http://www.nytimes.com/2011/06/10/opinion/10krugman.html?_r=1
I posted this comment on the NYTImes 6/10/2011 on Paul Krugman's column, referenced above.
Since it was 200+ into the comments, I thought I would post it here.
________________________
Yes, the policies of protecting the monied is certainly harming America's Main Street, but the question is, what do they hope to achieve?
Years ago as I was trying to follow the money, even finding it didn't make sense. People are losing their homes, their livelihoods, their sanity, and there can be no rhyme or reason for these captains of industry to sit on assets they cannot get a reasonable return on.
Foreclosed properties cost the local governments tons of money in lost tax revenues along with the fact that many of these housing tracts essentially go fallow, become flop houses, and cannot possibly return anything to the people who own the deeds to the property.
Now I know that Paul isn't talking about this specific problem, but it all falls into the same thing, and it most directly talks to the people who are directly hurt by the attitudes of both these captains of financial institutions, and by the turnstile governmental policies of private industry leaders becoming public servants.
The problem is that this has been the policy of the United States Government since the beginning, where virtually any tycoon could simply go to Washington and walk right in and talk to the President.
The majorly rich were often called to public service for a period of time due to their expertise, but normally that expertise has always worked out to the advantage of the public servant, not the American people.
Now yes, there have been times when the advantage of the rich became an advantage to the poor too, but not often, and never actually became a benefit to the poor, but rather an lucky reaction afterward.
That is until FDR came along at the right time to do something for the people directly. And even then, as his programs were working putting people back to work and rebuilding the economy, the rich people started in on pushing back in 1937-38, forcing FDR to capitulate and turn towards austerity measures. This is like making a stew, but only cooking it long enough to get it bubbling and yet not cooking it long enough to actually eat.
An earlier example is the downturn at the beginning of the 20th century when the banks were simply not doing much for the people at all, and so the major bank owners decided to create the Federal Reserve and did so by putting out stories about the Money Trust they wanted to bust. The only problem was that the major bank owners WERE that Money Trust.
And yet, in 1913 the Federal Reserve Act was signed into law, creating a private business entity that not only prints out paper money but runs this country monetary policies without direct oversight by the Congress. An example of this policy is the latest round of Quantitative Easing in buying Treasury debt, hoping to bolster the job market when no other financiers are taking part.
So who's making out on this one? The Banks, or Bank Holding Companies? Well, yes, particularly the Bank Holding Companies because they have a sliding window of a few days to borrow Billions of dollars at extremely low interest rates, and instead of putting that money into the economy, as it was originally intended, the make short term bets with vast amounts of money, earning pennies per dollar, and they throw the load back into the government with minimal interest payments, and wait until the next window opens up and do it again.
And all of these people are in that 1% of the population that hold virtually all the money, so they can afford to sit and wait out almost any situation. Sure, they may not be making as much money as they would if they truly invested, but they'll make money with the money just sitting there. They virtually cannot be hurt, even if they were just throwing money off a cliff all day long.
So why would they want to budge? There will be very few massive returns on investment in a stagnant employment market, and we are well behind the curve on new technologies, so where's the impetus for their participation in recreating an economy without exciting new avenues with which to make money?
No, it is easier to play the market with a Billion here or there, and reap the returns and yet still not offer anything towards creating the needed new economy. And there's nothing the US Government can do about it, nor the politicians, because America is not in the business of telling business what to do.
So this will last for years, because for all the sameness with the Great Depression, we can't have a war to drive a new economy. We already have two, and they are a drain, not a blessing.
Comments