Op-Ed: The Illusion of Wealth
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Editor's Note: James Quinn is a senior director of strategic planning for a major university. James has held high level financial positions with a retailer, homebuilder and a university in his 22-year career.
"I'd gladly pay you Tuesday for a hamburger today."
- J. Wellington Wimpy
If you're old enough to remember the Popeye cartoons, you'll remember Wimpy and his promise to pay at a later date for a hamburger today. As Congress listens to the latest pleas for $25 billion from GM (GM), Ford (F) and Chrysler, I can’t help but think of Wimpy’s promise. The entire $700 billion bailout (plus the $150 billion of pork used to buy votes) is based on the Wimpy motto. Give me what I want today and I’ll pay you at some future date. This has become the motto of government and corporate and consumer America.
The most amusing part of CEOs begging Congressmen for $25 billion is the assumption that there's $25 billion to give. The United States has no money. It's broke. It already spent $10.6 trillion more than it has. That's a lot of hamburgers. Uncle Sam, the personification of America, may need to step aside for the new personification of America, Wimpy. 
Citigroup (C) has overshadowed the automaker’s “miniscule” request of $25 billion with today’s taxpayer bailout of over $300 billion. Over the weekend, when the Federal Reserve and Treasury do their best work, Vikram “Wimpy” Pandit asked Ben “Popeye” Bernanke for $300 billion - and promised that his worthless derivatives would be worth something next Tuesday. Somewhere, Charlie Prince is still dancing.
TARP: I Thought Turkeys Could Fly
"As God is my witness, I thought turkeys could fly!!!"
- Arthur Carlson, WKRP in Cincinnati
Arthur Carlson was the clueless station manager on WKRP in Cincinnati, a sitcom from the late 70s. His idea for a Thanksgiving promotion was based on his belief that turkeys could fly. Treasury Secretary Hank Paulson is the Arthur Carlson of our generation. Instead of dropping turkeys from a helicopter, he dropped $179 billion in bailout money. It had the same impact.
As detailed in the following chart, the first $125 billion was forced on the 9 largest financial institutions by Paulson on October 28th. Since that force-feeding, 21 other financial institutions have applied for -- and received -- an additional $34 billion from the $700 billion trough. AIG is a bottomless pit that has sucked $40 billion more into its vortex. Every company in America is trying to figure out how to get a piece of the action. American Express (AXP) and GMAC are converting to banks so they can get bailed out by taxpayers for loaning money to people who couldn't repay them. GMAC generated all of GM’s false demand over the last 5 years by providing financing to anyone who could generate fog on a mirror and sign their name on a loan document.
By any reasonable assessment, the Troubled Asset Relief Program (TARP) has been a miserable failure and a complete waste of taxpayer money. The basis used to ram the bill through Congress was the purchase of the toxic assets off of bank’s book, but not $1 has been used for this purpose.
Furthermore, the banks who have received the $179 billion have not made any loans with the money. Some are using the money to buy other banks. Their goal is to become too big to fail. Others, like Citigroup, have used the money to buy back bad assets they created to mislead investors.
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But what do I know? The only wild turkey I really know about is the bottled kind.
spent $10 Trillion more than it has. I believe it, but how did
you come up with that number?
(Or am I not including unfunded liabilities such as SS?)
-Jon
Our unfunded future liabilities are $53 trillion. We haven't spent the cash yet.
I want to expand on your statement, "We are heading down a path toward corporatism, where government merges with corporate interests."
This bridge was crossed a long time ago, in fact, you may remember that it was the bombs dropping on Baghdad in spring of 2003 that stopped the tech crash. Wall Street was bailed out with no-bid "emergency" war contracts back then. I'm afraid you, like most financial commentators, widely underestimate the inherent evil of our money-controlled political system. The Fed's puppetmasters care little for anything other than their money and they will stop at nothing, including killing more of our sons and daughters in a war, if that's the only way for Wimpy to erase his debt due on Tuesday.
I am one of those who still believes in America and the promise of its Constitution. I am willing to die fighting against corrupt government just as our Founding Fathers were. I like them, am willing to risk all my wealth and my good name to overthrow a government which serves itself before it serves the people. Remember it was Thomas Jefferson who said, "The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants."
Prepare yourselves, Americans. The day of armed rebellion against tyranny is close at hand. Target practice is the order of the day, along with education to erase the brainwashing we recieve on a daily basis from our corrupt, plutocratic media. This is not the America that George Washington risked it all for, nor is it the Union that Abraham Lincoln restored. Sacrifices must be made. Prepare, Minyans, prepare.
Agreed.
I opened my browser today and there was a Citi banner ad.
I and my children are being taxed to pay for the caviar and prostitutes, golden parachutes, and Internet advertising.
How long do they think they will get away with it?
The guillotine eventually found the necks of the aristocracy.
I think I'm going to charge that AR-15 and ammo to my credit card...
How are we supposed to get our leaders to do what we want them to do?
What to do? Simple enough -- Social Security has to be adjusted with life expectancy, and perhaps all the way to the amount of life expectancy after retirement as it once had decades ago.
COOL!!!
Anyway, the gold standard and defederalization of the banking system could solve nearly all of these problems.
If the banks don't have guaranteed funds via the Fed, they don't have the ability to lower rates; which, btw, is also the fed's fault.
The speculative credit created by these socialized (really privatized) elements of the financial system are what leads to people believing in 'easy money.'
If people were forced to take their own risks, and so were the banks, NO ONE would be giving out 'cheap' houses and credit.
If you are willing to entrust your life to someone, under the guise of 'oversight,' there is always someone willing to take it: http://mediacondom.com/?p=32
