SELF-ABANDONMENT OF THE SYSTEM
Bernanke's re-selection leads to an Obamageddon
By Artur P. Schmidt
[This article published in the German-English cyber journal Telepolis 8/5/2009 is translated from the German on the World Wide Web, http://www.heise.de/tp/r4/artikel/30/30869/1.html.]
The banks are seemingly on the Victory Street and taxpayers face bankruptcy. That is Ben Bernanke's summary of the current economic crisis. After a five-month stock rally, the S & P Index shot over the 1000 point mark for the first time since October 2008 at the beginning of August 2009. This was triggered by the greatest money-printing orgy in history.
This rally proves enormous stock profits can be pocketed in the midst of a worldwide economic crisis. But at what price? The price is the self-abandonment of a system that can only maintain itself by a bubble, this time in government bonds, from the ultimate system collapse. Bailing out banks by printing money has led to several big banks standing again on a firm foundation. This was described as shifting the costs of the failure of banks to the general public. Bailing out banks = expropriation of people!
OBAMAGEDDON ANTE PORTES!
Paulson, Bernanke, Summers and Geithner are the architects of the policy of easy money who have learned nothing from the mistakes of the past. Didn't extremely low interests trigger the housing bubble, the Chinese stock bubble and then the boom on the raw material markets? There should be a debate around the dismissal of Ben Bernanke and dissolution of the Fed, which instead was recently outfitted with more power.
Thus Obama's political fate seems sealed because he may experience his whole personal Obamageddon without the correction of his economic policy. The money given to banks does not reach the economy. Instead more and more regional banks go bust. The credit crunch strikes more and more medium-size businesses with full force. Banks even declare that businesses only receive credit when they massively reduce their personnel.
QUASI-MONOPOLIZATION OF THE WORLD OF BANKING
The winners of the gift orgies in new money are Bank of America, JP Morgan, Chase & Co and Goldman Sachs. The losers are the non-bank businesses and their employees. Only the coffers of banks were filled with the inflation of the Fed balance, not the coffers of businesses that create jobs. What this means is less competition in the banking sector, a quasi-monopolization of awarding credit and control of the interest level and interest margins.
However the economic recovery cannot occur without a free middle class not plundered by banks. Without an immediate correction in Federal Reserve policy, the US economy may pass over again into free fall. The 2nd rocket stage of the crisis will be ignited. Civil war conditions could occur, not only a great increase of criminality, if the justice gap and the assets disparity are not closed by a new economic policy, a Second New Deal.
HYPER-DEPRESSION IS UNAVOIDABLE
The more the mass media shouts that the economic crisis is over; the more incredible and untrustworthy becomes the scenario. The same blind fliers who did not see the crisis coming are now announcing its end. The labor market will continue to be afflicted by mass layoffs. This allows the profits of businesses to soar without strengthening the mass purchasing power. Even if the gross social product rises again, Americans will have less in their pockets and many will have nothing. The gigantic US deficits will lead to further cost-savings that will drive unemployment to an all-time record. Commercial real estate will be vacant for years. Foreign countries will be less and less ready to finance the US debt machine, which ultimately will lead to higher interests and more dangers for the economy. Therefore the Great Depression of the 1930s may be surpassed by the hyper-depression of the first and second decades of the third millennium. Welcome to Bernanke's debt apocalypse!
"The Quiet Coup" by Simon Johnson:
"Is This Really the End of Neoliberalism?" by David Harvey