The Giant Banks, Federal Reserve and Treasury Have All Blackmailed America
May 22, 2010
As I wrote last October:
Congressmen Brad Sherman and Paul Kanjorski and Senator James Inhofe all say that the government warned of martial law if Tarp wasn’t passed. And Rahm Emanuel famously said:
Never let a serious crisis go to waste. What I mean by that is it’s an opportunity to do things you couldn’t do before.
•Senator Leahy said “If we learned anything from 9/11, the biggest mistake is to pass anything they ask for just because it’s an emergency”
•The New York Times wrote:
“The rescue is being sold as a must-have emergency measure by an administration with a controversial record when it comes to asking Congress for special authority in time of duress.”
Mr. Paulson has argued that the powers he seeks are necessary to chase away the wolf howling at the door: a potentially swift shredding of the American financial system. That would be catastrophic for everyone, he argues, not only banks, but also ordinary Americans who depend on their finances to buy homes and cars, and to pay for college.
Some are suspicious of Mr. Paulson’s characterizations, finding in his warnings and demands for extraordinary powers a parallel with the way the Bush administration gained authority for the war in Iraq. Then, the White House suggested that mushroom clouds could accompany Congress’s failure to act. This time, it is financial Armageddon supposedly on the doorstep.
“This is scare tactics to try to do something that’s in the private but not the public interest,” said Allan Meltzer, a former economic adviser to President Reagan, and an expert on monetary policy at the Carnegie Mellon Tepper School of Business. “It’s terrible.”
Not Just Government
But it’s not just government . . .
If the too big to fails say that the world economy will crash and there will be martial law unless they are bailed out, politicians – most of whom don’t understand finance or economics – will believe them, and sound the alarm themselves.
As Karl Denninger wrote yesterday:
[S]ounds like “Bail me out or I will crash everything.”