Putting Out the Fire With Gasoline

[babylonsister]

http://www.smirkingchimp.com/thread/13574

Putting Out the Fire With Gasoline
by Michael Fox | March 20, 2008



Two hundred billion - here, two hundred billion - there: before you know it we’re talking about a lot of money! When I introduced you to the Weimar dollar, the government’s proactive devaluation of the currency had just begun. On February 5, Congress and Bush approved a plan to “stimulate the economy” by distributing tax rebates of just $600 to millions of middle-income taxpayers. To each taxpayer, of course, it’s a drop in the bucket that will neither change their lives nor stimulate the larger economy, as the effect of merely printing all that money will be to devalue the currency, thus creating inflation in the most basic imported commodity (oil), and in the end, that money will, therefore, end up in the hands of the oil companies only. Meanwhile, the damage to the currency will have begun.

Then the Federal Reserve announced a $200 billion swap of government treasury bonds for the (valueless) bundled security funds being held and traded by large financial institutions. More dollars created from thin air, and once again, reducing the value of the currency. Nevertheless, Wall Street investors reacted jubilantly. For one day. Reality then set in, and investors immediately started dumping stocks; trying to take profits off the one-day spike.

This weekend, the Bear Stearns debacle: Once again, the Fed creates $30 billion for JPMorgan Chase to take over the insolvent entity, the only real asset being the Bear Stearns Corporate Headquarters on Madison Avenue. Twelve months ago, the stock value alone of Bear Stearns was in excess of $22 billion. JPMorgan is purchasing it for roughly $300 million, and a billion more if they want the office tower, though, frankly, why bother, since after they lay off the 14,000 employees of BS (how deeply ironic, that), who’ll staff the building, anyway?

So, The Dow jumped over 400 points in one day, then, realizing the really damnable awfulness of this whole transaction, I have never used this word before in a column here - but this is the first blatantly transparent transaction that qualifies as purely fascist, the complete integration of government and corporations – not nationalizing the bank when giving it our money, but just using OUR dollar to enable their massive acquisition. This begs two important questions: First, why does the 2nd largest American bank, JP Morgan Chase, need the government’s money to guarantee anything they buy? Are they so unable to finance it themselves? And is the entity they’re purchasing so dodgy that it’s uninsurable? Second, if the Fed is putting up all the money, why isn’t the Fed getting Bear Stearns? In other words, why isn’t it being nationalized, if only so it can be placed in receivership until it has been set right, and then spun back off as independent and the money returned to the Fed?

The questions, of course, are rhetorical. We know the answer to both. It is the realization of the corporatization of the United States, and the first fully flowered fascist daffodil of March. (No slur meant to daffodils)

snip//

Benjamin Franklin said, “Money makes money, and the money money makes, makes more money.” Franklin never did it with his printing press, however. This is so very much not what he had in mind.

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[MISSDem]

1. It is all very scary and goes hand in hand with this article:

http://commercialappeal.com/news/2008/mar/17/david-s-broder-we-dont-have-time-to-shilly/