Thursday, September 18, 2008

Is the United States Government a Ponzi Scheme?

For years, I have dutifully paid my taxes and slaved away to save for retirement and almost a third of it has disappeared in two quarters: does that qualify for "recession"? Given that the administration hires experts to make up euphemisms and has been caught red-handed planting yes-men and congressional hearing-style talking pointsmen in White House press conferences, I don't expect anyone to use the "R" word. But if you look at the employment figures, the closures of finance banking institutuions, the once-quirky, now-berserk stock market, and a half dozen or more other indicators, a recession it is.

I am as troubled by the bailouts as much as Alabama Sen. Richard Shelby is. You've seen Shelby on the pundit programs: he's a Republican and the ranking member of the Banking, Housing, and Urban Affairs committee. Shelby's as smart as a whip and knows a pig in a poke when he sees one. He says the Fed can't go on printing money indefinitely and for every destitute corporation with a hand out for a bailout. What happens is, you're borrowing money that can never really be repaid. Those who will pay are our children. Then, there's the certain inflationary spiral that will be an unavoidable consequence. I am tempted to make an allusion to the Weimar Republic. At a certain point, we won't need gasoline to go to the supermarket: we won't be able to buy food.

Now, the Dems and GOPS are dickering as to further bailouts, billions to fix the mortgage mess. Some GOPS don't want any mortgage bailouts on grounds the guilty shouldn't be rewarded at taxpayers' expense, while the Dems in the main, reminding us that the mortgage industry preyed on the weak and ignorant, believe home mortages should be included in the fix-it. The Dems are even moving for caps on CEO salaries to corporations benefitting from the regurgitation; enough of these damned golden parachutes rewarding anyone contributing to their own company's disaster.

Hey, folks, any way you cut it, this whole shit mess boils down to just this: we're indulging in plain old Biblical proportions borrowing Peter to pay Paul. What, pray tell, served as the collateral for all of those newly printed reserve notes? The collateral is a phantom! The United States of America, Inc., is one giant Ponzi scheme. By the time the little guys just entering the game finally fingure out that all of their money is going to the tip of the population triangle, the top 1% of the nation, the CEO of the USA, Inc. is on his merry way, back to Crawford, the World Capital of Bullshit.

Yes, Ponzi! Read his Wikipedia biography if nothing else. (There's also a biography in print.) Ponzi was an Italian immigrant who came, saw, and conquered. He figured out on his very own, most likely from observing Wall Street, that you could fund a pyramidic "entity" that had newcomers paying off the profits to the top co-players. The more new people with funds, the richer the top folk got. That is the way some multinationals operate today: the CEO'S are the Ponzi's. This was one reason McShame sent packing a woman who single-handedly almost demolished Hewlett-Packard and walked off with millions of dollars.

But I am divided myself about the bailouts.

You're also setting a poor example and inviting both a plethora of other importunities as well as rewarding the very twits who got the corporations into the mess we're in. Everyone is p.o.'d, and the blame game may be only in the fourth inning. One of the chief villains would seem those CEO'S with golden parachutes. But there's much too much fault to limit it to one group of people. Dems are pointing to Sen. Phil Gramm's deregulation of the finance industry, the opening of a Pandora's Box of evil demons in mortgage lending, a what's what's of horrors with not even a glance, much less oversight. But, wait! Some of the Dems voted for that bill!

So we shouldn't be too quick to blame the GOPS. Even Secretary Poulson admits that there was "scant oversight at the federal level," but de-rgulation didn't being with Bush II. But you can bet Obama will make much ado of the fact that all three sponsors of the act de-regulating the banking industry were all Republican. And the subprime recession points to that side of the aisle.

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