By Julian Dunraven, J.D., M.P.A.
Honorable Friends:
We are now past the election, but I cannot stop thinking of Disney’s Alice in Wonderland and the Dodo’s jolly caucus race. Do you recall the scene? The Dodo perches atop a pillar of rock on a beach, presiding over a crowd of critters running endlessly around his pillar in an attempt to get dry while the tide continues to crash over their heads. The Dodo instructs them that they must all run with the others if they want to get dry, all the while singing his ridiculous song:
'Round and 'round and 'round we go
Until forevermore
For once we were behind
But now we find we are be-
Forward, backward, inward, outward
Come and join the chase
Nothing could be drier
Than a jolly caucus race!
Certainly, everyone has been running together in our own caucus race. Both parties and both presidential candidates decided to run with the bailouts, and the bailouts continue to multiply and grow.
Yesterday morning the AP announced that AIG’s bailout has grown to more than $150 billion. Of this, $40 billion buys preferred stock for public ownership. The original $85 billion loan has been reduced to $60 billion and another $37.8 billion loan has been transformed into a $52.5 billion aid package.
We also have GM and Ford with their hands out for bailout money according to The Ludwig von Mises Institute. Have no doubt that they will get what they seek. They will get a bailout or two despite the fact that other automobile makers are doing just fine. They will get it despite the fact that, as the Institute points out, Ford has fewer employees than Abercrombie and Fitch and GM has far fewer employees than Target, Wal-Mart, or McDonalds, yet these companies would be laughed at if they demanded a bailout.
Goldman Sachs and Fannie and Freddie also are showing losses. Facing a third quarter net loss of over $29 billion, and a total outstanding debt of $880 billion as of October 31st, Fannie has warned that its $100 billion bailout may not be enough.
So where is all the requested bailout money coming from? Well, $40 billion of AIG’s money is coming from the $850 billion bailout package Congress just passed. The rest is being printed by the Fed. But let us be honest: all the bailout money has been printed. We were running a deficit long before we ever made even the first bailout.
Understand that, by printing money, the government pays for these bailouts by taking value out of the savings accounts of private citizens. As the money supply is increased through inflation, and by printing more than $2 trillion in the last few weeks we have increased the money supply by almost 50%, the money we hold in savings is devalued. Thus, we must all work harder and longer in order to save less. It is a very subtle form of theft, but make no mistake—it is theft. The citizens of this country are all having their accounts raided, through inflation, to pay for the failed policies of these companies.
Now look at who is running things. Michael Alix has been named as senior vice president of the bank supervision group of the New York Fed. Formerly, he was the chief risk officer at Bear Sterns, which went under back in March from its derivative investments. Former officials of Goldman Sachs can be found throughout the Treasury Department and Fed. I suppose if Goldman continues to suffer, its management can always find new employment with government. Don’t you feel safe?
So this is the state of affairs. The whole country is drowning in debt and asking for bailouts. Our government dodos, who happen to be the same fools who got us into such debt in the first place, are now busy pouring even more debt through inflation upon us to facilitate the requested bailouts. But keep running, they say, and eventually you will get dry. Pay no attention to the rising waves.
Honorable friends, we have fallen down the rabbit hole, but isn’t it entertaining?
'Round and 'round and 'round we go
Until forevermore
For once we were behind
But now we find we are . . . still behind
No comments:
Post a Comment