I mean, c'mon. Must be LSD, because these folks are, like, getting freakin' *delusional*.
First, there's been talk about inflation at the Fed. Inflation? INFLATION?! Why the fuck not talk about goddamned Martian invaders, for cryin' out loud, they're just as fucking real as INFLATION right now. Wages are still plummeting as the economy sheds jobs like a wet Lab sheds water on your living room rug, asset prices are still falling like a goddamned rock, and these psychotic sons of bitches are talking about fucking INFLATION? Jesus, what next, they start talking about the Borg threat to the Centauri sector?
I mean, look. Yes, the Fed has "printed" lots of money over the past few months. But that money NEVER LEFT THE FED. It just went from one ledger entry to another as the banks that the Fed "loaned" the money to just never loaned it out. Even Bernanke admitted as much in a recent speech to the NYC Fed. It never entered the economy. It might as well not exist. It's just mattress money deluxe right now, ain't doing shit for the economy.
Look. The dollar is backed by the sum total of the assets and economic output of the nation. If asset prices are plummeting, if economic output as measured by wages is plummeting, clearly there is no surplus of dollars and thus no inflation. I mean, let's get real here. If there was too many dollars in the economy, wages and asset prices would be going *up*. But they're not. They're going down like a rock tossed off the edge of a friggin' *cliff*. Bernanke might be making helicopter drops left and right of money, but it ain't doing shit except getting slid under mattresses. Like that does anybody any fucking good, shit, it ain't even good sleepin' at that point...
And now we got President O'Freakin'Bama who apparently has been into the *good* stuff. First he says it's okay to not have a strong non-profit nation-wide public option, thus giving the insurance industry yet another bailout despite the fact that Wellpoint (BC/BS) alone made enough profit to pay for healthcare for a MILLION PEOPLE, and they're just *one* of the many health insurance companies making multi-BILLION dollar profits. Wellpoint spent only 82% of their gross revenues on health care last year. That's all. The rest went to profit and administrative expenses. And Wellpoint is one of the more *efficient* private health insurers. Next, Obama proposes to pay for his subsidy of the insurance industry with... tort reform? Fucking TORT REFORM? Look, in 2006, last year I have numbers for, Medical malpractice insurance costs were $11.5B dollars. Total healthcare costs were over $2.4 TRILLION. In short, if every dollar spent on medical malpractice insurance went towards paying for health care instead, it would only pay for enough insurance for a million families of the roughly 20 million uninsured families. Big fucking deal.
What a freakin' farce. While Rome burns, our so-called leaders fiddle madly away in their bubble universe in Washington D.C. In the meantime, a number of my friends are now unemployed and the economy freakin' sucks, but hey, we got no shortage of goddamned fiddles fiddling out a merry insane jig, eh? So it goes in the United States of Fucking Insane...
-- Badtux the Rantomatic Penguin
I'm a little bit confused, but I know you can straighten me out.
ReplyDeleteI understood that many of the "banks" (formerly investment institutions) used the bailout money to buy weaker banks, etc., therefore spending the bailout money and thus not just moving the numbers around their banking ledgers. Granted, most of it has been used as usual (payoffs to the unindicted criminals - Goldman Sachs, Citi, Morgan Stanley/Chase through the AIG funnel - who created the scam).
And inflation is something that we will need to worry about several years in the future when that bailout money is finally used by the banks (after being begged grievously by Congress/regulators to do so) for purposes like loans - and other acquisitions, and it's just a scare story now to stop the money from flowing into avenues that are actually trying to cure the liquidity trap (which they actually care nothing about right now).
Help me to understand better what's really going on here, friend. Thanks for all you do. We rely on you to keep us well informed.
(And, of course, the insurance scam continues (now under the aegis of the "change" candidate).)
S
So it goes in the United States of Fucking Insane...
Actually, the investment institutions with the exception of Goldman Sachs are now mostly owned by banks. But one thing you didn't hear on the news was how the buyout was done. In most cases it was a stock-only merger, i.e., the stockholders of both institutions got shares of the new institution. No cash involved.
ReplyDeleteRegarding the mattress money the banks have shoved into the Federal Reserve, the Fed has the power granted under the Fed's charter to increase reserve ratios to keep it there until the Fed wants it released. So while worry about inflation from that mattress money is warranted, it's something the Fed can control by using powers it already has as central banker. Similarly, the Fed can "unwind" its open market operations and take money out of the economy that way, and deflate as it slowly lowers the reserve ratio.
I do agree that when the economy turns up, *then* inflation is something to worry about. But right now, with asset prices and wages still plummeting, inflation is about as real as Martian invaders, and just as worthy of worrying about. The Fed has the tools it needs to handle inflation once it IS something to worry about... but now isn't the time. Worrying about inflation right now is, excuse my language, FUCKING INSANE.
And remember you heard it from Paul Krugman first, but he's politer than me :).
- Badtux the Economics Penguin
Worrying about inflation now is like worrying about water damage to the basement while trying to put out a house fire.
ReplyDeletewhat next, they start talking about the Borg threat to the Centauri sector?
ReplyDeleteNarn it, that was good.
Baz Luhrmann also had a good one, worrying is as effective as trying to solve an algebra equation by chewing gum.