Tuesday, December 02, 2008

No comparison. Nothing to see here, folks.

Ben Bernanke is something else. He assures us that there is "no comparison" between the current recession and the great depression of the 1930s. Of course, he was singing a different tune when he was crying "wolf" to arm-twist Congress to authorize nearly a trillion dollars in bailouts. He assures us that the worst of the housing crisis will be over by the end of the year. Somebody give this man a drug test, or at least find out what planet he lives on.

The main problem with the Federal Reserve system is that our monetary system, and thus our entire economy, is based on lies and promises as empty as the gold reserves and as worthless as the pot-metal our coins are made of. Bernanke's braying has the same "ring of truth" as the noise a penny makes when tossed on a table. And he's not alone. When promises of bailouts for corporations and cradle to grave benefits for citizens are made by the likes of Bernanke and his bosses - all with money that doesn't even exist given that we are awash in debt with nothing in reserve - we really need to consider where the money comes from.

Just as the bubble of the happy-go-lucky 1920s burst and the market came crashing down in 1929 - with the result of some 12 years of misery known as the great depression (which was the "correction" to the illusion of prosperity that the "boom" really was) - we're looking at a very similar bursting bubble, a Wall Street nosedive, and hard economic times ahead. It is inevitable that there will be a hard correction for the years of the reckless spending on credit that we have engaged in. The bill is due, and there comes a point at which you can't rob Visa to pay MasterCard. But Bernanke is telling us, in effect, something we love to hear: "Yes we can!"

However, notice in the article that Bernanke is telling the American people one thing, and the president another. He refuses to submit to an audit, and believes World War II got the United States out of the depression - a myth of oversimplification told often in middle school text books, but one that a "depression scholar" ought to realize is nonsense. He is also arguing that the welfare state is going to make this depression better - not worse. But debt and spending and a lack of prudence based on the perception that there are no risks are the source of the problem - not the solution. The false sense of security of bailouts and welfare will make that debt worse, not better. It won't encourage prudence, frugality, and industry. We've seen how long it took AIG to parlay its billions of dollars of virtually blackmailed corporate welfare into utterly irresponsible employee perks.

If we could spend our way to prosperity, especially by being on a war footing, we would not be in a recession right now. The differences between the 1930s and now do not put us in a better position to weather the storm. By contrast, we are today the world's largest debtor, we actually have negative savings, a hostile country holds a huge amount of our treasury notes, we have an alarming trade deficit, our economy is now based on the low-wage non-exportable service sector instead of high-wage exportable manufacturing, we have millions of "helpless" people dependent upon government programs, the dollar is the world's reserve currency and when those dollars repatriate we're looking at large scale inflation, and the last remaining vestige of gold backing to our currency is "gone with the wind" of the fast-talking central bankers and Capitol Hill flimflam men. Other than that, Mrs. Lincoln...

We're only at the beginning of this recession/depression (our crash only started less than two months ago!) - and Bernanke has the gall to cite statistics at the height of the great depression as evidence that, because we haven't gotten there yet, the situations are not analogous? Is he serious?

But what else should we expect? In an honest political system, Berkanke would be in prison. But in an honest political system, printing presses would be restrained by hard currency. "Helicopter Ben" has been caught in lie after lie, in economic fallacy after fallacy, and still is permitted to continue lying and running the American economy into the ground. He has as much integrity as the fiat money he oversees - both are shamelessly fraudulent. The emperor has no clothes, and Bernanke doesn't have the common courtesy to at least wrap himself in a towel.

The United States used to hang counterfeiters. Now we give them titles, highly paid government jobs with generous perks, and hand them the keys to the mint so they can steal from us with complete immunity from any and all consequences. If he were managing a private company's books the same way, he would be sharing a cell with the folks from Enron and Arthur Anderson. And if Bernanke had any personal honor, he would resign.

At least Greenspan has admitted, if only a little, to his part in the failed experiment of a centrally planned economy. The Soviet Union learned the hard way that it can't be done. And instead of learning from history, we arrogantly rewrite it and claim to be exempt from the same forces. "It can't happen here." "We are too big to fail." We might as well let our federal government bureaucracy redefine the law of gravity.

Deep down inside, Bernanke surely must know better - even if he has become a laughingstock just like his Iraqi "minister of information" counterpart shown above.

1 comment:

Pr. H. R. said...

That China owns so many T-bills really is a ticking time bomb. . .

I take some hope that country of all only children will be more reluctant to go to war than our current leaders seem to be. . .