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- Tuesday, August 31, 2010, 6:15 PM Obama and the Fed are "killing the real economy to save the banks," Chris Whalen asserts. By allowing banks to heal their wounds through low rates, they embrace a policy of deflation that has horrible consequences for all manner of savers - retirees, companies, non-profits, municipalities - in a "massive, reverse Robin Hood scheme."
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For the past year and a half, the line against Obama was "He wants to spend, spend, spend, print, print, print, inflate, inflate, inflate, etc., etc.,etc." And there are still people who are saying it.
However, for some pundits it has become hard to deny the undeniable deflation percolating through the system. So, what do they do? Do they admit they were wrong? NO!
No, instead they turn it around and claim that they knew all along that what Obama wanted to do was "embrace a policy of deflation". Are you SERIOUS? How stupid do you think people are... OK, don't answer that.
Is the government not blatantly funneling money to the big banks at the expense of helping everyone else? (Or inflicting the short-term hardships that would repair the economy's long-term health?)
There were front door bailouts, back door bailouts, side door bailouts, you name it, and almost all of it went to the banksters.
I support Obama too (though currently only because he's slightly less disastrous than the leading Republicans), but I really wish he'd take a stand here. I'd say that it's getting ridiculous, but the reality is that it's been ridiculous from the start.
Not that the government is at all blameless, but the banksters have them over a barrel: if they pay the banks, the rest of the economy crumbles, if they don't pay the banks, the rest of the economy crumbles much worse and much more quickly.
What the consequences will be, I have no idea, as people seem to be making contradictory bets, running towards gold and us treasuries (in dollars, the anti-gold) at the same time.
which-ever one doesn't work, they will have to be mighty quick on the trigger.
what a way to run an economy, complete pack of incapable, unwilling, politically obsessed morons (postpone the collapse until somebody else's administration).
"Gone to Singapore"
Bullschitt... I think ANYBODY who hung his ass out there looking for something for nothing ought to get what they deserve - a little dose of humility... let 'em ALL take it in the ass and if it takes this whole damn country down, then that's too damn bad - ye reap what ye sow and we've done nothing but sow crap for the past 30 years or more. Now its time to get humble and stop whining and grow the hell up.
At least that way the free money from the government is hitting some of the little guys. The current system is just giving taxpayer money to the banksters on Wall Street and guaranteeing their million dollar bonuses.
It would also allow us to end all these nonsensical government programs propping up housing prices. And it would allow the government to then say - sorry - to those that were blatantly irresponsible and bought tons more house than they could afford. They don't get to refinance and there are no more government programs so they have to move. The banks have to write down the assets and sell at market prices.
Then we could find the true bottom in housing and start working our way back. Its not a totally "fair" proposal - but it sounds a lot "fairer" to me than to continue to give money to both bankers, and to those that bought 500K homes when they could only afford 150K homes.
Would it be Pfizer "settling" for yet their 3rd billion dollar plus fine for defrauding the medicare system and yet nobody in Pfizer going to jail?
Or would it be Haliburton making billions on no bid contracts in Iraq, yet an independent master electrican testifying in congressional hearing that Haliburton's work was the worst and shoddiest work he had ever seen in 30+ year career. And yet Haliburton keeps all their fraudlent profits and nobody goes to jail?
Or would it be Goldman Sachs and JPM turning a $300 million dollar sewar project in Arkansas into about a $5 billion dollar derivitives fraud that made their capitalist executives billions in profits. Yet a few local officals go to jail and nary a single GS or JPM employee was indicted.
Guess if somehow one thinks that capitalism, then one has to wonder what the difference between capitalism and facism or communism would be. They all amount to the same thing ... a tiny handful of elites ending up controlling most of the wealth and power by whatever means necessary. So the name attibuted to the process really has no practical significance to the vast majority of the citizenery.
Please embrace the new America and stop your saving and keeping cars for 6-8 years, that is so hurtful to the economy.
I consider it a fairly ignorant argument that most politicians are "in on it". I think they're just being used like the rest of us.
Follow the money. The big banks and their boards rake in tens, sometimes hundreds of millions every year from these absurd policies. These guys reach billionaire status in half a career, easy. And that's just their /personal/ gains, the fund and company gains are much, much larger.
Politicians get, what, a few million in campaign contributions? And sure, high ranking folks like presidents will be set for life, but as millionaires, maybe decamillionaires, but that's it. It's all pocket change. They're not even in the same league as the banksters, and the banksters know it.
(Note that the above does not apply to Fed chairmen, etc, who came from the finance industry and will certainly go right back to it.)
What's that you say? It's about the power? What power? Whose power? When the crisis finally "hit", did the government tell the banks what to do? No, it was quite the opposite. Take a look at the economic advisers over the last few administrations and see if you don't notice a pattern.
We are all hostages of the financial oligarchy.
1. Corporate titans, bankers, etc. want more money. Can't argue that. Personally I am not ticked off that they have done a better job at playing the system than I have. But I can understand those that are ticked off because the system is not fair.
The issue is that one should think about why the system is not fair and who is responsible for making it fair. Well guess what, that is the responsibility of your government elected officials.
2. The corporate titans have no power to take my money, my land, or put me in jail. But guess what, again, your government elected officials have all of the power to do all of these.
Now with this in mind, why do you blame the corporate titans for being money hungry when its the politicians that will be able to ruin you life. Oh, I forgot, the politicians said they were helping you.
Now its clear. All you want to do is help the politicians gain more power by attacking corporate titans so they cannot be so money hungry. That's real smart in the long run.
I don't know if I agree with everything in the article - but I certainly agree with the main thrust that the government has chosen to reward the irresponsible on the backs of the responsible.
What this also shows is how intertwined the government bureaucrats and the financial elite are (along with the politicians). How can a business go from making 1/2 point to over 4 points in a competitive capitalist economy? Obviously with the help and protection of the government. Where are the regulators? and why aren't they looking out for Main Street? I believe the answer is because the triumvirate of financial elite, bureaucrats/public unions, and politicians are joined at the hip in the greatest theft in history. Transferring the wealth of the middle class to the three groups.
Regulators should be looking out for small local banks and breaking up the big banks. The managers of the big banks are largely the same people that led us into this mess. Capitalism is supposed to take the assets of bad managers and have them end up in the hands of good managers. What we have done is to steal from good managers (responsible tax payers who save/invest) to give to bad managers (million dollar bonus bankers, public union pension fraudsters, and corrupt politicians).
Its a good article that makes you think about the subject matter - no easy task these days given how badly our own government is acting against us.
That just tells you what a cheap bunch of whores these politicians really are.
It also completes what is my personal definition of a politician and that is simply that they are nothing more than "liars and whore."
People do stuff for money. And the people that have the money get to tell the people that don't what stuff they have to do.
But it's all relative. And it's not about the amount.
It's about cause and effect.
Sure, elected officials are entrusted by the public, but the simple reality is that the banking overlords are just smarter than the politicians. It's sad, but it's true. (And don't blame the politicians too much -- /we/ elected them, after all.)
You can't intelligently hold up Obama or Frank or Dodd or any politician and claim that they're the masterminds. They aren't. If they were, they'd be getting much bigger pieces of the pie. They're tools. Just like traders are tools. And borrowers are tools. And ratings agencies are tools.
So if they're all the effect, what's the cause?
Follow the money.
The thinking of the former Fed official is emblematic of our current predicament. Anyone who thinks that consumer spending should be predicated on house refinancing, rather than the consumer's income, has his head buried on the sand. An economy cannot flourish if its main product is refinancing. Prosperous economies produce real, useful goods and services, not mortgage refis.
We have bailed out , modified , adjusted and pumped the economy. I am tired of seeing my kids future go down the drain because people that couldn't afford things got in over their head and we keep trying to bail them out and reward them for it.
Principal write downs? 99 weeks of unemployment ?
Who wants to make my 401k whole?
Enough is enough. It is about personal responsibility. Whether it's you need a job or you need to rework your finances.
If I was going to lose my home, I would work at any job I could find.
Growing up my parents split - my mother had stayed at home during their marriage 4 kids and single. She took a job and went to school at night. There were days she had to buy a jug or 2 of kerosene to put in the oil tank because she couldn't afford oil to be delivered. She did what she had to do to get by and provide for her kids. I think she may have gotten cheese and milk assistance. Now she has her own business and at 66 she still is working.
If I hear about one more person complaining that they are underwater on their house, I am going to barf. It is a home usually for a long time, why should that matter? I have never thought about our house value and if we our underwater, I just always thought, I don't want to owe too much and live for a house.
We built our house 15 years ago- it took us 5 years of renting/saving and searching to build a home of our own. Building made more sense, acting as my own general contractor I could save money.
I sealed the foundation, put down floors and planted every tree bush and plant in my yard to save money. We have paid our mortgage, saved our money and refinanced if it made financial sense. (to lower the interest- reduce the term) all with the same bank. 5 years left until I that note is paid and when that final check is written, I know it will be because of hard work and sacrifice. No one gave us anything, except the bank they gave us a chance to prove we were worthy
I am not saying that I have it all nutted but it seems like everyone wants something for nothing and they don't get it they walk away.....If we continue to build a society on these fundamentals, we will surely lose.
This maybe a little off topic but it scares me that our country is losing the basic concept of hard work, living with our choices and what is worse our government is rewarding people for it.
My grandparents would fricking have a heart attack if they were still here to see this.
be proud for what you have accomplished... you earned it!
Nothing had been learned and nothing had changed. Just as the Sept. 2008 collapse took most (99.9999% of the world's population?) by surprise, the next phase will be both intriguing and beyond our imagination.
The best thing one could do is to get out of debt first. Never back yourself into a corner and be caught. I follow the advice of an older broken who once said to me several decades ago: "...Buy it with your own money...". Case in point: the worst situation an investor faces is margin call, when one is forced to sell or cover at a painful price.
Deflation hurts savers? What? Was he playing hooky during Econ 101? INflation hurts savers. DEflation hurts borrowers.
Granted, it said all manner of savers, then went on to list those that don't save but consume. When do retirees save? If they were smart, they saved when they were working, not started when they retired. Non-profits are not savers, nor are municipalities. Does your city save money or spend it faster than it comes in the door?
We voted for Reagan, who started this debt mess.
Then we voted for Bush Jr., who sank our nation further into debt with wars and tax cuts (normally, common sense tells us you raise taxes to pay for a war, but the GOP is not fiscally conservative enough to understand this).
Then we took out loans we couldn't afford on top of all this.
Finally, Obama is pulling out of the wars, removing the tax cuts for the rich, tightening up lending standards, and reducing the costs of health care. In other words, he's addressing many of the underlying causes of our problems, and people are accusing him of being the cause?
Don't give the argument more people having care will reduce emergency care- They tried that argument in MA - We do not have enough doctors, so people that were not covered and now have healthcare still go to the ER.
Doctors are leaving MA in record numbers.
Tax increases without a budget and no government spending cuts is a joke. I though Bama promised to go through the budget line by line .......funny how that promise is never brought up.
Also, if you noticed his end of war speech - they just troops to Afganistan
As far as I remember the self-regulated CDS market was a Rubin-Summers-Greenspan idea.
The break up of Glass-Steagall was signed by president Clinton (conspicuously absent from your list).
Bush gave us the Irak war, but too big to fail was Clinton's doing. Pauson just followed the blueprint of his business-ancestor (aka Bob Rubin).
Reagan and LBJ have been dead and out of office long enough. If we couldn't fix whatever they did wrong by now it is no longer their fault.
Shameful, that was. It took Wilson his entire two terms to figure out that he'd been had. That just shows what happens when you put an academic in an executive position. We certainly wouldn't do that again, would we?
We could get back to the earlier demise of a sound medical and hospital practice system with Johnson's "Great society" program. I'll bet you don't remember that before Johnson medical cost inflation was UNDER the national average.
"Bernanke Content to Sacrifice American Savers to Recapitalize Banks and Benefit Debtors"
www.fundmymutualfund.c...
Glad someone with some cache is willing to say it to a news agency.
Anyhow back to NFL football and Dancing with the Stars - more important topics.
is.gd/eP3ws
Meanwhile distract the sheeple with Beck, Limbaugh, Maddow, hahah - it must be so funny to watch from above.
I'm trying to figure if anything published or viewed isn't at least 50% deflection and disinformation.