8 August 2009
The other face of Barack Obama - 2
The economic policy of the Obama Administration.
Barack Obama has now been president of the most powerful country in the world for over half a year. His swearing in was experienced as a relief - a breath of fresh air following the Bush-Cheney years. In a new series, DeepJournal explores some of the new president's major policy arenas. What is the practice behind the perception of America's new hero, President Barack Obama? In this second part: The economic policy of the Obama Administration.
A portion of that amount has already been distributed - not to Main Street, but to Wall Street. Roughly 180 billion went to AIG, which then channeled 13 billion to Goldman Sachs: '[...] the original plan to bail out AIG was concocted at a meeting held last fall, run by then Treasury Secretary Hank Paulson who, before becoming treasury secretary, had been CEO of Goldman Sachs. Also attending the meeting was Lloyd Blankenfein, the current CEO of Goldman Sachs. Also at the meeting: Tim Geithner, then head of the New York Fed', writes Professor Robert Reich. In the meantime Paulson became $200 million dollars richer, Geithner got to be Secretary of the Treasury, and Goldman seldom sees a loss these days: 'The winning % is what gets me... it's simply impossible'.
The U.S. Federal Reserve distributes the bailout funds, but allows no complete oversight of its activities. This while three-quarters of the American public are in favor of auditing the Federal Reserve. Congressman Ron Paul is now demanding to audit the Fed. On the way he is running right into the White House, which is proposing the exact opposite: 'The Obama plan would give the Federal Reserve new powers to oversee the entire financial system'. An MSNBC anchor says in his introduction of a discussion on Pauls plans [video]: 'The Federal Reserve, of course, having proven itself unreliable at best in monitoring the financial markets over the last couple of years. [...] The Federal Reserve still doesn't think they deserve to be audited. Even as they carry trillions of dollars of assets on their books, held against U.S. taxpayer money'. Ron Paul says of the Fed [video, 3:30]: They are the culprits, they create the bubbles and here we're giving them more power... This is allowing the fox to protect the henhouse. It just can't work. It's going to make things much worse'. Paul [video, 5:30]: 'The American people were very, very hopeful. That we have a new American president, a young guy making these promises. Now they're saying: 'It looks like it is more of the same'.
The sponsoring of the banks by the Obama Administration does not sit well with investor Jim Rogers. He says in an interview: 'For the people who get the money, George, it is going to make it better for them. But for the rest of the country and the rest of the world... No, it's not going to make things better. It's going to make things worse. We are in perilous times and he doesn't seem to understand that he is making things much worse'. Congressman Alan Grayson: 'Everybody's worst nightmares are now taking place because we are seeing the transfer of literally trillions of dollars of wealth from the taxpayer to the bad banks'. His questions to the Fed have not been answered and 'Bloomberg News is suing the Federal Reserve for this and other information under the Freedom of Information Act (FOIA)'.
Jim Rogers: 'It is astonishing to me that Mr. Obama ran on a platform of change and he's brought in people who caused the problems and are there now supposed to solve the problems'. He is most likely referring to folks such as -
It's not only the 'mortgaging of the future' through the spending of governement money on the banks that's catching criticism, but the so-called cash for clunkers program is also under fire. Turn in your old clunker and receive a 4500 dollar rebate on the purchase of a new car. Good for the economy. It immediately reminded me of my conversations with Albert Spits of the Frédéric Bastiat Institute. The French economist Bastiat is the one who came up with the parabel of the broken window. This theory says that a broken window pane is not a boon to the economy, despite the fact that it causes money to be spent and provides work for someone. For the money that must now be spent on the window could have been spent on something else. In this way you could end up being 'up 1', so to speak, instead of just breaking even.
Of course the owner of the old car receives the government-funded rebate once it stops running. In practice it is for just this reason that the cars end up having to be destroyed. Examples of this can be found online; 'Cash for clunkers: cool!' Analyst Peter Schiff looks on in amazement [video, 1:45]: 'We're taking out clunkers, cars that work, cars that were on the road, that are functioning... There is no debt, people have no car loans on these cars. And we're destroying them; these are valuable pieces of property. [...] Why are we giving people money to take out a car loan that they didn't have before? [...] The last thing we want is more debt'. He also points out that not all of that money ends up in the U.S. economy. Around half of new cars sold are of non US brands.
Steve Forbes, owner of financial publication Forbes Magazine, states in a headline: 'Obama Repeats Bush's Worst Market Mistakes'. Obama fan and billionaire George Soros says: 'I'm afraid that it's too much continuity between the Obama administration and the Bush administration as far as the management of the financial system is concerned'. What is the practice of Obama's economic policy? Banks that don't deserve it are being put on life-support, cars that still run are being destroyed, employees of banks that would no longer be in existence without government bailout money are getting huge bonuses, and on Wall Street profits are even being made on the crisis itself (a billion dollars) by assisting in the break-up of financial insurance companies.
1 April 2013
Albert Spits: Creëer je eigen financiële veiligheid
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26 September 2012
Belangenverstrengelingen ook bij Mexicaanse griepprik
28 August 2012
Daan de Wit (DeepJournal) interviewt Webster Tarpley op het Magneetfestival
27 February 2012
Albert Spits: 'ESM is monetaire staatsgreep'
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