Obama Hails Reformless Financial Reform Delivered By Party Bosses And Banksters And A Rant On The Silliness Of Viewing This Mess As A Debt Crisis
Last week in the Senate, Boss Tweed (Christopher Dodd) delivered a 'financial reform' bill embraced by Tammany Hall (Wall Street crooks). Now the bill goes to conference committee where the Tammany Hall lobbyists will weaken it even further. Appeasement of principles and virtue for political expediency or political gain is a fool's game that has many unintended consequences as Neville Chamberlain knows all too well.
The President tells us this "recession" (baaahaaa) was caused by Wall Street and political mistakes. Well the President is right. But unfortunately, they aren't the mistakes he believes are at the root of the crisis because he and every other person on God's green earth associate correlation with causation. They think with their eyes and not their brain.
"There are a thousand hacking at the branches of evil to one who is striking at the root." -- Henry David Thoreau
We've written countless times over the past five years that this isn't a financial crisis at its core. That it's an economic crisis. I think we can all figure out by now the entire world isn't collapsing because of $700 billion in subprime U.S. mortgages. That's preposterous on every level as we have said over and over and over both before and after this collapse. I haven't outright said what the root cause of this crisis is but long time readers can surely string together the countless posts and draw some conclusions if they haven't already done so on their own. I am just silently watching more and more financial bloggers, ideologues, status quo supporters and mainstream media stick their foot in their mouth for the time being. We have called every single major event in advance of it happening around the world from China to the Euro zone to Russia to the Middle East to our banking crisis to currency moves to commodities and even some major turning points in gold markets. Most macro issues have been discussed for years. Well in advance of anyone else. So I think I have built some credibility that I live in a meritocracy and have some idea of what is going on comparative to the status quo. I am telling you this isn't a financial crisis. Not even remotely. Neither is it a debt crisis. Well, it has morphed into one but that is not even close to the underlying cause.
"A leader is best when people barely know he exits. When his work is done, his aim fulfilled, they will say, 'We did it ourselves.'." - Lao Tzu
I could devise a politically mainstream plan to solve the U.S.'s debt problem and rapidly create 15-20 million middle-class jobs in the United States starting tomorrow. I'd bet my life on it. And those same policies would eventually end poverty in the United States. It would involve none of the extreme left wing or right wing measures proposed by batty ideologues on either side of the isle. And it would not involve more scope creep of corporatist government meddling embraced by our current political ideologues. And just as importantly, it would restore confidence and pensions and affordable healthcare to the American work force. It wouldn't be easy but it would be a very specific actionable plan that would work. It would work because it has always worked. it would work because it is based on very sound fundamentals and because it would solve the root causes of this crisis.
If one person can determine pragmatic and easily implemented solutions to such substantial issues, imagine what 300 million Americans could do in a merit-based economy. Or what 300 million Americans could do to come up with even better refinements or outright better solutions than what I would propose. And my solutions wouldn't require every American to have a college degree as our President has recently decreed as necessary to survive the future American economy. Our President is simply shoveling more of Washington elitist bulloney by picking economic winners and losers via counter productive political meddling in markets. The President might wish to try his hand at empowering people rather than mandating to the people. An empowered society could not only come up with better ideas than political idiots, but they could solve a whole range of problems that face our society.
If the President believes recent political and bankster mistakes caused this crisis, then maybe he would like to tell us what our economy would have looked like over the last ten years without the mistakes he is referring to. If we didn't have a predatory financial industry acquiring 40% of all capital equipment expenditures to run its Ponzi schemes, or if we didn't have and endless array of fraudulent financial instruments which help contribute well more than 50% of American corporate profits (direct and indirect), or if we didn't have massive war spending in the trillions of dollars, or if we didn't engage in Washington's endless game of political intrigue around the globe costing trillions of taxpayer dollars, or if we didn't have Wall Street's fraudulent securitization of mortgages related to the housing boom, then what would our economy look like? We would have ended up right where we are today with tens of millions of unemployed and tens of millions in poverty. The only difference is it would have happened more than ten years ago with a whole lot less debt. The chickens have come home to roost.
"Policy does not allow a choice between depression and no depression, but between depression now and a worse depression later: inflation pushed far enough would undoubtedly turn depression into the sham prosperity so familiar from European postwar experience, and would, in the end, lead to a collapse worse than the one it was called in to remedy." -- Joseph Schumpeter
You've got countless financial bloggers, equity market bears, Wall Street mobsters, corporatist Republikaaners, government-loving Democrats and the media telling you that America's problem is its massive debt. There are people making hundreds of millions of dollars in the finance industry who are paid to see crises develop. Yet they missed it in its entirety. You need to repudiate mainstream thinking and the incessant babbling about this being a debt problem. As we have written dozens and dozens of times over the past five years, this is not a debt problem; debt is but a symptom of the root cause. The world will continue to collapse regardless of what our debt load is if we don't fix the underlying problems.
What is even more batty are the absolutely ridiculous measures and solutions many are now espousing. Cutting the corporate tax rate to zero? Umm, this is the most ridiculous interpretation of the status quo's nonsensical embrace of neofeudal Corporate Personhood. It will result in complete collapse of the American economy. Guaranteed. Such stupidity has never worked in the history of civilization. Cutting wages and benefits? We've already hammered on that one. Some pruning needs to be done but we aren't going to cut our wages and benefits on the way to prosperity. There is also zero precedence for this. ZERO. That is, if you even need to be told such a ridiculous notion won't solve anything but instead unleash another round of crises. We need to save more? Are you kidding me? Where did this come from? We need to invest more. And we don't need more savings to invest more. Another ridiculous notion. This last one re savings is predicated on a consumer-based view of the economy. One we have repudiated by remarking that 80% of trade in the American economy is not consumer-related. 70% of GDP is consumer-related. But GDP is not an accurate portrayal of the American economy as we wrote quite some time ago. And recently the New York Times ran an article repudiating GDP as well, confirming its uselessness. I think we can all understand that fact with GDP up 5% and forty million Americans on food stamps. All of these ideas are nothing more than bat shit with no foundation in solid economic principles. Picking up on the debt problem, as many have done for some time, is the easy part. Anyone can see in a credit-based economy we cannot continue to issue more and more debt to solve our problems. But getting the underlying economics right and proposing viable solutions is something no one is doing. Even the best financial bloggers or economists out there are generally deluded in their view of sound economics. Some day someone with a microphone is going to figure this all out. In fact, I'm banking on it. At some point all of our solutions will trickle out on here or in some form of media.
In upcoming posts we'll take a very unique look at just how fraudulent this Congressional reform bill truly is. And as I wrote last week, we'll also take a reality-based look at the crisis in Greece.
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