Thursday, 9 October 2008

How To Solve the Financial Crisis: Get Rid of the Liars

By George Washington

After 7 years of lies from Bush, Cheney, Pelosi and the gang, people have stopped believing them.

As Ralph Waldo Emerson said:

"Who you are speaks so loudly I can't hear what you're saying."

Its like a thief who has been arrested 5 times for burglary. Even though he says all the right things to the judge at sentencing, the judge is still going to throw the book at him.

If the thief is appointed to head a government commission on corruption, do you think people will have confidence in the commission or its proposed actions? (Paulson was the head of Goldman Sachs when they sold huge sums of mortgage-backed securities called collateralized debt obligations, which are part of what caused the financial meltdown).

Paulson, Bernanke, Busy, Pelosi and the gang may be saying nice things about fixing the economy, shoring up the financial system and helping American citizens, but people don't believe them anymore. They've been proven liars one too many times.
http://georgewashington2.blogspot.com/2008/10/how-to-solve-financial-crisis-kick-all.html

The ex-President is right. Ordinary investors have lost confidence in these people. Their schemes seem targeted to saving the high end of town rather than solving fundamental problems. In an earlier post he mentioned that:

The crisis will deepen unless real productive manufacturing and service jobs return as the foundation of our economy, honest and transparent accounting is used, and the government stops gaming the system for the benefit of the wealthiest 1%.

The US and world economy has been torpedoed through the use of leveraged debt. This fake money system has now turned bad. A good solution, advocated by Webster Tarpley (and others), is to completely abolish the leveraged derivative market, to make the contracts null and void. If this phony betting system is simply wiped from the books a great weight will be taken off the real economy. This unproductive money system, created out of thin air for the benefit of the rich, can be dispersed into thin air once more.

The current crisis really has little to do with defaulting mortgages. At the centre of the problem are the financial games played upon these debts by the banks with money they did not have. If the US government allocated the hundreds of billions directly to cover US households, along with the appropriate financial policies, then the defaulting mortgage situation could be contained. The 700 billion bailout is only to cover Wall Street's shenanigans.

[Posted at the SpookyWeather blog, October 9th, 2008.]

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