Although I’m sure that, like I, many of you are not at all surprised by the extent of the financial crisis we have seen to date, I’m absolutely certain that most of you are shocked by the extent government’s response.This decline was inevitable… it was obvious and for years many have taken to writing/blogging and debating it’s various details but could anyone have ever predicted that as a result of this ugly episode the federal government would violate our economic and social system to such an extent?
I know I didn’t… I now see that I was naive.
In anticipation of the decline I had envisioned the outcome many times… Americans tightening belts, losing their jobs and then their homes, increases in crime, a “poverty effect” that would reverse most of our gains from the nineties leaving the country trapped in a vicious-circle pushing us into a long and deep recession always teetering on the brink of depression.
Yet… I suppose I should feel foolish admitting this now… I had always expected that households and firms would be largely on their own to navigate the down-side much as they had the up-side of this historic and nearly multi-decade boom.
I say “largely” because our government has, for generations, had at its disposal many well known tools for engaging tough economic times (unemployment insurance, FDIC, fed funds rate, lender of last resort etc. etc.) and although this bout looked to be fairly severe, they seemed to me to be adequate.
Never did I EVER expect that the federal government would force American taxpayers, and their many generations of descendants, to essentially be the sole bearers of this epic catastrophe.
It doesn’t matter if you were prudent, if you planned, if you resisted reckless behavior or were even thrown to the side, unable to keep up with all the mayhem.
You will now PAY for the aftermath.
And if that’s not enough, you’re not simply being drafted to defend our social system by subsidizing the failures of all the individual ignorant greater fools… you are going to be the FINAL greater fool for the WHOLE system itself.
If congress passes the proposed legislation and the president signs it into law (as is likely), all private financial institutions, even foreign institutions will clean their balance sheets of junk mortgages, credit card debt, car loans, student loans and other nearly worthless assets on the back of your labor.
I want to repeat a point that I made in a prior post.
Many of these private institutions are THE VERY SAME that lobbied hard for sweeping new bankruptcy reforms that now make it harder than ever for individuals to seek shelter during times of personal financial hardship.
If you’re late on your credit card debt, these institutions will hammer you with fees that can, under certain circumstances, eventually exceed the debt itself… if you default they will ultimately sell that debt to a collector that will stop at NOTHING to squeeze you for every last penny.
This bailout scheme will create a massive multi-generational transfer of wealth from the many average American households and firms to the very few wealthy, elite and well connected.
Let’s remember that these actions are coming at a time when our stock markets have declined less than 25% from their prior peaks and absolutely NOT in the context of a calamitous depression.
This is an absolute disgrace and I’m convinced that no other generation before us would have ever conceived of this level of cynical tyranny.
There is no liberty… you are not free… America is truly a collapsing empire with only hollow ideals and empty slogans left to remind us of our once proud ambitions.
