It’s been a phenomenal circus, the screaming and hollering on all sides about the “fiscal cliff,” in the media, from lawmakers, from chieftains of our industries, particularly those that feed at the government’s big trough, such as defense contractors, which include some of the largest global corporations. Even NPR this morning postulated that it would cause a million job losses. Hysteria comes to mind.
The final amount that the US government owes at the end of fiscal 2012 (September 30) is, drumroll, $16,159,487,013,300. It owes it, in no particular order, to the Saudis, US citizens, the Social Security Trust Fund, the Chinese, the Japanese, the Russians…. It amounts to about 103% of GDP. An earsplitting hangover from a debt binge that robbed the future. But there are winners.
Hope was once again in vogue Thursday night in President Obama’s acceptance speech, after having gone the way of the green shoots. Hope has been swirling around the financial markets as well. The Fed keeps dangling QE3 out in front of them. And ECB President Mario Draghi injected a mega-dose of it with his bond-buying promise. It goosed the markets even more and powered them to multi-year highs. Then came the jobs report.
It must have been a nightmare for Neil Barofsky, former Inspector General overseeing TARP during the financial crisis. He was on CNBC this morning to hawk his new book, when all heck broke loose. An argument about TARP, the most despised law in the US … how it prevented the collapse of Wall Street or something. But they failed to mention that by the time TARP was handing out money, it had already become irrelevant. A much greater power had taken control.
They only bubble up rarely, these scandals at the Federal Reserve System, but when they do, they’re doozies, involving huge amounts of money, massive conflicts of interest, all-out manipulation, collusion, favoritism, dizzying cronyism…. Over the 100 years the Fed has existed, it has done an excellent job in one of its other functions, maintaining the dollar, which has lost only 96% of its value—instead of 100%. Yet, it just doesn’t want to be audited.
The strongest and toughest creatures out there that no one has been able to subdue yet, the inexplicable American consumers, are digging in their heels though the entire power structure has been pushing them relentlessly to buy more and more with money they don’t have, and borrow against future income they might never make, just so that GDP can edge up for another desperate quarter. But it’s been tough.
The strongest and toughest creature out there, and maybe the smartest one, that no one has been able to subdue yet, the inexplicable American consumer has hit a wall. It showed up in a prosaic but ugly 8-K filing by Visa—a staggering and sudden shift that pundits tried to explain away somehow by referring to recent changes in debit card regulations. I mean, come on.
Newly appointed French Minister of Economy, Finance, and Trade, Pierre Moscovici surprised the world: “A country that indebts itself is a country that impoverishes itself,” he said and proclaimed that the government would cut the deficit because “public debt is an enemy for the country.” Powerful words, reasonable and refreshing. What a difference from what we’re getting dished up in the America.
Before retiring from Congress, Rep. Ron Paul, Chairman of the House Financial Services Subcommittee on Domestic Monetary Policy and Technology, slugs at the Fed one more time: Tuesday, his committee weighs six bills to reform or abolish the Fed which “continues to reward Wall Street banks while destroying the dollar’s purchasing power and driving up the cost of living for average Americans,” he said.
Contributed by Chriss Street. Four years ago, Nobel Prize winning economist Joseph Stiglitz and the Roosevelt Institute, where he serves as Senior Fellow, enthusiastically heralded the 2008 election as the beginning of at least a decade of expansion of government intervention into the American economy. But it has come as a shock to Stiglitz and the Roosevelt Institute that voters have already turned against the values of the days of disco.