Saturday, May 22, 2010

Government Waste and Wall Street

I just sent this letter to the Olive Press, our local newspaper:

Dear Editor:

Several local acquaintances have expressed surprise at the American media’s avoidance of discussion of waste in government.  “Why would the media support government waste?” they wonder.

Wall Street and the banking industry benefit from interest and sales commissions generated by the issuance of treasury bonds, bills and notes.  The more government waste, the more spending, the more government debt, the more Wall Street profits.  The left has been more aggressive in expanding government and so Wall Street likes it better than the right. In 2009, the first year of the Obama administration, Obama significantly increased total federal spending as percentage of gdp by ten percent over the Bush administration.  This causes the federal government to issue more treasury securities.    

It is true that Wall Street loved Bush’s wars, but the waste of the Obama administration does it better.  Wall Street profits by dealing and banks profit by holding bonds, which they can sell to the Federal Reserve Bank in exchange for monetary reserves, a ten fold multiple of which they can lend to the public at interest.  Thus, a single treasury security can generate (a) sales commissions to brokers; (b) interest payments to banks; and (c) a means by which commercial bank loans and the money supply can be expanded up to ten times the amount of the bond. 

Who owns the media?  The same Wall Street firms and commercial banks that profit from the government bonds.  One can tell which party is better for Wall Street by the degree to which it receives support from the banker-owned media.  Virtually all television stations and newspapers support the Democrats.  Since they are banker owned (for instance, MS-NBC is owned by General Electric) the party that is best for Wall Street and the banking industry is clear.  The media would not support the Democrats if they were not the best party for Wall Street.  Chris Matthews is a good GE man.

The Democratic Party’s spirit is embodied in Paul Pelosi, a corrupt San Francisco business man who has benefited directly from a range of subsidies that have been adopted under the aegis of the Speaker of the House, his wife.  As well, a host of billionaires and multi-millionaires, to include Bill Gates, George Soros, Warren Buffett, Steven Spielberg and Larry Page, have advocated the agenda of Barack Obama.  Wall Street contributed to Obama two to one over McCain, a much better ratio than Bush received, and Obama has rewarded and will continue to reward them.  The recent  financial industry law is an example.

Mitchell Langbert


Doug Plumb said...

The Report From Iron Mountain is available for free on the web. Of my eight years of reading and studying government I can honestly say I have never seen more important summary of government operations and goals.

It explains that the purpose of our modern governments is to generate waste- keep the common mans nose to the wheel in this age of technological innovation. Phoney environmentalism is just a replacement for the war model. A socialist government is the government of Thrasymachus as explained in the first few pages of Plato's Republic (What is Justice ?). Reading those two documents explains the hows and the whys of our current situation completely, and on ethical, sociological as well as economic terms.

Doug Plumb said...

"Then the race goes, not to the ablest at production, but to those most ruthless at brutality. When force is the standard, the murderer wins over the pickpocket. And then that society vanishes, in a spread of ruins and slaughter. Do you wish to know whether that day is coming? Watch money. Money is the barometer of a society's virtue. When you see that trading is done, not by consent, but by compulsion -when you see that in order to produce, you need to obtain permission from men who produce nothing -when you see that money is flowing to those who deal, not in goods, but in favors -when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you -when you see corruption being rewarded and honesty becoming a self-sacrifice -you may know that your society is doomed. - Ayn Rand, Atlas Shrugged