Thursday, October 8, 2009

Welcome to Zombieland USA

The recent financial stories not covered by the mainstream media have been interesting to say the least.

First, we have Neal Barofsky, the special inspector general for the Troubled Asset Relief Program (TARP) saying that the feds - Ben Bernanke and Hank Paulson - may have "stretched" the truth a bit about the supposed health of the nine major financial institutions which received $125 billion in capital infusions from the TARP program.

Secondly, we thought we had something 'good' that came from the recent G20 summit in Pittsburgh. The 'good' was the agreement among all the participants to have strict global guidelines on bankers' compensation.

But the United States and Treasury secretary Tim Geithner have now said that they will take a "flexible approach" to interpreting these compensation guidelines. In other words, these guidelines on bankers' compensation will be ignored. The Wall Street banksters win again! And the other nations are not pleased with US economic policies that are emanating from Wall Street.

In their rush to help their Wall Street friends, the federal government seems to forgotten the fact that small busineeses employ 50% of the country's workforce and contribute 38% of the nation's GDP. The middle class continues to be left behind......

So what exactly has TARP and the litany of other government bailout plans accomplished? It has propped up large institutions that have troubled assets which are still troubled and bad debts that are still bad.

On top of this, the Wall Street banksters have used these past six months to get back to 'business as usual' and incredibly increase their leverage even more. In other words, to make even bigger bets - with other peoples' money (taxpayers) - of the type that got them into trouble in the first place.

While this has been going on, at the regional and local level real businesses with real customers and real need for capital cannot get access to credit.

So what was the whole idea behind TARP? It was meant merely as a delaying tactic. The people (Wall Street) invested heavily in the old system of debt-based asset appreciation are stalling for time.

They are HOPING that time will somehow allow for a miraculous alchemy and turn the leaden assets and debts they have into gold. And the government went along with this dream of Wall Street and gambled the future of the country on it.

Welcome to Zombieland USA

The new movie - Zombieland - about a group of survivors in a world of zombies did fairly well at the box office. I can already picture the sequel......

Welcome to Zombieland USA - starring Ben Bernanke, Tim Geithner, Hank Paulson, and a cast of thousands of Wall Street banksters.

Survivors of the US economic bubble of 2002-2007 must defend themselves from the zombies!

Survivors are being attacked in the streets, in their homes, and in their workplaces. Zombie banks - kept alive only by artificial stimulants provided by the feds - take the survivors' money and their homes.

Meanwhile other zombies at the Federal Reserve and the Treasury department gnaw at survivors' savings by debasing the dollar and thus encouraging inflation. The only goal of these zombies is to allow the US to repay their debts with nearly worthless dollars.

All kidding aside, what we have done in this country is that we have saved zombie companies with zombie assets (debts that must be repaid for generations to come) at the expense of the living, breathing engine of the true free market capitalist system - small businesses and the middle class.

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