Friday, October 21, 2011

It Is Always Darkest Just Before It All Goes Completely Black

I strongly recommend reading a couple of on Karl Denninger’s Market Ticker.  First, we have  "Take Off Your Blinders"  regarding the OWS and trying to engage them.  Having seen some of the videos, I have to wonder how effective “logic” is going to be with the majority of the protestors.  Whatever.  Read it and draw your own conclusions. 

Then we have "Tying It All Together"  in which Denninger explains why he thinks the bank bail-outs, TARP, et al, were not government “taking over” capitalism.  Though Denninger is obviously much smarter, not to mention far more informed than I am, I will risk adding my own thoughts in this regard. 

Since Denninger has been in a running argument with a writer from PJM for the last several days, his comments here may carry some of that baggage.  The disagreement is pretty uninteresting to me and amounts to a couple of baboons flashing one another to show whose is the biggest.  I do not mean to denigrate either of the parties involved; it is merely a reflection of nature of all too many arguments on the interwebs.  That said, I think Denninger has the other guy beat.    

As I have stated before, we live in a fascist economy – not a free market economy.  We have government interference and control in business. We have incestuous relationships between regulators and the regulated.  We have the Federal Reserve – an alleged private bank, controlling the money supply and fiscal policy.  Our Secretaries of the Treasury for both Republican and Democrat administrations have been tied inextricably to Wall Street.  Then there is Fannie Mae and Freddie Mac which are unholy amalgams of government and private lending.  I am not being at all inflammatory when I say this system is fascist.  What we currently have is the dictionary definition of fascism as an economic system.  We are not talking about the authoritarian nature of Mussolini’s Italy or Hitler’s Germany.  This is purely an issue of the economic system.  People call it “crony capitalism”.  It is fascism. 

The only point at which I might disagree with Mr. Denninger is that he fails to emphasize that this the way the system is and has been working for way too long.  To blame the banks is to blame the government which is to blame the corporations which is to blame the bureaucracy, and so on.  It is all one messed up orgy of stupidity.  Big business and big government are two sides of the same coin.  And this is not a sudden occurrence.  It has been happening for decades. 

Unions are another factor in this equation.  Excessive and unrealistic demands by unions have done at least as much damage to American manufacturing and industry as the much-discussed greediness of CEOs and investors.  A free market economy is just as detrimental to union “closed shop” ambitions as it is to the economic manipulations of the Corporate-Political complex.

The Tea Party focused on taxation and out-of-control government spending and regulation.  OWS is trying to focus on Too Big To Fail banks and corporate influence.  The way to address both complaints is to get government money -- subsidies, entitlements, and bail-outs, out of the system.  The Fed has been propping up stock prices for years.  The Federal Reserve and the various levels of government in more or less open collusion with the not-so-private sector have been creating a pretense of economic growth where none exists with one bubble after another. 

Let the bubbles burst.  Let governments at all levels go on a starvation diet.  Cut the attempts at inflating and devaluing the dollar in what is a futile effort to stave off sovereign bankruptcy and save the fake economy.  In the long run, it will fail anyway.  Give it up now.  Some of the fat cats that OWS protesters seem to hate will be jumping out of windows because their lives were built on these fragile, illusory, and meaningless bubbles. 

I am sorry that has to happen.  I am also somewhat sorry that people who have sucked off the government teat for most or all of their lives will have to wake up to reality.  I am sorry, truly and sincerely sorry that unrealistic promises about pensions and benefits, Medicare and even Social Security cannot be kept.  I will suffer along with everyone else through the correction necessary because of the mismanagement of a fascist economy by the bumbling, the incompetent, the greedy and the power-mad.   But I can assure everyone that if we do not bite the bullet now, we will all be much sorrier all too soon.     

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