Welcome to the USSA

[H/T lewrockwell.com]

Once Upon a Time on Wall Street…

I thought I’d let the professionals tell you a little bedtime story. Things in our economy ain’t looking so hot right now, and stand to get worse before they ever get better, especially what with all the cooks in DC sticking their fingers in the soup.

So here’s the story, told with their words.  We join our tale just as the ties that bind up the golden kingdom are starting to fray and break…

[Chapter One]

Threatened by a “financial tsunami,” the world must consider building a financial order no longer dependent on the United States, a leading Chinese state newspaper said on Wednesday.

The commentary in the overseas edition of the People’s Daily said the collapse of Lehman Brothers Holdings Inc “may augur an even larger impending global ‘financial tsunami’.”

[…]

China’s central bank earlier this week cut its lending rate for the first time in six years, a move analysts said was aimed at bolstering the economy and the battered stock market.

“The eruption of the U.S. sub-prime crisis has exposed massive loopholes in the United States’ financial oversight and supervision,” writes the commentator, Shi Jianxun.

“The world urgently needs to create a diversified currency and financial system and fair and just financial order that is not dependent on the United States.”

[Chapter Two]

Henry Paulson and Ben Bernanke have saved us, for now, from a market meltdown – but at the cost of allowing the folks who caused the current crisis to keep ducking reality.

In the long run, guess who gets to bear that cost?

Please Help American!

DEAR AMERICAN:

I NEED TO ASK YOU TO SUPPORT AN URGENT SECRET BUSINESS RELATIONSHIP WITH A TRANSFER OF FUNDS OF GREAT MAGNITUDE.

I AM MINISTRY OF THE TREASURY OF THE REPUBLIC OF AMERICA. MY COUNTRY HAS HAD CRISIS THAT HAS CAUSED THE NEED FOR LARGE TRANSFER OF FUNDS OF 800 BILLION DOLLARS US. IF YOU WOULD ASSIST ME IN THIS TRANSFER, IT WOULD BE MOST PROFITABLE TO YOU.

I AM WORKING WITH MR. PHIL GRAM, LOBBYIST FOR UBS, WHO WILL BE MY REPLACEMENT AS MINISTRY OF THE TREASURY IN JANUARY. AS A SENATOR, YOU MAY KNOW HIM AS THE LEADER OF THE AMERICAN BANKING DEREGULATION MOVEMENT IN THE 1990S. THIS TRANSACTIN IS 100% SAFE.

THIS IS A MATTER OF GREAT URGENCY. WE NEED A BLANK CHECK. WE NEED THE FUNDS AS QUICKLY AS POSSIBLE. WE CANNOT DIRECTLY TRANSFER THESE FUNDS IN THE NAMES OF OUR CLOSE FRIENDS BECAUSE WE ARE CONSTANTLY UNDER SURVEILLANCE. MY FAMILY LAWYER ADVISED ME THAT I SHOULD LOOK FOR A RELIABLE AND TRUSTWORTHY PERSON WHO WILL ACT AS A NEXT OF KIN SO THE FUNDS CAN BE TRANSFERRED.

PLEASE REPLY WITH ALL OF YOUR BANK ACCOUNT, IRA AND COLLEGE FUND ACCOUNT NUMBERS AND THOSE OF YOUR CHILDREN AND GRANDCHILDREN TO WALLSTREETBAILOUT@TREASURY.GOV SO THAT WE MAY TRANSFER YOUR COMMISSION FOR THIS TRANSACTION. AFTER I RECEIVE THAT INFORMATION, I WILL RESPOND WITH DETAILED INFORMATION ABOUT SAFEGUARDS THAT WILL BE USED TO PROTECT THE FUNDS.

YOURS FAITHFULLY MINISTER OF TREASURY PAULSON

[H/T Lew Rockwell]

A Brazen Neocon

Bill Kristol, son of one of neoconservatism’s founder (and Trotsky’s deveotee) Irving Kristol, wrote about the proposed Paulson bailout today in the New York Times:

It’s not that I don’t believe the situation is dire. It’s not that I want to insist on some sort of ideological purity or free-market fastidiousness. I will stipulate that this is an emergency, and is a time for pragmatic problem-solving, perhaps even for violating some cherished economic or political principles. (What are cherished principles for but to be violated in emergencies?)  [Emphasis mine]

Herein lies the neocon morality:  there is nothing that cannot be perverted to serve our purposes.

What is the upshot of this rapacious philosophy?  The Telegraph’s Edmund Conway tells us:

When Treasury Secretary Hank Paulson announced that the world’s biggest economy was about to embark on the world’s biggest bail-out for its financial sector, the first concern economists had was about the long-term prospects for the nation’s finances and its currency.

Might the dollar now be vulnerable to a run? In the longer term, might this signal the beginning of the end for the dollar’s status as the world’s reserve currency?

[...]

“The magic trillion-dollar deficit is within sight,” says Simon Derrick, of Bank of New York Mellon, “The combination of the fiscal position and loose monetary policy is likely to be significantly dollar-negative. With an expanding supply of US paper they might want to hold something else as their safe haven, which might mean other currencies and might just as easily mean commodities such as gold.”

When a government opens the spending taps and borrows more, investors invariably take flight, fearing that assets denominated in those currencies will lose their value as inflation rises and the currency weakens.

But fear not!  Paulson and Bernanke are in control!  [No, really]

Federal Reserve Chairman Ben S. Bernanke said the U.S. economy will shrink if markets don’t begin functioning normally, joining Treasury Secretary Henry Paulson in urging skeptical lawmakers to quickly pass a $700 billion rescue for financial institutions.

“I believe if the credit markets are not functioning, that jobs will be lost, the unemployment rate will rise, more houses will be foreclosed upon, GDP will contract, that the economy will just not be able to recover,” Bernanke told the Senate Banking Committee today. “My interest is solely for the strength and recovery of the U.S. economy.”

Meanwhile  Bush is at the UN.  “Bush Tells Foreign Leaders U.S. Taking ‘Bold Steps’ to End Banking Crisis,” reads the headline.  And Paulson’s bailout plan contains this little gem:

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency. (Text of bill)

I shudder to think what “bold steps” could portend, what tyranny stands to be justified, in this madman’s endgame.

Too Funny for Prime Time

Amy Poehler and Tina Fey opened SNL last Saturday.  I missed it because our house has about 10 more people in it than normal, thanks to Ike.  (The hurricane…?)

Anyway, I’m sure you’ve seen it, but in case you haven’t, it’s right here.

As a critic of both the Demopublicans and the Republicrats (aka, the Demopublican Unity  National Committee  for Elections, or “DUNCE”), I found the lampooning of both women to be hilarious.  My partisan friends all thought SNL was satirizing only the “other” party’s standard-bearer.  Silly rabbits…