The more I listen to David Stockman’s The Great Deformation audiobook, the more enraged I get, and so far there hasn’t been much in there that I didn’t already know.
TARP was a Grand Swindle, perhaps the crime of the century as the better part of a Trillion dollars was injected into the banking system to shield corrupt, incompetent thieves from a cleansing purge that is the basic fundamental mechanism of a free market.
Since then it has only gone from egregious to utterly shameful as the Fed and government policy makers dismantle any ostensible simulacrum of capitalism to doll up an utterly contemptible rigged-game into a grotesque caricature of “prosperity”.
Our leaders buy into deeply flawed “models” of economic reality and even then, bastardize those beyond their original intent. For example, even Keynes, who advocated deficit spending to stimulate the economy in bad times; also said the government was supposed to run surpluses and save up money during the good times. But that hasn’t happened in a long time. Those illusory “Clinton-era surpluses” aside, the last president to actually pay down on the national debt was Eisenhower – the same guy who warned us all about the emergence of The Military Industrial Complex. (The last president to pay off the national debt was Andrew Jackson).
Instead we have broken Keynes-ism and if that weren’t bad enough we now have nonsense called “Modern Monetary Theory” or “Modern Monetary Realism” being pushed by academics and theorists. In it, the government can print as much money as they want and it’ll never get over inflationary or dilute the currency too quickly, why?
Taxes. Instead of taxation being used to fund the operations of the government, the role of taxation morphs into something altogether different: it shores up demand for the currency by making it mandatory to pay said taxes in the currency of the realm, and serves to “suck out” excess liquidity from the economy. (Read: all that money is supposed to go toward asset inflation, so whatever leaks through into the main street economy gets recycled out via taxation).
Add to that “Open market operations” which is basically the Fed pumping 85 Billion a month into the asset markets to drive up the stock market because with the Dow Jones and S&P500 making “new highs” – everything must be “ok”, right? (Just don’t look at the markets priced in real inflation adjusted dollars or gold, lest the true picture emerge).
Now we have governments around the world becoming what can only be described as incoherently desperate and hell-bent on keeping “the game” going and claiming normalcy at every turn.
Bail-in’s are here, and have been officially “templated”. Obama has introduced a proposal to cap retirement accounts in the US
The budget will include a new proposal that prohibits individuals from accumulating over $3 million in IRAs and other tax-preferred retirement accounts. Under current rules, some wealthy individuals are able to accumulate more than is needed to fund reasonable levels of retirement saving.
Now that the government is deciding what a “reasonable” rate of interest is (0%, for the foreseeable future), where the stock market should be (higher, of course) and how much savings are “reasonable” for any one person to set aside, don’t you feel safe, prosperous and free?
The picture at the top of this post is of the tragic Lolo Ferrari, an apt symbolic representation of our “economy”. A monstrosity surgically and artificially enhanced beyond recognition, ostensibly into something desirable. The outcome? She was psychologically and physically damaged beyond repair and died at age 37, committing suicide with tranquilizers and muscle relaxants, and quite possibility asphyxiating to death under the weight of her own overclocked cleavage.
Yes, this is what we’ve already become and we are headed for a similar outcome.