Wednesday, March 19, 2008

It is the new truth: if it's good for Wall St., it's bad for you.

Is what Anon posted as a comment yesterday. And he/she nailed it for the most part. And I hate that I agree with it. 10, or hell 5 years ago a statement like that would have been dismissed by me as some far-left, DailyKooklike statement of class envy, socialist bullshit. But it's not that.

I have no problem if someone makes billions of dollars. As long as they do it fairly, pay taxes on it and are not given an unfair advantage. That is not what is happening though. The Titans on Wall St. play in a risk less environment. They know that they can go ahead and bet billions on an outcome and they win either way. The outcome is realized, they win the bet. The outcome is not realized they win the bet anyway since Uncle Sam will be there with a bag full of money. It's like playing 21 and knowing that the Fed is next to you with a deck of cards to help you out should you ever need it. Dealer shows 19, you show 18, the Fed is there with a 3. You win yet again. Getting that card costs you nothing, it's a total freebie subsidy courtesy of Mr. and Mrs. Iidot, aka the taxpayers of America.

And what is even more disgusting is that these very same people are the ones touting themselves as capitalists. They are not even remotely capitalist. They are socialists looking for the government to prop them up at the slightest sign of trouble. If Wall St. were run like anything remotely resembling capitalism, Bear Sterns' office furbiture would be at auction right now and the Dow would be at 9500. Capitalism has winners and losers. That is the way the system works. It is the only way it can work. Without short term losers you cannot have a long term winning system. People like Volker knew that. And that is why he created the 1981-1982 recession. It hurt a lot of people, caused a lot of pain. But it also set the stage for 20 years of incredible prosperity.

And the defense used by Fed supporters is total bullshit. "Well if they hadn't saved Bear Sterns there would have been an economic meltdown" goes the reasoning. OK, so what? So the DOW would have lost 1500 on Monday. So what? If it is truly worth the 12,500 it's at now, it would have bounced back to 12,500. If it is truly worth 9500, then the 3000 difference is nothing but an artificial subsidy being offered by the Fed. And where did we last see this kind of phenomenon at work? Why it was the housing market in 2002. A $200K house magically became a $400K house overnight due to 1% interest rates. How's that working out for you Mr. Greenspan? History repeats itself, but holy shit I didn't think it would repeat itself within a decade.

And to add further insult to injury, in about 4 weeks time those vaunted stimulus checks will be coming. People who pay no taxes will get a $1200 tax rebate. Illegal aliens who file taxes with a plethora of stolen IDs will be getting a check for every ID they use, with mos of the money going to Mexico (I would love to see stats on money transfers to Mexico during the 3 weeks after the checks are sent, and I will bet it is at least a 40% spike over the same time period in 2007). On the other hand, people who dare make over $150K a year and pay more in taxes than many people gross, will be getting a big fat 'FUCK YOU' in the mail.

And that is the current state of things. Corporate welfare for billionaires on one end, regular old welfare for the poor and lazy on the other end. All paid for by those of us in the middle.

America, what a country.

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