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.

As MarketWatch’s David Weidner adroitly explained this week, there is a Washington D.C. to Wall Street connection that sabotages national economic policy. For people on both sides of the connection, financial growth is the goal. Governmental legitimacy is forgotten in its shadow. But wait, there’s more. Traditional governmental legitimacy is the enemy that the connection insiders aim to dismantle.

As the legitimacy of governmental justice dies, the door is opened to whatever imperative can save a sinking ship — probably plutocracy. While patriotic Americans grind their teeth as bailout and stimulus packages move forward, Wall Street super-elites place rose bouquets on Hamilton’s tomb and dance on the graves of the other Founders. They are delirious that Americans can no longer elect trustworthy legislators. Indeed, the electorate’s realization that their representatives will betray them saps the public’s political efficacy, leaving voters with little initiative to organize and resist.

It is a double-win for financial elites. The resiliency of the public is weakened as it shoulders the burden of the Wall Street stimulus. Simultaneously, Wall Street acquires fresh capital after throwing off mortgage securitization schemes that allowed elites to pocket billions in inflated salaries and bonuses. All of this strengthens Wall Street for the day when it offers to save a crumbling U.S. government on terms that make government dependent on super-elites. A loss of economic autonomy will befall the U.S. government once it can no longer sell enough Treasuries to sustain the rollover of its debt. It is not the burdensome interest that will finish us but the inability to find buyers for hundreds of billions in monthly auctions. Wall Street will hasten the disaster by stepping away from the Treasury market when its endgame is ready.

When the time comes, Wall Street will conveniently forget who saved it in its hour of duress. It will argue that the federal government’s inability to deal with massive deficits, monetary inflation, unbridled spending, and an immoral Fed make it a poor prospect for further investment. (Yes, that’s chutzpah: Induce the behavior, then blame the prey.) As Wall Street analysts cut U.S. government credit ratings, investors worldwide will flee U.S. Treasuries, allowing Wall Street to spread the blame for whatever happens next.

How could President Bush, good intentions aside, have been oblivious to this prospect in his Farewell Address? Could he not see the consequence of declining legitimacy? He helped sell his nation’s birthright and the inheritance of working Americans. What did we get in the trade? A bowl of Jacob’s stew (a short-term ‘solution’).

Economic weakness has given the Fed chairman the opportunity to weaken the working man relative to the capitalist by inflating the money supply. With the price inflation risk set aside, what injustice is there in creating trillions of new dollars out of thin air, as long as the money dumped on Wall Street is recycled into corporate loans to grease the business cycle and keep people employed? (Sarcasm intended.)

Granted, one Fed Governor, Charles Plosser, now takes exception to the Fed chair’s policy. Other observers object as well. The primary concern among economists who object to the Fed showering Wall Street with billions is the fear of delayed inflation. Hardly anything is said by economists about the sweeping destruction of governmental legitimacy or the evil of the devil’s hedges: “Buy growth; sell justice.” Or, “evade recession; accept plutocracy.” When unelected bankers are allowed to run the economy, bankers will feast at the table. The public’s role is to lick the bankers’ boots and eat scraps off the floor. Thomas Jefferson warned of such outcomes as did Andrew Jackson. It is preferential economics gone wild.

It only takes the magic of money creation to make Bank of America run again. Citibank, too, can be resuscitated by “government counterfeiting.” Greedy banks can be turned into “good banks” simply by infusing them with fiat capital while dumping their damaged assets into “bad banks” to be written off against the electorate’s balance sheet. Once perky again from blood drawn from taxpayers, financial institutions can lead the stock market in another round of government authorized Ponzi play. Unfortunately, the U.S. Senate does not have one statesman with “Mr. Smith Goes to Washington” spunk — courage enough to filibuster financial corruption until dropping from exhaustion.

Relative power is a zero sum game. Money created out of nothing for Wall Street reduces the value of money already in the hands of America’s workers and retirees. Americans had a chance last autumn to stop the Wall Street machine and bring a better day. But a wimpy and deceived Congress capitulated to blackmail, returning to Wall Street the upper hand. By what insanity did we put financial elites back in the saddle? Are we so afraid of hard times that we would rather serve thieves and liars? What does this say of national “greatness”?

In the Bible, the Apostle John dreams of a multi-headed beast trampling the earth. Somehow, one of the beast’s heads receives a near-fatal wound. When the wound miraculously heals, the beast becomes even more predatory, ruling the world for a season (Revelation 13:1-4). Fairy-tale? Maybe. But one thing is certain: No small phoenix arose from the 9-11 event, and a bigger one rises now from Wall Street’s debacle. The phoenix carries the message that rule by money, not “we the people,” is the design of elites for the world.

We are not doomed as a nation if a vital minority of thinking people engage in a principled intellectual war to enlighten the public mind. But the mind of the masses will not be enlightened until working folks have been tread down by their money-grubbing masters. Indeed, Americans in the Founding Era had to suffer under King George’s edicts and the demands of his governors before they would act adequately in their own interests.

The global government that comes now is too powerful to be thrown off by mere frustration. The Wall Street to D.C. connection means that our hijacked government will use Homeland Security powers to thwart physical resistance to its fraudulent operations. Reformers must fight an intellectual battle, realizing that it will take something special to topple the hegemon. Global warming might complicate the hegemon’s operations as might Israel’s ambitions. A global earthquake larger than anything in recorded history could have a material effect if one comes (Revelation 16:18). Whatever the case, if the global government loses its luster in the face of unmanageable catastrophe, people everywhere must be ready to seize the moment and restore constitutionally prudent republican government, bearing in mind the countless lessons of history.

Culture must change if “rule by money” is to be stopped. A viable American ethos must be discovered and refined. False intellectualism must be replaced with ethical wisdom. A new battle must be waged for young and old minds alike. This conflict will demonstrate whether the culmination of history’s lessons can empower benevolence and goodness to triumph over depraved greed and shortsightedness.