Isn’t it fun to watch “Corporate Types” beg for bailouts? It’s classic theater but lousy democracy. You can watch the bailout show while the bankers pick through the remaining carcass of the US economy. The bankers are dividing up the remaining assets in your retirement account and planning how to buy up the country’s remaining net worth for 10 cents on the dollar with their government bailout money. You’re watching GM, Ford and Chrysler drive to Washington and leaving behind their G-5’S.  

Just like at the poker table if you can’t tell who the mark is, it’s you! Please don’t become confused by the wheeling and dealings of the Federal Reserve. Understanding the workings of the World’s economy is beyond your ability to comprehend and after all it’s only your future and the future of the free world. How does it feel to have your life’s work being harvested while you watch helplessly?

Hey it’s Christmas. Charge another gift on the credit card and drink some eggnog. You’ll feel better knowing that God’s gift of America is being squandered and divided up by the devils minions.

I and a number of smarter folks than me have been warning you about what’s going on. Our economy has been deliberately destroyed and actions by the Federal Reserve, The Bush Administration and Members of Congress are insuring we won’t be getting back our American Lifestyles for a long time. You and I didn’t do this but we allowed it to happen. Everything you have in dollar based assets will be almost worthless by next summer.

Our government knows as soon as you figure what’s happened you will be plenty pissed. That’s why they are bringing in troops to control you. Our Constitution is being ignored. Our government for the most part is totally corrupt. Your life as an American Free Citizen is quickly coming to an end.

WHAT ARE YOU GOING TO DO ABOUT IT?

I hear the talking heads on Fox tell each other that the Bailout Deal had to be done because not do it would have caused a depression makes me feel they don’t get it. The great depression was caused by over active lefty government and a few greedy people on Wall Street. It wasn’t caused by us poor unwashed masses in flyover country.

In 1929 when Franklin Roosevelt went to Television to explain how the government was going to screw up the world’s economy for 12 years my family missed the show. Capitalism works, government intervention in the accompaniment of out right fraud on behalf of an unconstitutional quasi-governmental agency   doesn’t. Us rubes out in the boonies want to see perp walks of the thieves even if God forbid, some of them don’t look like me. This PC BS must stop now.

When our leaders follow the path of the no pain for comfort economy at the expense of our Constitution makes me feel that my birthright has been sold for pennies on the dollar.

Why didn’t you fix it? Why did you wait until just before the election? Maybe the best question is for President Bush, why do you trust the wrong people and don’t trust the tried and true proven principles of the free market?

Marx’s Proposal Number Five seems to be the leading motivation for those backing the Wall Street bailout 

By Martin Masse

In his Communist Manifesto, published in 1848, Karl Marx proposed 10 measures to be implemented after the proletariat takes power, with the aim of centralizing all instruments of production in the hands of the state. Proposal Number Five was to bring about the “centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly.”

If he were to rise from the dead today, Marx might be delighted to discover that most economists and financial commentators, including many who claim to favour the free market, agree with him.

Indeed, analysts at the Heritage and Cato Institute, and commentators in The Wall Street Journal and on this very page, have made declarations in favour of the massive “injection of liquidities” engineered by central banks in recent months, the government takeover of giant financial institutions, as well as the still stalled US$700-billion bailout package. Some of the same voices were calling for similar interventions following the burst of the dot-com bubble in 2001.
“Whatever happened to the modern followers of my free-market opponents?” Marx would likely wonder.

At first glance, anyone who understands economics can see that there is something wrong with this picture. The taxes that will need to be levied to finance this package may keep some firms alive, but they will siphon off capital, kill jobs and make businesses less productive elsewhere. Increasing the money supply is no different. It is an invisible tax that redistributes resources to debtors and those who made unwise investments.

So why throw this sound free-market analysis overboard as soon as there is some downturn in the markets?

The rationale for intervening always seems to centre on the fear of reliving the Great Depression. If we let too many institutions fail because of insolvency, we are being told, there is a risk of a general collapse of financial markets, with the subsequent drying up of credit and the catastrophic effects this would have on all sectors of production. This opinion, shared by Ben Bernanke, Henry Paulson and most of the right-wing political and financial establishments, is based on Milton Friedman’s thesis that the Fed aggravated the Depression by not pumping enough money into the financial system following the market crash of 1929.

It sounds libertarian enough. The misguided policies of the Fed, a government creature, and bad government regulation are held responsible for the crisis. The need to respond to this emergency and keep markets running overrides concerns about taxing and inflating the money supply. This is supposed to contrast with the left-wing Keynesian approach, whose solutions are strangely very similar despite a different view of the causes.

But there is another approach that  doesn’t compromise with free-market principles and coherently explains why we constantly get into these bubble situations followed by a crash. It is centered on Marx’s Proposal Number Five: government control of capital.

For decades, Austrian School economists have warned against the dire consequences of having a central banking system based on fiat money, money that is not grounded on any commodity like gold and can easily be manipulated. In addition to its obvious disadvantages (price inflation, debasement of the currency, etc.), easy credit and artificially low interest rates send wrong signals to investors and exacerbate business cycles.

Not only is the central bank constantly creating money out of thin air, but the fractional reserve system allows financial institutions to increase credit many times over. When money creation is sustained, a financial bubble begins to feed on itself, higher prices allowing the owners of inflated titles to spend and borrow more, leading to more credit creation and to even higher prices.

As prices get distorted, malinvestments, or investments that should not have been made under normal market conditions, accumulate. Despite this, financial institutions have an incentive to join this frenzy of irresponsible lending, or else they will lose market shares to competitors. With “liquidities” in overabundance, more and more risky decisions are made to increase yields and leveraging reaches dangerous levels.

During that manic phase, everybody seems to believe that the boom will go on. Only the Austrians warn that it cannot last forever, as Friedrich Hayek and Ludwig von Mises did before the 1929 crash, and as their followers have done for the past several years.

Now, what should be done when that pyramidal scheme starts crashing to the floor, because of a series of cascading failures or concern from the central bank that inflation is getting out of control? It’s obvious that credit will shrink, because everyone will want to get out of risky businesses, to call back loans and to put their money in safe places. Malinvestments have to be liquidated; prices have to come down to realistic levels; and resources stuck in unproductive uses have to be freed and moved to sectors that have real demand. Only then will capital again become available for productive investments.
Friedmanites, who have no conception of malinvestments and never raise any issue with the boom, also cannot understand why it inevitably leads to a crash.
They only see the drying up of credit and blame the Fed for not injecting massive enough amounts of liquidities to prevent it.

But central banks and governments cannot transform unprofitable investments into profitable ones. They cannot force institutions to increase lending when they are so exposed. This is why calls for throwing more money at the problem are so totally misguided. Injections of liquidities started more than a year ago and have had no effect in preventing the situation from getting worse. Such measures can only delay the market correction and turn what should be a quick recession into a prolonged one.

Friedman — who, contrary to popular perception, was not a foe of monetary inflation, but simply wanted to keep it under better control in normal circumstances — was wrong about the Fed not intervening during the Depression. It tried repeatedly to inflate but credit still went down for various reasons. This is a key difference in interpretation between the Austrian and Chicago schools.

As Friedrich Hayek wrote in 1932, “Instead of furthering the inevitable liquidation of the maladjustments brought about by the boom during the last three years, all conceivable means have been used to prevent that readjustment from taking place; and one of these means, which has been repeatedly tried though without success, from the earliest to the most recent stages of depression, has been this deliberate policy of credit expansion. ... To combat the depression by a forced credit expansion is to attempt to cure the evil by the very means which brought it about ...”

The confusion of Chicago school economics on monetary issues is so profound as to lead its adherents today to support the largest government grab of private capital in world history. By adding their voices to those on the left, these confused free-marketeers are not helping to “save capitalism”, but contributing to its destruction.

Scared Money and Bad Government… Disaster for Generations.

Take a breath. A large number of Washington elites are trying to panic the American people into trading in their economic freedom for the promise of putting on a band aid over a mortal wound. The market had already gone down more than 400 points before the vote.

The markets had already discounted the bailout bill as a turkey before Pelosi had insulted the Conservative members of the House. There will be a price to pay for the looting of Fannie and Freddie by the Democrats and their fat cat friends. I want to see this fraud end with a series of perp walks by the folks that stole the money.

The adoption of the Fascist (system by which government and business are intertwined) Bailout Bill for social and political agendas and calming the markets is ludicrous. This social takeover of business and risk is doomed to be a failure and the drop will only become much worse.

These problems were not caused by free markets. They were caused by government forcing banks to give loans to people that were not creditworthy. Surprise, Uncle Sugar gave you a loan you can’t afford and you have bad credit. Is there any doubt a large number of folks will walk? The Black Caucus, ACORN and I’m sure a few well meaning liberals thought they could social engineer the free enterprise system and make more Marxist. These groups don’t want the deadbeats to pay for their mistakes nor do they to take the blame for this government debacle.

Sure they are going to blame George Bush and Conservatives- it’s in their DNA.

The only cure for this problem is the free market. Cutting government spending, capital gains, and changing the accounting regulations would help. We need as much free market and transparency as we can get.  I thought George Bush knew this.

This Chicken Little act is getting old. Mr. President, calm down that Wall Street. Let’s go back to the roots of Capitalism, not Capitolism.

The “Crap Sandwich” was delivered by a well meaning President relying on a Democrat Treasury Secretary in the form of an emergency “depression saving” stack of worthless paper. In fact it was dropped on the American public just before Election Day and was met to insure the election of Obama as well as provide cover of the looting of Fannie and Freddie by Democrat operatives.

The Fascist Social Takeover Bill was bad at best and will not save anybodies 401K’s from the follies of the free market. There will be a judgment day for the fleecing of Fannie and Freddie. It will affect your investments and you must not forget who did this. A bailout at best would put a band aid on a wound infected with the germs of numerous fat cat Democrat insiders for the faux social plan of housing for the poor, cover it up and elect OBAMA.

If this monster had passed and Obama was elected on the basis of this plan we would all be eating “crap sandwiches” in a socialist state for a long, long time.

God bless the American people and the Democrats power play for killing this nightmare bill.