Another day, another run on the printing press

Apparently banks which can afford corporate jets and hundreds of millions in bonuses to complete morons who have run companies into the ground are suddenly afraid to lend money. This slight detail has not evaded the administration, who are now proposing another $400,000,000,000 into the black hole that is big business to increase lending. I have stopped keeping track of the waste that the government has shoveled between these corporations and the bailouts. Much of this debt is already being monetized since foreign lenders are concerned for the solvency of the US, so expect inflation to rise up again as more dollars are chasing fewer goods.

I notice the British have a lot of cartoons on this topic, but over on this side of the pond we seem to be lacking in good political cartoons on printing money. I guess it is one more area in which we have lost our competitive advantage.

One honorable congressman

Out of 435 representatives, only a handful had the fortitude to stand up to the multi-trillion dollar bailouts from both Bush and Obama. In honor of Ted Poe speaking the truth about the incredible debt this country is going to be buried under, I bring his two speeches on the two bailouts.

From September 2008





From January 2009

Why Can't We Make Him Sit in a Corner?

Once upon a youthful time, it was a fun prank to use a paper generator to create a nonsensical paper with a fake name to have a teacher read it then start laughing. Copying and pasting a paper and turning it in, however, was forbidden even in an age of such vapidity. Unfortunately the same rules do not apply to the Bailout Czar, Neel "I don't work in the interest of Goldman Sachs, honestly" Kashkari. This story might be laughable if this individual were not doling out $700 billion dollars which will be borne by generations. It also makes you wonder what are the real qualifications for these big wigs to haul in the loot they do when they seem to be incapable of doing a competent job at anything other than playing golf and signing the layoff agreements. When you had a grad school dropout with only a history degree who also happened to be an alcoholic and a drug user running Bear Stearns and being number two at the OMB you know that something is wrong with the elite in this nation.

The worst part is not just just that the incompetent are in high positions, but that they are recycled from one prominent position to another. Without an infusion of new blood, the country stagnates and the incentive to work hard drops off since your effort does not matter since an unqualified MBA from Harvard, or a connected buffoon will get the top jobs.

Fed loans two trillion, won't tell us who got it

The greatest theft in the history of mankind

Let them eat cake: a 2008 tale

Back in the late 18th Century in a once great power with overseas wars, economic might, and the defeat of their main rival for world influence taken down by a small nation there were a class of people who took from the treasury to enrich themselves. In this time, the poor were told that they should be happy being told how to behave by those in power, since the rich and powerful enjoyed the blessings of the almighty, or else they would also be wretched and poor like the factory workers. Even the elite of this time made patronizing remarks about the need for the poor to change their habits and sacrifice since times were so bad, such as telling starving Parisians to eat cake(a more expensive good) since they could not afford cheaper sustaining bread.

Fast forward to 2008 in the United States and see that history once again repeats itself. The most militarily and economically powerful nation is engulfed in two overseas wars, their main rival for world influence(the Soviet Union) was defeated just about a decade ago by upstarts in a tiny piece of land, and leeches in suits are draining the treasury to line their own pockets. In this modern time the churches of materialism(also known as megachurches) tell the faithful that wealth is a sign of being blessed and that those who are poor are not blessed. Now the aristocrats changed their titles from Marquess to Senior Executive, but the same dynamic holds true. Let me past this quote from a spokesmouth for welfare queen AIG to bring home the point:

Nicholas Ashooh, AIG's senior vice president of communication, acknowledges that the perception of his company has taken a hit.

"Oh, it's terrible, it's terrible," he told CBS News.

Ashooh said the retention program does not include anyone in the firm's financial products business, the tiny arm of the company that torpedoed AIG with its high-risk, bad loans.

"We know that this is not a popular thing. A lot of people just won't accept it, but if you think about it, it's a calculated decision to keep businesses intact so that we can sell them and pay back taxpayers what we owe them," he said.

The translation: we screwed up the world's financial system and are rewarding top executives but you should trust us with money that you worked hard for since we know what is best. If you let us take $115 billion and dole it to top management, who will probably leave anyhow, it's in your best interest. Oh, while you are at it, pay some interest for our largesse (bonds are not free money after all) and enjoy it. There's a Santayana saying that keeps getting stuck in my head right now.

Another free marketeer tucks tail and hides

Today it is with great joy that I announce the latest intellectual surrender by a free marketeer to the seductive power of government money. Ben Stein, apparently on a break from equating evolution with Nazism, has written a column about the need for a bailout. Try not to laugh as you read statements such a:s"

Amazingly, we can have whole fleets of C-130's fly to remote areas of Iraq and Afghanistan with pallets of hundred dollar bills piled from floor to ceiling. Then we can pass them out to warlords who make tea for our soldiers one hour and blow their guts out the next. We can send CIA operatives into Somalia and give millions, maybe hundreds of millions, to warlords to fight other killers.".

Hmm Mr. Stein, maybe you should have thought about that before groveling to Bush during his reelection? Of course this is the same guy who said that "Everything will be fine, just get back to work" in September. He also said that the economy is basically in fine shape in late October when the market melted down. It is always nice to see an ideologue forced to accept reality, though I am sure the second stocks have an uptick he will be back on the free markets, no regulation bandwagon.

PS. This is the same guy at an interview who stated that "science leads to killing."

The Best Deficits Fiat Money Can Buy

Today's story comes from CNBC about the cost of the financial socialism, I meant bailouts, exceeding the cost of WWII with inflation adjustment. So we are spending more money than it took to bring down both the Third Reich and the Empire of the Sun and all we have to show for it are executive compensations that only Croesus could imagine?

This is the largest transfer of wealth in human history, one which is mortgaging the future of the nation in the hands of the same idiots who got us into this place. Why nobody calls this the theft that it is comes as the biggest indictment of the modern media. In eight years Bush has increased the national debt from $5.272 trillion to $10.578 trillion. Check here if you want to see for yourself. The date range is from January 20, 2001 to today. Where is the outrage?

Today's update on the Fed's Printing Press Operations

Just when you thought the Fed could not blow more money on attempted market manipulation comes word that we are now on the hook for up to 450 billion more. With this latest round of fiscal malfeasance, the Fed and Treasury have add over a trillion and a half dollars in debt just this year. In other words, the debt level added this year is more than a quarter of what the total national debt was in 1993. Hurray for the party of small government.

Here's a video where Bush claims his 2003 budget will cut the deficit in half in five years. This pretty much sums up the legacy of Bush on economic matters, speak a big game and fail to follow through.

Getting Drunk on The Taxpayer's Money AIG Style

Apparently billions of dollars in the past two weeks has not been enough to satiate the pirate at AIG, as they are now tapping on a paper purchasing agreement from the Fed worth up to ten billion dollars. The same company that took 87 billion, or $87,000,000,000 of my money and your money, then received an additional 37.8 billion, and now they want a little extra time at he government trough.

Why is a company too big to fail? In a country where for years the economic mantra has been that "free market capitalism is the best way to achieve wealth" there should be riots in the streets over such government intervention. Instead, the corporate fascism is accepted as though government actually has power to do good for the economy. The problem is that government cannot effectively decide what 300 million people want on a daily basis, and no corporation can do so either. If the people do not want to invest in companies because they are illiquid, then government can only delay the problem because they cannot make every illiquid company liquid so that investors will flock to financials. If only someone actually advocated personal responsibility in DC...

Market volatility and political reality

Last week saw people losing over half their portfolio value in one week, and Monday saw the largest absolute increase in the Dow in history, so are happy days here again? The answer is that we will not know until the injection of capital into the financial system is completed. If(and that is a big if) the bailout plan succeeds the velocity of money should increase, which would avoid a depression since a low velocity means money is not being loaned out or used to purchase goods and services.

Even if the bailout succeeds, the political landscape will be changed by the economic realities of the last eight years. The first lesson is that the Republican party cannot claim to be the party of financial responsibility as they have presided over the complete removal of any spending restraint. Secondly, the McCain/Caribou Barbie campaign is in very dire straights with three weeks left in the election. Since early votes are already beginning in some states and will all be starting by next Monday, this last debate is really the final gasp in the campaign. If McCain comes across as badly as he has the last two debates, with stumbling and playing for a tie, prepare for the polls showing Obama up double digits to increase. Is the debate performance going to be too little too late?

Another day, another bit of corporate welfare.

Apparently the executives at American International Gang got a new nearly $40 billion dollar loan from the Weimar Republic, I meant the US Federal Reserve. This comes after they were reported to have blown $400k on a spa day which you and I paid for.

Here are some quotes from de Tocqueville as he toured the nascent America for you to contemplate against the backdrop of the rape of the American experiment by the suits on Wall Street:


"In towns it is impossible to prevent men from assembling, getting excited together and forming sudden passionate resolves. Towns are like great meeting houses with all the inhabitants as members. In them the people wield immense influence over their magistrates and often carry their desires into execution without intermediaries." Compare that to the closed door meethings between energy companies and the government which end up with more powerful companies and more gouged consumers.

""The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money."" No more needs to be said.

Think about those two ideas when you hear about how dangerous certain ideas are from different candidates or about how we taxpayers must give our hard earned money to billionaires. If this is a free, capitalist society, I would not want to know what a socialist one is like.

This is the face of America's downfall.
(Former AIG CEO Martin Sullivan)

I went down, down, down and the flames went higher

Today there is finally some positive economic news. Defeating the $700,000,000,000 bailout means that the greedy investment firm which still exist will be bought out by more liquid firms at fire sale prices and the world goes on. The alternative was borrowing nearly a trillion dollars from the Chinese to pay the bills, which would mean that we would be even less sovereign than our current state suggests. Hopefully the market realizes that the gravy train is not pulling into the station and money begins to flow to solid companies again. Either way Henry Paulsen should be fired.

The Robber Baron is Riding High

Today is the day when any pretense of fiscal conservatism can officially be kissed goodbye. Today the US Taxpayer is made to pay for the incompetence of the Fannie Mae and Freddie Mac management to the tune of hundreds of billion of dollars. This paragraph sums the situation up best:

"But even after the government seized the mortgage finance companies on Sunday and dismissed their chief executives, the companies’ outgoing leaders could see big paydays — a prospect that angers many investors, particularly because ordinary stockholders could be virtually wiped out."

We are paying for golden parachutes with our tax money. Welcome to slavery

Today's economics news

Today some big economic news came out which most americans will not hear since it does not involve a prostitute, a governor, or Paris Hilton's hair. First, consumer spending is down yet again this last month. The 0.1% increase is negligible due to the effect of inflation, so consumer spending is lower on magnitude. This means that more money is going to pay bills and buy food instead of buying that Ipod or designer clothes. Anyone who has gone shopping for groceries can see that inflation is definitely on the risse. Eventually the huge retail sector is going to crash since wages have been stagnant for years, while energy and food prices have flown.

Also, the economic conservatives at the Fed have decided to infuse more money into banks hoping to stave off a recession. This is a bailout by any measure, forcing you and I(and every other taxpayer) to subsidize the poor lending practices of banks. The same people who praise this move now can be seen talking about the need for failing businesses to be taken out when times are good. It's a horrible waste of money and creates more debt which brings down our economy over time by having foreigners purchase the bonds to finance said debt.