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Class War For Idiots / September 24, 2009

a_kick_in_the_nuts

There was a leak yesterday to Bloomberg that the Fed is making plans to “drain” $1 trillion from the US economy. Because supposedly our economy is overheating with too much money—not that anyone you or I know has seen a penny of it. It doesn’t seem to make any sense to suck money out of a cash-strapped country when the economy’s in ruins: unemployment is reaching Third World levels, foreclosures are hitting new record highs, and lending is still contracting at an alarming rate not seen since, yep, the Great Depression. So why would the Fed talk about pulling $1 trillion out of the economy, as if that’s the medicine it needs?

It is all about taking care the already-mega-rich Wall Street bankers and foreign investors who want to protect the value of all the money they plundered from America. They want to ensure that the trillions they were handed by Paulson and Bernanke and Summers are still worth the same trillions next year…and to do that, they’re going to apply a simple law of supply and demand: drain out $1 trillion from us, and the value of their trillions holds its value.

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What’s even more strange is that the Fed’s plan to “drain” an incredible $1 trillion from our ruined economy comes after the Fed spent two years pumping trillions into the banking system, on the specious theory that the best way to get us regular folks that money isn’t to give it to us directly, but rather, to give it to the bankers first… because they know better than anyone, better than us especially, how to distribute it down to the rest of us (that ol’ trickle-down theory that’s been working magic since Reagan suckered us into believing it). We’d lose it as soon as we received it—whereas they know how to hide it for safe-keeping.

Then there’s the question of how: like, how do you actually “drain” or “”mop up” $1 trillion from our economy–it’s not like CIA agents running around Central Asia buying back Stingers from the mujahedeen in the 1990s. (The actual process makes for boring reading, having to do with the Fed and primary dealers and its balance sheet and reverse-repos, bla bla bla.) What matters is this: The Fed is going to re-steal $1 trillion of the trillions it doled out to everyone who isn’t us, because Wall Street is complaining that if some of those trillions do trickle down to the rest of us, it’ll cause inflation. They’re calling it “excess”—the same guys who are making so many billions they don’t know what to do with it, they’re the ones who know what’s excess liquidity or not. So by taking away $1 trillion of money we regular folks might get our hands on and use for our own selfish purposes, Wall Street thinks that it can contain the inflation disease that we carry around.

This is why the Fed and Treasury made sure that all those trillions went to a select few plutocratic institutions first, and not to the rest of us. See, those dollars only have value to them as long as they’re the ones in control of the dollars, and the amount of dollars. If we all have these dollars, then they’re not much value or use to the billionaires anymore. The billionaires in Wall Street, Zurich, Abu Dhabi, and Hong Kong had two goals: first, to get ahold of the trillions they’d lost, even if it meant stealing it all from Americans. Then, once they got the loot, the next goal was to make sure it didn’t leak out to the rest of us and inflate its value away, otherwise, what was the point of looting all those trillions?

So that’s where we are now, in Phase Two: we regular folks must not be allowed to get our hands on any of that dough, or all economic Hell will break loose. Drain it, mop it, suck it up–get the trillion out of our hands before we do something stupid like buy Jeep Cherokees with it. Because basically we non-millionaires are slobs, and they’re not. They know what to do with money: In their hands, money doesn’t lose value (it may vanish or turn into negative money due to overleveraging, but it doesn’t inflate away, and that’s what makes them so great!); in our feckless irresponsible hands, the value of the dollar goes to shit. So they’re taking it away from us, $1 trillion of it, for our own good.

I saw this same top-down elitist economic strategy in Russia in the 1990s, and all over the developing world: tens and hundreds of billions of dollars in IMF/World Bank loans went to financial institutions and the oligarch class rather than to the people, because that was supposedly the most “efficient” way of distributing and employing that money… rather than directly using those loans to pay off the tens of millions of pensions, teachers, state employees, and so on, which was shunned as “inflationary” and therefore bad. “Bad for whom?” If you asked a question like that, you were a commie who didn’t get it. See, what economists like Larry Summers figured out is that when the rich get richer, they don’t spark inflation, which is the Invisible Hand’s way of saying “Thumb’s Up!”; whereas when the middle-class gets too much money, it causes inflation, and when there’s inflation, it’s a problem for the rich above all. That’s why Bernanke is going to drain that $1 trillion from us right when we were about to get a sip of it: The bankers would rather see us starve to death than risk the possibility that the trillions they stole might lose a bit of their value through inflation.

The Fed says this is all about fighting inflation–which is exactly what Wall Street, the Chinese, Zurich and the rest of the super-wealthy world has been bitching about for the past six months or so–that is, ever since they gorged themselves on the trillions in handouts, and thought, “Okay, I’m happy again. Don’t need this government money anymore, at least not at this rate. Hey, wait a doggone minute here–why is the government letting the rest of the schmucks in on the trillions? Get it out of their hands now!” Everyone knows what happened to Spain after they plundered all that gold from the New World: too much gold in everyone’s home led to gold losing its value. Lesson: make sure only a few people share in the spoils. So they want a lot of that money drained out of the economy before the rest of us get our hands on it and mess everything up with our highly-communicable inflationary diseases, which we carry around us like head lice. According to the people who run our economy—Larry Summers and Ben Bernanke and Tim Geithner—regular taxpayers like you and me carry highly-communicable strains of inflation in our psyches, and so we have to be quarantined from that money to protect the nation, and especially to protect the super-rich, who shouldn’t have to suffer just because we don’t bathe properly.

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“Ordinary fucking people–I hate ‘em!” Bernanke and Summers agree, in their grim, meth-deprived way.

So now we know they want to take $1 trillion from us. The problem is, how do you sell a plan this grotesquely evil to the public you’re stealing from? I mean look at the record of the last two years: first, you loot Americans by destroying the values of their homes and their pensions; then, you steal another $23.7 trillion from America’s past-present-future and transfer it to the super-rich because they lost all their money gambling; then, when $1 trillion of that $23.7 trillion is finally about to drip down to our parched beaks, the Fed runs in screaming “No! No! Don’t let it drip into their mouths!” and takes it away from us… for our own benefit. How to sell something that violently counter-intuitive?

First of all, you smother the heist in dull, unreadable business terminology, like “Reverse Repos” and the like. Then, you divert the idiots’ attention so that we don’t even notice what hit us until it’s too late. To do that, you have to alter the perception of reality–and this is where behavioral economics comes in handy. Because once the Fed drains all that desperately-needed money out of the economy, even those fairytale “green shoots” that Larry Summers’ PR people tell us are sprouting under our feet, with little green dollar-buds just waiting to bloom so long as we water them with our hope—even those fantasy-green shoots will die if in the reality-world, a trillion real dollars is drained out of our fantasy garden.

In the real feudal reality we inhabit in post-Reagan America, it’s the .1% versus the rest of us. And in between, you have Obama’s economic team, headed up by Larry Summers, genius extraordinaire. Let’s look at the field from his point of view: On one side, you have 300 million American robbery victims to worry about, because you know, how many times can you keep robbing the same idiots before they start to get it? On the other side is a more serious group whom Summers and Bernanke and Geithner REALLY worry about, every waking minute of their lives: Wall Street, and the major foreign money interests—Chinese, German, Arab, Japanese…. We worry about being homeless and dying horrible health-care-deprived deaths; they worry about the value of their billions. And their worries are more important and serious than ours. Wall Street already gorged on all the federal cash they could cram into their guts; now they’re afraid of seeing the value of their stolen cash debased and inflated. So once again, Wall Street’s interests, and their foreign finance allies/clients, trump the rest of America’s.

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This middle-class woman caught inflation in 2001. Can you blame the billionaires for wanting to mop up her excess liquidity?

So once again, our two interests are facing off in a zero-sum game–and yes, it’s a zero sum game, no matter what all the shills say. If I had a Special Drawing Right-denominated asset to bet on who’s going to win this battle between 300 million Americans on one side, and a few thousand mega-rich financiers on the other, I’d bet it all against me. I’d bet all the IMF bonds I owned on the Blankfeins, the Dimons, the Grosses, along with the Xiaochuans and the Schulte-Noelle’s—kicking our sorry asses again. And again. And again. They’re like the Harlem Globetrotters in this rerun, and we’re the eternal Washington Generals, slapstick punching bags to entertain the billionaires as they shake us down before every vacation they take. And sometimes just for the fuck of it, they even set us off against each other, like a debased 21st century gladiator tournament for the Roman oligarchs: pit one diabetic group of Red State pensioners armed with crazy signs full of comically idiotic errors and idiocies, against another group of diabetic union organizers who get funnier the poorer and blacker and angrier they appear–send one part of the peasantry, dressed up in jester costumes called “Tea Party” outfits, to attack an even feebler part of the peasantry, called “unions” or “ACORN.” I hope the Bill Grosses and the Jaime Dimons and our master Prince Alwaleed Bin Talal Alsaud at least find us funny as we whack each other around for their entertainment, that our sordid, shameless infighting at least isn’t all in vain and it gives our overlords a laugh once in awhile. Maybe that’s why Prince Alwaleed bought a big chunk of Fox News’ parent company, NewsCorp: just for laughs, for entertainment, something to keep him from dying of boredom while flying around the world on his private superjumbo Airbus A380, to divert his attention as he counts up the hundreds of billions that the government extended to Citigroup, which the Prince also owns a huge chunk of. Face it, there’s not a lot of good entertainment for a multibillionaire Saudi prince these days: it’s either funding Fox News for endless giggles, or funding Islamic hijackers, who are a one-show act.

But I digress…back to the Fed’s plans to “drain” the economy of $1 trillion: at least this helps explain why we’ve been shoveled so much PR bullshit over the past few months about how the “economy has turned the corner.” It’s a feint. Last week, once again, Bernanke said “the worst is over”; Geithner yesterday said we are “moving toward economic recovery”; and Larry Summers, the Brain Bug behind it all, has been spewing out this propaganda for months, like when he declared that things were improving because google searches for “economic depression” had fallen to “normal levels.”

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Larry Summers poses for his White House portrait.

The reason the Brain Bug is feeding us all this great news is that it’ll justify their next brilliant move: taking all this money away from us just when it was our turn to lap up whatever leftover swill remained at the bottom of the Fed’s trough, whatever the bankers and the sheiks and the CPC heads haven’t hogged for themselves. It wouldn’t be responsible, fiscally speaking, to let us get a chance to lap up the scum at the bottom of their feeding trough, given our uncleanliness and the likelihood we’d cause an outbreak of Inflation Plague—so the money’s got to be drained, for our own good. They know what’s best for us, after all. And if you can’t understand that, that’s all right, that’s why there are Brain Bugs like Larry Summers who can think for us.

See, Larry Summers and his ilk are behavioral economists who believe wacky elitist theories like “the perception of reality is more important than reality”—it’s the same crazy elitist theory that Summers peddled back in the 1990s, when he converted Yeltsin’s corrupt economic team to the “perception trumps reality” theory. Not that it was all that hard–as a lot of Russian liberal critics argued, Yeltsin’s reformers were essentially updated Bolsheviks in Western outfits, twisting reality and subverting democracy to push through their disastrous “free-market” reforms. The chief Bolshevik of them all, Anatoly Chubais, was once described by Summers as “my dear friend”–and Summers even wrote several of the presidential decrees for Chubais, who then handed them to Yeltsin for his signature. Throughout the 1990s, while reality-Russia’s economy collapsed 60% and Russians were dying off like fruit flies, Summers and his minions were running around Davos, Washington, Harvard Square and London saying that Russians were actually doing much better than their massive death-to-birth rate would suggest; the only problem, according to Summers’ behavioral economists clique, was that Russians just didn’t know how good they had it. Once they “got it,” they would start behaving according to the model: they’d spend, consume, invest, and do all the things they promise in those glossy investment brochures, until finally Russians became indistinguishable from mall rats in Salt Lake City.

Then in 1998 Russia’s entire economy imploded back to pre-Bronze Age times, to a point that would have shocked even the ancient Scythians. But that didn’t bother Summers none: he came out of that catastrophe more impressed with his genius than ever—and was rewarded with the presidency of America’s top university, whose finances and reputation he subsequently ruined, before being named Brain Bug Number One to run the American economy from within the White House.

So here we are, at the mercy of the Brain Bug, who sees a problem: the super-rich got their money and now want to preserve it by taking away whatever’s drifting down to the rest of the country, which is suffering. And wouldtcha know it, the Brain Bug has the perfect solution to this problem: behavioral economics. Change our perception of reality right when we need that $1 trillion, so that we believe things are getting better as it’s being “drained” away from us; and by our perception changing, we will change the economic reality, and all behave according to model. Just like the Russians did.

“Why not change the perception of the super rich?” you might ask. Here’s why: they’re not ignorant fucking idiots the way we are. You can’t fool them. Behavioral economics is a bit like Newtonian physics in that way: its laws only apply to us idiots, while for the billionaires on Wall Street, a different set of laws, like quantum physics, applies. Which may explain why they use words like Quants and Quantum Fund and all that–for them, reality is reality. A dollar is a dollar, unless you print more dollars for the schmucks–then a dollar is 60 cents. You can’t fool them with talk of green shoots and crises and statistics. Either they get their giant bonuses or they don’t.

Larry Summers is sure that he can manipulate the regular-citizenry’s perceptions of our economic reality so much that we’ll actually believe it and and “live” this improved economic reality that we believe: like, we’ll believe we have jobs and we’ll believe we’re paying affordable mortgages on houses that rise in value, even though in the reality-version of our lives, we’re trying to figure out how to apply for food stamps after losing everything we’d saved in our IRAs to pay off a mortgage that’s worth more than the house we no longer own… That’s how there are two laws of economics working, depending on the scale and the net worth of the observer: Reality economics for the super-rich; behavioral economics for the 300 million saps, who can be sold shit on a popsicle stick and told it’s Italian gelato, and they’d believe it.

And here’s the really depressing part: some of us really are buying it: as this recent article shows, folks in Mecklenburg County, North Carolina, are pretty sure that the economy’s lookin’ up after all, even though they admit in the same article that their own private economic situation is getting more dire by the day. (Then again, almost half of North Carolinans also think Obama is a foreigner…) So maybe we deserve it? Maybe Summers is right to despise us? Maybe behavioral economics works, and you really can fool all the people all the time in this plebian dimension of ours.

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Sometimes I wonder if Bill Gross and Larry Fink get together with Paulson and Bernanke and Larry Summers, and they survey all the hundreds of billions they were able to manipulate in the crisis, then say wistfully, like Robert Duvall in that great scene in Apocalypse Now: “Someday, this war’s gonna end…” Except that they’re not wistful and tragic like Duvall was, because this war will never end. In fact, it’s a turkey shoot, because no matter how many of us they mow down, we keep walking into their line of fire with a big smile on our faces going, “If I work hard, I can become rich too, just like you!” BLAM!!!

Nah, it must be boring for them. No wonder they’re all such insane gamblers. Without resistance or fear of consequences, how much fun can looting Americans be?

Mark Ames is the author of Going Postal: Rage, Murder and Rebellion from Reagan’s Workplaces to Clinton’s Columbine.

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36 Comments

Add your own

  • 1. Tim  |  September 24th, 2009 at 12:07 pm

    The Shock Doctrine is what it is. Naomi Klein knew what she was talking about, and she (as well as you) is on the news about once in a blue (or is it red?) moon. A reiteration is a reiteration.

    Working people’s wages has been the measure of inflation, rather than the actual money supply, for decades. Hell, they haven’t supplied M3 for awhile now.

    All I’m saying is, I’m so glad that classy people like Maria Bartiromo and Norah O’Donnell are on the airwaves and not you guys!

  • 2. Tim  |  September 24th, 2009 at 12:09 pm

    Oh, and now that my rant is over, the real reason for this is b/c, of the 2 major buyers of our Treasury bonds – China and Japan – Japan is finally coming out of its own Bright Depression, and, for reasons that are available on the Internets, has little to no interest in having all of its pension plans and government people buying our dollar anymore.

  • 3. Mark  |  September 24th, 2009 at 12:40 pm

    Was this written on meth? Check zerohedge.com for more details. Money market mutual funds may be the liquidity mess to be mopped up. Too many people have too much cash doing nothing for the good of the economy. And, it seems to be the final untapped pool of wealth.

  • 4. Carlos  |  September 24th, 2009 at 12:48 pm

    While I don’t agree with the reasoning or the conclusion of this article, I’m glad it was posted to prove to all the Obamaphiles here that the exiled isn’t an anti-neocon sanctuary or a “progressive” website. Go to Slate or Time if you want that shit.

  • 5. Quadrillion Dollar Man  |  September 24th, 2009 at 1:58 pm

    It’s not inflation if poor people don’t get any of the money! Shit, I wish I’d thought of that.

    You’re a genius Ames. This will be the piece that will make you famous.

  • 6. pws  |  September 24th, 2009 at 2:58 pm

    http://kids.niehs.nih.gov/lyrics/happytalk.htm

  • 7. az  |  September 24th, 2009 at 3:28 pm

    But when will it all finally end?

  • 8. Eddie  |  September 24th, 2009 at 7:24 pm

    The American perception of reality is so messed up that any reasonable action will be politically impossible or undesirable. If your compass poins south no matter how sound your reasoning is you will not navigate right. Giving money to people in unpayable debt will only work as long as the perception of the creditor is that the debt will one day be repaid. Removing credit alltogeter results in a massive economic contraction and maintaining the status quo only postpones the inevitable crash as debts remain and grow. The truth is the crash happened the day America decided to abandon reality and instead focus on an alternate reality more pleasing and lucrative for both the politician and the populace. The reasoning was if we accept this alternate reality others will to and one day we find ourselves living in neverland. I’m sorry to break this but neverland does not exists. Unfortunately debtors hell does.

  • 9. aleke  |  September 24th, 2009 at 8:22 pm

    @Carlos

    The Exile is anti-neoliberal, which is exactly what Time, the neocons, Steve Jobs, Chubais, Larry Summers, and every crook and fascist in office is. Slate is Fox News for American Liberals. And American ‘liberals’ are just as complicit (maybe even worse since they’re false progressives) in this awful, stupid system.

  • 10. rjwest  |  September 24th, 2009 at 8:24 pm

    Hmmm… Well, Mr. Ames, I’ve listened and agreed to a great deal of what you[ve written. However, there’s no reason to go all to pieces because the world is run by the shite monkeys. Put that meth pipe down! Stand away from it, keep those hands visible (or invisible… whatever).

  • 11. Sublime Oblivion  |  September 24th, 2009 at 11:40 pm

    You are completely correct to compare Russia’s “reformers” and liberasts to the Bolsheviks. I have done so myself on many occasions.

  • 12. jimmy james  |  September 24th, 2009 at 11:45 pm

    Great reference to the Starship Troopers pussymonster.

    Interesting to hear you spout the William Jennings Bryan view, Ames. I agree that inflation will actually cure a lot of our ills, but not a lot of people are courageous enough to say it.

  • 13. Allen  |  September 25th, 2009 at 2:23 am

    A classic Exiled rant right here …

    Macroeconomics is a voodoo science at best — more P.T. Barnum than Isaac Newton any day. One thing that’s really true is the perception of reality thing; pretty much all economists, not just behaviorists, think it’s necessary to lie to the public all the time. Otherwise, you might provoke them to do something you don’t want them to do … like make a run on the bank.

    On another level, anyone with a shred of common sense understands that the sum total of all so called “advice” offered the Middle Class by the media and finance professionals is worthless. Nobody ever got rich in finance by giving a sucker an even break — Middle American that means you.

  • 14. ray  |  September 25th, 2009 at 4:43 am

    Keeping inflation low while recouping my tax dollars isn’t that crazy. When I hear all this talk about keeping the money out of the hands of people like us, it sounds like Ames has forgotten that the money is all deficit spending anyway. It isn’t like there is a big pile of gold there that the lords of Olympus are not deighning to dispense to the proles: it’s money that they aren’t taking out of my pocket in taxes or financing from China.

    As to the lending slowdown, that ain’t such a bad thing either. Highly levereged banks were a sizable part of this clusterfuck, as was lending mney to people who had no way to pay it back.

  • 15. Mark  |  September 25th, 2009 at 5:48 am

    If Slate weren’t at least sympathetic to the neocon line, they wouldn’t feature Chris Hitchens as their star writer.

  • 16. WE  |  September 25th, 2009 at 6:36 am

    Having spent several years in Russia and Central Asia, it was obvious how byzantine everything really was, but seeing America go down the same path has been disheartening. I don’t believe Americans will revolt, at least not against the real problem, it’s too abstract and nebulous. It’s easy to hate those snooty fag enabling dreadlocked suburban liberals or those toothless racist sister fucking rednecks, we make a caricature of a person and apply it to a group. But hating a system that is complicated beyond the means of comprehension for many, that just seems to be beyond us. Our reaction will be passive aggressive, just like all of the smiling church ladies in big hats trying to run you off of the road in their SUVs.

    The last step for Russification will be the disillusionment of public sector workers, bureaucrats, or anyone who has a nominal amount of power that can be leveraged. While our elite act just like Russian elites, our police, postal workers, and state bureaucrats tend to be fairly honest. We will know that things have fallen when you can bribe your way out of any traffic violation, when you start getting around 50% of your mail, when people start selling diplomas in the subway, when there was a mistyped digit in your application to renew your license and you’ll have to resubmit all of your paperwork but if you just step over this way…

    We’ll just have to wait for the corruption to trickle down to the common man. It won’t be difficult once people absolutely cannot live on their wages and have to supplement them with bribes. All it takes is for people to lose the myth, to simply say no, this is fucking pointless, hard work doesn’t get you anywhere, it’s all fucking rigged and absurd like some Kafkaesque nightmare, fuck it, I’ve got to take care of my family and anyways, my boss takes way more than I do anywyas. And that will be that…

  • 17. Lookwhatyoumademedo  |  September 25th, 2009 at 9:12 am

    Finally the voice of wisdom has a name and it´s Ames!

  • 18. Realist  |  September 25th, 2009 at 9:45 am

    Indeed. The so called “elite” families have fucked up the US beyond repair and corruption, theft and criminality will become truly egalitarian in nature.

    The dying federal beast will lash out against the last pockets of productivity (farming, energy, transportation) and turn the country into one big prison grid.

  • 19. rick  |  September 25th, 2009 at 11:07 am

    “Macroeconomics is a voodoo science at best — more P.T. Barnum than Isaac Newton any day.”

    I’m inclined to agree, but I’m not aware of any spirited or fun debunking of specific claims made by professors, on the macro or micro level, except maybe Nassim Taleb. I would like to read some. Most people can’t think originally, though. We have eunuch professors, unable to traduce speech codes and taboos, idiot hack journalists, and semi-talented “star” journo-explainers of the world, who are dangerously likely to gutter themselves into ideologies and ally themselves with coward publications.

    Efforts to integrate evolutionary psychology into “behavioral” economics look farcical, in their current form. I’ve been exposed to economic professor-think a lot lately, for reasons I won’t get into, but the underlying tone of positivity is what’s most striking. It’s like reading reason.com. “Everything is in fact right with the world” is the overwhelming, underlying message of neoliberal/libertarian/economic think. Many principles they elucidate and understand are true-ish, but there’s a lot to rebut and contradict. It’s weird we automatically accept everything in a tin-pot dictatorship will be corrupt as fuck, but just not here! Market forces at work! GOOD!

  • 20. Josephus P. Franks  |  September 25th, 2009 at 12:23 pm

    Sadly, economic orthodoxy today is much the way it was during the 20s and 30s. Dead wrong and deadly. That is, to non-bankers.

    Everyone is taught to have a anti-deficit bias because they mistakenly assume a federal budget is the same as a household budget. Not so.

    Educate yourselves here http://www.newamerica.net/publications/policy/fiscal_austerity_trap and here http://counterpunch.org/auerback09152009.html

  • 21. aPeasant  |  September 25th, 2009 at 1:28 pm

    Forget about it Joseph. You can’t educate anyone about economics because it’s not science it’s religion.

    For every person who sees this there are twenty Rays(@14) who can prove mathematically the top 1% must live like Ferdinand Marcos for the rest of us to live like the bottom feeders we are. It’s called Stockholm Syndrome.

    Ames thinks that violence is the only chance. Perhaps he’s right. I think it’s too late. The Dark Age is here.

  • 22. Boris Nemtsov  |  September 25th, 2009 at 1:55 pm

    Ames wrote about the 1998 Russian crisis a month before it happened. He’s probably right about this too. Pizdyets.

  • 23. Quadrillion Dollar Man  |  September 25th, 2009 at 2:00 pm

    You have to be an astronomical moron to want to educate people about the orthodoxy of fiscal austherity when the Federal Government is running a 100% percent budget deficit. (As in, the feds are spending 100% more than they are collecting in taxes.)

  • 24. porkers-at-the-trough  |  September 25th, 2009 at 4:40 pm

    Very good… so let’s take it to the next level, it’s really ALL ABOUT POPULATION CONTROL. Now as everyone knows, the first rule of biological life is “there will be competition for resources” even if resources like a food source are abundent, the success of a population will grow, until that source is no longer abundent. Today in the world fully 1/3rd of the world is dependent on food fertalized by the Haber process
    http://en.wikipedia.org/wiki/Haber_process#Economic_and_environmental_aspects
    and as everyone knows, we are now in this insane exponential population growth curve, the evil Neo-Cons squandered the opportunity of the 1990s to address birth-control and nuclear non-proliferation.
    (Both of which issues detract from the authoritarian “Moral Values” theme that the amoral oligarchs keep and their media whores keep pounding down our throats, like the WashPost, NYTimes, Fox ‘news’, and other outlets headlining a doctor murdered in church as “Abortion Doctor Killed,” dehumanizing the victim as a quasi-criminal who performed “abortions.”)
    Also, the proto-Likudniks tried to ally with England and France to sieze the Suez canal, they can invoke ANY excuse to start a war. This of course is the model for behavior of the god of the bible, who repeatedly demonstrates his greatness NOT by keeping a rival tribe or society DOWN in population…. but by KILING that rival tribe or nation in the field, the better to soak the soil with blood, I suppose.
    And, in the final analysis, we (and our so-called “god”) are really just killer chimps: not only will we kill a rival troupe (much less inferior monkeys) to prevent them from robbing ‘our’ fig-tree, but we will go into a tantrum and ruin the fruit, if we can’t have it.
    Earth is an astronomical GARDEN OF EDEN – there is NO WHERE ELSE in the universe that we know of – out of BILLIONS of known objetc – where men or women could habitate FOR EVEN A SECOND in shirtsleeves & shorts – but the damn authoritarians in America – the Neo-Cons & Neo-Confeds – are trying their DAMNDEST to get us EXPELLED from our astronomical garden of Eden, under the eyes of a “god” equally as cruel, arbitrary, and merciless as the god of genesis.
    By THAT standard, the Chinese (who Exiled holds no love for) are almost civilized and restrained, at least THEY are doing SOMETHING about the insane exponential population curve that is wrecking the planet.

  • 25. Slavich  |  September 25th, 2009 at 7:20 pm

    You cover this issue like no one else in the media. Thank you.

  • 26. Allen  |  September 25th, 2009 at 10:52 pm

    @rick

    I dunno. I have had some experience with various economics professionals from the academic world. Most were pretty forward about how their work is, not entirely unjustifiably, viewed as voodoo science. The Micro guys scoff at Macro as basically a debate club with few valid or reliable conclusions, while they themselves cling to their world of over-simplified (but at least mathematically quantifiable) models of human behavior.

  • 27. Plamen Petkov  |  September 26th, 2009 at 2:00 am

    great article but it needs some serious reediting and cut down in length. Ames essentially repeated the exact same thing 10 times in a row. What, do you have a specific word quota you gotto keep?
    I coulda put it in 1 sentence: too much money causes inflation so now they wanna take a few off to keep the value up. End of story. But since this is the Exile you have to go on a ranting spree. Too bad.

  • 28. Fissile  |  September 26th, 2009 at 8:35 am

    So, why no American revolution? For starts, most people can still manage to live under a roof, even though they don’t own it, and probably never will. They can still eat there fill of subsidized hydrogenated fats and carbs. They can still drive a car, although they don’t own it outright. They can still watch cable, and visit a doctor. The “system” can still provide all these things. Bottom line is that there are almost no truly independent people left in the the USA. How many people today can live off the grid? Back in the 1930′s millions could. Americans continue to go along with the teetering system, not because they are incapable of seeing the problems, but because they have no other viable alternative.

  • 29. Flozzi  |  September 26th, 2009 at 11:08 pm

    Why doesn’t anybody else talk about Larry Summers’ previous “experience” in helping “fix” one major economy (i.e. Russia before the collapse of 1998)? That’s actually interesting and should be mention more in the MSM.

  • 30. wengler  |  September 27th, 2009 at 8:41 am

    When the Soviet Union collapsed plenty of people still went to work even though they weren’t being paid, thus avoiding a really absolute breakdown that would’ve taken decades to recover from.

    In Argentina when the factory owners and their capital fled overnight leaving the country bankrupt and leaderless, many of the factory employees eventually wandered back and started operating the factories again without resorting to resource hording or disastrous liquidation.

    The collapse of private enterprise in the US will simply destroy parts of the country. There are industries in place to quickly liquidate and security in place to make sure big empty buildings stay empty and people don’t go back to work. It began with Reagan’s assurances that white people would be rich and the government would forever protect their white wealth from the blacks/hispanics/”ethnic whites”/unions/poor/drug addicts and that social outcomes to any group of people other than the white elite did not matter one iota. Your granny got cancer? Too fucking bad that you weren’t smart enough to concoct a Wall Street confidence game to get millions to pay for her treatment. The productive economy was replaced with sociopathic con games like leveraged buyouts.

    Of course the sickest part is that these teabag/Ron Paul hard money types probably love this dollar draining even as it basically ensures their continued debt slavery until the day they die. The insurrection/rebellion/change or whatever you want to call it is going to be centered around this personal debt. This sort of system may have worked well in remote regions where people had to go to the company store, but among the hollowed out remnants of the middling class is going to come those with very little left to lose but their chains.

    I don’t know if the current proto-police state is yet effective enough to start picking them off one by one, but I’d guess there’s a good five or ten years still to see which way this thing turns out.

  • 31. fajensen  |  September 27th, 2009 at 11:39 am

    The FED is planning to sell its ALT-A and Subprime-derived-crap Bonds back to the “Widows and Pensioners” – probably above the 95 cent/dollar they paid the banksters for it! How nice of them!! Time to get out of Mutual Funds, I guess.

    LONDON (Reuters) – The U.S. Federal Reserve is studying the idea of borrowing from money market mutual funds as part of eventual steps to withdraw stimulus, the Financial Times reported on Thursday.

    The Fed would borrow from the funds via reverse repurchase agreements involving some of the huge portfolio of mortgage-backed securities and U.S. Treasuries that it acquired as it fought the financial crisis, the newspaper reported, without citing any sources.
    This would drain liquidity from the financial system, helping to avoid a burst of inflation as the economy recovered.

  • 32. LOLZORG  |  September 30th, 2009 at 9:40 pm

    Carlos the Neocon wrote: “While I don’t agree with the reasoning or the conclusion of this article, I’m glad it was posted to prove to all the Obamaphiles here that the exiled isn’t an anti-neocon sanctuary or a “progressive” website. Go to Slate or Time if you want that shit.”

    First, the eXile is truly fucking Progressive. The retard Senate Democrats aren’t. If you don’t think the eXile is Progressive, look up the definition, retard.

    Second, an “anti-neocon sanctuary”? You don’t need a fucking sanctuary to hate the Neocons. Mention the name, “Cheney” in any society, and watch the bashing begin. “Anti-neocon sanctuary” is the most retarded thing I have heard. ROFL! LOLZORG!

    Third, the eXile is rabidly anti-neocon and justly so. Check out all of their articles involving neocons. Ever noticed how neocons are always being bashed?

    But you are right about one thing Carlito. The word “neocons” no long needs to be capitalized. Thank you for the entertainment. Please, come again.

  • 33. Waiheke Kiwi  |  October 13th, 2009 at 1:22 pm

    Brilliant ! We have our “elitists” here who have tried to import the failed American free for all model to New Zealand with partial success, mainly the privatization policy,and big returns for property speculation and capital gains untaxed, plus keep the low paid workers doing essential work low paid,cause you can’t have much brains if all you can do is cleaning!(E.G. We have one free for all politician here who is still advocating a flat tax on all which makes the rich richer and the poor poorer because the provision of social benefit is hugely reduced,the Rich contribute a hell of a lot less, These guys spout this stuff like a Papal edict which is God backed truth!These same politicians high jacked a Labour Government in 1984 to import the disastrous American system but were belatedly stopped by the then prime Minister) Despite the massive disaster of this selfish every man for himself economics clearly exposed now by America they are still trying hard here to push it all the way 100%!The Mainland European social cohesion way fortunately for us has shown a socially responsible way forward which has been acknowledged by some of our politicians.

    If a country is in trouble its essential sacrifices must come from the top down.And the “Wealth Worship” Society must be dismantled.

  • 34. Ponter  |  December 7th, 2009 at 2:19 pm

    So the elite is looting a trillion from the regular person’s economy to avoid inflating the value of all that other money they looted. Well that’s all well and good, but inflation is the only way to generate new money to pay off the interest on that old money. Sooooo … someone needs to get hosed for the elite’s plan to happen. Given the numbers we’re talking, sounds like whole nations are going to get hosed. So, is this really likely, given all the semi-elite who are going to moan and groan?

    In other words, someone is not going to get their loan paid back, owing to a “lack of liquidity.” Which means that a lot of people are going to lose jobs, and a lot of home owners, say, are going to get foreclosed, and a lot of banks who aren’t the Too-Big-To-Fail-Banks are going to be allowed to go under. This also means they’re going to crash the economy big time. Of course, the true elite doesn’t care. They’ve already broken ground on their new mansions in China, India, Brazil, Indonesia, Jordan, South Africa …. They aren’t actually Americans, after all. They aren’t anything but, well, rich! But the underlings might still raise some objections.

    The alternative to this plan is for the elite to convert their dollars into something better — either another currency with an upside or into tangible assets — and let the dollar just drift off into the sunset, doing whatever, it doesn’t matter, it’s only a matter of time before it sinks, etc.

  • 35. ehswan  |  December 7th, 2009 at 5:12 pm

    This may not be relevant, but may be of interest. I’ve read that to spend $1 triilion would require spending $1,000 per second for 30 years. Kinda puts a $ trillion in perspective eh? Further I’ve read that we (USA), will have to borrow $5 trillion in 2010, That’s $150,000 per second. That means the richest, most powerful country IN THE WORLD has to borrow $150,000 a second just to keep it’s head obove water. INEXPRESSABLE!

  • 36. RB  |  February 11th, 2010 at 7:05 pm

    You are one smart AND funny writer… I had no idea Summers was such a scumbag, right along with the rest of them… the $1 billion rape is recorded at http://en.wikipedia.org/wiki/Lawrence_Summers.

    BTW, this has everything to do with ‘trickle-down’ Reaganism, which is about tax cuts and real suckers who believed Reagan even though they wound up working longer hours for less pay. Reagan also ruined education and got idiots saying things like “Obama and his super-rich, lying Democrats are Marxist rapists, and their single goal is wealth transfer and power.” Reagan was extremely RIGHTWING compared to them. Weird thing is that some dumbfucks still believe that Reagan had nothing to do with the financial crash, and that Bush had nothing to do with losing 2 wars.


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