September 30, 2008
This morning, I saw reports in the media of a large contingency of Americans that were furious at Congress for not passing the Wall Street bailout plan that is now being spun as a “rescue” plan. Yet I am almost sure that if you polled one thousand of these Americans that were angry at Congress, that zero out of those 1,000 people have actually read the actual legislation, and thus, have no idea that Congress is protecting them from the greatest robbery of the 21st century. I have seen many journalists act more like a PR agent for the US government and Wall Street, stating that this plan should immediately be approved because the US Federal Reserve and the US Treasury have claimed that delaying its passage would threaten the stability of the entire global financial system. I have also read articles where journalists stated that this bailout plan is no place for bi-partisan politics.
What a bunch of nonsense. This bailout plan has nothing to do with political bickering or an immediate threat to a global financial meltdown. Americans that are angry at Congress should start by reading the legislation and then formulating an intelligent opinion about whether or not they truly want a quick fix that will sacrifice not only their future but their children’s futures as well.
The same clear and present dangers in the US financial system, the same exact systemic problems that existed one year ago, are the same problems that still exist today. The only reason that stock markets didn’t start to collapse one year ago is because of the mountain of lies that Wall Street told the willing and believing sheep herd of investors (well I guess in some sense there have been mini fall-outs in between that have all been stopped cold by free-market intervention). In any event, the dangers were just as great five years ago, four years ago, three years ago, two years ago and one year ago. But those in charge who want even more power now through this bailout plan did nothing to solve the problems that were so evident back then. Not exactly the vote of confidence one would desire in order to entrust the fate of the US to the same people that have made the situation worse, not better, from its critical stages over the past couple of years.
Furthermore, for those of you that have already forgotten what the US Secretary of Treasury told the whole country on March 18, 2008, let me remind you. In response to a question about how this current administration could have let the economic situation in America become so bad, Secretary Paulson replied, “My reaction is we’re all over this. And the president is very focused on what’s going on in the economy. We got out ahead of it early, coming off a third quarter where the GDP grew at 4.9 percent.” (author’s comment – I am not blaming this current administration for creating this problem, because yes, I understand that the problem started under Alan Greenspan’s watch and his propensity to deregulate the financial industry into the wild, wild west). In response to the question, “Are more Wall Street firms in danger, at risk, of going under?” Paulson replied, “I’ve got great confidence in our financial market, our financial institutions. Our markets are resilient. They’re flexible. Our institutions, our banks and investment banks, are STRONG. ” Just to emphasize his point about the strength of the US markets, Paulson stated, “Our markets are the envy of the world.”
Consider that one month after Secretary Paulson made those statements, on April 23, 2008, I wrote an article on my blog titled,
- “Will US Markets Crash Now or Later?”
In that article, I wrote, “It’s amazing that people think I have an agenda for wanting markets to crash, oddly connecting my market sentiments to arguments about patriotism or religion. It’s just that I feel obliged to report what I see, because so few nuggets of reality trickle through the mainstream information filters and reach larger audiences.” I further noted, because it was so obvious to me that markets were likely to crash because of the monetary policies being assumed by the US Treasury and the US Federal Reserve, “Should an extended rally of the Dow above 13,000 occur, it will serve no purpose other than to create the illusion of wealth, as opposed to the creation of real tangible wealth. The higher U.S. markets rise in today’s environment, the more likely it is that they will fall even harder in the future. Here’s why. Currently, the U.S. Federal Reserve is playing the same shell game that it has for decades, one in which they alternately inflate stock markets and real estate markets. If stock markets are crashing, then they inflate real estate markets, and vice versa. It’s a vicious circle that eventually will collapse under the weight of its own foolishness.”
So my ability to know that a market crash was coming in April, just after one month after Hank Paulson declared US markets the “envy of the world” either (1) makes me 1,000 times more competent at assessing the economy than Hank Paulson; or (2)identifies Hank Paulson as someone bent on deceiving the American public. Whichever answer you come to rest on, neither conclusion, of which one or the other has to be true, would qualify him to be the leader of this bailout plan.
This is precisely why American’s anger about Congress’s refusal to pass the bailout plan is severely misguided and misinformed. This contingency of angry Americans first of all needs to direct their anger in an intelligent manner, and question whether the perpetrators of this crisis, the US Federal Reserve and the US Treasury, are truly the qualified entities that should be administering this plan. Secondly,
- every one should read the clauses contained in the legislation at a minimum, which you can do here
before deciding that it is a positive thing for America when it clearly is not. The creation of a crisis is often a tactic employed by those in power to seize even more power from a confused and dismayed populace, and unfortunately, if history repeats itself, this legislation will eventually be passed on false cries that Congressmen are unpatriotic for voting against this act when the exact opposite is true. We should all be wary to let the very thing we will curse one year from now happen today.
[tags] negative points of the Wall Street bailout plan, US Federal Reserve, Hank Paulson[/tags]
