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Posted by on Feb 10, 2010 in Economy, In The News, Markets, Opinion, TG Roundup

Free Markets, My Foot!

Top 3 Holders of US T-Bills in Billions

Here is a nonsensical rant from a right-wing nut and a CNBS host Larry Kudlow. According to this ‘recovered’ drug addict and yet to recover ‘BS’ addict, all tax cuts are good, unions are bad. Bailouts are a necessary evil as long as they prop markets which were not fundamentally justified being at the levels they are in. I can’t even stand watching this idiot. But, there is some useful discussion about the yesterday’s chatter that China is finally dumping its non-treasury debt holdings (such as Freddie, Fannie agency debt).

I know that Chakravarthy garu and I might disagree on this subject. I would like to have a discussion with anybody who agrees with the ideology Kudlow spews. Let me start the discussion by saying, when you take both capitalism and socialism to extremes they produce devastating results. The fall of the Soviet empire is a testament to taking socialism to the extreme. We are now witnessing the fall of the United States empire, where capitalist pigs were protected from necessary regulation and proper tax structure. Thanks to the so called Ayan Rand principles, her blind follower Greenspan has tried to protect the markets themselves from recessions which are the necessary corrective mechanisms for excesses in any economy.

It it utter nonsense to believe that cutting taxes to zero, deregulating to the bone and borrowing and spending to the hilt produces prosperity.

This is the same bullshit Reagan worshipers like Kudlow have been pushing on to us for over 30 years. All Reagonmics did to the US economy is help produce three boom and bust cycles. Each of the booms created a newly rich:

  • First: executives of mega businesses (like Home Depot, Wal Mart) which expanded at the cost of small business (mom-and-pop store destruction);
  • Second: investors and executives who benefited from the IT boom. Even though this business did not destroy small businesses, it siphoned a lot of capital into companies that have no business being in business; and
  • In the third and the most recent boom, home owners got the illusion that their homes are going to go up in value at 20% clip per year. The likes of mortgage bankers and Wall Street bandits also bought or pushed this illusion and sucked up all the capital in the world into soon to be busted inflated housing market in the US.

The bust following each of these booms (1987, 2000-2001, 2007-2008) are bigger than the previous ones. As a result, the middle class in this country was destroyed where as a bunch of fat-cat bankers and military industrial complex got filthy rich via expanding household and government debt.

Anybody would care to comment/discuss? Chakravarthy?

2 Comments

  1. Mohan garu,
    Totally agree , you need to have balance of the both. After all true capitalism is nothing but socialism in disguise. A true capitalist wants to make money. So he starts a company. Unless he expands the company he cannot make more money. Exactly how he does the expansion ? by Hiring people , paying them salary, giving them medical benefits, giving them bonuses, giving them retirement pension. Which sounds more like socialism. Except that the folks who work for a Capitalist are forced to earn the money. Thus the argument about innovation and such. The capitalist wants to make sure the business is sustainable for a long time. A true capitalist’s work ethic ( only work ethic) is more of a communist leader. Which is to say they are passionate about their business. America was running on those principles.Not any more. The new capitalists became greedy. They collapsed strong corporations which were more than 50 years old if not 100 years. Enron,AIG,Lehman, GM, Ford, Chrysler, Citi, … the list goes on. When middle class folks working for these companies loose jobs. Someone else has to step in to protect the economy. That is xactly what Obama is doing. The concept of Zero tax is a joke. Sure Zero tax , and who pays for the snowplough ? Who pays for the roads ? Tax is needed. But the money collect should be used efficiently. The issue that the FED cannot track money is a discussion for another day. I have a good insight into how bad the federal department are at managing tax money.

    • Each time I think of this financial mess, the story of the goose that laid a golden egg comes to my mind. The Greek contagion is going to be pretty ugly. Now that the coming storm is ‘sovereign debt crisis,’ who is there to bail the nations en masse?