Three Card Monte and Ben Bernanke as told by Kevin Williamson of the National Review

Today’s pièce de résistance. . .

Exchequer
NRO’s eye on debt and deficits
Is the Fed Pursuing Our Interest or Banks’ Interests?
by Kevin D. Williamson
Posted on December 01, 2011 4:00 AM

The Fed signals that it intends to hitch our national wagon to Europe just as Europe is going over the edge, and the Dow jumps 4 percent. Maybe I’m missing something.

[snip]

Congress should make it clear — today — that the Fed’s mandate does not extend to bailing out Europe’s banks and Europe’s governments. This is especially true after the secrecy and unaccountability with which it conducted the $7.7 trillion shadow bailout on top of TARP.

[snip]

One of the big problems at MF Global (as at Lehman Bros.) was off-balance-sheet accounting, using various bookkeeping shenanigans to hide the fact that liabilities were dwarfing assets. The United States government does that both in the obvious sense — pretending that future entitlement liabilities don’t really exist — but in a more subtle sense, too: Wealth isn’t abstract numbers. Wealth is real stuff: food, oil, steel, houses, people performing useful services, etc. You can flood the world’s financial systems with liquidity and create the impression of economic activity, but that does not create one automobile, pair of shoes, or bag of coconuts. You can finesse the economic metrics, but that doesn’t make you any richer.

Government spending in the United States (at the federal, state, and local level) is about 40 percent of GDP, and we’re borrowing 40 cents of every dollar we spend. We’re spending the money now, with promises of future benefits that amount to (literally) more than all the money in the world, and promising to pay off today’s spending out of future taxes, as though the future is not going to want to spend the money on itself. That is not a program for stability. Not in Europe. Not here.

Ben Bernanke and Timothy Geithner as presciently portrayed by the Coen Brothers in the 1987 film “Raising Arizona” :

 

Here’s the final word from history’s foremost economics Guru & Über Mensch:

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One Response to Three Card Monte and Ben Bernanke as told by Kevin Williamson of the National Review

  1. Gary Sevakis says:

    It`s true both the USA and Europe have spent themselves silly as a means for political appointments by the masses and for favors from well heeled benefactors. Much could also be said about the inefficient bureaucracies but privatization can be just as or more so in some cases and/or lead to uncontrolled monopolizations of services that should and can be effectively supplied by the government if run by dedicated competent individuals instead of politically correct cronies. Although this does not seem possible it has occasional occurred throughout the world.

    On the lighter side, not really, the Europeans are now trying to work out an agreement that would allow them to offer Euro bonds that would then let the turn on the Euro printing presses at which time we would have QE3 and then wishfully there would be no inflation. Not possible. This interim bailout may last a few years but end in disaster as the people in charge will not get their act together as in governing for the people and not mostly for their sole benefit. I`m predicting some sort of corporate aristocracy with theological overtones that would make George Orwell proud. I feel sorry for the kids. Sort of Looney Toons. That`s all Folks.

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