Tuesday, August 25, 2009



Hey, tough guy, free marketeer, get the government out of my life, if only people would show more personal responsibility types on Wall Street! Did put your employer through a tough patch by applying the latest “risk mitigation” techniques and creating a FrankenCMO out of a bunch of mortgages that never should have been made, dismissing out of hand the old adage that putting a bunch of small piles of excrement together can only result in larger, even more malodorous pile of excrement? Did you put your bank into insolvency by stuffing its portfolio with the aforementioned piles of fast rotting garbage that your classmates at Yale put together? Did you put the retirements of your fund’s shareholders on permahold by using the modern financial techniques you learned as a justification for loading their portfolios with the dyspeptic discharge of your frat brother from Columbia’s trading desk? Did you fall and suffer a figurative or literal owwy knee? Well, your worries, to the extent you ever had any worries, are over! Uncle Ben will remain at the ready to pick you up, dust you off, kiss your wounds, and make everything better! Your shareholders may have seen their shares go to zero. Many of your “lesser” employees may be out of work, and out of luck. Your investors may be looking for work as Wal-Mart greeters, but you won’t have to sell any portion of the east coast fleet of Ferraris. Uncle Ben will make it all better!

Obsequious Ben Bernanke has shown that he is willing to fit yet another supercharger to the printing press at the Fed and put uncountable billions of taxpayer dollars at risk in order to make life as easy as possible for the Wall Street types whose approval, and potential access to future lucrative employment, he so desperately seeks. By reappointing him as Fed chairman, President Obama provides yet more compelling evidence that the Obama administration is nothing more than a dissolute and rudderless extension of the Bush administration. “No investment banker left behind” neatly encapsulates the Bush/Obama policy toward the economic and financial world.

Of course, the experts, most of whom have been direct recipients of the Bush/Obama/Bernanke Succor for the SuperRich approach to financial policy, will scoff at my failure to jump on the Bernanke float at the victory parade. What would have happened, they sneer, if Obsequious Ben had not turned on the turbocharger and “saved” our financial system? The answer is we don’t know; there is no certainty that we would be wallowing in the dystopia of a ‘30s redux if Obsequious Ben had not sycophantically kissed the rings of his future employers and potential (“Can I come? Can I? Can I? Can I?”) dinner party companions on Wall Street. It is at least as likely that we would have been much further along on the path of recovery, hopefully with a set of players distinctively different, and more circumspect, than the walloping wonderboys, and their nursemaids in Washington, that got us into this mess in the first place, if the situation were just left to work itself out with the Fed providing only ample liquidity rather than regular morning, afternoon, and evening feedings with either fiat or taxpayer cash and micromanagement of the financial system. We also don’t know, but I would be willing to bet, and have done so by taking long positions in gold, oil, and TIPS, that Mr. Bernanke’s efforts to dry the tears of the tough guy, rugged American individualist types on Wall Street will lead to an utter debasement of our currency, a rampaging inflation, and a decided acceleration of what looks like America’s inevitable economic and financial decline and fall, all while providing only temporary economic relief, almost none of which will be felt on Main Street.

Let’s see: Treasury Secretary Preppy Timmy Geithner. Fed Chairman Obsequious Ben Bernanke. Change we can believe in, indeed.

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