The Corruption of Capitalism

by Jack Lee

There is mounting evidence the US economy is barely ahead a meager 1% since the first dot.com bubble burst in 2000.  The latest dreary employment numbers underscore that reality and what I’m about to say next:   We’ve stalled our economy, and it’s no coincidence that we did it just as quickly as government (and debt) has ballooned.  

Government now represents nearly 23% of the nation’s economy in terms of jobs, fat salaries, loans and big spending.  It’s chilling to think this was barely 3% just 100 years ago.  Government spending and all the unfriendly business regulations that went with it, has damaged and perhaps forever altered, the necessary climate for a healthy, growing economy.   Government did it to us with layers, upon layers, of socialist-lite over-regulation and heavy taxation.   Of course you know, Obama and Ben Bernanke both have this fuzzy  theory that somehow printing more money (more debt) is good for us….better,  prepare for the next big bubble.

Borrowing a line from Morning Joe, “For all practical purposes Wal-Mart is a proxy for Main Street America, so it is not surprising that its sales have stagnated since the end of the Greenspan bubble.”

The banks and Wall Street have been the major benefactors of bailouts, not us.  They’ve leverage off this influx of unlimited capital by front loading U.S. Government Bonds to the point that have created a bond balloon and a false economy.  This will be 4th balloon since 2000.  Consider that each balloon soon exploded wiping out stockholders and robbing us of trillions in savings.  Now we’re headed into another and perhaps final balloon.  It will be the largest yet and it threatens to devalue the dollars and trigger a global depression.

Currently, only one major European economy carries more debt than us, …Greece.   This is insane.  It’s destructive!  And we are all at risk, not just the banks and Wall Street.   The gang of 12 behind the Federal Reserve bank are experimenting with our futures.  They’re using a radical Keynesian plan that is untried in all of global history.   My personal take is that nobody tried it, because it’s so obviously doomed to failure; it’s just another ponzi scheme.   But, they’re telling us don’t worry about the debt, don’t worry about the QE’s, don’t worry, don’t worry….Washington will make it all better.  They will make all the necessary adjustment over time.  Well, here’s a news flash…Washington has never made it better and time is not on our side.   We’re over $7 trillion in debt and growing!  Time is running short and Washington has shown no signs of reversing course;  Obama hasn’t presented Congress with a budget since he took office.

I understand that when we speak in terms of trillions it doesn’t compute with most people.  It’s just too much to wrap our heads around.  However, if you were to chop off some zeros and call the US gross national product a household income of $23,000 a year it’s easier to understand.   And if that were the case, then that would mean our household is carrying a liabililty of about $730,000 and this money is accumulating interest every year.   Imagine that your household is in hock for $730k and you’re going to live on $23k and then pay that down enormous debt, plus interest?  It’s not going to happen and yet every day we keep adding to the credit card debt by the thousands of dollars?

Come on, folks, this in nuts!   This is a household headed straight into bankruptcy and it can be no other way.  We’re a big economy and it’s going to take a concerted effort to tear it down, but in another 2-4 years it will be torn down and with it will go the world’s greatest economies like a house of cards.    Yes, it’s that serious!  But, don’t take my word for it.  Read up!  There’s a ton of easy to follow books on this subject written by some of our best and brightest.

You want an example?  Here it is:  David Stockman’s book, “The Great Deformation – the destruction of capitalism in America.”

Here’s a snippet of what is in his book: “Defying right- and left-wing boxes, David Stockman provides a catalogue of corrupters and defenders of sound money, fiscal rectitude, and free markets. The former includes Franklin Roosevelt, who fathered crony capitalism; Richard Nixon, who destroyed national financial discipline and the Bretton Woods gold-backed dollar; Fed chairmen Greenspan and Bernanke, who fostered our present scourge of bubble finance and addiction to debt and speculation; George W. Bush, who repudiated fiscal rectitude and ballooned the warfare state via senseless wars; and Barack Obama, who revived failed Keynesian “borrow and spend” policies that have driven the national debt to perilous heights. By contrast, the book also traces a parade of statesmen who championed balanced budgets and financial market discipline including Carter Glass, Harry Truman, Dwight Eisenhower, Bill Simon, Paul Volcker, Bill Clinton, and Sheila Bair. ”