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Wednesday, February 3, 2010

Obama Hitches a ride on Volcker's Vagon.

Since I couldn't put it better myself, I thought I'd use Clive Crook's logic (yes, a financial reporter who's name's Crook ... who says there's no irony left?):

"Suppose Goldman Sachs were to comply with the Volcker rule by relinquishing its bank status (which it adopted after the crisis was upon us, with the authorities' blessing, to avail itself of the full range of assistance). When the next crisis comes round, would the Treasury be able to let Goldman fail? The Lehman experience answers the question. Lehman was not a commercial bank. If Goldman, having reverted to non-"bank" status, could not be allowed to fail, what would the Volcker rule have achieved?"

Precisely. Even as President Obama mouthed the terms of the so-called "Volcker Rule", the obvious uselessness of it, to anyone who followed the shenanigans at Treasury and the Fed during the denouement of Le Debacle could clearly see, it was nothing, did nothing, changed .... absolutely ... Nothing. As stated in the preceding paragraph, Goldman Sacks America was already a non-bank, they changed its status specifically so that they could inject taxpayer funds and put the American taxpayer and the US's Sovereign credit-rating at risk and then to underwrite the outsize bonuses and salaries that the executives at Goldman's had, yes, literally Sacked, leaving the Company without the necessary capital base to adequately cover their insatiable greed-driven speculative bets.

And now with a nod and a wink, the President stands in front of the country and purports to indemnify the system against a recurrence of the crisis by doing no more than putting us back to the situation where these sharks can again run free to maul and savage the financial system for their own aggrandizement while simultaneously debauching the very system on which their feeding frenzy depends. This is the height of cynicism, as it depends, not only on the government simply pretending it's doing something, but on the reliance on an utterly stupid electorate.

It does for the financial "industry" what stumblebum Benron Bernanke's doing over at the Fed for the housing industry: propping up a failed Ponzi scheme to re-energize profits so as to enhance federal revenues (all those bonuses are most assuredly NOT tax-deductible).

In Charles Dickens' "Martin Chuzzlewit", when called upon to paint the American Eagle and asked how he would do so, responds, "I should draw it like a bat for its short-sightedness, like a bantam for its bragging, like a magpie for its honesty, like a peacock for its vanity, like an ostrich for its putting its head in the mud and thinking nobody sees it....

....and like a phoenix for its power of springing from the ashes of its faults and vices and soaring up anew into the sky!"

But right now our Phoenix is teetering on the brink of insolvency, like so many other municipalities and States in the country, who also depended on constantly growing tax revenues from property owners who overpaid for houses they were assured would keep going up in price. Government on every level, as well as businesses, shamelessly betrayed the American people in order to pad their own pockets. This is the paradigm which Obama's desperately trying to resusitate. The only place tieing us to Volcker's Vagon will get us is Barrack to the Future.
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