December 25, 2009
The bail-out of Wall Street and the banking and mortgage industries is not monetary policy; it is a massive transfer of wealth from future taxpayers to the Financial Power Elite.
The monetary-policy terminology of “quantitative easing” and “bail-out” is a masterstroke of propaganda, for it purposefully masks an unprecedented transfer of wealth from future taxpayers to the Financial Power Elite.
I want to be crystal-clear here: what Bernanke & Co. represent as “monetary policy” is in fact a massive transfer of wealth from future generations of U.S. taxpayers to Wall Street and the banking/mortgage industries.
The propaganda is purposefully designed to distract our attention from the fact that “monetary policy” has fiscal consequences for future taxpayers–unprecedented mountains of Federal debt which must be serviced over a generation in which interest rates will rise.
Various SIFPs (standard-issue financial pundits) are trotted out as shills to support “quantitative easing” and “bail-outs” as “sound monetary policy” to ward off Depression. Yet what did squandering $1.2 trillion on toxic mortgage-backed securities actually gain the nation? What did squandering several trillion dollars on bailing out AIG, Wall Street, the banks, Fannie and Freddie, GMAC, etc. etc. etc. actually gain the nation?
Perhaps the only “depression” that was averted was the depression the Financial Power Elite would have experienced had their empires of leverage and derivatives been allowed to fall, eradicating their ill-gotten wealth in the process.
The goal of propaganda is to redirect attention away from the truth via misinformation and the construction of plausible, emotionally appealing facades–simulacra in the Survival+ analysis.
Thus the transfer of trillions from your childrens’ future earnings is masked behind the seemingly harmless and cost-free facade of “monetary policy.”
Another Survival+ concept in play here is complexity fortress. Bernanke and Co. have constructed a complexity fortress, hiding their actions behind veils of secrecy (all “for the good of the nation,” heh, as if transparency was the enemy of democracy and free speech), obfuscated transactions (purchasing futures contracts via proxies, and so on) and the sheer complexity of structures such as TARP.
If the web is too tangled for anyone but insiders to understand, then the complexity fortress is complete and invulnerable.
This was of course a favored strategy of Wall Street–derivatives so complex that only those who wrote them understood the risks.
There is another facet to this propaganda campaign of masking fiscal burdens on citizens behind the bland mask of “monetary policy”: the complete destruction of integrity and ethics in the halls of power.
Ethics receives lip service in the U.S., of course, along with other fictions such as “fiscal responsibility,” but that faint bleating is itself a sort of veil over the bleaker reality that integrity and ethics have been entirely marginalized in the public culture of the nation.
Were anyone to actually resign in protest or disgust, they would be cynically castigated for throwing away wealth and power in a needless gesture. As for ethical breaches– everyone knows a phony apology (“I am sorry I hurt my family and my wife, I take full responsibility, blah blah blah”) is all that’s needed. After a brief pause to allow the news cycle to wander past, they can resume the pillaging of the public coffers, the fraud, embezzlement and legerdemain that have been raised to a state of perfection in the halls of power.
In other words: integrity is for chumps. This marginalization of integrity, both institutional and individual, is a key element in the Survival+ analysis.
Thus we have Bernanke & Co. stand before us with straight faces, even as they know their policies are enriching the few at the cost of the many taxpayers who are safely in the future. That we as a nation are stealing from our children and grandchildren to avoid any housecleaning now–that doesn’t bother Bernanke & Co., nor does it bother the senators who are biding their time, awaiting the moment where they rubber-stamp the pre-approved apparatchiks.
This marginalization of integrity in the halls of power has infected the entire nation; those below look up and see fraud, corruption, lies, propaganda and self-serving aggrandizement, and they conclude that ripping off the taxpayer, pursuing fraudulent claims and mortgage documents, etc. etc. is in essence the “officially approved” manner to get ahead.
True to the high standards of propaganda which now pass as “normal,” this erosion of truth and integrity in official statements, statistics and policies is vehemently denied by those in power.
The costs of this erosion cannot be tallied easily, but we can predict they will be paid out over many years, if not a generation and beyond.
The Hunger Site
January 1, 2010 at 1:33 pm
People need to understand that we’ve got our own municipal bailout going. The Lennar Corporation is not just a big builder. It’s also a big predatory mortgage lender, pushing its own units.
December 27, 2009 at 11:34 am
The investment banks have quite likely been paid several times over, for the homes they’re now foreclosing on, because AIG insured the mortgage backed securities, and, because the banks also held them in short positions, betting they’d go bad, even as they sold them to pension funds and municipalities.
December 26, 2009 at 6:28 pm
Hugh,
Great piece. Well written and perceptive. Do I know you from 25 or so years back? Harcourt?
h. brown
December 26, 2009 at 10:41 am
I think it is clear that the dollars in which this debt will be repaid will be measured in fractions of the value of the dollars that we spend now.
-marc
December 26, 2009 at 7:28 am
Key phrase “integrity is for chumps.” Sometimes you have to wonder where we’re all headed. Thanks for this.
December 26, 2009 at 6:46 am
And Federal Reserve Chairman Ben Bernanke was named Person of the Year by Time magazine, a very dubious choice. Bernanke is insistent on using inflation to make our personal debts seem small, all the while setting the country up for a much larger disaster long term. Bernanke is borrowing from Peter to pay Paul… and robbing taxpayers to pay Peter.