The Problem is Not the Economy, It's the Politicians 11-20-09 mpg The Great Stimulus Debate of '09 - posted at ICH Special Note - Some quotes...."Household debt has declined in recent quarters for the first time since 1951. For their part, many small businesses have seen their bank credit lines reduced or eliminated, or they have been able to obtain credit only on significantly more restrictive terms. The fraction of small businesses reporting difficulty in obtaining credit is near a record high, and many of these businesses expect credit conditions to tighten further. - The demand for credit also has fallen significantly....Because of weakened balance sheets, fewer potential borrowers are creditworthy, even if they are willing to take on more debt. Also, write-downs of bad debt show up on bank balance sheets as reductions in credit outstanding. " [Also known as the great "unwind" of excess, which still has a very long way to go] -- "What's needed now, is a gargantuan blast of stimulus to jolt the economy out of its lethargy and put the mighty wheels of industry back in motion. That will require public mobilization and a massive commitment of resources. $1 trillion, $2 trillion, even $3 trillion--whatever it takes--should be pumped into the jet-stream so the dollars fall to earth like a spring rain from sea to shining sea. That will get people spending again. That will put people back to work. We'll worry about the red ink later." [Also known as the "Great Support" dictum, i.e. more (Federal) debt is good.] Mike Whitney has a problem, he believes this nation's politicians will try to do the "right thing". He says credit has stopped and we’re currently experiencing a deflationary unwind, (true) that the conservative "Misians" are wrong and that there is in fact no signs of incipient inflation (true) and that we as a nation should spend, spend, spend to combat this unwind, in other words, create enormous amounts of federal debt (highly problematical) or we're going to have a double dip (true in a sense, not spending will definitely accelerate the current unwind, but keep in mind it’s a depression, not a “double dip”) He left something out thought, how the great wind-up happened, which is quite curious since he has written extensively on this issue, and this website editor has posted at least twenty articles of his describing how we as a nation got into this mess. The excessive creation of uncollateralized, unsupported, debt at will by both Wall Street and Main Street through the creation of mortgage backed securities and other derivative products. Six points regarding the article..... First: It would have been nice if he'd discussed exactly why the creation of mountains of unsupported Federal debt is good, whereas the creation of mountains of unsupported private debt is bad. It is theoretically possible that the "cure" of stimulus could actually be far worse than the "disease" of massive deflation, even assuming a Great Depression comes to pass in this country similar to the one experienced in the '30s. Second: And this is a really big point regarding items Mr Whitney has already extensively covered....the parasitic class has done absolutely nothing to prevent the financial crisis from happening all over again. They have done absolutely nothing to fix the financial system, in fact, much of the current legislation they're attempting to pass actually makes oversight of the system even harder, makes the system less transparent, and allows the Banksters to continue the same bad old practices in new, more devious, ways. They'll be allowed to keep printing "priceless" CDO's CMO's MBS's SIM's and all kinds of other derivatives and synthetic instruments. And NO, "priceless" doesn't mean they're valuable; it simply means they're price-less, they have no price, you can't even quantify them, much less categorize them or catalogue them. Heck people across the world will have no idea what these instruments actually do or even what they're used for except they'll be given a triple-A rating by the credit agencies in this country. So even IF Mr. Whitney's idea of stimulus is successful, (unlikely at this point) any growth that is created will just be sucked away into the even bigger black hole the Bankster class is currently creating. Third: It’s quite obvious since Obama started saying all these things right after having had his nice little chat with the Chinese and Japanese that these governments not only told him this nation’s fiscal behavior is intolerable (i.e. they don’t think we’re going to pay back our debts), they probably told him they don’t have any more money to buy any of our additional debt, after all, they’ve got their own problems and their rather more targeted stimulus programs are already starting to fade. As for the US-NRE’s monetary behavior, they probably told him they don’t want to see any more money printing either (monetization), but they know us for the lying dead beats we are, and they, like everyone else in the world, are currently taking steps to protect themselves by buying gold, commodities, setting up trade agreements that don’t use dollars, and spending the dollars they do have as fast as they can. Fourth: To do what? To help prop up an over-leveraged economy and thereby support above market “asset valuations” -- stocks, bonds and commercial real estate, in perpetuity, for the rich, lazy and unscrupulous? Fifth: Why bother! Spend two, three, four trillion more so we can have it all eventually go to the Bankster class for back-stops, guarantees and pay-outs just as the prior twenty four trillion did? Just to watch a good chunk of it go to their bonuses and compensation plans, to support their zombie-fied institutions....forever? Sixth: What for? To buy foreign products from overseas and stimulate foreign economies? To build bridges to nowhere? To line the pockets of our legislature or our corporations? To fund and maintain the newest, most corrupt, evil, vicious, version of the Roman Empire ever seen on the planet? His use of the word “stimulus” should have been better defined. Had the unwind been deliberately initiated by the parasitic class several or more years ago, with a limited stimulus package designed to help with job creation and to cushion the subsequent economic blow....that would have been one thing. But now, after all these costly shenanigans and lies we've been told we’re supposed to trust this president and this congress to do the “right thing”? You've got to be kidding! Mr. Whitney wants Guns (military spending), Butter (domestic spending), Banksters (criminal/parastic class stealing) AND a Stimulus Plan (job creation spending) to get this nation out of its depression, a depression caused by the deliberate creation of excessive credit/debt to fund an Empire, and his solution to help end the crisis is by creating more....excessive credit/debt? Debt the likes of which no one on this planet has ever seen before! It was the Bankster and parasitic class that got this nation into this mess. They wanted a Neo-Roman Empire funded by cheap debt, only a little of which they used to placate the peasants during their quest for their “New World Order”, the rest of which they used to make themselves filthy, stinkingly, rich. They control this economy, they control this country. Until they, or at least their lackeys in the government are removed, there can be no constructive proposals that could, or would, ever be honored by these people. Come this November the population of this country will just have to go down to the polls and vote the Demos AND the Repubs out of office and start afresh. It’s that simple, and it’s that easy. Everyone should just stop talking about revolutions, "change”, “hope”, interest groups, pressure groups, lobbyists, K-Street, Wall Street and even Main Street. It ISN’T paper or plastic -- it’s NOT Mutt or Jeff -- it DOESN’T have to be a Demo or a Repub -- it’s simply the act of not watching TV, or listening to the radio, or reading the newspaper but instead going onto the web and into the polling booth, voting your conscience, voting for ANOTHER political party, and voting all of those Goddamn bastards out of office. It's time to choose, it really is that simple. - mpg |