Government Bailouts

What Might Have Been: The Real Costs of Bailouts


If the economy is weakening should we do everything in our power to get it moving again? As explained in Rex Nutting’s Feb. 22 article, “No end in sight for recession” an unprecedented amount of fiscal and monetary stimulus is being injected. What is not explained is how this beckons unprecedented inflation, heavier taxation and further weakening of the U.S. dollar.

Rewarding Irresponsibility: The Fall of Financial Integrity


Who, if anyone, is surprised that Mr. Stanford’s chapter unfolds in Madoff-ite fashion, politics and all? Who, if anyone, does not expect bailouts and partisan subsidies to continue, with justice thrown to the wind as evidenced in the expanding mortgage subsidy affair?

Must We Further Enable Financial Elites?


Now we know why no one but the tax-flawed Timothy Geithner would do as the new Secretary of the U.S. Treasury. Ronald Orol’s report contains clues supportive of some observers’ contention that Mr. Geithner is under the influence of power hungry elites. Mr. Geithner’s proposal comes with the same directive as Paulson’s 2008 TARP proposal: We have to act without delay or be sucked into a black hole of collapsing banks and unemployment.

What Will it Take to Satisfy the Banking Beast?


One war is over. Another one begins. The war to save America from plutocracy was lost this week as the federal government capitulated to financial sector demands for fresh capital and more bailout guarantees. Naturally, the Bush and Obama administrations don’t see themselves as losing the financial war. But they’re two of a kind when it comes to Wall Street. Just consider Obama’s willingness to work the phones to U.S. Senators to secure more money for financial elites.

Alternatives to Big Bank Bailouts


Federal Reserve Chairman Bernanke claims that banks need more aid if we hope to return to economic growth anytime soon. What he really means is that banks and leveraged investors need inflationary economic growth if they are to get the type of returns that widen the gap between the wealthy and everyone else. This is why Fed governors have been peppering their speeches with concerns about inflation falling below “desirable levels.” What is the desirable level for inflation?

Madoff's Capitalism and the Scandal of the American Mind


A movie about Bernie Madoff should be made if it will help Americans see that covetousness for undeserved gain keeps us from setting up an honorable and just architecture for our financial markets. The movie needs to focus on more than the Madoff family scandal. It needs to evaluate the scandal of the American financial mind, and do so in quite the same fashion that the Christian scholar Mark Noll evaluated “The Scandal of the Evangelical Mind” in his 1995 book.

Are We Better Off With or Without The TARP?


Some market observers opine that we ought to be thankful for the fiscal stimulus provided by Paulson’s Troubled Assets Relief Program (TARP). They argue that the U.S. economy would be in a deep hole without TARP. Probably. But that deep hole might be a better spot than the deeper pit of lost governmental legitimacy we now find ourselves in as TARP socializes the investment errors of wealthy speculators. It may be that the Secretary of the Treasury’s radical action will help us skirt a severe recession and even partially re-inflate capital assets in the near term.

The Greater Grinch: Madoff or the FED?


Which anti-Claus has done more harm: The Federal Reserve or Bernie Madoff? A holiday stage play could show the FED creating money while Madoff filches it. But in the larger picture the FED is by far the bigger bandit. Madoff’s Ponzi scheme aimed at making money for a select group. But greed and dishonesty caught up with Madoff when the economy turned, resulting in the forfeiture of illegitimate profits and perhaps much of the invested cash.

A Great Delusion: Money For Free


What is a delusion if not a false belief held in spite of invalidating evidence? Defined in this Webster’s Dictionary way, many of American’s financial and political leaders are delusional. Some elites claim that deficits don’t matter — they can be inflated away, the resultant distortions of little consequence. Others, including a large chunk of the “Forbes” crowd, think economic growth is a sustainable paradigm on a finite earth — an idea that is dumber in our time than the flat earth theory 400 years ago.

The End of Big Money's Legitimacy


“The Star-Spangled Banner” became the national anthem on March 3, 1931, when the Congress and President Hoover formally recognized the anthem. In the midst of the Great Depression, a song about the flag flying proudly in the land of ‘the free and the brave’ gave encouragement. While the Stars and Stripes are still aloft, our nation’s financial impropriety now drags the flag through the dirt. Our U.S. Congress will continue to make laws but the destiny of the country is no longer theirs to command. We have passed the tipping point.

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