“Demand a property tax on idle wealth. Demand it NOW.” —Liam McGonagle
“Seriously, do you expect a better opportunity to extract concessions from your enemies than when they lay begging, bleeding at your feet?” —Liam McGonagle
In case you were in the washroom when ‘Jersey Shore’ was interrupted with this late-breaking newstory: Ben Bernancke just committed the U.S. to provide the European Central Bank (“ECB”) with an unlimited line of credit.
That’s right, a brand new bailout. Structurally along the lines that Business Insider had warned us about in September, but much more ambitious; that article had postulated a trifling $1 trillion, not the bottomless pit we’re actually being presented with.
The basic deal is that we hand dollars over to the ECB in exchange for Euros, the value of which, has become highly dubious to say the least. The ECB will in turn invest those dollars in large corporate banks to bolster balance sheets they themselves ruined through reckless underwriting practices and constant pressures for tax holidays and austerity measures.
|Boun Natale e felice anni nouvi, Mario!|
This is being billed as a stopgap measure to compensate for the fact that the genius architects of the Eurozone couldn’t be bothered to implement a fiscal coordination authority in their new currency. Must have seemed reasonable at the time. We’d seen the end of history, after all. Just like American civil liberties after 9/11, all the rules had changed. The new era of seamlessly integrated global markets had pushed the capitalism’s cycle of inevitable liquidity crises into the dustbin of history, right?
But is it really stopgap? While similarly available currency swap loans had been available for some time previous, the duration of the current arrangement (i.e., a 50% reduction in the interest rate) is through January 2013, and is unlimited in amount. Meaning that the commitment is bounded in no way by the current supply of U.S. dollars. So, at least theoretically, the U.S. will end up printing the dollars it will be obligated to provide incompetent European bankers.
When the implications of this development had finally settled in, and I’d had a chance to change into a clean pair of trousers and shower up a bit, I settled to thinking. Two paradoxically conflicting corollaries floated to the surface:
1. Nobody, I mean NOBODY, seems to have learned the lesson of the previous bailout regimes or Quantitative Easing programmes, namely that the size of the money supply in-and-of-itself is of distant, secondary importance to the circulation of currency. Or, to put it in layman’s language: BANKERS DON’T DRIVE THE ECONOMY, CONSUMERS DO.
2. The bizarre occurrence of one nation printing money to manage the fiscal problems of another demonstrates exactly the sort of international commitment and cooperation that would be necessary to curb the irresponsible corporate leeching that led to these problems in the first place. You know what I’m talking about, that old mantra of the defeatist traitor: “But if we try to regulate corporations effectively, they’ll just pull of stakes and move the show overseas!”
As this incident suggests, it is effective government that provides the necessary stability for corporations to exist. If so-called “populist” Tea Baggers in the House had the brains to realize this, they’d take this opportunity to make corporate elites pay their fair share of the burden: i.e., more historically reasonable income tax rates and a tax on idle wealth. Seriously, do you expect a better opportunity to extract concessions from your enemies than when they lay begging, bleeding at your feet?
Sadly, neither of these realizations seems likely to amount to much. This is the era of greasy hacks like Newt Gingrich are seen as “transformational leaders”  and the worthless empty suit Obama tries to slide turds like this past us whilst simultaneously telling the American people that their “moment is NOW“. To date, the most vigorous response I’ve seen on this issue has been Ron Paul, condemning the Fed for taking this action unilaterally.
Which, quite frankly, whilst being a step in the right direction, is nowhere good enough. Paul was asleep at the wheel on this issue in September, wasting our time with penny-ante Solyndra b*llsh*t. And nowhere do I see him calling for greater international government cooperation to curb the unaccountable multinational banks who are the primary beneficiaries of these abuses. No mention anywhere of any increased corporate oversight, or fair transaction or property tax on the parasitic financial sector that destroys 80 cents in GDP out of every $1 that we give them. Overall, even after grading on a curve, I just can’t give Paul any grade higher than a “D-”. Try harder.
 Newt’s constant use of the word “transformational” is equal parts insult, comedy and tragedy. There’s one reason that dried up old carpet-bagging whore never got “born again” into the Evangelical movement he so lustily courts on the campaign trail: He’d leave a toxic oil slick in the baptismal pool. The only thing Gingrish ever transformed is my dinner into vomit.
Another heaping helping of Hades, from Dystopia Diaries