Wednesday, August 26, 2009

How can change come?

For me the litmus test of whether Bernanke will ultimately fail and lead the country into deeper depression—or whether he will reform the financial system—begins with this:  now that the immediate crisis is averted, over coming months does he weed out the bad debts and bad banks, letting the losses fall where they should according to law, or will he attempt to sweep them under the carpet as I suggested yesterday, to try to make them disappear into the black hole of the Fed?  The latter would complete the massive transfer of wealth from ordinary Americans to the financial elite that Hank Paulson initiated.  If Bernanke temporizes and “lets zombie banks run” we are assured a prolonged liquidity trap, more asset bubbles as the Goldman Sachs’s and other trading banks take advantage of free money from the Fed, and a grinding immiseration of the national psyche. 

My proposal for fiscal policy is to provide livable workfare and health benefits to the unemployed before spending a nickel on anything else.  Ron Paul suggests bringing troops home to pay for national health insurance—that at this moment in history to cut everyone loose as his libertarian principles would require would be inhumane.  If the fiscal stimulus is distributed anything like the financial bailouts were, it will go to the richest Americans.  The political system has been corrupted by money and serves moneyed interests above all others. 

Let’s forget macroeconomic models, “fiscal stimulus” and “quantitative easing.”  Let’s concentrate on the American people.  The nation is a fiscal basket case—and the people don’t trust the government to spend their money any more.  They didn’t agree with the bailouts and no one listened to them.  They’re right to be concerned with the deficits.  They don’t trust the financial markets any more.  They have no idea how to invest their growing savings.

Let’s stop all the academic nonsense and help out the American people.  The American empire is showing all the classic signs of elitist, hubristic collapse.  It never ceases to amaze me how even commentators on the left can ignore what’s going on right under their noses while debating macroeconomic figments.  In this context the way that most of academic economics has circled its wagons to support Bernanke is particularly pathetic.  They did the same for Greenspan, while it was the “tinfoil hats” who were critical.

How does change come when the President and Congress are so clearly compromised?

1 comment:

  1. I suspect you already know the answer.
    The losses are going under the carpet.
    It would be a miracle if it were otherwise.
    Everything is bought and paid for.