Friday, September 26, 2008

Financial lifeboat drill


The market hasn't opened yet, but I have been suddenly blessed with second sight, I can see the future, and I see size XX-Large trouble brewing.

Since no mainstream news source will take notice of his statement, I will turn the remainder of this post over to Ron Paul, who I believe is still a candidate for president. A couple of days ago, he wrote (abridged; boldface emphasis added by me):
Dear Friends, Whenever a Great Bipartisan Consensus is announced, and a compliant media assures everyone that the wondrous actions of our wise leaders are being taken for our own good, you can know with absolute certainty that disaster is about to strike. The events of the past week are no exception. The bailout package that is about to be rammed down Congress' throat is not just economically foolish. It is downright sinister. It makes a mockery of our Constitution, which our leaders should never again bother pretending is still in effect. It promises the American people a never-ending nightmare of ever-greater debt liabilities they will have to shoulder. ...

The Federal Reserve System is actually positioning itself as the savior, rather than the culprit, in this mess!

• The Treasury Secretary is authorized to purchase up to $700 billion in mortgage-related assets at any one time. That means $700 billion is only the very beginning of what will hit us.

• Financial institutions are "designated as financial agents of the Government." This is the New Deal to end all New Deals.

• Then there's this: "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency." Translation: the Secretary can buy up whatever junk debt he wants to, burden the American people with it, and be subject to no one in the process. ...

Our one-party system is complicit in yet another crime against the American people. The two major party candidates for president themselves initially indicated their strong support for bailouts of this kind - another example of the big choice we're supposedly presented with this November: yes or yes. ...

The issue boils down to this: do we care about freedom? Do we care about responsibility and accountability? Do we care that our government and media have been bought and paid for? Do we care that average Americans are about to be looted in order to subsidize the fattest of cats on Wall Street and in government? Do we care?
When the chips are down, will we stand up and fight, even if it means standing up against every stripe of fashionable opinion in politics and the media?

Times like these have a way of telling us what kind of a people we are, and what kind of country we shall be.

In liberty,

Ron Paul


zazie said...

In French : "Bienvenue au Titanic" ; that is the answer some of us have given for two decades at least to those who complained, moaning "Mon Dieu, où va le monde?", about, schools, young people, "liberated" (???) sex-life, the number of abortions, etc, etc.....Their only solace seemed to be the wonders of modern technology and the affluent society they lived in ; That is why I am tempted to think, and say, that they are reaping what they gave sown.

Sebastian said...

Your blog has reached new heights with the ongoing commentary on the bailout - keep it up. Though I don't fully agree with you on the macro-economics, I love the harking back to classical political philosophy: a period of austerity will be good, for poverty teaches important lessons and puts wealth in a proper perspective; we have grown addicted to luxury and easy credit; the youth has been corrupted; the illegals will leave our borders; the cast of Gossip Girl should be thrown into the sound like Cicero!

Sorry about Chessie Cat - all good things come to an end.

leadpb said...

Paper wealth and paper debt won't survive trial by fire-- a gold standard is better than no standard at all. That gold bar icon on the right bar of your site always reminds me of this concept. Would it be as a weight on the neck of the financiers, or serve more like weight training?

Rick Darby said...


"Their only solace seemed to be the wonders of modern technology and the affluent society they lived in." Oui, c’est ça. Our young people grow up living with the latest video software, smart phones, personal networking Web sites, etc. before they have a chance to acquire any historical, philosophical, or spiritual understanding that could give them an outside perspective to keep their use of technology in its rightful place. Instead it becomes their central value, the thing they imagine gives life its meaning.


I've been delving into the classics in recent years, and maybe they have affected my thinking. Speaking of Cicero, one of the things that annoyed me about the HBO series Rome was its portraying him as a scheming, unprincipled weasel. From what I have read of real history, he was somewhat of a ditherer, never quite taking a stand for or against Caesar, and playing his cards poorly following Caesar's assassination. He strikes me as a philosopher at heart, caught in a web of intrigue between ruthless power-mad politicians that was beyond his natural abilities to fully understand.

Just the same, his knowledge of Greek philosophy and literature, his expressed principles, and of course his eloquence that has rung down the ages make him one of the great names in Roman history, perhaps too great a man for HBO's scriptwriters to comprehend. But then the whole series, especially the second season, seemed designed to portray everyone as nastily as possible.


To paraphrase William Jennings Bryan, "You shall not press down upon labor this crown of thorns, you shall not crucify mankind upon a cross of inflated paper currency."

leadpb said...

Here is an excellent banking/finance primer from the Mises Institute website:

I found it reader-friendly and quite eye-opening.