Wednesday, October 30, 2013

Living in John Galt's America

The Federal Reserve announced today that the $85b per month QE3 purchase of bonds from the open market with freshly printed money will continue for the foreseeable future. This policy is starting to have an effect on the economy with banks who are able to sell their bonds to the Fed being more willing to provide home mortgages & retailers are beginning to offer store brand credit cards again in a big way. Banks are also offering high limit cards with 18 months at zero interest offers to anybody with a passable credit rating.

Easy credit sounds like one of those nasty bubble economy things that I have a habit of ranting against. The thing is, that this is a perfectly acceptable practice when the economy is in the tank and you need some stimulus to 'prime the pump'. It's not okay to push easy credit when the economy is supposedly doing great, but you simply want to hide the fact that Reagan's 'trickle down' economic policies are in fact destroying America. That's not to say we don't need all those New Deal policies back again instead of letting the people whose behavior is right out an Ayn Rand novel run things.

Speaking of  'works of fiction', Alan Greenspan has come out with a new book. One of his doozies is that he claims that the Housing Bubble was easy to see coming. This completely contradicts his sworn testimony before Congress where he completely dodged responsibility for the crashing of the Housing Market. Only Bush (or Cheney) could be said to be more responsible than Greenspan, but you can put anything into a book since right wing corporations publish all the books.

Janet Yellen is the nominee to be the next Fed Chairperson, Rand Paul has declared that he'll hold up her nomination until the Senate votes on a complete Fed audit. A small problem for the Senator from John Galt's mountaintop paradise (Ayn Rand's rich guy utopian hero), is that as Vice-Chair, Yellen will simply take the position regardless of Ayn Rand Paul's theatrics. Rand Paul used to brag openly about his adherence to his namesake's economic principles. He's a little more coy about it now, but his beliefs haven't changed that the rich are the makers and the workers are the takers.

Let's not forget that Alan Greenspan was an actual disciple of Ayn Rand when she was alive, he personally brought flowers to her funeral. Greenspan's culpability in keeping Vice President GHW Bush's children out of prison during the S&L crash when Reagan sent 800 bankers to Federal prison is the only reason a hack like him was named to head the Federal Reserve. But he served his billionaire friends well, they were just millionaires when he took over the Fed, and he made them into billionaires in a few years. A billionaire has a 1000 times as much wealth as being a mere millionaire.

Obama didn't send any bankers to prison, and you hate to think of him as a worse President than Reagan, but the truth is that it was a different time. There were a lot of people around in the 80s who could remember the last big bank crash in 1920s & 30s. Today we live a sort of Dark Ages, where people think that economic policy is just magic. The elder Bush called Reagan's proposed policies 'Voodoo economics', but today it's considered normal that zombie banks wander the land. Today, every economic sector is dominated by billionaire owned monopolies, and you can have three jobs but still starve in John Galt's (I mean Allan Greenspan's) America.

Twitter @BruceEnberg  - telling you the things Ayn Rand and Allan Greenspan don't want you to know.


Anonymous said...

A lot better stimulus woulkd be to raise the minumum wage to $15/hr. The dollars passed on to people who spend thier entire paycheck have a multiplier of 1.76 to 1. The employers busnesss, especialy small businesses, would benifit along with the big box stores and the money would circulate in the US for a while before going down the rabbit hole in Utz Switcerland, the Bahamas, and the Cayman Islands.