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79% of Americans Want an Audit of the Fed, Only 21% are in Favor of Confirming Bernanke, and Only 20% Think Geithner is Doing a Good Job

George Washington's picture




 

79 percent of the American public is in favor of auditing the Fed,
according to a new poll by Rassumussen. Because another 14% are not
sure, that leaves only 7% opposed to an audit. And as Rassumussen, the
support for auditing the Fed is nonpartisan and very widespread:

Unlike many issues tracked by Rasmussen Reports, there is virtually no partisan disagreement on the issue of auditing the Fed.

 

Similarly,
investors and non-investors are equally supportive of the idea.
Generally speaking, there is overwhelming support for such auditing
across all demographic categories.

Another poll by Rassumussen shows that only 21 percent of Americans favor confirming Bernanke for another term as Fed chairman.

Rasumussen also points out:

 

Americans
continue to be critical of another key player on the economic front,
Treasury Secretary Timothy Geithner. Forty-two percent (42%) of
Americans say Geithner has done a poor job
handling the credit crisis and federal bailout programs. Twenty percent
(20%) rate Geithner’s performance in these areas as good or excellent.

 

Consumer confidence as measured by the Rasmussen Consumer Index has fallen to a four-month low.

Small Businesses Have Lost Confidence Also

You
might assume that - despite the public's lack of confidence in
Bernanke, Geithner and the economy - at least businesses are confident.

However, as Rassumussen notes:

After three months of gains, the Rasmussen Employment Index
dropped more than four points in November to its lowest level since
July. Just 14% of workers now say their employers are hiring, the
lowest total since February.

 

Economic confidence
among America's small business owners in the Discover (R) Small
Business Watch(SM) index plummeted in November, as more owners cited
serious concerns about cash flow and saw economic conditions for their
own businesses getting worse.

Specifically, Discover reports:

 

Economic
confidence among America's small business owners plummeted in November,
as more owners cited serious concerns about cash flow and saw economic
conditions for their own businesses getting worse. The Discover Small
Business Watch index fell 12 points in November to 76.5 from 88.5 in
October...

  • The mood of small
    business owners generally has soured in November for three straight
    years, as economic confidence dropped from October to November in 2007
    and 2008. The November 2008 index of 67.5 is the low point for the
    Watch since it started in August 2006.
  • 52
    percent of owners say they have experienced cash flow issues in the
    past 90 days, up from 44 percent in October. Forty-one percent of
    owners say they have not experienced cash flow issues, which is the
    lowest response in this category since the Watch began. The remaining 6
    percent said they weren't sure.
  • 53
    percent of small business owners see conditions getting worse in the
    next six months, up from 43 percent in October; while 19 percent report
    that conditions are improving, a sharp decline from 29 percent in
    October; 23 percent see conditions as the same, and 5 percent weren't
    sure.
  • 62 percent of small business
    owners rate the economy as poor, an increase from 55 percent in
    October; 30 percent rate it as fair, and 8 percent say it is good or
    excellent.
  • 53 percent of small
    business owners think the overall economy is getting worse, up from 44
    percent in October but still significantly lower than the 69 percent of
    owners who felt that way in February 2009, the last time the Watch
    index was this low. For November; 28 percent say the economy is getting
    better, down from 35 percent in October; 16 percent see it staying the
    same, and 3 percent are not sure.

Wall Street
might believe that everything is grand, but small businesses are the
engines which create job growth in America, and if they are
pessimistic, they won't hire.

The Economy Cannot Recover Until Bernanke and Geithner are replaced

As I have repeatedly written, the economy cannot fundamentally stabilize until trust is restored.

Former Secretary of Labor Robert Reich wrote that Wall Street's biggest problem right now is the collapse of trust:

The
problem is, government bailouts, subsidies, and insurance aren't really
helping Wall Street. The Street's fundamental problem isn't lack of
capital. It's lack of trust. And without trust, Wall Street might as
well fold up its fancy tents.

A 2005 letter in premier scientific journal Nature reviews the research on trust and economics:

Trust ... plays a key role in economic exchange and politics. In the absence of trust among trading partners, market transactions break down.
In the absence of trust in a country's institutions and leaders,
political legitimacy breaks down. Much recent evidence indicates that
trust contributes to economic, political and social success.

Forbes wrote an article in 2006 entitled "The Economics of Trust". The article summarizes the importance of trust in creating a healthy economy:

Imagine
going to the corner store to buy a carton of milk, only to find that
the refrigerator is locked. When you've persuaded the shopkeeper to
retrieve the milk, you then end up arguing over whether you're going to
hand the money over first, or whether he is going to hand over the
milk. Finally you manage to arrange an elaborate simultaneous exchange.
A little taste of life in a world without trust--now imagine trying to
arrange a mortgage.

 

Being able to trust people might seem like a
pleasant luxury, but economists are starting to believe that it's
rather more important than that. Trust is about more than whether you
can leave your house unlocked; it is responsible for the difference
between the richest countries and the poorest.

 

"If you take a
broad enough definition of trust, then it would explain basically all
the difference between the per capita income of the United States and
Somalia," ventures Steve Knack, a senior economist at the World Bank
who has been studying the economics of trust for over a decade. That
suggests that trust is worth $12.4 trillion dollars a year to the U.S.,
which, in case you are wondering, is 99.5% of this country's income. ***

 

Above all, trust enables people to do business with each other. Doing business is what creates wealth. ***

 

Economists
distinguish between the personal, informal trust that comes from being
friendly with your neighbors and the impersonal, institutionalized
trust that lets you give your credit card number out over the Internet.

Similarly, market psychologists Richard L. Peterson M.D. and Frank Murtha, Ph.D. wrote in 2008:

Trust is the oil in the engine of capitalism, without it, the engine seizes up.

Confidence is like the gasoline, without it the machine won't move.

Trust
is gone: there is no longer trust between counterparties in the
financial system. Furthermore, confidence is at a low. Investors have
lost their confidence in the ability of shares to provide decent
returns (since they haven't).

And two professors of finance write:

The
drop in trust, we believe, is a major factor behind the deteriorating
economic conditions. To demonstrate its importance, we launched the
Chicago Booth/Kellogg School Financial Trust Index. Our first set of
data—based on interviews conducted at the end of December 2008—shows
that between September and December, 52 percent of Americans lost trust
in the banks. Similarly, 65 percent lost trust in the stock market. A
BBB/Gallup poll that surveyed a similar sample of Americans last April
confirms this dramatic drop. At that time, 42 percent of Americans
trusted financial institutions, versus 34 percent in our survey today,
while 53 percent said they trusted U.S. companies, versus just 12
percent today.

 

As trust declines, so does Americans’
willingness to invest their money in the financial system. Our data
show that trust in the stock market affects people’s intention to buy
stocks, even after accounting for expectations of future stock-market
performance. Similarly, a person’s trust in banks predicts the
likelihood that he will make a run on his bank in a moment of crisis:
25 percent of those who don’t trust banks withdrew their deposits and
stored them as cash last fall, compared with only 3 percent of those
who said they still trusted the banks. Thus, trust in financial
institutions is a key factor for the smooth functioning of capital
markets and, by extension, the economy. Changes in trust matter.

They quote a Nobel laureate economist on the subject:

“Virtually
every commercial transaction has within itself an element of trust,”
writes economist Kenneth Arrow, a Nobel laureate. When we deposit money
in a bank, we trust that it’s safe. When a company orders goods, it
trusts its counterpart to deliver them in good faith. Trust facilitates
transactions because it saves the costs of monitoring and screening; it
is an essential lubricant that greases the wheels of the economic
system.

America knows that Bernanke and Geithner have acted
in the interests of the largest banks, and not done much to help Main
street or the American people.

Trust will not be restored until
Bernanke and Geithner are replaced with people whose loyalty is to the
American public and small businesses, rather than the Wall Street
giants, and whose track record demonstrates that they will put the
entire economy as a whole - rather than the big boys - first.

 

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Tue, 12/08/2009 - 00:52 | 156201 Anonymous
Anonymous's picture

Who are you all anyways? A bunch of bitter Lehman employees pissed GS got the best of ya?

Tue, 12/08/2009 - 00:50 | 156198 Anonymous
Anonymous's picture

Anon wrote:
"Funny that this is the same theme in "Fight Club", and the the great unwashed masses hae a name:"
I mashed up some footage I shot in 'Nam and uploaded it as Viet Cong Fight Club. Got a ton of hits until YouTube's algos nailed my for copyright infringement. (tip: never use more than 25 seconds of a song unless you really smudge it up)...
here's a Helicopter Ben mash-up that seems to be crowd favorite, notice how similar looking Bernanke and the simian are...

http://www.youtube.com/watch?v=FrpuVDMW6lw

Mon, 12/07/2009 - 22:45 | 156110 Anonymous
Anonymous's picture

Hello all and thank the Godz for ZH!!! From the view of the "unintelligent unwashed masses", this is a tyme of "social flux". We know the polls of the American Citizenry:

A majority do not want the "Halth Care Bill" currently proposed.
A Majority believe their elected representatives are crooks.
The Congress has the lowest approval rating in history.
A majority want their "elected representative" to read a bill and understand it before they vote on it.
A majority want the CEOs heads of the corrupt banks that took bailouts.
A majority want the heads of the elected representatives that voted for this folly.

And they will get their heads, eventually. Just "after the major fall". When the electronic trinkets no longer are attainable, and the family unit will again have to turn from the distraction of "all this crap" filling up their houses and actually see what a mess we and our country have becom, as represented by the economy by proxy of spendthrift on credit on shit we don't need.

If there will be "blood on the floor of the Senate" figuratively, then the real stuff will not be too far behind when American Citizens have to do without "necessities".

Funny that this is the same theme in "Fight Club", and the the great unwashed masses hae a name:

"When a mamber of Project Mayhem dies, he gets a name, His name is Robert Paulsen."

Mon, 12/07/2009 - 20:20 | 155997 windiepink
windiepink's picture

...79% you say? And this assumption is based on?

Mon, 12/07/2009 - 20:03 | 155986 Anonymous
Anonymous's picture

We cannot fall into apathy and despair ourselves, no matter how justified. If we (and I feel the ZH community is the top 10% of finance-savvy 'Netizens) give up and say nothing can be done, how does this help? Do you have some other planet to retire to and forget about this place? We have to continue to be here and communicate, expose the crimes and demand (and facilitate) changes that are actually useful and not a furtherance of the corporate tapeworm.

Mon, 12/07/2009 - 19:45 | 155971 Anonymous
Anonymous's picture

THE TRUST IS GONE!!!

Whatever the government is pushing or promising, you can count on the exact opposite to happen!!

We are not fooled, but must act en masse to change anything!

Mon, 12/07/2009 - 19:43 | 155969 Anonymous
Anonymous's picture

if 0.79% of these people were armed, and stormed washington, then you would see an audit; forget about otherwise.

Mon, 12/07/2009 - 20:42 | 156020 Cheddar Bob
Cheddar Bob's picture

short and sweet.

Mon, 12/07/2009 - 18:02 | 155847 Anonymous
Anonymous's picture

um, am I the only one who read all the quotes and came away thinking you completely missed the point? The players don't trust each other is the problem, the "trust" you are referring to, while you are positing that the big problem is the players don't trust the ref.

Also, since when do americans have any f*cking clue about anything? We can't locate russia on a map and we sure as hell have no clue what ben bernanke even does, never mind whether he's doing it right.

Mon, 12/07/2009 - 17:50 | 155837 Anonymous
Anonymous's picture

Its going to end up like "Save the Tiger"
http://www.imdb.com/title/tt0070640/

Mon, 12/07/2009 - 16:33 | 155734 trav777
trav777's picture

WTF...someone is cribbing my goddamned writing!

I am the one person I've ever seen who uses "zugzwang" in economic writing and now I see it pop up in an article by Clive Maund

Mon, 12/07/2009 - 16:12 | 155690 Anonymous
Anonymous's picture

The real demise of our great country began when we stopped smoking cigarettes. America was a great place when we smoked.

Mon, 12/07/2009 - 15:50 | 155651 DaveyJones
DaveyJones's picture
79% of Americans Want an Audit of the Fed, Only 21% are in Favor of Confirming Bernanke, and Only 20% Think Geithner is Doing a Good Job....and four out of five dentists recommend sugarless gum for their patients who chew gum What else is new. They all suck. Gordon Gekko's Got it Right. Start from Scratch.  This batch is spoiled   
Mon, 12/07/2009 - 15:31 | 155621 Anonymous
Anonymous's picture

There will be no Audit of the Fed... everyone knows it, especially Ron Paul who concedes that the bill will likely be amended, watered down, delayed and castrated.
Those who are charged with enacteing and enforcing the law have been purchased by corporate, private and/or criminal cash.
It is impossible for anyone to be elected without this money, and once elected must pay off their sponsors by promoting that interest in opposition to the interests of the electorate.
The sheeple meanwhile are distracted and divided by red herring issues promulgated by the media who dominate and set the national discourse.
Where is there hope? Only in that the system crashes quickly ...the conspirators will flee and maybe, just maybe we get our liberal democracy back

Mon, 12/07/2009 - 15:26 | 155616 Anonymous
Anonymous's picture

SEND THE POLL DATA TO ALL THE US SENATORS!!!

Mon, 12/07/2009 - 14:00 | 155452 anarkst
anarkst's picture

"Trust will not be restored until Bernanke and Geithner are replaced with people whose loyalty is to the American public and small businesses, rather than the Wall Street giants,..."

 

Trust??  America is full of liars.  Nobody trusts anybody anymore.  All of these characters are infinitely interchangeable and replaceable.  If the professional class knows how to do anything, it knows how to lie, cheat, and steal.  America needs to confess, repent, and only then can confidence be restored.   

Mon, 12/07/2009 - 13:16 | 155384 Anonymous
Anonymous's picture

I don't see how firing Geithner and Bernanke will solve anything. There is a rotating staff of people flitting between Goldman Sachs, the Federal Reserve, the Treasury, and whatever "preferred" financial organizations exist at the moment.

When there is enough light shined on these two cockroaches they will be dispatched and another tentacle of the vampire squid will swing into position. Nothing will change until the wrong lever is pulled and it spirals out of control.

We need complete collapse and economic reset, not the next central planner waiting in the queue.

Mon, 12/07/2009 - 19:32 | 155954 Cistercian
Cistercian's picture

 Unfortunately, the discussion of the American, and proper recourse to this problem is banned from this site.This is due, in no small measure, to the anti-American totalitarian reality in which we now exist.If the "reset" you refer to occurs, have no illusion as to how the mess will play out.

 I agree with your premise.I wish I could discuss the actual ramifications of it and what it would entail.Complete collapse....it seems so close.It must seem closer to those who are homeless due to job loss.They are already in the sad vanguard of where we are headed as a nation....total dispossession.

 Was not Thomas Jefferson's prescience incredible?

Mon, 12/07/2009 - 13:03 | 155352 Neo of Zion
Neo of Zion's picture

The entire value of our currency is trust - look at the back of your dollar.

IN GOD WE TRUST

and no other...

Mon, 12/07/2009 - 23:34 | 156156 Hephasteus
Hephasteus's picture

The dollar is like the FED and the SEC. In GOD we trust. Everybody else is under suspicion.

Mon, 12/07/2009 - 13:02 | 155350 Anonymous
Anonymous's picture

The Fed will not get audited...everyone knows this, even Ron Paul admits that the bill will be watered down, amended or otherwise delayed... so that in practise, there is no hope that the right action will be taken. The sad fact is that legislators have been bought off by the interests they are suppossed to regulate.
Politicians can't get elected without sponsorship money.. corporate, private contractor and criminal interests are effectively sheilded from regulation by their employees...
The sheeple continue to be distracted by a media blitz of red herring issues designed to create confusion, divert attention and sew division. We are getting what we deserve...servitude and a declining standard of living.

Mon, 12/07/2009 - 12:55 | 155335 Careless Whisper
Careless Whisper's picture

We need a triple play; Bernanke, Geithner, Summers. They are sooo 90's and everything that is wrong with the way things are headed.

Mon, 12/07/2009 - 13:05 | 155358 Neo of Zion
Neo of Zion's picture

ZH so 2008, Fed so 2000-late

Mon, 12/07/2009 - 12:49 | 155329 Anonymous
Anonymous's picture

You say, "Trust will not be restored until Bernanke and Geithner are replaced with people whose loyalty is to the American public and small businesses, rather than the Wall Street giants, and whose track record demonstrates that they will put the American people and entire economy as a whole - rather than the big boys - first."

I agree that Bernanke and Geithner must be replaced, however, it would be just as bad of a policy for their replacements to give taxpayer handouts to individual borrowers and small businesses as it is for them to be giving out taxpayer handouts to "Wall Street giants". Government officials must faithfully and evenhandedly uphold the rule of law -- i.e. the Constitution. They must not steal the hard-earned fruits of the taxpayers' labor to redistribute to anyone -- big or small. Redistributing wealth from the responsible to the irresponsible - whether big or small - is a moral hazard in that it only encourages more bad behavior.

In the United States, justice is supposed to be blind and we are all supposed to be equal under the law. Trust will not be restored until the rule of law is enforced evenhandedly. Right now, the government is constantly ignoring the law or changing it to favor those that they consider too big or too well-connected to fail. (e.g. stealing taxpayer money to pay off private losses of banks/borrowers through bailouts; changing accounting rules to allow banks to appear solvent by avoiding marking their assets to market; allowing tax cheats like Geithner and Rangel to not only go unpunished, but to hold powerful positions in which they make and enforce against ordinary citizens the very laws that they themselves broke) The rules are only being enforced against the little guy (e.g. if you or your neighbor failed to pay your taxes you would be hit with fines, penalties, and possibly jail time; if you fail to pay your mortgage, you will lose your house).

Until the law is enforced evenhandedly, there will be no confidence. Constantly changing the rules in the middle of the game does not inspire confidence. Allowing too-big-to-fail firms to get away with fraud does not inspire confidence. Paying off bank losses from failed loans with taxpayer dollars does not inspire confidence. Paying for individual borrowers' mortgages or for their cars, appliances, or caulking with taxpayer dollars does not inspire confidence. If the government wants to restore confidence in the system, they must stop the looting, start prosecuting, and claw back taxpayer money spent on unconstitutional bailouts and stimulus.

Mon, 12/07/2009 - 16:51 | 155756 Miles Kendig
Miles Kendig's picture

It is supremely unfortunate that the fine lady that stands outside of or atop most courthouses in America has indeed had her blindfold ripped off, been trafficked, scales tossed aside, forced to wear a pastel micro-mini, clear heels and charges by the minute. Until this wonderful lady upon whom our society rests is restored we are in for rough sledding.

Mon, 12/07/2009 - 12:46 | 155319 Anonymous
Anonymous's picture

This is simple. Cannibals rule the earth and have since the beginning of time since they are the predatory of our human species. Cannibals have families to take care of and in the MARRIAGE OF CLINTON & GOLDMAN SACHS how can any one with a spark between two brain cells not figure this grand game out!

The GLOBALISTS are a family of cultists in reality. And, they are mass murdering criminally insane poly-addicted druggies.

RUSSIA is outing them and of course they got the PERM tragedy as well as the train wreck back-to-back, to remind them what happens when cannibals are pissed off.

And don't forget the Bloomberg reporter who had a heart attack when the new gun info on shooting and causing cardiac arrests was released as one of the new and improved weapons sold by the globalists, but of course.

In a word, GLOBALIZATION. It is a ways and means to take the human population of earth and ethnically cleanse enough so the families (Clintons & Goldman Sachs, et al.) can manage their drug addict offspring who cannot find their brains cells to learn what the word work means.

http://www.tpuc.org/content/climategate-whos-who

Mon, 12/07/2009 - 12:24 | 155281 trav777
trav777's picture

Trust won't be restored.  We have larger problems.

You may trust your counterparty, but if his business plan has no hope of succeeding, you aren't committing capital to it.

The business plan of world economics is to GROW out of this mess.  We have an economy that works like a tumor.  Grow and consume.

Firing Geithner and Bernanke won't make a single bit of difference.  Their stupidity or inability to accept reality won't make the real world function differently.

Every move these guys have made is foreordained.  Look at NeObama...he was calling to pull the troops out during the campaign.  Now, he gets in and what does he do?  The opposite.  That is because he doesn't HAVE the option to do what he wants or what he promised.

This is like sitting down to a chessboard played by somebody else and you're already in the endgame.  The moves are already determined at that stage of the contest.  Al Gore would have invaded Iraq because of the oil supply situation and impending Peak, which Dick Chainy talked about repeatedly.  This is zugzwang.

The die really is already cast here, and everybody must fill their roles in the play.

Mon, 12/07/2009 - 20:37 | 156014 Anonymous
Anonymous's picture

agreed.

Mon, 12/07/2009 - 20:12 | 155991 Ripped Chunk
Ripped Chunk's picture

I have to say I agree with everything you write here.

Mon, 12/07/2009 - 12:03 | 155248 Miles Kendig
Miles Kendig's picture

Trust - A state where our political class tell us one thing while doing another. (See Bush and a "minimalist foreign policy" or Obama "Change we can believe in")

Confidence - A condition where we are led to believe that commerce and exchange can be accomplished with continuity while actively destroying the value of that very medium of exchange.  (See the Bush & Obama policies of supporting a strong dollar vs the history of the DXY.  While Bush said deficits don't matter while sustaining the "heart of the nation" - The money center banks with the ownership society, Obama acts like with the trillions he is giving away (23.7 trillion known to date) to sustain full employment and the mandated minimum wage in said heart of the nation he must up the ante on the crumbs tossed to the masses to sustain said confidence while fighting a losing battle against total collapse and default by state, county and local governments across the nation.)

Full Employment - A condition where given the number of citizens with employment capable of sustaining economic development (That thing called the entrepreneurial spirit) and economic sustainment (Where those things called wages payable in a currency - See "confidence" above) are sufficient to maintain the economic balance of the debt service of that society.  (The needs of the banks and the government that serves them is paramount to the security and health of the nation.  Not some quaint, romantic ideas about small businesses being sustained by the psychology of a nation premised upon the entrepreneurial spirit and free enterprise.  Laughing stock concepts that trust and confidence are marketable commodities easily manipulated via a Broad Street or Madison Avenue ad campaign.  At least we now know who is the very personification of GOD on earth thanks to the good Lord Blankfein and his Broad Street campaign.)

I suspect that given these operative conditions many Americans find themselves in it is no wonder so many are rejecting these constructs of trust, confidence and full employment and finding themselves labeled 'unable to adapt" and cosigned to a life of Ritalin, Xanax, Porzac and all of the other pharmaceuticals so necessary to keep trust & confidence going. As more and more folks examine the structure and decide that the citizens who reject the construct are in fact reacting normally to an abnormal situation and these citizens come to terms with the reality that it is the so called heart of the nation and those that populate and perpetuate it that are quite sick. 

Mon, 12/07/2009 - 11:45 | 155237 earnyermoney
earnyermoney's picture

In my opinion, trust will be restored when perpetrators of financial fraud are prosecuted for their crimes. This includes individuals in the public and private sector.

If an audit of the Federal Reserve were to happen, I'm confident it would reveal the criminal nature of the Treasury and Federal Reserve.

Mon, 12/07/2009 - 17:17 | 155794 Anonymous
Anonymous's picture

Assuming, of course, that the auditors themselves are not also "captured" and that enough information is released publicly via the FIA.

Mon, 12/07/2009 - 11:28 | 155215 Ned Zeppelin
Ned Zeppelin's picture

It's time for another Zero Hedge status update and push on the Audit the Fed bill.  The Bernanke "hearings" and inevitable reconfirmation are not worth the political energy.  There is a slight chance that Audit the Fed could pass, I think, but we'll never know unless we push it here and elsewhere as hard as we can.

Mon, 12/07/2009 - 11:27 | 155210 SWRichmond
SWRichmond's picture

Mises, in his masterful essay "Economic Calculation in the Socialist Commonwealth", showed clearly why command economies must fail: by thwarting price signals, capital and resources are misallocated and economic activity breaks down.  The fact that "our servants" can still believe that we can lie our way out of this mess shall stand as a lasting monument to hubris.  Trust cannot be restored until truth is restored, and truth cannot be restored until a critical mass of players loses faith in the command economy.  When the looting stops, that will be the signal. 

Mon, 12/07/2009 - 15:17 | 155601 B9K9
B9K9's picture

SW, I generally like your comments, as they tend to be unique & insightful, but like a few other intelligent posters, you really need to dispense with the naivete.

Mises, to his everlasting credit, was an intellectual, much like Rothbard, who believed in the product of his work. Hence, his conclusions that command economies fail primarily due to technical reasons such as misallocation of resources, etc.

Hayek has much better insight and gets right down to the crux of the issue: forget such niceties such as inefficient pricing signals, etc. The bottom line is that ANY top heavy social structure will INEVITABLY produce a Hitler-esque environment.

The assignment of monopoly power to various state functions, to the detriment of the private sector, simply ensures that pathological criminals will be attracted to the most valuable, yet weakest link in the economic system.

Our servants, as you call them, no more believe that they can lie their way out of this mess than they believe in Santa. The point is that they simply DO NOT CARE whether or not you recognize that they are looting in broad daylight.

The criminal class are "all in" that nothing will personally happen to them. Right now, it's getting to the point of a wolf pack killing frenzy, where the predators are experiencing an endorphin high of complete nihilistic behavior.

A few posters @ ZH get it; others who aren't so subtle get banned/regulated. I am patiently waiting for you, Deadhead, et al to stop with the "if they just did this, then perhaps things could get better" line of reasoning.

There's only one solution, and that is a complete re-build after this sucker goes down.

Mon, 12/07/2009 - 21:57 | 156077 SWRichmond
SWRichmond's picture

Do not imagine me naive.  Many different stripes come here to ZH and read, bringing many different grasps of the elephant. I have engaged in this discussion with many different people with may different outlooks, some of whom are totally immune to or dismissive of any discussion of corruption as the cause for failure (they will assert that all systems are corrupt and cite examples of systems that continued to exist for hundreds of years).  I know there is a criminal class running the show.  I have clearly stated elsewhere, and perhaps here on other occasions, that "we are living in a criminal conspiracy and we are the marks."  Merely repeating this message will continue to fail to reach those who are dismissive of it; believe me, I've tried. 

I consider it possible, though, that some who might ignore a message based on corruption might be receptive to one that is more technical, especially since this is a technical market site.  And it is a fact that command economies must fail, in spite of everything else, because no one is smart enough to correctly divine the  wants and needs of hundreds of millions of individual souls, and because ultimately no one produces anything of value anymore, and for all the reasons outlined by Mises.  It does no harm to point to the great body of scholarly research that exists but remains largely unknown because it is not what TPTB want people knowing.

Those of us who have studied history must do everything in our power to bring as many to our side as possible and prepare them for the crisis; it is out of the crisis itself that Hitler arose.  The uninformed and unprepared will want a strongman to fix things for them.  Scary times indeed.  When I look across the water at the control and surveillance society that UK has become I see where we might be headed in just a few years' time. 

Edit: "When the looting stops" is a reference to the time when there is nothing left worth taking and the efforts by the government to prop up the system will cease.  That is when they will try to implement martial law.

Mon, 12/07/2009 - 16:32 | 155729 BoeingSpaceliner797
BoeingSpaceliner797's picture

B9K9,

A thoroughly corrupted system, as a direct result of its thorough corruption, cannot be rehabilitated/fixed/etc.  It is, in many ways, like a condemned building. 

Mon, 12/07/2009 - 10:40 | 155169 Cursive
Cursive's picture

The turn is coming.  Many posting here and elsewhere have expressed the usual cynicism that the American people are too lazy and too stupid to make the necessary changes to fix our economic and social problems.  I believe we will.  We've all got to keep doing our part, though.  WRT trust, we'd be a lot better off if we really trusted in God and not the promised utopia's of imperfect beings such a Man.

Mon, 12/07/2009 - 16:26 | 155717 janchup
janchup's picture

Trust God. That is funny but it is true, people really do trust hallucinations.

Mon, 12/07/2009 - 11:00 | 155190 Anonymous
Anonymous's picture

79% of the peole think god keeps all the good things for herself.

Like Vengeance. Why does she get to have all the fun?

Mon, 12/07/2009 - 10:18 | 155158 Anonymous
Anonymous's picture

What do you mean that small businesses won't hire? Haven't you seen the CES birth / death model? Since the recession started, the Bureau of Labor lets us know that small business has created 1.5 million jobs.

Mon, 12/07/2009 - 10:16 | 155155 Steak
Steak's picture

<America knows that Bernanke and Geithner have acted in the interests of the largest banks, and not done much to help Main street or the American people.>

Both men would almost certainly say that theirs is a problem of communication and not of actual poor (let alone disastrous) performance.  Indeed they would (and have) claim that their actions helped save the world.  And that speaks to both men's true skills: politics.  Bernanke did all but fellate Greenspan in terms of sucking up to the guy.  Geithner has proven time and time again he can cultivate high powered allies without actually DOing anything.

Another typical DC debating tactic is to question an opponent's facts in mind numbing detail, dismissing entire theses at the first possible quibble.  "Qana is in the SE of Lebanon, not SW as you claimed, all your points about the middle east are bunk" for example.  So Geithner and Bernanke surely say to the Prez that this disapproving public could not set forth a list of indictments against them and even if they tried the facts would be inaccurate, and that is technically true.

But for all that people dismiss the collective wisdom of the American people, we can tell when we're being screwed.  The objective political scientist in me says that the longer these asshats stay in, the more likely we'll see a Republican legislature and WH in 2012, if on nothing else but a wave of anti-incumbent sentiment regardless of party.

Mon, 12/07/2009 - 17:20 | 155792 Miles Kendig
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Steak, the practiced political observer that I am is convinced that many folks believe that it matters not the party, the results will be the same.  Many younger participants have become deeply disillusioned with the discovery that they have been used like a cookie at a capitol hill Bar-B-Que.  This while seniors realize that there can be no hope of financial stability in government spending without their consent at deelectrification the third rail of American politics for the sake of sustaining the minimum wage on Wall Street.  That isn't gonna happen either. 

So, what we have here is what Peggy Noonan has called the collapsing bell curve of popular support that any segment of political or industrial leadership is actually capable of leadership. Given these operative conditions I suspect that turnout will be at historic lows during the mid-term elections.  While the "loyal opposition" discovers that history and actual ideas and how to rally support to enact and sustain them does matter.  Then the 2012 cycle will continue the process of self enforced disenfranchisement and further splintering of the electorate with each segment becoming more embittered with every other segment. Given these conditions the process of looting will continue unabated until it collapses of its own weight.  At that time, without a significant change in operative conditions our society will have become even more fragmented than either of us consider possible with the attendant effects upon the process of transition to wherever we will go as a society from there.

BTW, happy 4:20 pal.

Tue, 12/08/2009 - 01:50 | 156232 Anonymous
Anonymous's picture

+100

Mon, 12/07/2009 - 10:11 | 155153 Anonymous
Anonymous's picture

Great observations, moneymutt. I live near Holyoke Mass. which is a shelled out bombed out remnant of the great industrial city it once was. It's been in a steady decline since the 1970s. It's now one of the main distribution centers for drugs in New England. It has never recovered from the loss of thousands of manufacturing jobs and there is absolutely no hope on the horizon for it to improve in any shape or form. The story of this city has been repeated thousands of times all across the U.S.

Mon, 12/07/2009 - 11:25 | 155213 Ned Zeppelin
Ned Zeppelin's picture

It has never recovered from the loss of thousands of manufacturing jobs and there is absolutely no hope on the horizon for it to improve in any shape or form. The story of this city has been repeated thousands of times all across the U.S.

The data speaks.  Who has benefitted from our policies? Who believes "free trade" is such a great idea? Transnational corporations, not the demos. Not the former inhabitants of those towns, who once worked and earned a working wage, and had hopes and dreams.  Did anyone ask the question: which policies support our fellow citzens now and into the future?  

Mon, 12/07/2009 - 10:05 | 155146 Daedal
Daedal's picture

79% of Americans Want an Audit of the Fed, Only 21% are in Favor of Confirming Bernanke, and Only 20% Think Geithner is Doing a Good Job

First, I want to acknowledge that I agree 100% that auditing the Fed, as well as firing Geitner and Bernanke, is necessary.

Having said that, the statistics about what most Americans think is of little value. We had the same caliber of people in charge 2000-2007 and if you did the survey in 2007 I'm sure most of those people would've approved of Bernanke and not cared about auditing the fed (as was the case).

Before we start using statistics to support our point, we should at least acknowledge that people are reacting to the economic situation they are in, and are simply pointing figures. They just happen to be right, but only as a byproduct of circumstance, not as a result of any rational understanding.

Point being: even if everyone was approving of Bernanke and Geitner and did not want the Fed audited, doesn't mean that the Fed ought not be audited, or that Tweedledee and Tweedledum ought not be fired.

Mon, 12/07/2009 - 16:47 | 155753 Anonymous
Anonymous's picture

Special, you're very special. The specialest of all. Very good of you to make that distinction, very clear now that you are more deserving of our attention than the 79% of Americans that you agree with. You should be sure to vote.

Mon, 12/07/2009 - 09:25 | 155124 moneymutt
moneymutt's picture

Great insight too little emphasized in these times. I often think of this in more general times...just compare a neighborhood or a country where it is in a time of Pax, low crime, trust, optimism, to a neighborhood or country in a time of war, crime, corruption, fear and you find two worlds inhabited by people of almost same make-up but of wholly different results. Think of a working class neighborhood during time of good jos, things are stable, crime is low, people don't lock their doors. During times of segregation in US, 40s, 50s, 60s black neighborhoods were poor compared to white, but US economy was doing quite well and working class was doing quite well, and these nieghborhoods were stable and safe, few locked their doors, but check back 15 years later, same people more or less but everything is bombed out, shot up, and drugged up. Same thing happens in working class areas in England, like Liverpool, people don't just fall on economic hard times, everything falls apart, crime, drugs run rampant.

Michael Moore did a bit in one of his movies about Canadians not locking their doors, I don't think Canadians are more moral than US, but I think a culture, a country goes through times where they are happy and stable and secure and times where they are fearful and insecure.

Mexico gives a recent example of a country on such a descent. Trust is gone, streets are war zones. Drugs and crime. Compare them Costa Rica's progress or even say Peru's progress in last 15 years.

The need for security and protection in a rough culture is such a parasitical wasteful drain on the commonwealth.

It seems to me the "plenty" dissappears first, then trust, then a death sprial decrease in both. What seperates any neighborhood or country from good times of PAX and bad times of war, crime, insecurity seems like a scary thin line.

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