Tuesday, October 5, 2010

Discard after use

The stock market was way up today on the news that Japan’s central bank has lowered their interest rate to zero. This move was intended to weaken the Yen by opening the flood gate but the Yen went up anyway as the USD weakened instead and gold priced in USDs set a new high at 1340, up 33% in the past year. Traders were buying everything but the USD and short term Treasuries fell in the anticipation that the Federal Reserve will now have no choice but to print trillions in new money and start buying US debt. 

Fed Chairman Bernanke is going around telling anyone who will listen that Congress will have to get a handle on the deficit that ran 1.3 trillion the fiscal year just ending but this was less than the previous year at 1.4 trillion which was the last budget year of the Bush Administration. Bush only submitted a half year budget his last year knowing that Obama would have no choice but to extend it to a full year thus making Obama look like the big spender.

The Fed Chairman wants a balanced budget, but not right now, the economy is “too fragile” to cut spending or increase taxes. The fact is the economy is not fragile, it’s dead thanks to his predecessor Alan Greenspan and his free market cronies. Nothing that has been proposed will resurrect it and everybody knows it.

It will take rolling back everything that has been done in the last 30 years of Reaganomics. The question is whether the remnants of the middle-class realize it while there is still time to do anything about it. The super rich are pulling out the stops to try to overwhelm the elections by out spending progressives 7 to 1.

It’s not a question of repaying the huge debts that have been run up but rather taking the money back. The super rich have engineered a massive wealth transfer exceeding even the level they reached in the last Great Depression that they caused. This was reversed under FDR and it can be done again but it will be much harder this time.

This time we can’t just re-open the factories but we must re-build from scratch with must industries completely gone. Rebuilding will be a painful experience but not doing it will ultimately be worse. It’s start over or accept living in a corporate feudal state where you are a human resource, a consumer, a unit of labor to be discarded when not needed.


Anonymous said...

Let's make one thing clear: "the super rich are pulling out the stops to try to overwhelm the elections by out spending the" DEMOCRATS "7 to 1."

Only a fraction of Democrats, either the electorate or members of congress, include what could be even remotely described as "progressives."

John Puma

Anonymous said...

After Citizen united can anyone say this country is a democracy with a straight face. Supreme Court=The Corporate Court.