Reposting some truth...

I don't usually put politicks on this blog but this is very good!

Financial Reform Bill Fixes the Economy ... Just Kidding!

from George Washington's Blog by George Washington

Congress, Bernanke, Geithner and the boys are patting themselves on the back for passing the financial "reform" legislation. Obama says it was "my policies that got us out of this mess." The glorious financial reform bill has fixed the economy. Just kidding! In reality, as discussed below, none of the real problems have been addressed.

The rule of law has not been restored, so - as PhD economist James Galbraith notes - the economy can't recover. Consumer confidence is plunging again because no one has actually taken the steps which would restore trustin the system. The real economy continues to bleed and unemployment continues to plague the economy, because the government is feeding the parasite and killing the patient. Main street continues to bleed because - instead of breaking up the too big to fails so that their dead weight stops suffocating the real economy (virtually all leading independent economists have said that the too big to fails must be broken up, or the economy won't be able to recover; and see this), the government has allowed them to get even bigger (and see this and this). Indeed, just as BIS warned years ago, bailing out the banks has simply spread their crisis into a sovereign crises ... and now the banks and governments are broke, and the entire fiat money system worldwide is imploding.

Deficit hawks" like top economic historian Niall Ferguson says that America's debt will drive it into a debt crisis, and that any more quantitative easing will lead our creditors to pull the plug. See this and this. Indeed, PhD economist Michael Hudson says (starting around 4:00 into video):

If the problem that is grinding the economy to a halt - too much debt - and if no one in the government, in either party is looking at solving the debt problem, then the answer is, we're going to go into a massive, go into a depression as far as the eye can see.

Yet the U.S. hasn't reined in its profligate spending. While modern economic theory shows that debts do matter(and see this), the U.S. is spending on guns and butter like debts are a good thing. As PhD economist Dean Baker points out, the IMF is cracking down on the once-proud America like a naughty third world developing country. (As I've repeatedly noted, the IMF performed a complete audit of the whole US financial system during Bush's last term in office - something which they have only previously done to broke third world nations.) On the other hand, "deficit doves" - i.e. Keynesians like Paul Krugman - say that unless we spend much more on stimulus, we'll slide into a depression. And yet the government isn't spending money on the types of stimulus that will have the most bang for the buck: like giving money to the states, extending unemployment benefits or buying more food stamps - let alone rebuilding America's manufacturing base. See this, this and this.

Nobel prize winning economist George Akerlof predicted in 1993 that credit default swaps would lead to a major crash, and that future crashes were guaranteed unless the government stopped letting big financial players loot by placing bets they could never pay off when things started to go wrong, and by continuing to bail out the gamblers. (Not only has the government rewarded the gamblers, bailed them out and let them engage in a new round of risky betting, but it hasn't even reined in credit default swaps.) Paul Volcker is warning that the watered-down Volcker rule (which won't even kick in for some time) won't prevent the next crisis. Similarly, one of the primary authors of the legislation - Chris Dodd - long ago said the billwouldn't prevent future crises. Shady accounting is part of what got us into this mess ... but as Citigroup Inc. analyst Keith Horowitz notes, banks are making huge amounts of money from an accounting rule that allows banks to book profits when the value of their own bonds falls. High frequency trading is wrecking the markets ... but isn't addressed in the new legislation. Neither is reforming money pits like Fannie and Freddie The Fed is warning of 5 to 6 years before the economy recovers, and "significant downside risks" and a possible slide into deflation. Big surprise ... the idiot Bernanke doesn't understand that liquidity was never the problem, he has continued the same behavior which got us into this mess in the first place. Bernanke and the Fed have caused widespread destruction to the economy (see this, this, this and this) ... and yet the Fed has been givenmore - instead of less - power.

The moron Geithner was largely responsible for the crash and prolonging the crisis (see this, this, this, this, this,this, this, this, this and this) ... and yet Geithner is being given more - instead of less - power."

Instead of becoming more democratic and more of a free market capitalist economy, the U.S. has become an oligarchy, a kleptocracy, a banana republic, a socialist or fascist state which acts without the consent of the governed. No wonder the American and world economies are falling back into the double dip of a very nasty downturn. And see this.