Even the Chinese Know It

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Editor’s Comment:

AUSTERITY MEANS “PROTECT THE BANKS AND SCREW THE PEOPLE”

The Financial Times ran an article 2 days ago about the Chinese being encouraged to spend more aand save less. I’m no fan of China’s political system, or even its economic policies (which come to think of it are the same thing, as Von Mises points out). As we look around the world and see Iceland prospering, China’s growth slowing to a mere 8% while our REAL GDP is still negative or by the reckoning of most economists, headed into downward territory. These propering countries who have concentrated on stmulating the rate of commerce (i.e. the economy) are the countries that are reducing debt (Iceland is now at the point where more than 25% of household debt has been eliminated not with spending fiscal stimullus money but with pressure on the idiots that got us into this messs- the banks.

Then look at the countries who are effectively governed by the banks, directly or indirectly— like US and Europe. They stand in stark contrast to Iceland and China. We are headed into what is called a “double dip” recession as though we would have hands up with ice cream cones in them, but the truth is that these recessions is literally taking food, medicine, and clothes off the table while they send their children into schools that are no longer able to teach and are located in neighborhoods that are less safe from criminal activity and the occoasional warehouse fire all because of “austerity.” Such neighborhoods are also less familiar and less appealing than the ones they got thrown out of after being tricked into using a home in which generations of their family grew up as the source of cheap capial encouraging, cajoling and pushing them with literally midnight visits to get them to sign on the dotted line to purchase a defective, fraudulent loan products whose purpose was to fail.

As we look at those countries who have adpted the politics and economics of austerity (“less spending” or “spending cuts” as it is known in the U.S.) the consequences could not be more clear — austerity, spending cuts, less spending, get the government out of the way are all slogans  that are leading us into disaster. And they are all spoken by people who are owned and controlled by the banks. And at the risk of offending my readers with political statements, Obama was exactly right when he said that the purpose of government was not to turn a business profit like Romney said he did (my sources tell me that Mitt was a figurehead running for president and they were making him look good, not that he was actually of any value). Obama correctly points out that government’s purpose is to maintain a society in which everyone gets a fair shake and a fair shot at the brass ring. Thus government is not for the rich who already got wealthy but for those who have not yet  achieved wealth. And this is because history teaches that no society has ever endured without a strong middle class.

This country needs to revive its economy by having more people spend more money. The obstacles to that are that too many people have no money, no  credit and no jobs. This is the time to divert the corporate welfare of farm subsididies and oil subsidies and the like to those programs that will give all our citizens a fair shake and a fair shot at success.

Like Iceland, the way to increasing the value of our currency, the way to prosperity is to reduce household debt. And the biggest item here that not only decreases household debt but increases household wealth is to return the homes that were wrongfully foreclosed and not to give a pittance of money to the victims with a slap on the wrist to those who stole the home with a credit bid when they were not only not the creditor, but they had never invested a dime in purchasing the loan. That used to be illegal. Wait a minute, it still is illegal. So why are we allowing the banks to continue this charade and why does the government, including Obama’s administration, drag its feet in taking apart these monsters that destroyed our economy? Why is the administration assume that the 7,000 OTHER banks and credit union wolld not prosper and enter into tacit agreements to keep the government afloat while we wait for the stimulus to take effect?

There is no expert or pundit that says we are wrong. All the banks have been able to do is to roll out doomsday sayers who say that if we follow the law we will be headed for disaster. Well take a look.  Disaster is here. And the Dow Jones Industrial Average is not a proper indicator or substitutute for people who can’t put food on a table that is now located in a dwelling that the rest of us would not even consider — their car.

We choose instead to protect the banks at all costs and we call that austerity because where else is the money going to come from except the banks who siphoned it out illegally? That is our policy, our politics and our economics. And while our soldiers risk life and limb because their country called them to duty, their families were being foreclosed, some at the precise moment they were taking a shot in the leg or heart for us. Is this the society we sent them to fight for?


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