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Congress: They've given up their teeth and expect people to respect their tongues.Blog comment, unknown author
Good Bye Capitalism.
OK, now we've done it. With one frightened swoop this week, Paulson, Bernahke and the U.S. Congress have finally sleazed their way into announcing capitalism as a false god.
The financial wizards have decided that the only way to save the patient is to kill it. All bad housing loans – whether outright fraud or simple stupidity or maliciously planned – will be bought up by the federal government to relieve the strain on the financial markets and put it on the U.S. public.
So far it is abundantly unclear if this will be limited to housing loans as the same problem exists with commercial building loans and even other kinds of financial instruments that are not collectable or sellable and it is also abundantly unclear if this covers only derivatives in the U.S. or those held throughout the known world but guaranted via U.S. companies.
As of 9/22/08, our beloved President believes, according to Bloomberg, that Auto Loans, Credit Card debt and Student loans are similar areas that should be included.
All I know is that the price tag just went from Billions to Trillions and we don't even really know the scope of the problem yet – and maybe never will. Actually both Paulson and Bush have made a statement similar to 'We need to make a decision right now and figure out what went wrong later' - Yikes! how scary is that? When our leaders act in a state of fear, or try to create a state of fear in their audience - well, there's not much trustworthy in that situation.
AND, I can't see why all these junk CDS items are not just as toxic as debt in the hands of the government as they were in the hands of Fannie Mae et. al.
Now, I know what you are going to say.....
I expect your thought might be that the program is not only saving the elite, it is also saving your pension savings, your 401K, your money market. It is saving the little guy too - right?
Well, yes and no. Yes for the short term and no for the long term. Remember all the headlines are about saving companies, saving organizations, saving corporations who oversold themselves, have no money to back up their promises and the other banks don't trust them either so they can't unload their ill-gotten products.
It is implied that saving them will save you but think about it – in the end, you, as a taxpayer and a citizen, will be paying off their debts. Yep, if this works, and that is still a question, your money market, your 401K , your annuity may still be paying out the same percentage but that percentage will now have less value as the money that used to go to building infrastructure, to keeping taxes relatively low, must now go to paying off the biggest junkpile of products every assembled.
One article I read during this turmoil noted that a thousand, billion dollars (no longer the 'high' number) will be spent on the bailout alone and that may not be sufficient, depending on what is eventually included as a 'troubled asset'.
See, the gov has to figure out how to buy these products - at par with what the banks list them as, or at a discount. Then they have to offload those products, preferably at par for what they paid for them and preferably at a profit. The profit part is going to be a fantasy as a organization of this size will have to have an army of highly paid (and highly connected) professionals and managers which will have to be paid regularly whether the properties or derivatives have been sold or not. The "experts" that will be hired to 'manage' this problem will be the same folks who caused it.
Think about it – nobody is buying this junk now. Why would they suddenly want to when it is in a bigger pile? So, we are going to pay lots of the same people presently involved to now contract even higher pay to sell something that is worth less than it was originally.
In reality, this becomes a scam over a lie. The façade that it is helping is only a matter of prolonging and getting as much out of the system as it possible can before it continues its inevitable fall. This chimera that something is worth more, or is less dangerous if the government owns it is a catch-22 phrase or the newspeak of "1984".
In the end it will fall, mainly because it no longer really lives the ideals it was born with. Freedom is not really freedom, democracy is not really democracy and capitalism is not really capitalism. Got a good deal on yet another bridge to nowhere?
Oh, the full quote that is the title of this column came from a comment to an article on the Palins ignoring Alaskan congressional subpoenas in Salon Magazine. Of course, the Bush administration has shown us well that if there is no consequence, which Congress has not had the balls to provide, there is no need to obey it.
In totality, the quote says: (I apologize for not crediting the author but it was a pseudonym on a blog)
Every human being, everywhere, has an inherent contempt for the rule of law. It is only when that rule is backed up, ultimately, by a gun (or other such force) that anyone is compelled to obey it.
Legality is not morality, after all. Anyone who hopes that people respect law because it is law is doomed to disappointment. Isn't that the heart of Congress' troubles right now? They've given up their teeth and expect people to respect their tongues.
Far reaching effects......
Yep, the vaunted capitalism that the U.S. has been preaching to the worlds other countries, especially the poorer ones, as the way out of poverty, out of scarcity, the way to power and wealth is now known world-wide for what it is – a false front to get the citizens wealth for the elite.
Capitalism, which sets one citizen competing with all others on the fear of scarcity finally rolled over and exposed its fat & soft underbelly.
Let's go back in time a bit, shall we? Japan's recovery from recession has lasted much of 20 years. The wisdom of our economic experts is that their recovery has been so painful and so slow because they refused to let their banks fail and instead, artificially supported them with federal money. That reasoning has been American economic wisdom across the political spectrum for a century– it is basic lassez-faire economics.
Now, the U.S. is threatened with a failing financial structure and what does it do? It suddenly dives in with all the resources of the State, takes the weight off of the folks who caused the problem (bankers, investors, corporations) and put the burden on the whole of the citizenry – under the control of one member of the State - commonly called Communism!
Now, the rich stay rich and the poor get poorer. There is no reason for the wealthy or powerful to change their ways and no consequences that prevent them from doing the same things all over again.
If anybody thinks that the rest of the world has not taken notice, they are sadly mistaken. This one act will probably do more than all the illegal wars, mercenary soldiers, torture, First Strikes and International Monetary Funds ever did to make others suspicious (and knowledgeable) of the U.S. righteous pronouncements about freedom and the differing meanings of that word.
Like the religion(s) that so often go along with it, capitalism has always offered a 'salvation' down the road if you just suffer through these earthly tribulations first. Salvation will come, you will be solvent, money will be shared (it shall trickle down), you'll have land, the people will have the power, we will protect you. Right?
It is so much like the Palin family promising transparency and cooperation in a probe of a rather unimportant situation and then refusing to respond to subpoena's and suddenly changing the reason for troopergate in the first place. Yep, it is just one little thing but ethics are ethics and if one can manipulate them in one way, there is no reason to believe they will not manipulate them whenever they feel the need.
The same goes internationally when your actual, behavioral motto is, "Do as I say, not as I do!". In a desperate move to save the economy and the ultra-wealthy, the U.S. finally destroyed its moral power, it's vaunted philosophy and its place in the world.
What is even more telling is that it is not simply the mistakes of a terribly faulty administration. Congress itself has done nothing of value, either before or since the Democrats took control in 2006.
They are toothless and untrustworthy – get rid of them all!!!!
