TruthSavvy.

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. (It is yet to be revealed what portion of the claimed losses were basis money.) The FED’s policies, on the other hand, will impact the whole nation. FED efforts to stimulate near-term growth will lead to monumental long-term costs and unmitigable damage to government legitimacy.

Lawyers for Madoff-ites are intent on conning the government into restoring their clients’ accounts under the dubious claim of SIPC insurance or lack of due diligence by the SEC. This effort ignores the fact that millions of Americans have suffered dramatic investment losses because of Wall Street’s misrepresentation of stock market dynamics. The general public’s recessionary losses have always been counted as “market losses,” with no protection from the Securities Investor Protection Corporation (SIPC). There is no reason that the greed of the Madoff-ites in concentrating their investments in a low visibility play should entitle them to special privilege in recouping losses.

The Federal Reserve has pledged to do everything in its now ample imagination to return the economy to growth. Yes, this is the same FED that showed no creativity in checking unsustainable growth. The FED envisions itself working nobly for the little people — pursuing full employment that growth alone seems to bring. Yet the FED chooses not to explain that the government’s debt embedded policies are the reason employment is aligned with growth. Indeed, debt excessively expands an economy, creating the apparent necessity of using debt to stay caught up. The problem is that debt-founded economies are like Ponzi schemes: there is no catch-up in the end.

Callaway gets attention with Madoff as the “anti-Claus” — an adroit play on the sinister “anti-Christ” in Christian tradition. But Madoff’s anti-Claus image roils the working class less than it impacts Callaway’s “masters of the universe,” their Wall Street temple now exposed worldwide as the gaming table of financial predators dressed in sheep’s clothing. Indeed, even the guardian of the sheep — the SEC — is now revealed as a cover-up organization that provides a false sense of security. Thus, Callaway is right in arguing the SEC should be “completely leveled” — an idea that ought to include new staff recruited with no cultural connections to Wall Street.

People in the know realize that the SEC has ignored legitimate complaints for at least two decades. When the SEC examines matters that might touch Wall Street’s favored elites, its apparent purpose has been to make superficial inquiry then declare “case closed.” In this way the SEC has guarded the backs of predators rather than holding them to account. Even in cases where the SEC has prosecuted skullduggery it has apparently taken action to break individuals or businesses that dominant elites wanted to stomp out or raid for key assets.

In the main the SEC’s work has been to provide “public relations style” regulation that keeps Congress on the sidelines and provides Wall Street’s premier financial service companies and hedge funds with confidence that the American public can be gamed without regulatory interference. This posture facilitates an endless array of manipulations for elites and their friends. Scores of despicable games are played continuously on Wall Street, concealed and defended as “proprietary trading” methods (i.e., intellectual property). If exposed to due light these culpable designs could never pass muster as legitimate expressions of responsible capitalism. Indeed, the Obama administration should find a way of returning to the public domain the loot of exploitation that Wall Street elites have distributed to Swiss banks accounts and offshore hedge funds. If the financial sector needed a bailout, the funds should have come from this loot, not the pockets of working class Americans.

No one should hold their breath hoping that the current administration will get it right. It won’t happen because the culture of the Washington beltway is wrong. In 1995 most freshman and sophomore House Republicans were determined to balance the budget. Three years later a growing number of them had adopted a “starve the beast” strategy fed to them by crafty lobbyists. The deceptive idea was that aggressive deficit spending on behalf of GOP constituencies during years of Republican control could starve the “beast” (the federal government) of discretionary spending power when Democrats eventually regained power.

Well, didn’t that strategy work dandy! The annual deficit, current account deficit and national debt all soared in beastly fashion. The business sector expanded unsustainably and asset prices lost their tethers. The beast never starved: Its appetite and temper just grew fiercer. Now, alongside the bloated military-industrial complex Americans face a new spending program calamity: Both parties will “starve the beast” bigger. And the bigger beast will eat more of what honest working people produce. There’s no hope until party leaders, key staffers and connected lobbyists are thrown out Humpty-Dumpty style. Likewise, the SEC will never regulate suitably as long as its auditors, regulators and executives are drawn from the Manhattan Island culture.

The American public is duped. The bailout and stimulus strategy is crafted along the same lines as the Bush Administration’s war on Iraq. The common denominator between the Bush and Obama administrations is the pool of elites — different uniforms, rhetoric and special interests served but submission to the same ultimate ends.

People can now see through Bush’s war on WMDs and the fear of Islamic terrorism. But most observers do not yet grasp that the 2008 U.S. Treasury war on “economic meltdown,” and the FED war on the ‘terrors’ of unemployment, foreclosure, and loss of retirement security, reflect the same elitist Armageddon strategy as we’ve just been through. The end game is to get the U.S. government to leverage itself so extensively that it cannot go on without financial lifelines. This is why the FED is a more dangerous anti-Claus than Madoff. Granted, Madoff’s deception gives the FED an excuse to use even more debt to fight damaged confidence in financial markets.

Interestingly, even as Madoff-ites had so much confidence in Bernie as to accept the risks of asset concentration, the world at large is risking it all on the good faith and credit of the United States. (See Alistair Barr, Dec. 18, “Madoff’s rise fueled by leverage, controversial fees,” Marketwatch.) Ponzi schemes are illegal because they eventually defraud latecomers. When one looks at the future budgetary obligations of the U.S. it becomes evident that the growing debt will not be repaid. Every additional month that we play the national Ponzi game will create a greater global emergency.

The coming global emergency (a high probability within ten years) will require an intensive concentration of power to remedy. We’re already seeing this in the FED; granted, the FED’s balance sheet may end up being decimated before game end. If so, the FED and other damaged central banks of the various nation-states may be reconfigured into ‘district’ banks for the ultimate global super bank — the leaders behind that throne to become the true masters of mammon’s universe. Financial power so intensely concentrated would be the ultimate slap in the face to our Constitution’s Framers. Such power would bear great potential for anti-Christ outcomes as well as anti-Claus gifts (in the “Madoffian” sense). If the world finds itself with its back to the wall and daily bread at risk, will it have to choose to be saved by one power or another? But which one?