FRONT PAGE CONTRIBUTOR
Senator Sanders Critiques The Federal Reserve’s Gotha Program
“We’re talking about huge sums of money going to bail out large foreign banks,” said Senator Bernard Sanders, the Vermont independent who wrote the provision in the Dodd-Frank Act that required the Fed disclosures. “Has the Federal Reserve become the central bank of the world? I think that is a question that needs to be examined.”
Senator Sanders raised a condign question. Why is the Fed bailing out UBS AG and Barclays Plc? Sanders, the socialist from Vermont, could perhaps look to the catechisms of his ideological muse St Karl for a proper theological explanation.
In a higher phase of communist society, after the enslaving subordination of the individual to the division of labor, and therewith also the antithesis between mental and physical labor, has vanished; after labor has become not only a means of life but life’s prime want; after the productive forces have also increased with the all-around development of the individual, and all the springs of co-operative wealth flow more abundantly—only then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banners: From each according to his ability, to each according to his needs!
– Karl Marx “Critique of the Gotha Program” (HT: Wikipedia)
The logical question thus becomes what aspect of Ben Bernanke’s income redistribution scheme should perturb a fundamentalist follower of the Socialist Faith? I see none to speak of. Robin Hood used TARP to steal from the well off and distribute to the poor without regard to whether the poor in any way suffered through condign penury.
Sure, if I viewed the US economy through the Gimlet Eye of a professional investment manager, I may well see what Gordon Gekko would have called a dog with fleas. We’ve just received yet another “worse than expected” job report. Oh, and the 10-Yr Treasury Bond, benchmark for mortgage rates in the US, just went back under 3%. Lions, Tigers and BEARS, – oh My!!
Yet, despite the immediacy of the suffering for the 80% of the US population where Bernie Sanders’ socialism gets written off as way too much bong-smoke and bull-feke; we need to remind our Comrade of Capitol Hill that others have greater need. Here’s how things are working out in the parts of Europe where Helicopter Ben launched an air assault of dollars. Michael Panzer, author of the Economic Collapse Blog, offers us the following incites gleaned from recent institutional research.
Greece: “Greece is de facto insolvent, in our view, all the more so after the recent debt and deficit revisions… Whether its debt will be restructured at that stage, including haircuts, will depend on factors beyond the sustainability of its debt…” Ireland: “Accessing external sources of funds will not mark the end of Ireland’s troubles. The reason is that, in our view, the consolidated Irish sovereign and Irish domestic financial system is de facto insolvent. The Irish sovereign cannot from its own resources ‘bail out’ the banks and make its own creditors whole.” Portugal: “After an Irish agreement with the EU/IMF, the market’s attention is likely to turn to Portugal’s sovereign, which at current levels of interest rates and growth rates, is less dramatically, but quietly, insolvent, in our view. We consider it likely that it will need to access the EFSF soon.” Spain: “For now, the markets have put Spain in Italy’s sovereign risk class when, in our view, it should be closer to Portugal and Ireland once its banking sector problems are recognized. We argued before that the EFSF should be much larger (€2trn). Should Spain need assistance, it will stretch the resources of the EFSF, perhaps beyond its current limits.” Italy and Belgium: “At longer horizons, high debt levels and political instability in Italy and Belgium may yet give rise to fundamentally warranted sovereign debt crises, while self-justifying crises are possible even in the near term, despite roughly balanced structural primary budgets.”
If Greece, Italy, Portugal and Spain meet The Economic Creator at the same time, you’re talking about a sovereign bankruptcy that spans over half of what the Roman Empire did after Trajan conquered Hispania. On top of that, the people in these bankrupt states are rioting when their governments attempt to slow down their unmanageable spending. Everyone loves the Visa card until the creditors start calling and the Repo Man comes for the Ferrari. Europe has lived above its means and contributed nothing for future generations to grow upon. The seed corn has been what’s for dinner; and now these idiots curse their paltry harvest.
Europe is about where the guys in the Red Shirts are after Captain Kirk beams them down to some hostile planet. Spain needs about 2 Trillion British Pounds to get back home on their stupid green jobs and real estate boondoggles. That won’t earn them a first-down. It just gets them back to the original line of scrimmage.
Of the great traditional states of Christendom, this leaves The Holy Roman Empire (Germany, Austria, and Northern France) to squat the debt load. Charlemagne couldn’t make the lift and couldn’t pay the chiropractor if it financially broke his back. Helicopter Ben, by Senator Sanders’ deeply-revered precepts, now had an obligation to fly to the rescue. “From each according to their abilities…”
For the better part of five decades, Europe has lived much of Bernie Sanders’ dream. When French Utopianist, Morelly expounded his Code of Nature, he called for the following system of morality which most of Europe has at least partially adopted.
I. Nothing in society will belong to anyone, either as a personal possession or as capital goods, except the things for which the person has immediate use, for either his needs, his pleasures, or his daily work. II. Every citizen will be a public man, sustained by, supported by, and occupied at the public expense III. Every citizen will make his particular contribution to the activities of the community according to his capacity, his talent and his age; it is on this basis that his duties will be determined, in conformity with the distributive laws.
(Wikipedia Ob. Cit)
Perhaps what has Bernie Sanders in a snit is the fact that everything he wants for America is in force in Europe. Utopia arrived, and then had to be bailed out by Helicopter Ben. Senator Sanders got to watch everything he proposed for America put to the test in that uncompromisingly honest laboratory known as reality. It is the results, not the bailout that breaks Senator Sanders’ heart.
Fear not, Bernie, there is a solution. In line with Senator Sanders’ vision of a modern Satan; Gordon Gekko sits over there in the corner. He wears his stylish Armani Suit, sips his martini, and smokes a top-of-the line El Cubano. Perhaps he quietly proposes an alternative to Senator Sanders. It would go something like this…
Greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures, the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge, has marked the upward surge of mankind and greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the U.S.A.