[wordy as hell, but read it if you care about what little money you have left]
our descent into third-world-nation status is happening so much faster than even i in my darkest dreams could have imagined that it leaves me stunned and shaking my head in disbelief.
consider the two signal events of this past week:
1. the aig farce
so it turns out that, as a consequence of legislation not only (a) poorly and corruptly conceived; but then (b) deliberated and voted upon in criminal haste, previously-contracted bonuses were paid out to the aig folks with our goddam tax dollars--talk about the wrong thing at precisely the wrong time, huh?
so, what to do when your constituents are screaming for blood?
well, if you're our craven, inept, scared-shitless house of representatives, you figure the best way to make sure the blame doesn't come back to where it actually belongs is to (a) lie about it, (b) point the finger at the effect (i.e., the aig bonus recipients) instead of the cause (i.e., yourself), (c) draft and quickly pass new panic legislation in a lame-ass attempt to undo what was already done, and (d) hope the american people continue on their dumb-streak and buy it.
where do i even start with what's wrong with this picture?
how about with the chilling effect such interventionist legislation will certainly have on any company that has or will accept TARP or TALF money? i mean, if they do well in the future, is the wrathful congress gonna come after 'em later and take their bonuses away? seriously, what's the incentive on the part of the people who actually run these companies to (a) take the goddam money in the first place, and/or (b) stick their head up above water and try to shine when they're only gonna get it cut off? you can't save 'em and penalize 'em at the same time, you assholes.
or, how about the real problem: the fact that what the house just did--imposing an ex post facto tax on the bonuses of specific individuals--is clearly unconstitutional?
see, according to that pesky ol' constitution, there's two things congress isn't allowed to do--actually, before i go any further, lemme just go to the source and quote chapter and verse:
"No Bill of Attainder or ex post facto Law shall be passed." (Article 1, Sec 9.)
in case you're curious, a "bill of attainder" is basically any law aimed at a specific group of individuals (like the aig bonus recipients, for instance)--this was put in there to prevent the sort of kangaroo-court shit that's happening now; and ex post facto means "after the fact"--as in, congress retroactively taxing at 90% bonuses that were previously granted by self-same congress without the burden of said taxes.
so basically, our august house of representatives is ready to throw the rule of law under the bus in at least two different ways in a craven attempt to save their own individual and collective skins come election time. good god.
two questions remain. in the face of such populist outrage focused at aig, and faced with similar concerns,
1. what will the senate do with this mess?
and, more importantly,
2. what will our approval-craving, constitutional-law-professor president do when the bill ultimately comes across his desk?
buck stops here, barack--you don't get to vote 'present' this time.
2. but fuck all that; here's the thing you really need to pay attention to
ben bernanke, our depression expert and fed-head genius, announced on wednesday that, in an attempt to free up capital so banks can lend more low-interest money, he's gonna buy up not only all the mortgage-backed securities they wanna sell him, but all the unsold treasury bonds the government issues as well.
so basically from now on the government is gonna print all the bonds they wanna sell, and the fed is gonna print up all the money necessary to buy 'em. great.
this brings to mind, what--argentina? weimar republic? zimbabwe? madoff? [insert ponzi scheme of your choice here]?
whatever--upon this pronouncement by bernanke, three things happened dramatically, immediately and simultaneously (and i would know because i was watching both cnbc and my thinkorswim account at the time):
1. the market, in a burst of reflexive euphoria, went from -125 to +125 in about ten minutes
2. the price of oil jumped like a goddam motherfucker; and
3. the price of gold did likewise.
within a day (i.e., once the afterglow wore off and everyone had a chance to think about what this all meant), the market dropped like a rock--but oil and gold stayed way up.
see, the market understands that, when you keep printing more money, inflation is inevitable, so everybody with half a brain is gonna rush to buy inflation hedges like gold and commodities like oil, thus driving up the price of everything. [get ready for that, ok?]
basic economics, right? so why doesn't bernanke realize this? i mean, seriously, does he really think that, even if he frees up money to lend by buying up all that useless shit, any bank in its right mind is gonna commit its precious capital to long-term low-interest loans in the face of the inflation he's suddenly created?
sometimes the conspiracy theorist in me really does think they're doing all this on purpose--and this is definitely one of those times.
two words for anyone who still reads this shit: buy gold
