From $1 trillion in debt
to $4 trillion in debt in six weeks
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Is this the end of America? |
Terence Corcoran
says U. S. law-making is riddled with slapdash, incompetence and
gamesmanship.
Ben Bernanke’s Federal Reserve is dropping
trillions of fresh paper dollars on the world economy, the President of
the United States is cracking jokes on late night comedy shows, his
energy minister is threatening a trade war over carbon emissions, his
treasury secretary is dithering over a banking reform program amid
rising concerns over his competence and a monumentally dysfunctional
U.S. Congress is launching another public jihad against corporations and
bankers.
As an aghast world -- from China to Chicago and
Chihuahua -- watches, the circus-like U.S. political system seems to be
declining into near chaos. Through it all, stock and financial
markets are paralyzed. The more the policy regime does, the worse
the outlook gets. The multi-ringed spectacle raises a disturbing
question in many minds: Is this the end of America?
Probably not,
if only because there are good reasons for optimism. The U.S. economy
has pulled out of self-destructive political spirals in the past,
spurred on by its business class and corporate leaders, the
profit-making and market-creating people who rose above the political
turmoil to once again lift the world out of financial crisis. It’s
happened many times before, except for once, when it took 20 years to
rise out of the Great Depression.
Past success, however, is no
guarantee of future recovery, especially now when there are daily
disasters and new indicators of political breakdown. All
developments are not disasters in themselves. The AIG bonus
firestorm is a diversion from real issues, but it puts the ghastly
political classes who make U.S. law on display for what they are: ageing
self-serving demagogues who have spent decades warping the U.S.
political system for their own ends. We see the system up close,
law-making that is riddled with slapdash, incompetence and gamesmanship.
One test of whether we are witnessing the end of America is how many
more times Americans put up with congressional show trials of individual
business people and their employees, slandering and vilifying them for
their actions and motives. And for how long will they tolerate a
president who berates business and corporations as dens of crime and
malfeasance? If the majority of Americans come to accept the
caricatures of business as true, then America is closer to the end of
its life as a global leader, as a champion of markets and individualism.
But America is at risk in other ways, especially in the technical
business of setting and executing policy. The presidency of Barack
Obama has set out on a course that has no precedent in U.S. history.
Franklin D. Roosevelt, whose New Deal transformed the U.S. economy
during the Great Depression, pushed America off on a sharply different
political and ideological course. The Obama administration is
different in many ways, not least in its supreme self-confidence in its
methods and objectives.
Reform of health care, environmental
policy, education, energy, banking, regulation -- every nook and cranny
of the U.S. economy has been put on alert for major change.
Expansion of government spending, plunging the U.S. into unprecedented
deficits, is without parallel. In economic policy, through
regulation and control of energy output, financial services and monetary
expansion, the U.S. government has embarked on a fundamental
reshaping of America. It is designed, in short, to bring
on the end of America.
The spillover effect of all this on the
rest of the world promises to be dramatically disruptive. The
greatest global risk is in monetary and currency policy.
Here is a chart that graphically
demonstrates the sharp deviation in monetary policy from past norms.
Under the chairmanship of Ben Bernanke, the Federal Reserve is in the
midst of a giant economic experiment, flooding the world with U.S.
dollars, hoping that flood will stimulate economic activity.
The
total monetary base, already at astronomical levels, is now expected to
take another big hit with the new Fed policy of buying up U.S.
longer-term treasury bills in a bid to drive down long-term interest
rates.
Mr. Bernanke is sometimes known as "Helicopter Ben"
because he once in an academic paper referred to the use of
"helicopters" full of money to rescue an economy from deflation.
In comments Wednesday to explain the Fed’s new policy of buying
$300-billion in U.S. treasury bills, Mr. Bernanke noted that the Fed is
now more worried about inflation being too low than about it getting too
high in the future.
For the rest of the world, however, the worry
is that America is at risk of becoming the fountainhead of a new
inflationary outburst. The U.S. dollar is now in decline, gold is
moving sharply higher, and new global currency turmoil is on the
horizon.
It may not happen. A paper just published by the
Federal Reserve Bank of St. Louis, source of this chart, says that the
Fed will have to be prepared to absorb all the excess money it has
poured into the U.S. economy. It will be a technical and political
challenge unlike any central bank has ever undertaken. The future
of America is at stake. |
What's American About This? |
The Obama
administration will call for increased oversight of executive pay at all
banks, Wall Street firms and possibly other companies as part of a
sweeping plan to overhaul financial regulation, government officials
said.
Senior executives on both sides of the Atlantic
warned of an exodus of talent from some of the biggest names in US
finance, saying the "anti-American" measures smacked of "a McCarthy
witch-hunt" that would send the country "back to the stone age".
"Finance is one of America’s great industries, and they’re destroying
it," said one banker at a firm that has accepted public money.
"This happened out of haste and anger over AIG, but we’re not like AIG."
The banker added: "It’s like a McCarthy witch-hunt...This is the
most profoundly anti- American thing I’ve ever seen."
Nobody knows what
"increased oversight" means, but if you think this legislation
will apply only to the evil bankers, you're deluded. It will be
used against all executive compensation packages for all American
companies -- Hollywood, a major source of leftist propaganda, will be
exempt.
The federal government
created this mess and is now blaming the private sector. Obama
played a
key role. Barney Frank, Chris Dodd, and the Congressional
Black Caucus were big players, as well.
Now, the Marxists and
socialists in the White House and Congress are taking advantage of the
chaos to pass this legislation.
White
House chief of staff Rahm Emanuel gave the game away back in November
with his observation that:
"You never want a serious crisis to go
to waste. What I mean by that is it's an opportunity to do things that
you think you could not do before. This is an opportunity…And this
crisis provides the opportunity for us, as I would say, the opportunity
to do things that you could not do before."
Passing thought:
When Obama starts limiting the incomes of the "evil corporate barons",
where the hell is he going to get the tax revenues to pay off his $4
trillion dollar debt? |
©
Copyright Beckwith 2009
All right reserved
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