The Bond Traders With Their Hands On The Train Whistle

Obama almost acts controlled. As David Stockman, Reagan’s former budget director, remarks, where is his fortitude? He should be saying to Congress: “If you send me a bill that extends tax cuts for billionaires and yet doesn’t deal with ending the deficits, it’s going to get vetoed.”

I should watch more of Fareed Zakaria’s GPS. I don’t agree with him all the time, and sometimes I strongly disagree with him, but I like his perspective because it is something other than strictly American. And I like it that he brings people on his show who will say uncomfortable things. Like Stockman, who is scathing on both parties.

As Stockman says, the Fed is playing a most dangerous and irresponsible game to avert reality, the reality that 30 years of debt-fueled binging have left the US financially and monetarily precariously fragile. If and when the bond traders of the world lose faith in the US fiscal process, the resulting sell off of US treasury bonds will be a catastrophe for US finances, forcing the Fed to raise interest rates and throw us into a Depression, or let it ride and watch government essentially implode.

Stockman also says these debt-fueled serial bubbles shifted wealth—the super-wealthy benefitted from them monstrously disproportionally. And he says that the previous party of fiscal restraint and responsibility, the Republican Party, shifted to tax cutting that became an ideology, even when it was demonstrated time and again that it didn’t work, but only shifted wealth upward and actually made deficits worse.

Stockman, who is writing a book on the financial crisis, says the panic was in Wall Street and the Treasury far more than anywhere else, and they showed who had the power, for they deceived us not only previously, but in what was ACTUALLY necessary to restore economic stability. The floodgates were released for them far past anything needed, and these floodgates meant they could return to their obscene profits and wealth transfer (they will hand out $144B in bonuses this year alone).

Anyone still in doubt about who has the real power? Still want to trust them? Believe it when they say the economy is recovering nicely?