Wednesday, April 10, 2013

Axis of Evil: Uncle Sam, The Fed, Wall Street

David Stockman explains why our banking and finance industry is not free market capitalism. This is important, because what you see going on in Europe is coming here. We had a chance to let the reset happen back in 2008, but Bush instead let his gang of pirates, led by Dirty Hank Paulson, loot the Treasury and refill the pockets of the Wall Street Gamblers after they shot craps.

Stockman was Reagan's first Budget Director, but he fell out of favor because of his candor. His subsequent business career has had its ups and downs, but he is respected (and often hated) on the left and the right for his intellectual honesty.
"The Republican Party has totally abdicated its job in our democracy, which is to act as the guardian of fiscal discipline and responsibility. They're on an anti-tax jihad -- one that benefits the prosperous classes." --David Stockman
I recommend this article to everyone. Stockman explains in layman's terms what happened back in 2008, and how the criminal enterprise continues today.

Free Market Short-Circuited
...once you basically unplug the pricing mechanism of a capital market and make it entirely an administered rate by the Fed, you are going to cause all kinds of deformations as I call them, or mal-investments as some of the Austrians used to call them, that basically pollutes and corrupts the system." (Stockman)
Stockman says the pirates in government, the Fed and Wall Street should be under house arrest. I was thinking that they should be hanging from lamp posts, but OK, I'd go for house arrest. In the days back before the Fed, many of them would have been splattered on the sidewalks of Wall Street, which is one more argument for ending that institution and removing the taxpayer-funded safety nets from these crony crapitalists and vampiric banksters.

Main Street got Mugged

In 2008, the Federal Government robbed the taxpayers and gave the money to Wall Street. It doesn't matter that it has all been paid back. They made billions off of that seed money and avoided their own financial ruin. We got paid back with no interest, and we are all poorer than we were in 2008. It is criminal how our government colluded with the Crony Craptains of High Finance.
For the fiscal 2009 year, Goldman Sachs generated what I call a $29 billion surplus – $13 billion of net income after tax, and on top of that $16 billion of salaries and bonuses, 95% of it which was bonuses.

Therefore, the idea that they were on death’s door does not stack up. Even if they had been, it would not make any difference to the health of the financial system. These firms are supposed to come and go, and if people make really bad bets, if they have a trillion dollar balance sheet with six, seven, eight hundred billion dollars worth of hot-money short-term funding, then they ought to take their just reward, because it would create lessons, it would create discipline.

So all the new firms that would have been formed out of the remnants of Goldman Sachs where everybody lost their stock values – which for most of these partners is tens of millions, hundreds of millions – when they formed a new firm, I doubt whether they would have gone back to the old game.

What happened was the Fed stopped everything in its tracks, kept Goldman Sachs intact, the reckless Goldman Sachs and the reckless Morgan Stanley, everyone quickly recovered their stock value and the game continues. This is one of the evils that comes from this kind of deep intervention in the capital and money markets. (
And now, after this brazen inside job, carried out in broad daylight, we have elected officials saying government needs even more of our money? Bull! They are crooked and stupid. The federal government is the sheep shearer for Wall Street.

More advice from Stockman:
“I invest in anything that Bernanke can’t destroy, including gold, canned beans, bottled water and flashlight batteries."
See also:
The Corruption of Capitalism in
The Nation: It wasn't Stockman Who Wrecked the Economy

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