes, fresh off a victory in which the American electorate showed mass amnesia the very folks who crashed our economy are cutting off the aid to those folks who have suffered most for their policies. Even more outrageous than this is the priorities shown by Republicans after the election. You see, while they will let the unemployed suffer their incompetence, the one folks they constantly watch out for is their own, the very wealthy. Yes, Republicans have chosen to side with those who crashed the economy over those who suffer it.

--The Unemployed Suffer the Real Cause of Deficits
As John Maynard Keynes had said of 'pound notes' in England, the U.S. government might have done better had it put the $billions$ in mason jars, buried them in a land fill and let 'private enterprise' (real people) dig them up. Had that been done, real people would have spent those monies in ways that might have revived an economy on life support.

As I have reported: the U.S. economy --not gold --supports our currency But what happens when the economy is no longer producing, no longer employing the population? That is, in fact, the case as confirmed by the CIA's own World Fact Book. The U.S. is on the bottom of the list with the World's Largest negative Current Account Balance; China, who owns us, is on top with the world's largest positive Current Account Balance. If it had not been in China's interest over the short term to prop us us so that it might dump its goods on our shores thus robbing us of jobs, the house of cards might have collapsed already. That cozy arrangement was set up by Bush in advance of Nixon's infamous but largely ceremonial visit to the Forbidden City back in the 70s. The deal may be nearing the end of its usefulness to China. When China no longer benefits from this arrangement, it will pull the plug on the dollar.
Just look at us. Everything is backwards. Everything is upside down. Doctors destroy health, lawyers destroy justice, universities destroy knowledge, governments destroy freedom, the major media destroy information, and religion destroys spirituality."

--Micheal Ellner
Another lesson that might have been learned but will not be is that neither banks nor governments create 'wealth'. Wealth --as every credible economist from the conservatives Adam Smith and Ricardo to the left-leaning Karl Marx has said --is created by labor. That's worth repeating: labor creates wealth. Else, capitalists could not have made profits and fortunes upon the backs of those whose labor in fact created the wealth in the first place. Investments are made after the fact, by those wishing to skim some of the wealth off the top but only after it has been created and the major 'stockholders' made happy.

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