Elaine Meinel Supkis
The housing rescue will save no homeowners but will make the Chinese and Japanese investors happier. Not to mention pirates and others. The entire US rebate program went towards Exxon/mobile's bank vaults. The editors of the NYT, working on behalf of the owners, have a stupid editorial about all this as well as a long, long article about how Paulson, a consummate insider, is really a naive baby who knows nothing about how power works, how lobbying in DC operates, how the levers of power work, etc. It is truly a hilarious profile with obvious internal clashes of reality. It is obvious that the concerted effort of all our rulers to appear as if they are stupid and helpless and victims of the economic messes they created themselves. Totally.
It is unconscionable to omit food aid from a stimulus measure, because the priority in a downturn should be to help the most vulnerable Americans. It is also poor economics, because a temporary increase in food stamps, which are spent quickly and in full, is the single most effective way to lift consumer spending. Direct aid to states and localities also reaches vulnerable populations, like Medicaid recipients, and is powerful stimulus because the extra money is passed on quickly to employees, contractors and program beneficiaries.
Another reason to approach the next stimulus bill differently is that the government has now intervened to prop up the economy in other ways, most notably by giving the Treasury authority to bail out Fannie Mae and Freddie Mac, the mortgage giants, if necessary.
The Treasury might never have to spend a penny. Or it may have to spend upward of $100 billion. The growing possibility of huge taxpayer outlays — and ever larger federal deficits — leaves little room for error and waste in future rescue efforts. That argues against another large tax rebate scheme, or various temporary tax cuts, like increased write-offs for business equipment. Politically popular though they may be, such measures have far less bang for the buck than direct spending programs to boost the economy.
Congress must take the lead this time, not the Bush administration, in writing a stimulus bill that truly addresses today’s economic problems and challenges, without wreaking undo damage on the federal budget.
The earnest editors of the New York Times never cease to amuse. We saw record food inflation yet the government did absolutely nothing about this. How about indexing food stamps with inflation? Eh? And NOT core inflation but real food inflation. Food goes up, stamps go up. Food prices drop, so do the stamps. Duh. How easy is this? It is laughably easy! Of course, this is not the solution any more than indexing the elderly's Social Security to a price index of things the elderly buy and use! No, it has to be indexed to a totally fake, obviously well below the rate of inflation, indexes! I will note that fuel prices hammer the elderly in particular. Social Security has risen in the lowest single digits this last decade while fuel costs have risen from $10 a barrel for oil to $140 a barrel. It is now dropping although Iran Kitty is hard at work to raise it back up again, egging the US back into menacing Iran. Right now, it is not working. But the Iranians have the ability to change all that. They will keep at it until the US resumes hysteria in the Gulf again.
Republicans on Saturday blocked the Senate from considering a bill next week that would nearly double federal aid to help the poor pay heating and air-conditioning bills.
Although a dozen Senate Republicans support the measure, most voted with GOP leaders who would rather spend the time trumpeting their call to expand offshore oil drilling before Congress takes six weeks off for vacation and the presidential nominating conventions.
The wealthy supporters of ecology protections own a lot of fine beachfront properties. They do NOT want offshore oil rigs and oil spills. So they are throwing themselves upon any legislation that will allow this. They won't even allow non-polluting wind mills because they might annoy the pretty vistas! Everyone in DC must look like they want to solve problems. But the problem here is cheap oil. The people of America went hog wild when oil was only $10 a barrel and the size of vehicles and houses ballooned. We will use up every drop of oil as fast as humanly possible if we can. A heavy oil tax which could be used to subsidize energy purchases of people on fixed incomes or the poor is the way to go. But we won't go there because rich people don't want to go there. They are big, big energy consumers!
Back to the stupid bonanza from the government: this is an IOU. On top of a ten trillion dollar mountain of IOUs. It robs the future and its sole function turned out to be a funnel of money to OPEC, oil speculators and the big oil corporations in America. They are, right now, pouring money into McCain's campaign so they can continue to run America like they did with oilmen Bush and Cheney.
The NYT editor is worried about 'wreaking undo damage on the federal budget'. HAHAHA. It crashed years ago. It limps along only because super trade rivals that are killing us in the markets, Japan and China, are buying up most of our debts. Note that this stupid editor never mentions this! The fiction that Americans are supporting our government's overspending continues simply by never mentioning who our creditors really are! This ridiculous coverup is deliberate. The editor knows perfectly well, he isn't buying up all our Federal red ink! None of his rich buddies are buying up ALL the red ink, either! THEY CAN'T!!! They are stuck! They are in debt, they don't have lots of loot to use to buy our national debts and besides, thanks to the super-low, fake interest rates set by Bernake, it is below the rate of inflation so no one but dire trade rivals seeking to slit our throats buy this junk. A major theme here at Culture of Life News, of course. Now, to prove yet again, how I am right while these clowns are wrong, let's go to exactly one year ago at my own news service:
Risk is how investors makes profits in the stock markets. Just two weeks ago, the huskers on Wall Street were all yelling we were in a new economy that will be fueled by corporate mergers and consolidations as well as buy backs and this would go on forever and forever. This was a silly lie. Another hedge fund, a really big on, the Man Fund of Ireland, is now dying. The herds of investors who keep markets alive are now spooked and running like hell for cover as the lions of Bankruptcy stalk and kill them, one by one.
Another hedge fund in trouble, a bigger fish. As Bear Stearns discoved, having outside the main group hedge funds does not isolate risk and destruction, it probably makes it worse. This is because if a financial house spins off various funds which they still run, if any of these collapses, they can't hide it within the organization. It is out there in the open for all to see! And all seeing people then run like hell from the parent organization.
All the stupid schemes cooked up to 'spread risk' also spread risk by contaminating everything with risk. Investors must be risk-adverse when risks lead to bankruptcy. Pulling out before the whole house burns down is the art of investment. Just like selling in the housing market, timing is important. It is better to take the potential loss of some extra profits and sell an asset just before a turn than to hang on, overprice it and then get stuck. Many houses for sale these days are overpriced. The market turned back at the beginning of 2006. Most professional home builders cut prices and sweetened deals to get out before the fall was obvious to everyone.
In the teeth of an obvious downturn brewing for the last 1 1/2 years, all the happy talk people have been nearly hysterical, trying to trick investors who are not professionals, into believing all was well and the world was going to go into a super-boom, bigger than the one caused by 1% or lower interest rates. This, in the teeth of a rising headwind of hurricane force as all world central banks except for Japan raised interest rates higher and higher due to excess 'liquidity' which is French for 'banks making money out of thin air using their magic wands.'The world is awash in cash. Global liquidity is a phenomenal force. Some economists like the Conference Board's Gail Fosler call it "the garden of Eden"--low interest rates, lowish inflation. Only intermittent volatility, new record peaks in many markets. Money is being made hand over fist.
One amazing factoid: Central banks bought more securities than the Treasury issued in 2006--a total of $320 billion according to Brad Setser, a former Treasury official who follows the money flows better than anyone.
Some central bank economists believe there is a shortage of fixed income product in the world. That's right. You heard it here first. A shortage. Meaning there's not enough bonds to satisfy pension funds and insurance companies worldwide. No wonder interest rates are so low.
Interesting, isn't it? $320 billion extra 'securities'? I would suggest, they aren't all that secure. Actually, nothing is totally 'secure.' Not even the Bank of Japan! History is littered with the corpses of zillions of past 'securities' that ended up worthless. Whole nations can and do go bankrupt. Some empires go bankrupt. This usually causes vast historic changes and ever-bigger global wars. Up until just a year ago, the extra $300 billion in securities went into real estate. That option is now shut so it is groping about, seeking a way of existing. Pieces of paper sitting in banks not being lent to home owners are sad puppies and usually go for less than the rate of inflation.
Whoa! There were extra securities for sale? And there was this undying need to buy them? HAHAHA. We see now that the buyers were mostly people seeking not to protect pensions but governments seeking power and leverage over US policies. And it worked! Hello! Note how the US no longer mentions the value of the yen or the value of the yuan! There is NOT A PEEP ABOUT THIS ANYMORE! HAHAHA. Why was this dropped, anyway? The rescue of Bears Stearn and...oh, do note I talked about Bear Stearn's bad situation last year....the rescue of Fannie Mae and Freddie Mac is all about pleasing these Asian rivals who loom over us like a dark summer thunderstorm. It should be mentioned that both China and Japan are on the same page. The same wavelength. Both want the same things. This obvious unity of purpose and ends should be noted by the US and acted on. We cannot pretend they are different from each other. The fiction that one is an ally and one is an enemy must end. We will not save our nation if we follow the fake Cold War models.
President Bush plans to sign a bill next week that commits the United States to spending about $40 billion over the next five years to fight AIDS overseas, a major expansion of what many consider his most successful foreign policy initiative.
The legislation also extends an implicit pledge that has little precedent in the history of U.S. foreign assistance: to continue purchasing lifesaving drugs for millions of individual people in developing countries for an indefinite period of time.
OK: no food stamps, health care insurance or heating aid for US citizens but these same people will bankroll an open-ended scheme to pour great profits into the bank accounts of pharmaceutical companies? This is a huge profit-making venture! AIDs is a very peculiar disease: there is no cure. The medicines only prolong the lives of victims. Who then, especially in third world nations, spread it further and faster. This is not a vaccine that prevents the disease and stops it spreading. These medicines increase the spreading of the disease because the victims can't protect themselves from contact. I would heartily approve of spreading both male and female condoms, just for example. This is cheap and effective. Spreading drugs is not effective, it is totally counterproductive.
I may sound heartless here but the aim is not humanitarian, the aim of this bill is to open a door to the US taxpayer's pockets that will load us up with infinite debt. For the more the people take these drugs and don't practice safe sex, the worse it gets. But the big pharmaceuticals get richer and richer! Wow! Easy street for them. On top of all this, we don't have $40 billion for anything. We don't have $180 billion a year for the twin wars in Central Asia and the Middle East. We don't have the $500 billion for huge Pentagon gold-plated weapons systems!
Here is a totally insane NYT story about Hank Paulson that is full of contradictions:
IF Henry M. Paulson Jr. hadn’t left Wall Street for Washington to become Treasury secretary in 2006, he would still be making tens of millions of dollars a year as the chairman of Goldman Sachs. He would be comfortably zipping around the globe on a corporate jet. He would be presiding over the only big Wall Street firm that hasn’t lost billions on bad debt.
Even Mr. Paulson, for all his Wall Street experience and market savvy, occasionally appears flummoxed by the scale and complexity of the current crisis.
“When I talk to people, there are a whole lot of them that say: ‘I don’t like this,’ ‘I don’t like that,’ ‘I don’t like the other thing,’ ” he said in the Times meeting. “I say: ‘Neither do I. What idea do you have? What do you think we should do?’ ”
Moreover, a Treasury secretary who initially preached against “excessive regulation” of the financial sector is presiding over a sweeping government intervention in the economy, one that conceivably marks the end of a federal deregulatory push that began in the late 1970s and accelerated in subsequent decades.
Why in the name of a million demons and gnomes is t his gnome 'flummoxed' by what is going on? He could spend ten minutes a day reading my news service. He won't. He can't. The need to be mystified by the magic of what is evolving is a way of coping with criminal behaviors. ALL the players on the stage here, all the fools and follies of the present supporting cast in 'The Collapse Of The Entire US Economic Systems' have to pretend they cannot connect cause and effect. They cannot foresee obvious future outcomes. They have to preserve their cloaks of naive childishness. They must look like they are victims and not the authors of the messes they are creating. Every day, they wake up and what comes to mind is not, 'How do we figure out this mess,' but rather, 'How can we benefit from this mess?' So they all seek the wrong things, they head down the wrong roads. They want eternal wealth, easy profits, continuous expansion of their controls over things they pretend they can't control.
The 'I don't like this or that' comment is very telling, by the way. Obviously, even Paulson has the dim wit to throw out some real solutions here and there. These are not popular with the gnomes. They hate these suggestions and demand they not be talked about. Period. Note also, Paulson, who is against regulation, is for regulation....but only if it benefits him and his buddies who don't like this or that solution! Once they subscribe to a solution, they rush out and shove it along and then retreat back into the fiction that they don't control events.
“He has handled this crisis extremely well,” said Representative Barney Frank, the acerbic Massachusetts Democrat who is chairman of the House Financial Services Committee and customarily a scathing critic of the Bush administration. “It’s fair to say that he and almost everybody else failed to anticipate some of these problems. We all underestimated it. What I give him credit for is how rapidly he adapted.”
WHEN Mr. Paulson accepted the Treasury job, he sought advice from Robert E. Rubin, another former Goldman Sachs chief, who served as Treasury secretary in the Clinton administration. The two sat together in the library of Mr. Rubin’s Manhattan home as Mr. Paulson peppered him with questions about how Washington works.
“Some people from business or law go down to Washington and they go with the view that they’ve done very well in whatever they’ve done and they can take that same way of functioning and apply it in Washington,” says Mr. Rubin. “Very often that doesn’t work. Others say, ‘I’ve had a lot of experience, but this world operates in different ways and I have to learn how this world works.’ That’s a much more effective approach, and that’s my impression of what Hank has done.”
“I’ve watched him grow in the last year, not in terms of intellectual capacity but in his appreciation of how this town works,” says Mr. Dodd.
He was also deeply embroiled in the 2003 ouster of the former New York Stock Exchange chairman Richard A. Grasso over complaints about Mr. Grasso’s compensation. And Mr. Paulson sat at Goldman’s helm during the excesses of the dot-com bubble, selling vast numbers of subpar companies that promptly crashed with the market. Goldman wasn’t the worst of the offenders, but it wasn’t an exception either.
WHEN Mr. Bush struggled to right his listing administration in 2006, his chief of staff, Joshua B. Bolten, a former executive at Goldman Sachs, recruited Mr. Paulson to replace John W. Snow at Treasury.
Take note of all these comments! They are all trying to picture this very, very, very rich, very, very, very connected man who has been very, very, very busy lobbying in DC for years, as a Naïf. A wild child who was fooled by events because NO ONE could foresee them except for who? Me? HAHAHA. To go on: This infant man needed to be taken by the hand by other Goldman Sachs former executives who also took over our government and running our economic systems from the top in DC, why, they had to educate this very, very rich and very, very politically savvy infantile baby as to where the levers of power were? HAHAHA. HAHAHA!!!!!
Oh, the fictions of the ruling elites! They are so funny. As if Paulson never, ever went to Bilderberger meetings, etc. A child from the backwoods carrying a musket and a coonskin cap. Note the little side story about how he used his political connections to get rid of Grasso! Note how it was Bolten, a Goldman Sachman himself, who brought Paulson into the Treasury! Geeze, is there a connection here? Perish the thought!
Moreover, Mr. Paulson has especially endeared himself to the denizens of Wall Street by using federal power and the public purse to rescue the financial industry from its own, outsize mistakes and prevent the meltdown from getting out of control.
“He’s saved their bacon,” Mr. Cox says.
In 1999, he snared Goldman’s top job after leading a palace coup to push out Jon Corzine, his co-senior partner. (Mr. Corzine, a Democrat, is now the governor of New Jersey.)
At the same time, Mr. Paulson began echoing the line of many in the financial industry that the real problem facing Wall Street was a welter of cumbersome regulations.
HAHAHA. This little boy actually was a brutal infighting gnome who took over Goldman Sachs after a bitter battle. Eh? What? And his endearment with the gnome community is appreciated since his rôle was to rescue them using the US taxpayer's future earnings? HAHAHA.
I eagerly await the next NYT editorial about the Bilderberger meetings including what the editor said to Paulson over canapes and champagne.