Bloomberg provides a telling example of what is wrong in DC. Senate’s Health-Care Legislation Poised for Passage
Senate Majority Leader Harry Reid plans to win final passage by Dec. 24 now that he secured the vote of his party’s last holdout, Nebraska Senator Ben Nelson.
He finally struck a deal that satisfied his demand to keep U.S. subsidies from being used for abortion and won an agreement for more aid to help Nebraska provide coverage for the uninsured.
Nelson said the language satisfied him, though it drew criticism from antiabortion groups. The Nebraska lawmaker also won another prize, with additional Medicaid costs to his state being absorbed by the federal government.
The agreement came late on Dec. 18 over a handshake.
“It was a pretty powerful moment,” said Reid, a Nevada Democrat. “That’s what this place is built on, handshakes legalized bribery.” (emphasis Inthon)
Upon closer inspection of its “accomplishments”, we discover our government is a transparent kickback machine; something which is manipulated and used to advance one’s career and line one’s pocket.
Governments disintegrate when citizens and lawmakers reject individual, familial and community responsibility and instead believe in the goodness of “free money” (printed up or borrowed, of course) and citizens and lawmakers feel no sense of self-ownership.
What hope remains for the future when there is no incentive to encourage individual responsibility and self-ownership?
Governments stop functioning and cannibalize themselves when politicians shift from representing an informed group of constituents to becoming professional raiders for their financial backers (unions, other politicians or corporate interests).
Takeaway: Have no faith in national politics or national politicians. Self-reliance and community reliance are more robust and sustainable.
A gem from Nassim Taleb, a trader who predicted the crash and sees more difficulties ahead:
What I am seeing and hearing on the news — the reappointment of Bernanke — is too hard for me to bear. I cannot believe that we, in the 21st century, can accept living in such a society. I am not blaming Bernanke (he doesn’t even know he doesn’t understand how things work or that the tools he uses are not empirical); it is the Senators appointing him who are totally irresponsible — as if we promoted every doctor who caused malpractice. The world has never, never been as fragile. Economics make homeopath and alternative healers look empirical and scientific. (emphasis by Inthon)
No news, no press, no Davos, no suit-and-tie fraudsters, no fools. I need to withdraw as immediately as possible into the Platonic quiet of my library, work on my next book, find solace in science and philosophy, and mull the next step. I will also structure trades with my Universa friends to bet on the next mistake by Bernanke, Summers, and Geithner. I will only (briefly) emerge from my hiatus when the publishers force me to do so upon the publication of the paperback edition of The Black Swan.
I would go one step further; rather than blaming the Senators, blame the voters who elected these Senators (all of whom are ignorant of the dangers of fiat currencies, central planning and central banking).
The U.S. has never been this fragile. An economy reliant on consumption, cheap energy/commodities, easy credit, entitlements, corporate welfare and social welfare is not durable or sustainable.
The years ahead will require deleveraging on a large scale and small scale. Those grounded with an awareness of our current unsustainability will be more apt to mentally weather the future slowdown/economic pain.
Takeaway: Borrowing money to spend on entitlements, wars and handouts cannot go on forever. Prepare yourself for the consequences of our current financial immaturity.
It should boggle everyone’s mind how easily bloggers are able to catch obvious fraud in the financial markets while the SEC and other regulatory bodies are looking the other way.
Here are some gems just from the last week alone:
- Perot Systems FrontRunning – ZeroHedge.
- Blatant reinflation of housing bubble – Denninger.
- Corruption at HUD – Karl Denninger.
The SEC was not able to catch a ponzi scheme even after Harry Markopolos delivered it to them on a silver platter.
Choose your sources of information/facts/news very carefully. Stick with those that are honest enough to state their opinions openly and publish their predictions.
Read what you disagree with before drawing your conclusions.
There is a difference between loyalty and blind loyalty. Blind loyalty to anything (religion, government, ideology, spouse) is deadly.
Takeaway: Perpetual reliance on someone else’s seal of approval will rot your brain. Complacency kills.
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.
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