Remember that campaign of fear to pass the Wall Street bailout--that successful selling of fear to the whole world which pretty much guaranteed a disastrous stock market, a credit "freeze", and pressure on the economy that has probably resulted in a "worldwide recession"?
Well, it was all bogus. We went through all of that agony for nothing. It was all political posturing that did nothing but confirm that Paulson, Bernanke, and all of the "experts" on Wall Street did not have a clue.
Remember how Democrats and Republicans postured about how the taxpayers were not giving a "blank check" to Paulson and Bernanke? Well, they LIED, didn't they? The original "bailout" was sold as a "purchase" of "toxic" assets by the government to get them off of the books of financial institutions. That "plan" has beeen adjudged a failure before it has even been implemented.
Over the weekend, Wall Street and the financial "community" (the very people who got us into this mess, along with ACORN, leftist Democrats, and politicians who were pushing the central planning idea that every American should be able to afford a house) got what they wanted, and the "comprehensive plan" has little resemblance to the "plan" sold to Congress and the American people. That discarded "plan" was the plan that had to be passed or we were doomed. That over-the-top campaign of fear was followed by astonishment that there was still a "lack of confidence" in the markets. Talk about a self-fulfilling "crisis". That is why the new "plan" won't do much either. You can't sell "fear", and then restore confidence with a blank check for government. Yes, the new "plan" is a blank check from taxpayers around the world for governments and Wall Street to use as much taxpayer money as they want to do almost anything they want to "bail out" the financial "smart guys" who got us where we are.
See the Flying, Fickle Finger of Fate entry on Saturday. I already have you some of the outlines of this blank check. The new "mantra" that Wall Street (CNBC, Larry Kudlow, Goldman Sachs and company) have decided upon is that world governments, including the U.S., must "guarantee" "interbank lending (every loan between banks, I guess). Then Europe, or parts of it--including Britain--have guaranteed all bank deposits. That means that the increase of FDIC insurance of bank deposits to $250,000, which was supposedly a big "sweetener" for that Wall Street bailout, was a fraud. The pressure is on the U.S. to at least temporarily guarantee all bank deposits, with no limit, without evidently having to have Congressional authority. Blank check anyone?
Now what is wrong with guaranteeing all bank deposits? well, it gives a blank check to banks to get deposits however they can, using whatever inducements they want to give, and the taxpayers stand behind any excesses. In other words, if this is a "good idea", why don't we do it already? It is not a "good idea". It is a blank check, terrible idea giving financial people the impression that they can blackmail governments into what they want. Larry Kudlow deserved the "Finger" for this kind of thinking, and so did Wall Street and the financial community as a whole. The "interbank lending" is a similar blank check.
I am not done, and neither are these "blank check" people. There is a move to go further, and guarantee all bank debt. Talk about a "blank check"!!! No one could even make this stuff up. Where are all of those politicians explaining how this is not a "blank check" (liars that they are)?
I am still not done. It appears that the main part of the new "plan"--not even really mentioned when this Wall Street bailout bill was pushed through Congress, is to "inject capital" into banks by means of purchasing preferred stock (with maybe some warrants), instead of by purchasing "toxic assets".
In other words, what was that "debate" (fraud) in Congress all about, if the "plan" being debated is not even the plan being implemented. How can you trust any of these clueless people, who scare everybody pushing a "paln" through Congress that they have acknoledged to be doomed to failure before it has even been implemented?
How can Paulson and the Fed do all of this without Congressional authority? Well, despite the posturing of politicians, Paulson and Bernanke are evidently interpreting the Wall Street bailout as giving them a blank check to do what they want. Their attitude seems to be that even if they overstep their bounds, no one will call them on it because the campaign of fear and extortion has made all of our "leaders" incapable of challenging Wall Street and the financial "community" on what they want.
So we have a completely different, "comprehensive" plan--one that was not presented to Congress or the American people at all. Further, this total usurpation of power is being done without apology, or explanation as to why we should trust these people when they have so revealed themselves as to having no clue. These central planners want a total blank check, after proving themselves to be failures, and they are asserting that they have a blank check. It is hard to imagine something much more dangerous than this. Even FDR did not simply impose massive,, taxpayer funded programs without any real authorization.
Is this the end? Of course not. The new CEO of Goldman Sachs (succeeding failure Paulson, who is now Treasury chief doing the bidding of Goldman Sachs there) is already calling for a "new" stimulus package, as if the stimulus being provided by this taxpayer blank check to Wall Street were not massive.
Of course, all of this stuff is supposedly "temporary"--the worst of all possible worlds. The increase to $250,000 should not be "temporary". It should be permanent ($100,000 previous limit has not been raised in decades), and there should be no guarantee of all bank deposits and all bank debt. The "interbank lending" guarantee is straight extortion from Larry Kudlow and company, which should have been ignored.
Now we are into the new world of global central planning to satisfy Wall Street. Wall Street has accomplished what the Soviet Union could not. Wall Street, and the international, financial "community", have extorted the whole world into a version of "Communism". We are, indeed, in a "brave new world." We will be darn lucky to survive it.
Wall Street, which should be in disgrace, is actually becoming all powerful--asserting the right to rule the entire world, and tell governments what to do. Yes, I am using "Wall Street" here as shorthand for the entire world financial community, including the various "fiance ministers" (whatever they may be called in each country) who have totally failed to come up with any "solutions" that do not give total power to themselves (a reward for failure).
Nope. If this is "necessary", we are domed anyway. Because this precedent dooms us. Since there seems no way to stop this power grab, am I joining the "doom and gloom" crowd? In a way I am. I am pretty depressed about it, even though I am not that depressed about the economy itself.
As I have said, conservatism has been exiled to the wilderness. There seem to be no real "free market" people left--especially people who can "tweak" the free market to handle problems instead of abandoning it.
Too bad. The worst of it is that there is almost no government assertion of power, in order to "save" us, that is out of bounds now. The contest will be over who can assert the largest expansions of government in order to take care of us, and how many people have credibility in opposing such expansions of government now (after most have sold out to fear)? Not many. Not enough.
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