|The Daily Show With Jon Stewart||Mon – Thurs 11p / 10c|
Two “answers” which speak volumes of our leaders:
- At 1:12, Jon Stewart asks “Are we broke?”, Goolsbee replies “No”.
Bizarre. It seems that a country running trillion dollar deficits and unable to function without borrowing money could be classified as “broke”, but not to our leaders.
- At 4:20, Goolsbee says: “When you’re looking in the face of the next Great Depression that’s not the time to tighten the belt”
Indeed, when has there *ever* been a time when either party thought it would be a good idea to tighten the belt and stop borrowing? Heaven forbid we curtail spending on military/”the children”/retirees/politically connected segments of the population.
Takeaway: Leaders will do what it takes (lie, obfuscate, deceive) to accrue political capital. It is not in their interest to be honest with us, especially when our borrowing/spending based economy relies on confidence that “everything will be ok”. A system heading over a cliff due to instability cannot be solved with more of the same pathetic ideas (reliance on debt, policy tweaks) that got us here.
Obama reappointed Bernanke as Fed Chairman earlier today, effectively sealing their fates as men that will take us from a recession into the Greater Depression.
For those “economists” who’ve lately been singing his praises on CNBC, all I have to say is this…
It takes a special kind of system (government) to screw up this badly and still be resoundingly supported by its leader.
In his reappointment speech Obama also pledged support for the continued secrecy independence of the Federal Reserve.
How foolish of citizens to inquire where trillions of dollars are being spent… clearly we should trust the former bankers running the Federal Reserve that regulate the banking system. After all, they obviously know what they’re doing.
Instead of perpetuating the broken system financed by politically embedded financial organizations, Obama could have attempted any of the following:
- Raise awareness of the ghastly unaffordable pension schemes which will inevitably crumble
- Strictly enforce FASB mark to market accounting standards instead of allowing companies to use “judgment” to value their toxic assets
- Clamp down on High-Frequency Trading
- Require the FDIC to close and wind down insolvent banks before the government taxpayer-funded safety net has to be used
- Eliminate alphabet soup bailout programs which are forms of corporate welfare
- Demanded transparency for toxic assets which traveled from insolvent banks to taxpayers
- Slash parts of a budget (military, NASA, HUD, etc.) that are so bloated we must borrow billions from foreigners to stay afloat.
Would that severely correct the housing and stock markets? Yes, probably. Can we continue on our current path? No. Will we eventually face unbearable consequences for our decisions? Yes.
Ironically, neither Bernanke nor Obama nor either political party seem to care about the following message:
It is not the responsibility of the Federal Reserve–nor would it be appropriate–to protect lenders and investors from the consequences of their financial decisions. – Ben Bernanke
So, Obama reappointing the guy who didn’t see any of this coming, who bailed out the irresponsible, who continues to provide cover for banks in the hopes that things will return to normal still makes Obama the “man of the people”? Why aren’t those who voted for Obama clamoring that this Bush appointee is more of the same? Why do horrible decisions not matter when *their* party is in charge?
The reappointment of Bernanke does have a silver lining. All the people that bought into the hope proffered in eloquent speeches that government can provide jobs, clean energy, healthcare, education and other goodies will eventually learn a valuable lesson. The love affair Americans have with celebrity, good looks and good speeches and a lack of discourse/intellectual honesty will finally meet its match against a tidal wave of financial reality.
We are witnessing firsthand government selling Hope while funding Grift.
A generation will learn that our government system, like all systems which redistribute power and wealth, is one that is relentlessly gamed and manipulated for the benefit of those in charge.
Takeaway: Strip away the external validation that media/family/friends give to people and institutions and think for yourself.
One of the biggest problems facing our country today is the lack of awareness/consciousness about how much things truly cost.
The obfuscation via government intervention in all its forms (stupendous deficits, subsidies to failed corporations/business models, pork barrel handouts) is one of the factors seducing people into a false sense of complacency that our economy is just fine. Borrowing money to keep your bills paid might seem ok, until you realize the borrowed money must be paid back with interest.
In less government-dependent/credit-fueled times, a major decision like raising a child was saved up for and anticipated. Healthcare was funded out of pocket or with straightforward insurance. Retirement required savings. Nowadays, our government promises us all these goodies with borrowed money, which we will eventually pay for with interest (assuming the dollar doesn’t collapse first).
In less government-reliant times, there were fewer entitlements, senses of entitlement or bogus lawsuits which now haunt would be doctors and entrepreneurs. Why bother using your MIT degree to start a new business when you can day trade and make the “market more efficient”… hah!
Even the stock market used to be a reasonable measure of future economic value. Now it is a game profitable game to be played/manipulated with enormous leverage. The S&P PE ratio is over 100 according to S&P and the graphical evidence is stunning. Anyone with their 401(k) invested in stocks is asking to be smoked. Meanwhile, insiders are bailing out.
I have no desire to go back to days of extreme hardship or give up technology, but it seems the more government obfuscation we allow to seep into our lives, bit by bit, the further we get from the truth and honest consequences of our lifestyles. A single woman with three kids who is reliant on the state for breakfast and lunch year-round is in a worse off position since the true costs of her lifestyle are not borne by her, but rather, the taxpayer, who is under increasing pressure to stop paying them. This “help” that the State provides via welfare, subsidized housing and other giveaways are not sustainable and ultimately dangerous for its beneficiary.
If you want to ruin a man, give him everything he wants. Never let him fail, struggle, grow or mature into a man. – Inthon.com
As a result of government encroachment on all levels of life we are living in delusion about how much things *actually* cost and how they function. There are now entire families dependent on the government for food assistance, educational assistance, medical assistance and job placement assistance. This is neither normal nor sustainable.
As the credit-fueled economy inevitably slows down and inflation spike or benefits are cut, there will be a lot of disillusioned, angry and unprepared people. There have been numerous chances to come clean from politicians, media and leaders. Instead, all we hear are happy bromides about how things will be back to normal. The only voices sounding the alarm that the debt-fueled economy is unsustainable are drowned out.
Takeaway: I hate to be so closed-minded as “government bad” “free market good”, but it is obvious to anyone paying attention that the more we cede our power and money to the government, the less reliant, intelligent, capable, stable and robust we are as a society.
The Market Ticker blog, written by Karl, is simply fantastic. He elegantly points out inconsistencies, lies and facts which the media forget or choose to ignore. Karl goes above and beyond by taking the time to document his findings in plain English so that a lay person can understand the lies and distortion that have become the economy.
Two GEMS by Karl.
I’ve always said the American dream should be a home – not homeownership,’’ said Representative Barney Frank, chairman of the House Financial Services Committee and one of the earliest critics of the Bush administration’s push to put mortgages in the hands of low- and moderate-income people. – Barney Frank, boston.com article
Now watch the clip…
Quote of the clip… the last 12 seconds:
…but you’re not going to see the collapse that you see when people talk about a bubble.
Barney Frank is ideologically bankrupt, intellectually dishonest and self-serving.
He pats himself on the back when things to go right, then claims no responsibility when things blow up in his face. Anytime people say that Barney Frank is “working on a bill”, remember this clip. Thank you, Karl, for finding this and sharing it with the public.
2) The truth about the overvalued stock market:
Let me note that this is all short-term trading - there is absolutely no intelligent way to INVEST for the “long term” in a market that is acting as this one has been for the last month and change. The only INTELLIGENT thing to do as a LONG TERM INVESTOR in a market that is blowing off on a parabolic spike engendered by LEGALIZED ACCOUNTING FRAUD (the FASB “MTM” change) is to SIT IN CASH, as it is essentially impossible to know WHEN that fraud will be exposed and cause the market to return to underlying fundamental value BUT IT IS A CERTAINTY THAT IT WILL OCCUR.
Again, what does it take to get this covered on CNBC or any major news outlet? Every CNBC guest spot ends with a BUY recommendation for some fund manager. CNBC never mentions the P/E ratio is still over 100 for the S&P.
Karl Denninger does a fantastic job of not only understanding economics, delving into the details and reporting his nuggets of wisdom, but he also agitates for education, awareness and activism.
He takes the time to understand the issue and present the facts in a useful manner. He does this without any allegiance to any bogus political “party”.
Takeaway: The media love to broadcast whatever sells ads (Sarah Palin news, celebrity gossip, the newest pill to pop, the latest diet miracle, etc.). This is rarely compatible with useful, important information.
The websites on the right-side of the page have taught me more than CNBC, network news and my college finance professors combined. Seek out the best friends possible, best sources of information possible and best “food” for your brain possible.
We could not have allowed the big banks to fail since they are vital to the powerful, monied interests that control elections, special interest groups and media that enrich the status quo serve the needs of the common citizen