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« WATCH LIVE: BP Might Have Stopped The Leak | Main | Coach Bob Knight Annihilates BP Executives For 'Lazy, F#@***ing Response' To Oil Spill »
Friday
May282010

Revisiting the Scene of the Crime: Did the Bailouts Save the World Or Just Wall Street Bonuses?

Brown's Ice Cream in York, Maine -- Summer, 2009

---

 

By Daily Bail Contributor Dr. Pitchfork


Did the bailouts save the world? 

If you work at 200 West St., 270 Park Ave., or 1585 Broadway, then the bailouts saved your bacon (and your fat bonus).  If you happen to work, or have recently worked, at 33 Liberty St. in NYC, or at the Eccles Building in Washington, D.C. -- in other words, if you have been a complete and total failure as a bank regulator -- then the bailouts are probably the only thing standing between the pitchforks and your sweet, bureacratic ass.  But if you live and work in the real world, then the bailouts are nothing but a massive, heretofore unpunished crime against you, your children, and your children's children.  And let's not forget about your eighty-year old grandma.

Jeff Harding of The Daily Capitalist has a great post on the bailouts, epistemology and basic economics.  Did the bailouts save the world?  Harding says bailout apologists should prove it.  (They can't.)

---

David Wessel, I have five words for you: post hoc, ergo propter hoc.

Mr. Wessel is the Wall Street Journal’s chief economics commentator, and is often the face of the Journal on television. He wrote an article recently (“Bailouts Save Day, Win Scorn“) that laments the fact that, despite the fact that the bailouts saved the world, Mr. and Ms. America don’t believe it. In fact, he points out that Americans’ distrust of government and large corporations has grown as a result of the bailouts, something they see as unfair, and an example of cronyism between Wall Street and Washington.

Mr. Wessel is a bright guy, a star of a pro-capitalism newspaper. Yet he makes serious economic and logic errors that are not based on theory or the record. He needs a lesson in economics and epistemology (the science of how we know what we know).

I could further argue that the bailouts have actually harmed the economy and have delayed recovery because some of these large financial institutions were bankrupt and should have been allowed to go under in an orderly manner. The pain would have been intense, but short. Now we are still in pain, the economy is on the verge of setback, and we have saddled future generations with the cost of paying for it.

There is no basis to say that fiscal or monetary stimulus has saved the economy. I challenge Mr. Wessel to prove this assertion as well.

Since the Fed had boasted that it could easily manage recessions by pumping money into the system, why hasn’t that worked? Why are we still having a credit freeze? Why is money supply continuing to decline? Why is unemployment, especially U-6 unemployment, growing? Why are we experiencing deflation instead of inflation? Why does he assume that Keynesian fiscal stimulus has any lasting effect?

What really happened to us was the Great Panic of 2008.  I’m not talking about the collapse of Lehman Brothers.  I am talking about the panic of Hank Paulson and Ben Bernanke.  They had no idea what was happening at the time and didn’t know what to do.

Continue reading at The Daily Capitalist  >>

---

Pitchfork here.  This deserves it's own post, but here's the Minneapolis Fed's analysis of the "credit crunch" and how it affected non-financial companies.

---

 

UPDATE:  I'm pissed just looking over Harding's article, so I'm adding to my post.

Just to put a fine point on this:

1. The bailouts DID NOT save the world.
2. Jamie Dimon, Lloyd Blankfein, and Ken Lewis have received tens of millions of dollars SINCE the bailouts.
3. Meanwhile, YOU, Joe and Jane Taxpayer, got bent over and used like easy pieces of meat.
4. Finally, after being raped by the Titans of Paper Asset Trading, asswipes like David Wessel come along and tell you it was all for your own good and that you should just learn to enjoy being used and abused.

How does that make you chumps feel? It makes me want to hurt some people. Real bad.

Share your story -- how do you feel about being used and abused like this? Are you a chump?

 

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Reader Comments (28)

Great job pitchfork...enjoyed the various links...
May 28, 2010 at 4:57 AM | Registered CommenterDailyBail
Just to put a fine point on this:

1. The bailouts DID NOT save the world.
2. Jamie Dimon, Lloyd Blankfein, and Ken Lewis have received tens of millions of dollars SINCE the bailouts.
3. Meanwhile, YOU, Joe and Jane Taxpaye,r got bent over and used like easy pieces of meat.
4. Finally, after being raped by the Titans of Paper Asset Trading, asswipes like David Wessel come along and tell you it was all for your own good and that you should just learn to enjoy being used and abused.

How does that make you chumps feel? It makes me want to hurt some people. Real bad.

Share your story -- how do you feel about being used and abused like this? Are you a chump?
May 28, 2010 at 4:45 PM | Registered CommenterDr. Pitchfork
Pitchfork...

Why don't you add that part to the story above...
May 28, 2010 at 4:46 PM | Registered CommenterDailyBail
honestly, it's disgusting to read about fools like wessel...he should know better...he's a shill for the street and uses the fact that most people don't understand the multiple bailouts to make the case that rescuing the big banks did no harm...you did an admirable job encapsulating the anger that many of us feel...
May 28, 2010 at 5:49 PM | Registered CommenterDailyBail
I am no chump, I have been following this for 25 years, it is happening exactly as I expected it would...

Chumps are unprepared, hence the panic you can see as many post all over the internet as their assholes are quivering at the prospect that their future is destroyed, and trying to find one single responsible person.

When you buy into the dream of the poppy field, you get what you deserve. Have you ever read the Wizard of Oz, by Frank Baum?

I am not asking if you saw the movie.

http://www.wccusd.k12.ca.us/elcerrito/history/oz.htm

Brief synopsis, there is actually more to it.

Have you ever read Secrets of the Temple? It is a difficult read for many, but well worth it, and written way before Obankster.

http://www.wccusd.k12.ca.us/elcerrito/history/oz.htm
May 28, 2010 at 6:28 PM | Unregistered CommenterS. Gompers
"..... the bailouts are nothing but a massive, heretofore unpunished crime against you, your children, and your children's children."

Well said, Pitch.

The funniest (or saddest) part of all this is that most Americans are quivering in fear of Wall Street because if we move against them - the 401(k) gets it. What a joke.

I'm working on a piece right now about mutual funds as a group (hopefully it will knock your socks off). Here's the question: If you counted up all the money put in to mutual funds since 1980 (when 401(k) laws went into effect) and compared that to the Total Assets held by all mutual funds as of the end of 2009, what was the effective annualized rate of return?

Spoiler alert - it's better than stuffing your mattress, but how much better (and for how much longer)?

I'll tell you this: the current Wall Street model for "wealth creation" doesn't work and will never work. And these bailouts make as much sense as selling your home to buy lawn ornaments. Indefensible.
May 28, 2010 at 10:44 PM | Unregistered Commentermark mchugh
not to change the subject here...but Texas Dar and others have been discussing the possibility/likleyhood that a north korean sub blew up the deepwater...

i haven't said anything on this until now...i came across this article from the raw story...the person responsible for the idea has a crazy history of hoaxes...from the article:

-----

Conspiracies rum amok

Meanwhile, a variety of conspiracy theories about the sinking of the Deepwater Horizon drilling rig have emerged, with some suggesting that it may have been an Obama administration inside job, an attack by environmental terrorists, an indirect result of people liking meat or even an act of God.

One theory in particular that's been circling conspiracy sites claims the disaster was caused by a North Korean torpedo as a way of presenting an "impossible dilemma" to President Obama ahead of the United Nations nuclear summit, with the goal being total chaos in the world's nuclear arms debate. The writer, going by the name "Sorcha Faal", sourced the claim as part of a "grim" report circulating the Kremlin, providing no additional details as to how the information was obtained. That was apparently good enough for "The European Union Times," which ran the claims in-full.

Blogger Chris Baskind, writing for More Minimal, retorted:

Though the EU Times doesn’t attribute its source, a quick Google reveals the author to be Sorcha Faal, the well-know internet hoaxer. For perspective, some of Faal’s recent potboilers:

* Parliament Of Owls Gives ‘Final Warning’ To America
* US Quake Test Goes “Horribly Wrong”, Leaves 500,000 Dead In Haiti
* Ring Of Fire Eclipse Gives Grave Warning To World
* Norway Time Hole “Leak” Plunges Northern Hemisphere Into Chaos
* “Who Are They?” Russian Scientists Ask About Mysterious Objects Near Sun

Little green men, earthquake machines, and an accusatory congress of raptors. Entertaining stuff, but not a pedigree which lends much credence to the North Korean mini-sub story.
-----

here is the link...

http://rawstory.com/rs/2010/0504/russian-paper-suggests-nuclear-explosion-cut-gulf-oil-geyser/

----
May 28, 2010 at 10:55 PM | Registered CommenterDailyBail
Here's what I think about that, DB.

If there's only one thing that the US is still better than anybody else in the world at, it's tracking submarines. If it was an attack, or even a genuine accident, the Navy would know. The next question is, "would they tell us what really happened?" Maybe, maybe not. Who knows.

911 did wonders for the price of oil, and 15 of the hijackers were Saudi. I like conspiracies better when they actually make sense. just sayin'

The important thing is that we drop a nuke into the ocean floor so the Phillies can start scoring runs again. And Thanks for the link, DB!
May 28, 2010 at 11:30 PM | Unregistered Commentermark mchugh
Ofertas Hoteles Sitges - Hotel Dolce Sitges

http://www.youtube.com/watch?v=e9HhhkwNFFM
May 29, 2010 at 12:29 AM | Unregistered CommenterZarathustra
zara...what was the point of the clip from a spanish hotel in sitges?...i know sitges from the year i spent in spain...but i'm curious why you posted it...
May 29, 2010 at 8:31 AM | Registered CommenterDailyBail
"If there's only one thing that the US is still better than anybody else in the world at, it's tracking submarines. If it was an attack, or even a genuine accident, the Navy would know. The next question is, "would they tell us what really happened?" Maybe, maybe not. Who knows."

Mini subs are almost impossible to detect; only an estimated 14 percent of them are stopped, and usually scuttled after they are used. I am familiar with the "Kremlin" story, and if there is any truth to it, we will be the last to know. I am more inclined to believe that they were cutting corners to increase bonuses as several indicators are already showing, no seismic valve, salt water instead of drillers mud, etc. After all these are not British beaches they are worrying about,right? And when they sign the contracts it clearly says they can handle all problems...

http://www.nytimes.com/2009/04/26/magazine/26drugs-t.html?pagewanted=1&_r=1&adxnnl=1&adxnnlx=1275134683-
OngEGdAedpa111Aqepo%20ZQ

Wait till we get a load of Chinese exploitation of our resources in the Gulf, I am sure they will do everything they can to achieve a safe and enviromentally sensitive exploitation, right? Based on their past track records of course.

http://articles.latimes.com/2009/oct/22/business/fi-china-oil22

Anyone ever realize that some things are more valuable to the Chinese than our fake paper debt? They will make way more off our resources and trade agreements that they force upon us than they ever will in fake paper.
May 29, 2010 at 8:40 AM | Unregistered CommenterS. Gompers
They will make way more off our resources and trade agreements that they force upon us than they ever will in fake paper.

----------

Precisely. Outstanding point.
May 29, 2010 at 10:12 AM | Registered CommenterDailyBail
And yet because of our determination to honor this fake paper, we will give up our resources...

At some point there will be a move to disavow our debt to china...peter schiff said it...they own less than a trillion of treasuries...hell the Fed has bought more than that in the last 18 months...

And they purchased the treasuries with newly printed money (credit)...so it didn't really cost them anything....easy sleezy...
May 29, 2010 at 10:24 AM | Registered CommenterDailyBail
“Bilderberg-controlled news outlets in Europe and the Western Hemisphere are conditioning the public to accept two of the super-secret elite’s major goals in advance of its meeting June 4-7 in Sitges, Spain: a U.S. attack on Iran and a financial bailout of Greece and other European Union (EU) countries,” writes Tucker.

http://www.prisonplanet.com/bilderberg-the-open-conspiracy.html
May 29, 2010 at 1:08 PM | Unregistered CommenterZarathustra
May 29, 2010 at 1:18 PM | Unregistered CommenterZarathustra
That is the Rothschild's Godfather theme...does it work? It is a bit of revisionist history for a faster piece with a little more drama and melancholy.

I just didn't so much like the tune Chopin actually wrote for them...

http://www.youtube.com/watch?v=DqihZwPkkGo

The Ballade No. 4 in F minor, Op. 52 is the fourth and final of Polish composer Frédéric Chopin's ballades for solo piano. It was composed in 1842 in Paris and Nohant, and revised in 1843. The work was dedicated to Baronne C. de Rothschild, wife of Nathaniel de Rothschild,[2] who had invited Chopin to play in her Parisian estate, where she introduced him to the aristocracy and nobility.
May 29, 2010 at 1:29 PM | Unregistered CommenterZarathustra
May 29, 2010 at 1:50 PM | Unregistered CommenterZarathustra
"Share your story -- how do you feel about being used and abused like this? Are you a chump?"

OK. This is how *I* dealt with it;

I bought myself a house ...OVERSEAS.
I took all my savings out of the bank and bought precious metals with it ...3 years ago.
I sold all of my American stocks and bought Northern EU & Asian stocks instead.

Oh! Almost forgot; I also wipe my ass religiously with the American flag after pooping.
May 29, 2010 at 3:29 PM | Unregistered CommenterRecoverylessRecovery
Was the house in Poland with borrowed Swiss francs because, ummmm, I got some bad news for you.

What Asian stocks did you buy?

Please don't answer, I was born at night but it wasn't last night.
May 29, 2010 at 3:53 PM | Unregistered CommenterZarathustra
"Was the house in Poland with borrowed Swiss francs..."

WRONG country, AND I paid it off in CASH.

"What Asian stocks did you buy?"

The ones that are going UP and will probably continue to do so for the next 10 years.
May 29, 2010 at 5:37 PM | Unregistered CommenterRecoverylessRecovery
What grade did your high school teacher give you for the project? Sounds like you did a good job on it.
May 29, 2010 at 6:18 PM | Unregistered CommenterZarathustra
If safeguarding one's assets and investing wisely can be considered a 'high school' project, then BY ALL MEANS make fun of me.

I'll make sure to RETURN the favor & remind you of your stupid comments when the INEVITABLE time comes for you to start DUMPSTER DIVING in search of your next meal.
May 29, 2010 at 7:26 PM | Unregistered CommenterRecoverylessRecovery
OBAMA IS HOMESICK...

President Barack Obama is spending the long Memorial Day holiday weekend at home in Chicago, where he will sleep in his own bed for the first time in more than a year.

... from a Huffington Fluff piece
May 29, 2010 at 10:08 PM | Unregistered CommenterZarathustra
BILL CLINTON IS OBAMA'S ERRAND BOY OR SO THEY SAY

Yes, former President Clinton does political duties for Obama and Rahm Emanuel."

http://www.foxnews.com/politics/2010/05/29/clintons-role-sestak-controversy-stirs-questions-white-house-motives/
May 29, 2010 at 10:25 PM | Unregistered CommenterZarathustra
WOW, THIS ARTICLE IS SPOT ON!!!!!!!!!!!!!!

Barack Obama's credibility hits rock bottom after oil spill and Sestak scandal

The combination of Obama's passivity over the Gulf oil spill catastrophe and his cynical political manoeuvrings could spell disaster for him, argues Toby Harnden

Central to Obama's appeal was his promise to be truly different. His failure to achieve that is now at the core of the deep disappointment Americans feel about him.

Even worse was Obama's refusal to say anything about the growing furore over White House attempts to persuade Congressman Joe Sestak to pull out of the Democratic Senate primary contest in Pennsylvania. Obama's advisers had preferred the Republican turncoat Senator Arlen Specter - and Sestak inconveniently let slip that he'd been offered a government job to step aside.

Whether or not the law was broken, the cynicism of this is breathtaking. Obama offered a break from the Clinton-Bush past and an end to the shoddy backroom deals of Washington. So what does he do? He tries to deny Pennsylvania voters a chance to decide for themselves by using his former foe Clinton to offer a grubby inducement.

http://www.telegraph.co.uk/news/worldnews/northamerica/usa/barackobama/7783408/Barack-Obamas-credibility-hits-rock-bottom-after-oil-spill-and-Sestak-scandal.html
May 29, 2010 at 10:38 PM | Unregistered CommenterZarathustra
@RecoverylessRecovery please get back to me here PL
Mar 26, 2011 at 7:34 PM | Unregistered CommenterCosmic

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