Monday, February 2, 2009

Response to Crisis - Kleptocracy

Obama has certainly done many good things since he took office. However, as I feared last year, his appointments in the economic field are proving disastrous. Timothy Geithner and Larry Summers were two terrible choices that represent a direct continuation of the utterly failed policies of Greenspan and Paulson.

A kleptocracy is a political system run by thieves. The only beneficiaries in the system are the thieves themselves, and the public is left robbed. At this point in American history, Wall Street appears to have taken over democracy completely, and is somehow able to dictate the terms no matter who is in the White House or in Congress.

A kleptocracy usually includes large elements of bribes, corruption and extortion, without which the government cannot function. Around the world it is often said that The United States has the “best politicians money can buy”. Indeed, that is how it is, and Wall Street has bought these politicians over many years now. Politicians cannot run their campaigns without these donations, so the relationship is unavoidably symbiotic.

Kleptocratic regimes are usually associated with countries such as Uganda and Congo, so why is the U.S. a kleptocracy? Because Wall Street controls the agenda and gets all the benefits.

We are now approaching the third or fourth bailout attempt with the exact same theme: outright taxpayer donations to failed Wall Street firms and banks and their stockholders.

Everybody can see that it’s not working, so why is the Obama administration suggesting another one of these bailouts: the bad bank solution!!?? The bad bank solution entails simply giving banks taxpayer money to cover their losses, with no strings attached. And believe me, that money will never be seen again. It’s going to go into a black hole of losses, built up by fictitious profits, but now exposed and imploded.

To engage in something so morally offensive and intellectually misguided as the bad bank solution only has one explanation: the system is totally corrupt. Why else would the government embark on a bailout that everyone knows won’t work?

I blame Timothy Geithner and Larry Summers for continuing the kleptocratic system. Their only concern seems to be the continuation of the supreme rule of Wall Street in American democracy. Geithner specifically said today that the current financial system must be preserved.

If they are going to rob the taxpayers, it would actually be better if they robbed the money and spent it on luxury goods. That would at least provide some jobs for people, or prevent luxury goods companies from having to lay people off. Maybe a “Thain renovation” would be appropriate?

Moreover, I advise that the winner-takes-all voting system should be destroyed.

No comments: