Sunday, September 28, 2008

Is this "Socialism for Wall Street" or Something Far More Sinister?

Not far from America's financial epicenter, universally known as "Wall Street," is a huge, empty crater where the Twin Towers of the World Trade Center once stood.
Within weeks of the disaster that annihilated those once-glorious free market icons, fear served as the justification for a panicked U.S. Congress to enact the so-called PATRIOT Act.
Without even seeing the text of the bill, the congressional herd mentality to "do something!" produced one of the greatest assaults on the American Constitution ever passed into law. Its odious impact on our liberties still remains today. And barring the miracle of a new Congress emerging with both courage and common sense, it will continue on for years to come.
And now we find ourselves 7 Septembers after 9-11, in a different yet all too familiar national media "panic."
"The experts" are telling us that the Congress must act immediately to bailout Wall Street, adding nearly a trillion dollars to the national debt. (The existing public debt alone figures out to be US$31,600 for every man, women and child in America, and this new demand will add another estimated US$2,300 for every American).
But wouldn't hindsight prompt us to think before acting this time around?
Welfare on Wall Street
I am not going to review here the immediate and past history that TV talking heads recite ad nauseum that leads to a media-induced national migraine. Instead, let's go back to the beginning.
Wall Street's name is a direct reference to a defensive wall that Dutch settlers erected on the southern tip of Manhattan Island in the 17th century. The area didn't become famous as America's financial center until the end of the 18th century, when 24 of America's most prominent brokers signed an agreement that created the New York Stock Exchange.
But now, in my humble opinion, it is time to resurrect that wall, at least figuratively, and certainly politically and legislatively - in order to defend America against Wall Street.
The garrulous Senator from Delaware, Joe (The Mouth) Biden made the news last week in saying that paying greater taxes was wealthy Americans' "patriotic duty." But even he could not foresee the dimensions of what would come next...
Yes, the "panic" came quickly. Lehman Brothers Holdings Inc. filed for bankruptcy protection. The government took control of AIG. Liquidity froze up. They're saying this could be the most dire market malfunction since the crashes of 1987 - or even 1929.
But the crash was not a surprise to everyone. Here at The Sovereign Society we have long been warning you individually and collectively for quite some time. We told you that the House of Cards was going to collapse - it was just a matter of when. And we have been offering sound investment alternatives to avoid the disaster.
What Lies Beyond the "End of an Empire" Closeout Sale?
"The financial market crisis of 2007 may be remembered as the beginning of the nationalization of a large part of the financial system." So wrote Floyd Norris in The New York Times. (Dec. 14: A Worrisome New Wrinkle in Bailouts).
Norris also noted that it was foreign governments' billion dollar "sovereign wealth funds" that came to the rescue last year: "It took a [Singapore] government bailout to shore up was Citigroup that got [Abu Dhabi] government aid to help recover from its bad investments."
Now we are told that the United States government, headed by a Republican president, must create its own US$700 billion sovereign wealth fund (or sovereign debt fund) to rescue us once again. This fund must buy up an untold amount of investment vehicles gone bad - home and other real estate mortgages, sub-prime derivatives, exotic instruments few understand and no one seems able to evaluate - except by calling it "junk."
And all this, only weeks after Congress adopted a US$300 billion housing bill that was supposed to solve the crisis!
If It Looks Like a Duck and It Quacks Like a Duck...
Bank bailouts may or may not be necessary to avoid a major economic recession, but government owning private businesses and banks smacks of fascism.
Yes, dear readers, if you enjoy reality TV shows, you'll love the reality of the same kind economic fascism once promoted by Mussolini, Hitler and Juan Peron, among other economic crackpots. Hugo Chavez, anyone?
America, welcome to "backdoor fascism."
Added to all their other horrors, these fascist leaders put their national economies under government control without outright confiscating the means of production.
Fascist governments nationalized key industries - especially banks - managed currencies and made massive state investments. True, fascist economies were based on private property and private initiative. But these were contingent upon agreement with and service to the state.
The industrial and business aristocracy of a fascist nation often put the government leaders into power. In doing so, they created a mutually beneficial business/government relationship and power elite.
Have you checked how much Wall Street has donated to both Democrats and Republicans in Congress who are now writing the new emergency bailout laws?
Fascist regimes were governed by groups of friends and associates who appointed each other to government positions. They then used power and authority to protect their friends from accountability. Fascist governments instituted state-regulated allocation of resources, especially in the financial sectors.
"Oh, but that can't happen here," you protest.
Hey, folks, just look around. Isn't any of this beginning to appear sickeningly familiar? What is past is prologue!
At Least Someone Out There is Making Sense
Newt Gingrich is one of the few urging Congress to step on the brakes in this US$700 billion bailout plan,
In National Review online, former speaker of the U.S. House of Representatives, Gingrich writes: "Congress was designed by the Founding Fathers to move slowly, precisely to avoid the sudden panic of a one-week solution that becomes a 20-year mess."
In an NPR radio interview, Gingrich said he thinks the bailout plan is "just wrong," and that "it's likely to fail, and it's likely to make the situation worse over time."
Will America ever Wake Up and Smell the Totalitarianism?
Wouldn't it be unusual - even heroic - if the two current candidates for the U.S. presidency stopped their irrelevant hollering at each other? If they dropped their absurd daily nostrums that even they know will never become law?
Isn't it about time that they cancel their campaign whistle stops and return to the U.S. Senate Chamber, (where, after all, they are both still members), and participated in a real debate? Perhaps about where America and the national economy truly should be headed - and what they would do about it?
If ever there has been a point in modern times when true leadership was needed, that time is now.

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