The Gift that (We) Keep(s) on Giving: Through January 2013

"Demand a property tax on idle wealth.  Demand it NOW."--Liam McGonagle

"Seriously, do you expect a better opportunity to extract concessions from your enemies than when they lay begging, bleeding at your feet?"--Liam McGonagle


In case you were in the washroom when 'Jersey Shore' was interrupted with this late-breaking newstory:  Ben Bernancke just committed the U.S. to provide the European Central Bank ("ECB") with an unlimited line of credit.

That's right, a brand new bailout.  Structurally along the lines that Business Insider had warned us about in September, but much more ambitious; that article had postulated a trifling $1 trillion, not the bottomless pit we're actually being presented with. 

The basic deal is that we hand dollars over to the ECB in exchange for Euros, the value of which, has become highly dubious to say the least.  The ECB will in turn invest those dollars in large corporate banks to bolster balance sheets they themselves ruined through reckless underwriting practices and constant pressures for tax holidays and austerity measures.

Boun Natale e felice anni nouvi, Mario!

This is being billed as a stopgap measure to compensate for the fact that the genius architects of the Eurozone couldn't be bothered to implement a fiscal coordination authority in their new currency.  Must have seemed reasonable at the time.  We'd seen the end of history, after all.  Just like American civil liberties after 9/11, all the rules had changed.  The new era of seemlessly integrated global markets had pushed the capitalism's cycle of inevitable liquidity crises into the dustbin of history, right?

But is it really stopgap?  While similarly available currency swap loans had been available for some time previous, the duration of the current arrangement (i.e., a 50% reduction in the interest rate) is through January 2013, and is unlimited in amount.  Meaning that the committment is bounded in no way by the current supply of U.S. dollars.  So, at least theoretically, the U.S. will end up printing the dollars it will be obligated to provide incompetent European bankers.

When the implications of this development had finally settled in, and I'd had a chance to change into a clean pair of trousers and shower up a bit, I settled to thinking.  Two paradoxically conflicting corollaries floated to the surface:

1.  Nobody, I mean NOBODY, seems to have learned the lesson of the previous bailout regimes or Quantitative Easing programmes, namely that the size of the money supply in-and-of-itself is of distant, secondary importance to the circulation of currency.  Or, to put it in layman's language:  BANKERS DON'T DRIVE THE ECONOMY, CONSUMERS DO.

2.  The bizarre occurence of one nation printing money to manage the fiscal problems of another demonstrates exactly the sort of international commitment and cooperation that would be necessary to curb the irresponsible corporate leeching that led to these problems in the first place.  You know what I'm talking about, that old mantra of the defeatist traitor:  "But if we try to regulate corporations effectively, they'll just pull of stakes and move the show overseas!" 

As this incident suggests, it is effective government that provides the necessary stability for corporations to exist.  If so-called "populist" Tea Baggers in the House had the brains to realise this, they'd take this opportunity to make corporate elites pay their fair share of the burden:  i.e., more historically reasonable income tax rates and a tax on idle wealth.  Seriously, do you expect a better opportunity to extract concessions from your enemies than when they lay begging, bleeding at your feet?

Sadly, neither of these realizations seems likely to amount to much.  This is the era of greasy hacks like Newt Gingrich are seen as "transformational leaders" [1] and the worthless empty suit Obama tries to slide turds like this past us whilst simultaneously telling the American people that their "moment is NOW".  To date, the most vigorous response I've seen on this issue has been Ron Paul, condemning the Fed for taking this action unilaterally. 

Which, quite frankly, whilst being a step in the right direction, is nowhere good enough.  Paul was asleep at the wheel on this issue in September, wasting our time with penny-ante Solyndra b*llsh*t.  And nowhere do I see him calling for greater international government cooperation to curb the unaccountable multinational banks who are the primary beneficiaries of these abuses.  No mention anywhere of any increased corporate oversight, or fair transaction or property tax on the parasitic financial sector that destroys 80 cents in GDP out of every $1 that we give them.  Overall, even after grading on a curve, I just can't give Paul any grade higher than a "D-".  Try harder.





Footnote
[1] Newt's constant use of the word "transformational" is equal parts insult, comedy and tragedy.  There's one reason that dried up old carpet-bagging whore never got "born again" into the Evangelical movement he so lustily courts on the campaign trail:  He'd leave a toxic oil slick in the baptismal pool.  The only thing Gingrish ever transformed is my dinner into vomit.

Great News, Everybody: A New (Secret) Bailout!

This in from Business Insider:  Scuttlebutt that German Chancellor Angela Merkel will be softening up Obama, Federal Reserve Chief Ben Bernanke and Treasury Secretary Tim Geithner for yet another round of bailouts for the incompetent multinational financial elites.

Awesome!  I was afraid that the next round of bailouts would require "patriots" like representative Paul Ryan (R-Wisconsin) to take to the floor begging again.  I feel so relieved now, knowing that the whole thing can proceed quietly without anyone having to jeopardize their campaign funding.

The Parable of the Blind, Pieter Bruegel, 1568

But where do our other, prospective "leaders" stand on this topic?  Hard to say.  Irrelevance and opacity seem to be the primary tenets of the major candidates' PR machines.  Here's what I mean.

Ron Paul's heart may be in the right place regarding the need to end counterproductive wars and pointlessly intrusive social wedge issues, but his knack for failing to identify urgent priorities remains unequalled.  Witness the most recent update to his news page:  Paul's response to the burning issue of a vaguely worded email RECEIVED (i.e., NOT sent) by a third-tier lackey in the slave galley of Obama's PR establishment.  Yeah, I know.  $527 million is 0.05% of the $1 TRILLION in bailout money supposedly at stake in the Euro bailout, but Ron's never claimed to be more than what he clearly is:  an amateur.

Still, it was a bit of a disappointment.  Those of us who had taken heart in the earnestness of Ron's campaign do feel a little saddened by his betrayal of it's core moral theme, that public figures should take firm stands on what they believe and know to be correct, regardless of the short-term pragmatic consequences.  Ron doesn't have and never had a snowball's chance in Hell of winning anything other than honorable mention.  But his piling on here to the failure of an innovative business venture, and one pioneering a technology that could threaten the petroleum-military complex at that, just feels like he's gotten himself lost.  Hopelessly lost.

And that was the high ground, folks.  The rest of the lot could either bore you with their predictability or make you laugh at their vapidity:

A quick visit to Michele Bachmann's website yielded only her trumpeted zeal for "politicking" in Iowa.  FYI to Bachmann:  You're from Iowa.  You have home turf advantage.  You already won the straw poll there last month.  Time to move on.  There's another 49 states in the union, some of them with more than 1 electoral college vote.

Rick Perry's site wasn't a helluva lot better.  True, he seems to have left last month behind him, but devil a word you'll hear about the impending bailouts.  He also spent all his gunpowder in low-grade partisan b*llshitting.  G*ddamn it, at least Bachmann gave us a few laughs.  All Perry did was bore me to tears.

Mitt Romney's response was a little more nuanced and amusing.  Yes, no one is surprised that the much-vaunted hedge fund manager uttered not peep #1 about the use of public funds to underwrite his pals' vacation homes in St. Tropez, or that he cleared his policy platform with these same scum bags.  But did you know you could win a once-in-a-lifetime date with this Tiger Beat dreamboat?  I don't know about you, but his flat, nasal automaton speech and "Reaganesque" elder statesman-y graying temples just make me melt.  'Specially the way he says:  "Corporations are people, too, my friend!"

No, you won't hear much about Bailout III:  The Re-"Bush"-ening on any administration web site either.  Not the Fed.  Not the Treasury.  Not the president's blog.  Hardly much of a surprise.  Obama's always been an awkward, "play-behind-the-beat kind" of guy anyhow.  He seems continually caught off-guard by the way his bailouts, unconstitutional wars, plutocratic tax giveaways and civil rights violations have continued to erode the economy and the support of the people who voted for him in 2008.

But shouldn't we expect more from his "challengers"?  There should be no question of pragmatic compromises in order to achieve tactical victories, because going on the 4th year of 10%+ unemployment and simultaneously sky-rocketing unemployment claims and corporate profits, there's really nothing left to compromise any more.  Ergo a complete and overwhelming moral victory seems free for the taking.