When the Old Bad Becomes the New Good
What do you call it when investors are paid with cash taken in from other investors, rather than from investment returns? OK, now what do you call it when investors are paid with loans taken out from … themselves?
I don’t know, but we’re going to find out.
Welcome to the land of Bad Banks and the Home of Depraved. It's not quite as catchy as the Land of the Free and the Home of the Brave, but at least it's accurate.
Is Congress really considering leveraging its decades of experience running Bad pension programs like Social Security, Bad health insurance plans like Medicare, Bad Government Sponsored Entities like Fannie Mae and Freddie Mac, and Bad regulatory agencies like the SEC? Are they going to crown these achievements by chartering a Bad National Bank to aggregate the nation’s Bad loans where they can be managed under Bad accounting rules unavailable to Bad Wall Street miscreants?
Maybe so. Our tribal elders don’t appear sated propping up Bad brokerage firms, Bad car companies, and Bad homeowners. A Greek chorus of Bad economists is emboldening them to get Bad to the bone.
Are you amused or frightened that our political overlords are so comfortable in their sinecures that they no longer need to use misleading euphemisms and can actually call things what they are?
FDR used hard times to give us The New Deal. As this $900 million dollar accretion rolls down Capitol Hill, brace yourself for what history may one day call The Bad Deal.
Can this possibly be the victory that Progressives worked so long and hard to achieve?
Are We the People so flummoxed by the relentless only-the-government-can-save-us-now media campaign that we’re going to stand mute as this slow-motion train wreck unfolds?
You betcha! What the hell, if the Age of America is over let’s go out with a bang!
If Congress has the genuine honesty to label its handiwork Bad, let’s face our own shameful truths. The jig may be up but with a little ingenuity we Baby Boomers can probably keep the party going long enough to slip these mortal coils before the bills comes due.
Is there any doubt that tax-dodging sharpies at Treasury will successfully recruit the Chinese Communist Party to underwrite The Bad Deal? What else are these born-again Commies going to do with the trillions of dollars they’re sitting on, build a Navy so they can come over here and beat up their best customer?
After decades cringing in poverty, the Chinese people rose up to work their butts off filling the shelves at Wal-Mart. They did this because their dear leaders promise that, one day, they will live like Americans. And how will these laborers, whose wages and working conditions right-minded people fret loudly about, be compensated for their efforts? With Congressional IOUs!
Tell me again who the suckers are?
When it comes time to redeem these IOUs, our Chinese brethren are in for a surprise. A decade of double digit inflation is the mother of all debt relievers. While we’re at it, we’ll see who gets the last laugh after we’re done fleecing the oil sheiks out of their sovereign wealth funds. The inflationary debacle lurking around the corner will be a lesson in monetary policy they’ll never forget, even if we have.
There was once a workers paradise where comrades living in economic equality lamented "We pretend to work and they pretend to pay us." Was the former KGB agent being sardonic when he opined at Davos that "The entire economic growth system, where one regional center prints money without respite and consumes material wealth while another regional center manufactures inexpensive goods … has suffered a major setback?"
Not yet, Bucko! Because the manufacturing center of which you speak is tightly controlled by the same sort of single-party central planners that are rapidly being installed here in the U.S. The music won't stop until the Chinese people throw the bums out in the same way we ushered ours in.
Wouldn’t it be ironic if Bad debt ultimately brings democracy to China?
So go ahead, pass out subsidies to build new houses even though we have a glut of empty old ones. Re-engineer the Detroit car companies to build politically correct vehicles no one wants to buy. Roll out giant environmental make-work programs that make no economic sense. The Bad bank stands ready to lend you Bad money provided by Bad Chinese despots flogging their Badly overworked citizens on behalf of Bad U.S. consumers whose own Bad government will spend any sum to put off Bad times.
The recently rehabilitated Lord Keynes once responded to critics with the retort “In the long run, we are all dead.” True. But not before we Baby Boomers and our duly elected representatives finish sucking the financial marrow out of every credulous rube and unborn child we can find, both here and around the world.
Imagine how long Bernie Madoff could have kept the game going if he had his own money-printing press.