We have real enemies who mean to destroy us. During the height of the financial panic of 2008, they gave our economy the strongest plausibly-deniable push they could, with the goal of inducing a complete financial collapse. They were actively countered and defeated in real time by the Bush Treasury Department and the Fed. These enemies are patient and know that this same attack will work sometime in the not too distant future, as we continue to fail to address our damning financial reality.
Knowing all that, I present to you Barack Obama’s budget, in family budget terms.
I’m going to assume that my boss will give me 3.9% raises every year until 2017. I also expect some hefty bonuses on top of that. I am not going to cut my spending for basic needs, basic desires, advanced desires, and wanton debaucheries. By 2017, we will be in primary budget balance: I will no longer have to borrow more money to cover all my spending, though I will have to continue to borrow more money to keep paying the interest-only mortgage. Also, I have some other, ahhh, business obligations shall we say, that we’ll have to talk about some other time. Things kind of go downhill from there. Don’t worry though, I’m planning on paying back the original lenders with dollars that are …ah, well wait a minute, you don’t want to hear all those mathy details either. Your alternative is to go with the Republican plan: cat food for Grandma, back-room abortions, and slavery.
Laura Ingraham is right, it’s time to man up. 2016 is too late.
I am not sure the 2008 meltdown was orchistrated by outside forces, but you can be sure the Chinese, Russians, Islamists, etc. are all taking notes.
Sorry Taiwan, you are probably fucked.
Not orchestrated so much as seized upon.
motionview, thanks for giving the correct spelling of orchestrated.
I am not sure they immediately seized upon it at the time, if only because they were scrambling to protect their own interests. They may have, but I just do not know for sure. But you only get a single shot to dodge something like this. And it could be an economic Stuxnet or something worse.
Thanks for the scribd link to the Freeman paper. Think I’ll see if I can slog through it.
Agreed.
The question nobody wants to ask (vis-a-vis the financial attack of ’08) is: were those enemies foriegn or domestic?
Sores for one is always alert to an opportunity to loot on a global scale. It’s not hard to imagine others with similar instinct and will, aimed as much toward malice as mere avarice.
Soros
Interestingly, the crazy man, Glenn Beck, mentioned on his show a couple of years ago that studies had been done in regards to financial war against the US..and that financial war games showed the US would lose.
But Beck is just a crazy conspiracy theorist nutjob.
If you haven’t seen it yet the Kleiner Perkins analysis is very telling – leftist tax-farmers reluctantly calculating that the host is dying.
Possible attempt to undermine the US dollar? To destroy the US financial system via maneuvers by shadowy offshore operations?
This is Soros’ M.O. all the way. Simialar to what he did to the B.O.E. 30+ years ago. Too convenient in my book that it involved untraceable foreign hedge funds.
Anyone remember the massive outflow of cash from investment funds in September 2008? I remember then I suspected Soros & Co. Everyone told me it was crazy talk.
A grizzled old DC detective once explained to me that, “there are no coincidences in police work, just inexplicable occurrances”. I recall at that time it sounded to me a lot like Burrough’s Sherlock Holmes saying, “…when you have eliminated the impossible, whatever remains, however improbable, must be the truth”.
And it occurs to me that those maxim’s are applicable here as well.
Bob,
It doesn’t really help matters that America played directly into the hands of those who would do us financial harm.
It all goes back to banks making risky loans at the behest of government and government allowing banks to lay off all the bad paper on Freddie and Fannie.
Obviously, I’m ignoring the entitlement problem. That alone would have brought us down. The housing bubble merely accelerated the problem.
link
Leading off the report:
The equivalent of four years of the country’s GDP “evaporated”. Into thin air.
A lot of crazy talk being vindicated these days, Bob and Blake. The contrivance that is the global monetary system and the wholly progressive nature of its ways and markets — read: it’s managed and mismanaged, created and destroyed by means not beholden to the will of the US holder of Fed notes, per the above, much less our government’s evident interest or even understanding, assuming money should be a centralized government connivance in the United States in the first place — has inescapably fatal weaknesses.
Watching Bernanke today before a Congressional panel of ignorants and the complicit was to observe the most powerful man in the world scared out of his wits. No one man or agency can ever play that much chess and win every time, assuming they intent to to your and my benefit which clearly they do not.
Soros isn’t the only offender but he’s surely found something he can dick with, which isn’t at all how things such as money should ever be. Since he can, everybody does — he’s not exactly discovered something new. “The US is a Ponzi scheme” -Bernie Madoff, expert, Ponzi schemes.
How’s it end? When it collapses, in a global currency, of course, the ultimate progressive wet dream.
Until then, just call it more crazy talk.
Did America play into those hands or was it guided? Seems to me Chuckie Shumer’s transgression in July of that year IIRC, almost touched off a bank run. Also seems to me the shenanigans in the housing market were exacerbated by Kennedy, Frank and Dodd. All guiding hands IMHO.
What I have begun wondering is:
Would the meltdown have been initiated under a Kerry presidency AND how would the meltdown have been initiated differently under democratic/socialist hands? Americans weren’t really paying attention to the shenanigans of the greenies, the unionists and the socialists except as minor irritants when these guys were laying the groundwork as Americans always felt that the republicans could checkmate any over the top initiatives, so didn’t really worry about that cliff just over the horizon.
Whatever Bush was told that caused the panic at the WH in October 2008 must have been a doozy. Kerry as president (Heinz-in the pocket of Soros and Tides) would have been in on the carnage to come, so how would the trap have been sprung on Americans in that instance w/o damaging Kerry?
I really do not like these people. Not even a little.
“Would the meltdown have been initiated under a Kerry presidency ”
no. the meltdown was a way to attain power. had kerry won the program would have moved forward. the meltdown was a way to attain power.
JHo, you are right in saying that many of the “weaknesses” in our system is inherent, given the accepted nature of monetary policy and modern economic “theory”.
And I’m not being an eeyore when I say that the day of reckoning maybe coming sooner than later.
God help us all.
The fail was always built in, Bob.
What’s that adage about everybody taking credit for discovering something in the end? Like that.
Bush knew.
Only partially and only as a means of insuring the total takeover of both branches. The meltdown provided cover for the stims I and II and gave cover to all the ‘investments’ in all those prog programs the GM, bank and Wall Street crony payoffs. The deficit increases had to be justified somehow. The crisis gave all the shenanigans cover.
Assuming Kerry in power since 04 and the 108th congress composed 48D, 51R, 1I senate and 205D, 229R in the house, Kerry did not have the wherewithal to do anything approaching what Obama did. And I suspect had they attempted it, 2006 would not have been the banner year for dems that it was. The war would not have been a lever, nor Gitmo, nor warrantless wiretapping as Kerry would have probably been doing as Obama has on foreign issues. Republicans would probably have still spent their way to losing both houses, though.
Would the crisis have been in 06? Probably. The mechanisms were probably in place to be executed once Pelosi and Reid attained power. The question then becomes could the democrats execute all they wanted in 2 years with the numbers from the 06 congress? The tea party would have probably been born two years earlier and the democrats would probably been booted out in 08.
The best situation for them was the 08 takeover attaining all three branches at once. Anything else provided either a too short window with not as large of margins in the congress and more blue dogs to contend with and a looming election resulting in something like 10.
Speaking in general, and not necessarily responding to Blake or Stephanie in particluar:
In structural mechanics, a column is designed to support loads applied along it’s axis; we all know this experientally by looking at the posts that hold up our decks, or porch roofs, or by seeing pictures of the grand porticos on Greek and Roman temples, or their neo architectural equivalents. If the loads are restricted to the directions designed for, axially, then the column can stand without failing for millenia. But there’s a well known phenomena called “buckling”, where a column fails; it appears to fold in on itself, and for a moment may visually appear to be “kinked” where the buckling has locally begun. This type of failure is generally idealized as being caused by a non-axial side force flexing the column like a toothpick where you’re holding the ends between a thumb and forefinger and pressing sideways, perpendicular to the length of the toothpick; you’ll see it bending like a long bow that has been drawn.
In many ways, the acts that I suspect, that I alluded to upthread, and that the financial terrorism report in the link spoke of were not really what collapsed the financial system per se. It was heavily overloaded, with the “weight” of bad loans, the inherent disfuntion of the macro-ecomnomic model, and of course, the overhang of debt, but undisturbed, and regardless of it’s flaws, the system might not have collapsed as rapidly as it did. That’s where the outside players come in.
The report doesn’t name anyone specific. Indeed, they worked through offshore entities, ones beyond the regulatory reach of the US government where their anonymity was completely assured. And while I personally think Soros was the major player, with an eye to guaranteeing a Rethug! loss, I wouldn’t rule out an “assist”, coordianted or otherwise, by other large players who merely wanted to take the US down a few pegs.
But in my “tin-foil-hat” world, it was a Soros gambit that got out of hand. Recall that in September 2008, following Palin’s debut at the Rethug! convention, McCain had actually moved out to a tenuous 4 to 6 point lead, depending on the poll, over Obama. Bush had refused to deal with Iran, something I still am severely disappointed by as an aside, and had maintained a low profile. So for all of their efforts over a two year period the progressive messiah appeared to be heading to a heartbreaking narrow loss to the happy warrior and the chillbilly; it was 2000 and 2004, with the looming disappointment raised several orders of magnitude over what had been seen as unfair previous losses. Astoundingly, despite all of the financing chicanery, press duplicity, primary stealing, and race card playing it looked like the won wasn’t who we had been waiting for…
So enter Soros, stage right, to seal the deal by stirring up a dramatic stock market slide; an early October surprise. To the knowledgable, it would seem like a logical occurrance, beyond suspicion, after the events of the first half of the year and the hearings in Congress during the summer of ’08. To the retired, and fixed income folks, living on their investments, the decline in value would underscore the “Failed Economic Policies of BOOOOOOOOOOOOOOOSH!“, that had been one of the mainstay talking points during the Democratic primary campaigns and the general. And to the run-of-the-mill sheeple, the coin-flippers, who know nothing about issues-but belive that they are more knowledgable than any and who’ll share that perception with any who make the mistake of asking, many of whom would already be voting for the won to assuage the white guilt they had been taught to have, it gave those unsure yet another reason to vote for “brand D” instead of “brand R”.
The irony here, and the cause of the suffering of many here at home and overseas, is that the genius Soros effed up; what was meant to be a little bump caused the column to buckle! And instead of a short spell with a resumption of growth afterward, the Glorious!, Miraculous!, recovery brought about merely by the steadying presence and aura of the won, instead his boy Obama has to own the mess that I believe Soros had a hand in merely to aid his election.
So I guess this is a long winded way to say, Blake, you’re right, there were avenues to exploit; but that doesn’t mean they didn’t require exploitation to begin the avalanche of deflation.
And Stephanie, this wouldn’t happened under a President Kerry (I shudder to even use those words!) because there would have been a different chain of events instead, meant to ensure that happy days were here through his reelection.
Sounds like tin foil hat stuff, I know, but Soros has a track record of skullduggery from way back, and he and his minions had been working to get a socialist elected for the better part of 4 years…
Sorry for the TL:DR comment
My Regards
Bush knew about the problems at FNMA and HUD and did try to reform but couldn’t get anywhere with Trent Lott and the moneygrubbers running congress – but did he know that the hedge fund and banking shenanigans would trigger the crisis?
Soros probably had two or three different methods to trigger the mess – currency, oil and hedgefund manipulations. He’s heavily involved in all three and has been for years. Bush’s downfall was that those in positions to alert him (SEC and Treasury) were not watching his back or the country’s, but were in it for themselves and probably bought off as well. Bush’s problem was that he believed those at the top levels of the SEC and treasury were honest brokers. They weren’t.
He fucked up, he trusted them. Bush as Flounder and left floundering by his trusting nature.
I concur on the engineering analysis. Bernanke’s deer in the headlights response is largely due to the ‘over implosion.’
I disagree on Kerry, though. A large part of the long march is to thoroughly discredit capitalism and a failure of lesser proportions initiated under Kerry would still have given the MBM and the dems/progs the impetus to plunder and shore up the socialist underpinnings at HUD, GM, EPA and elsewhere. Only through a crisis could so large a deficit been attempted after all the yakking about horrible deficit spending in the election cycle. And only through a crisis could the attempt at discrediting capitalism have been moderately if not fully successful. A crisis would have been initiated on his watch, it would have been blamed on the failure of capitalism and the implementing of Ocare, Cap and Trade and all those oh so wonderful utopias and would have then fueled the turbo charge of spending that was done. A crisis was required in both cases, one with the president aware (Kerry) and one with him blindsided (Bush) but in either case, both requiring large infusions of deficit spending to unions, Wall Street and the Banks and brokerages to insure the right levers were sprung to grease the way for the socialist implementation.
Great point Stephanie, about the long march needing a crisis as a pretext to implement their statist agenda. It might have had a different “flavor” to be sure, but I’m certain that the usual suspects would have been blaming the usual “villains”, the rich, the eeeeevvvollll corporations, capitalism, etc…
It never ceases to amaze me that in a free society, politically speaking, instead of arguing the merits of ideas they instead resort to posing and chicanery.
Of course I realize that it’s because, laid bare, most wouldn’t buy their agenda and the rest would call it the communism they’d recognize.
But here of all places, where they can speak freely and debate honestly.
@23″A crisis was required in both cases, one with the president aware (Kerry) and one with him blindsided (Bush) but in either case, both requiring large infusions of deficit spending to unions, Wall Street and the Banks and brokerages to insure the right levers were sprung to grease the way for the socialist implementation.”
=
@16 “had kerry won the program would have moved forward. the meltdown was a way to attain power.”
what do you do about this onslaught? maybe cupcakes?
I love Sherlock Holmes, Viscount Greystoke! Greatest African big game hunter /ivory poacher turned consulting detective to ever travel from the Center of the Earth to Mars by way of King Solomon’s Mines. That batman of his, Umbopa Watson, great side kick! No wound that can’t be treated by something in that witch doctor’s bag of his. [grin]
“Whatever Bush was told that caused the panic at the WH in October 2008 must have been a doozy”
Has anyone seen what Dr. Sowell has had to say about the TARP and bailout programs. If I was GW I would have sought his advice on the deal.
Ok, to avoid having a Danger flush in the recent comments I’ll call it a night.
(still waiting on that extension Goldstein;)
Night All
and Keep Firing
If you are really interested in who the economic terrorists are, read the following analysis I wrote for the benefit of my clients.
On September 29th, 2008, the US House of Representatives voted against the $700 billion dollar bailout bill proposed by treasury leading to an 8.8% decline in the S&P and a 778 point drop in the Dow, the worst ever recorded. Why did the house vote against the bailout bill? On September 8th, 2008, Sarah Palin, a virtually unknown governor from Alaska, addressed the republican convention and gave a speech credited with breathing life into the McCain campaign. Over the next three weeks, the polls reflected this turn around showing McCain/Palin with a small lead by the last week of September. Internal polling showed that in spite of the economy, the war and George W. Bush, Obama/Biden were in danger of losing what should have been a shoo in.
Members of the house up for re-election had made a back room deal to accommodate the public’s dislike of the bailout bill. Those up for re-election, regardless of party affiliation, could vote against the bill while the rest of the house voted for it thus assuring its passage. This arrangement did not recognize the shifting presidential election environment. It was meant to provide a measure of stability to the financial markets and an orderly re-election of house representatives.
The leadership in the Democratic Party was panicked by the presidential polling. They made a decision to undermine the arrangement in the house regarding the bailout bill. Majority leader Pelosi stood up on September 29th, 2008 and gave an incredibly partisan speech that was so vile, the majority of the republicans made a decision to vote against the bill regardless if they were up for election. This meant that the bill would only pass if the Democratic majority voted in favor. When faced with the prospect of potential defeat at the polls or undermining confidence in the financial markets, they chose the latter to save their own skin and skew the perspective on the presidential election.
On October 3, 2008, the house passed a “revised” bill but the damage had been done. It contained essentially the same provisions but there were some modifications best characterized as window dressing. By October 15th, polls reflected a 6 to 10 point advantage for Obama. The public had shifted their position on the economy and placed blame for the melt down on the republicans with McCain bearing the brunt of this shift. All of this I attribute to the Democratic Party’s decision to risk the world’s financial system to elect Obama. However, credit also has to go to the Republicans who ran a spectacularly awful campaign and John McCain in particular for his deployment of Palin and his decision to make Reverend Wright a non-issue. Proper tactical use of these could have made a difference but we will never know.
People who will risk everything that everybody owns so that they can gain and maintain power are wicked. Actions like this bring into question whether they did not know the effect of what they were doing or they did. If they did not know, they are stupid and incompetent and should never be anywhere near the levers of power. If they knew the damage that their actions would bring and did it anyway, they are evil and should never be anywhere near the levers of power.
Great discussion, all. Thanks.
Pretty interesting stuff Brian.
Do you realize that the entire House of Representatives stand for election every 2 years; all 435 of them? Did you mean Congress instead?
I mean no insult by asking.
“Majority leader Pelosi stood up on September 29th, 2008 and gave an incredibly partisan speech that was so vile, the majority of the republicans made a decision to vote against the bill regardless if they were up for election.”
glenn beck territory. go iso and aflcio.
Look up Peter Schiff. You can find a great montage of Schiff talking about how much financial trouble the US was in back in 2007. Needless to say, Schiff was mocked mercilessly. Stuck to his guns, though.
Also, check out Long Wave Group.
Outstanding work on the coming depression.
See Long Wave Group paper here: http://tinyurl.com/4gkfqel (Kondratief Winter is Upon Us)
And here: http://tinyurl.com/24qw9ox (DOW 1,000 is not a Silly Number)
See Peter Schiff here: http://www.youtube.com/watch?v=2I0QN-FYkpw
and here: http://www.youtube.com/watch?v=Z0YTY5TWtmU
Personally, I think the people responsible for the financial mess unleashed forces they only thought they controlled. That kind of hubris tends to do a lot of petard hoisting.
Jeff, I’ve got a comment caught in the spam filter. I think I put too many URL’s in it.
Ernst, if you’re a Sherlock Holmes fan, see the series staring Jeremy Brett.
Jeremy Brett is the consummate Holmes. The DVD’s are available through Amazon, if you’re interested.
More of an Allan Quartermain fan, as you may already have inferred. My favorite Holmes movie was Murder by Decree with Christopher Plummer and James Mason.
For the record, Pelosi has never been House Majority Leader. That is a post entirely separate from Speaker, and was held at the time by Steny Hoyer. Prior to the Democrats taking the majority in both houses of Congress as a result of the 2006 elections, Pelosi was minority leader and Hoyer minority whip.
Furthermore, while caucus leadership positions are determined solely by the membership of the respective caucuses, the title of Speaker is a cameral position in the House of Representatives and also the only such House position traditionally held by an elected member of Congress. Other posts such as parliamentarian, secretary, sergeant-at-arms, etc., are held by employees of the House.
Bob I knew that but there are some seats that are safer than others. It is my understanding that those members who were in “questionable” districts, regardless of party affilaition, reached an agreement to vote against the bill while those in safe(r) seats would support it. When I reread what I wrote I realize that it did not convey this properly. I apologise for that.
Agree wholeheartedly. My wife and I also found this new BBC series to be interesting and look forward to it continuing. Sherlock: Season One.
For a very well researched paper on the US financial crisis and who is to blame read this. http://rossmckitrick.weebly.com/uploads/4/8/0/8/4808045/us_financial_crisis.rm.pd
For a complete time line, http://www.uiowa.edu/ifdebook/timeline/timeline1.shtml
I read Schiff. I also read zero hedge and several others. The problem I have with the prognosticators and the hair on fire folks, particularly those that tout their wisdoms after the fact, is that they are usually right… eventually, and some are so in the weeds that they end up bunny hunting.
Ron Paul is seen as a kook, too. Many of his proposals are worthy *cough* audit the fed *cough*, but those tend to get lost in the deluge of all of his quirky stuff. And his foreign policy…. eep!
At Belmont Club.
Once again the eternal choice when the Left’s machinations have a little light thrown on them due to the destruction that always follows in their wake. Are they merely stupid or are the malevolently evil?
the bureaucrat:
monk
A piece by Michael Barone about this one, Barack and Me?
An vice versa update on the old “what’s good for General Motors is good for the USA”.
Brian,
Again, interesting thesis.
However, if government and private debt would not have been out of control, the circumstances for the financial meltdown wouldn’t have been present.
Basically, national fiscal irresponsibility lead to the problems we’re now facing.
Stephanie,
You make a good point about Paulson.
Paulson should probably be in jail for the next 30 years.
Fiscal irresponsibility was (and is) the bullet. Reserve note monetary policy is the gun.
Money is debt. Debt created by policy and inherently mismanaged (and not infrequently destroyed) by the manipulations of those who can and will. This kind of money is what leads smart people to say things like this.
Personally, I think the people responsible for the financial mess unleashed forces they only thought they controlled.
I’m reminded of a book that I read recently. The premise is that shadowy rich European families trigger a worldwide crisis by simultaneously destroying and/or disabling oil fields and refineries across the globe, intending to do a little social engineering: replace the current ruling class and “thin the herd” of a couple of hundred million extra people to bring the population down to more Gaia-friendly levels. Unfortunately, they break things a little too much. Like a high speed turbine engine, when destabilized too much the global economy basically tears itself apart and it’s “Say Goodnight, Gracie” to civilization.
It was an interesting read. Although I found the author’s premise that if the oil taps were turned off Monday evening then by Thursday morning we’ll all be living in a “Road Warrior” world kind of hard to swallow. Maybe in the UK (where the story is set), but not as likely here in the US. We do have some resiliency, at least in the short term, I believe.
Link