Sunday, November 16, 2008

BAILOUT 2: MORE ON THE "CREDIT" INSULT

After writing the post below, I thought about what Kashkari said some more. He said that helping people directly wasn't feasible, but that taking taxpayer money to help banks directly was helpful for strengthening the system.

So basically what that comes down to is this bewildering, insulting, ludicrous situation:

We give the banks money to loan to us.


Does that make any sense at all? Why are we being forced to go along with this? That's how we should think of the bailout--we are giving free money to banks so they can loan money to us at interest. They get free money, we get debt.

And as Kashkari helpfully points out, we're being forced to do that to help sustain "the system," with the idea that what is good for the system is good for the people. Nothing could be further from the truth--again, we're GIVING banks money that they are supposed to then LOAN to us.

An Analogy

That's the equivalent of me saying to my friend, "Hey man, I'm hungry." So my friend says "If you'll give me an apple, I'll sell it to you." So I give him an apple which he then sells to me for a dollar. Then he says, "In a month, I'll need you to repay me an apple."

So now my friend has a dollar of my money plus he expects me to give him another apple as repayment for the apple I gave to him to sell to me because I was hungry.

I ask him why he thinks I should go along with his little scam. He says "Well, it's all for the good of the system. And hey, you got some benefit out of it--you got an apple when you were hungry. It's only fair that I should be justly compensated at a fair price for facilitating your receipt of sustenance. You see, the system works for the good of us all."

I protest, "But now I'm out a dollar and two apples while you have a dollar and will have an apple in a month. In fact, I've given you everything you now have. By what rights do you charge me for this?" And he says, "The system, the system must prevail! Questioning our free market system is not going to help you--but giving me free money sure will help one of us, i.e., me."


"The System" Uber Alles


And that's the situation we're in with this bailout--we give banks money to lend to us, and then they expect the amount of the loan plus interest yet we're not supposed to notice that the banks wouldn't even have the money to "lend" us if we hadn't given it to them.

But you see, it's for the good of "the system." And saving "the system" is what's important--saving the fortunes and homes of the people is secondary or tertiary if it ranks at all. Kashkari wants "the system" to be sustained because the system is what keeps him and his kind in silk undies and three homes.

2 comments:

Anonymous said...

You are right! That is why we hear so much rhetoric and outlandish comments warning us about the damaging effects of ideas such as welfare and communism because that is essentially what we are doing for the banks and corporations but they surely don't want us doing it for ourselves. After all our system is about capitalism, which means we are slaves to make capital for bankers and corporations and the Federal Reserve. We just exchanged monarchy system for an oligarchy system. What is it with us that we feel we must be ruled by some entity and told what to do as if we have no intelligence ourselves? We are like a battered spouse in an abusive situation. The status quo is better because at least we know what to expect. I mean what if we left the relationship and had to survive and/or stand on our own two feet? OMG that would be terrifying! what if we failed? or worse what if we were alone? I think this country needs to get a good pep talk from Stuart Smalley. You know, we are good enough,smart enough, and doggonit people like me. Come on Americans let's get a back bone. Ush Kia...

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