The only thing I like about rich people is their money.
-- Nancy Astor (1879 - 1964)
The problem created by this election is that there is only just so much lipstick available. But, there are plenty of pigs.
Witness the precipitous drop in the market, which will now be supported in our newfound brand of socialistic capitalism (“Disaster Capitalism) – in which what goes up must only go up. If it comes down, we have to make it go up, anyway. Even if we have to buy it to make it go up – with taxpayer’s money – our money. Yours and mine. Clearly, the natives are getting restless.
So, let’s see, President Paulson bails out his buddies at Goldman Sachs after letting his enemies lose everything at Lehman, then he engineers a $700 Billion dollar bailout Band-Aid that will be operated by a buddy at Goldman and allows fully 10 percent of that taxpayer money for golden parachutes. Not bad.
And, the first $250 Billion goes to Goldman, JPMorgan and Citigroup among others on the short list.
Wouldn’t you love to be at that party when the severance checks are handed out?
The fact is that no matter what Paulson does, no one will be able to stop this runaway train. We have Lehman's credit default swaps coming due at auction – which will identify the counterparties- and we may find out who’s behind curtain number two (could it be AIG, JPMorgan Chase or Citigroup?) which may tell us who holding another bag of $100-400 Billion in derivatives.
There’s also the hedge fund disaster - a two trillion dollar problem that has seen over $200 Billion in redemptions just this last couple of weeks.
There’s the money-market problem, which has caused the bankruptcy of an HMO and is rippling through schools and hospitals that used funds like The Reserve (which just failed) to maintain their checking account cash in order to make higher interest on the float.
Lest we not forget, pension funds are tied inextricably to Wall Street performance – across our entire nation. The merger of GM and Chrysler will be another bailout connected to that problem. The guess is that another 50 to 100 Billion will be needed there as well.
Are we finally arriving at the point of capitulation in the markets or are we witnessing the bailout of more than a few Wall Street characters who are benefiting from the carnage – yet again. A few disgruntled citizens are beginning to wonder why we want to push this form of “Democracy” on any other country – as we have in Iraq, to the tune of $3 Trillion of our dollars.
So, is this a bear rally that, like 1929 will take two years to finally reach bottom – while all of these manipulations simply protect a few insiders?
Is this capitulation (the technical term for a bottom), or is Main Street finally getting the picture and planning to repudiate these phony economic leaders like Paulson who is simply protecting his friends?
Counties, Towns and Villages across this country are already starting to head for the Chapter 11 exit – because they cannot pay salaries with no credit and failing investment accounts.
Since “all politics is local,” it is time for our leaders to grapple with the direction needed in this country. A grassroots correction in course for our Republic and the system of Democracy we believe in needs to be reviewed.
We need to stand behind our principles and regenerate our faith in our form Democracy. As with the term-limits debate currently going on – the people voted in a referendum and it needs to be respected. Not bought off.
Buying a seat in the City Council, buying the Mayor’s Office, or selling out your constituency for the promise of higher office – even buying your way into a political club for future endorsements – have all contributed to what King Paulson has now given us with the Bush imprimatur. Democracy for sale.