Good summary from blogosphere

The Truth About the Bailout

There’s so much information (not to mention “information”) about the big banks, the Bailout regime, and the financialized economy the banks and government constructed and now use as the vehicle of tyranny.

How to process it all? How to separate the good information from the bad, the useful from the pointless, the truth from the lies? How to weaponize each idea, anecdote, and piece of data?

Here’s a list of criteria which are true and, I think, useful.

1. The big banks caused the crash. They hold the overwhelming responsibility for a Tower of Babel which was bound to come down and is bound to come down again. Any other responsibilities are trivial. The proximate causes are irrelevant.

2. The Bailout artificially props up insolvent banks. But in spite of their phony profits, the banks remain collectively insolvent, and most if not all of them individually so. Every cent they gamble and loot comes directly or indirectly from the Bailouts, from free QE money, from the TBTF premium. It’s ALL taxpayer money. The big banks are now permanent wards of the state. We the people OWN them once and for all, and are free to do anything we want with them, the moment we are inclined to do so.

3. The Bailout accomplishes no socially valid end, but only enables the banks to reopen the casino.

4. The Bailout only intensifies monopoly concentration, which lay at the core of the Too Big To Fail extortion dilemma. (The policy of TBTF only helps confirm the structure in a positive feedback loop.)

4A. (Wealth and power concentration in themselves are anti-democratic, socially and economically destabilizing, and morally perverted.)

5. The finance sector is a purely rent-seeking monopoly. We can place pretty much anything it does on the list of feudal tactics. Every cent they extract is a TAX upon us. All their “innovations” are con jobs, and all their lobbying is bribery and extortion. Rentier Wall Street is the driver of all federal government policy, with the corporatist government serving as a functionary, a conduit, and as a goon.

6. No true reform will be legislated thanks to corruption. We can extend this: The system is so corrupt beyond redemption that there will never be constructive major legislation again. All major bills will be Potemkin at best (like the finance “reform” bill is looking to be), or a further assault (like the health racket bill). In either case they will only seek to further entrench the rackets oppressing us.

7. Anything which is legislated will not be enforced thanks to corruption and capture. We can extend the principle: The law itself is a battleground, and the rule of law in great jeopardy.

8. We don’t need the big banks for recovery, for lending, for international competition, for anything else. All the evidence is that smaller banks provide the real value here, while big banks are not only unable and unwilling to engage in constructive action themselves, but their monopoly power actively hinders the smaller banks.

9. The size of the banks runs counter to our need for a decentralized economy with greater resiliency and robustness. The stimulus has been remarkable for how little money has headed in a constructive direction. This is because of the banks.

10. Only the rich have benefited from the Bailout. Only they will continue to benefit. Everyone else is prey.

11. The banks (and therefore the Bailout) fund the permanent war, which in turn militarizes the country for the benefit of the banks.

12. The stock market is the terrorist wing of finance monopoly. Its purpose is to punish all public interest government action (for example letting the market work in Lehman’s case, or the Congressional rejection in the first Bailout vote). Such punishment is a tool of disaster capitalism, generating the sense of immediate crisis, the Shock Treatment, to terrorize and stampede policy-makers, the media, and the public into allowing or enabling the power and loot grabs.

(On the other hand, it rewards official crime. Thus health insurance stocks have been a barometer of the policy debate on health reform, for example going up after every racket-friendly action on Obama’s part.)

Appendix: The mainstream media’s coverage is systematically biased in favor of corporatism, often atrociously so. The infrequent good articles are accidents, incidental to the media project.

The Bailout is a war upon America. This is Bailout Nation, Bailout America. (We should settle on a name for this debased regime, this perversion of America.)

The basic principles of freedom and humanity tell us that the only measures of an economy’s health, practically and morally, is how well it empowers the people of a society to produce real goods and services for themselves, and how many good jobs it empowers them to create and preserve for themselves.

No other metric has any inherent validity, and nothing else as far as money flow has any value. The rest is just a shell game.

These truths dictate the right positive principle, relocalization, and the necessary negative principle, anti-corporatism. the need to smash the banks. For we are at war.

The call – Smash the banks! Break up Too Big to Fail! Too Big to Fail is Too Big to Exist.

Of any policy we must ask first, What will it do to help Smash the Banks? Of any alleged leader or would-be leader: Where is their call to relocalize? And what have they done to help Smash the Banks?



fCh said...

Arizona Steve
Cave Creek, AZ

I am a Democrat that voted for President Obama. I do not agree with Mr. Krugman's government spending philosophy to get us out of the economic morass. Government finance is no different than an individual or a company... if you spend more than you make, you will go bankrupt. Mr. Krugman advocates that the government keep spending while we raise taxes on the rich to compensate.

Well, I guess I fall into his "rich" category. I own a global business. I employ 150 folks full-time in India, 60 folks full-time in the US and 5 in the UK. My company made a before tax profit of $1,800,000 last year. I personally bring home less per year than I pay in taxes. Why? Because as an LLC, every bit of profit I make is taxed on my personal taxes. I bring home around $185k and pay around $600,000 in federal taxes. The rest is plowed back into the company to hire more folks and buy additional infrastructure. Also, I pay employee health and dental care, retirement benefits, 401k matching, long and short term disability and dental. I don't borrow anything to do this.

That extra 4% of federal taxes (once the Bush tax cuts expire) will cost me an additional $70,000 or so. On top of that, the President advocates increasing the cap on Self Employment tax. The new taxes would add an additional $22,000. I am looking at around $92k in total additional taxes. So, some of you would say deduct from your $185k take home. Others would say, simply don't hire an additional two employees or cut some of those rich benefits you give to your employees.

Either way I go, you have just taken $92,000 out of the hands of someone who can use that money to increase America's wealth... either by adding employees or buying additional computers, etc. So, since the government will take it from me... where should that money go? To bailing out banks? How about bailing out someone in foreclosure? Hmmm... maybe you could use it to bail out the states or the local governments. California perhaps? How about Bell, California?

I don't see how that helps America, Mr. Krugman.

Anyway, my two cents worth. said...

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