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Paul Farrell: "Fed Dictator Bernanke Needs To Be Toppled"

Tyler Durden's picture




 

This must read Paul Farrell piece has to be recreated in its entirety.

Via MarketWatch

Fed Dictator Bernanke Needs To Be Toppled

Fed boss Ben Bernanke is the most dangerous human on
earth, far more dangerous than Hosni Mubarak, Egypt’s 30-year dictator,
ever was. Bernanke rules a monetary dictatorship that will trigger the
coming third meltdown of the 21st century.

But this reign of economic terror will end.

Just as Mubarak was blind to the economic needs of the masses and
democratic reforms, Bernanke is blind to the easy-money legacy that’s
set the stage for revolution, turning the rich into super rich while the
middle class stagnates and peanuts trickle down to the poor.

Warning, Egypt also had a huge wealth gap before its revolution.
Bernanke is the final egomaniac in America’s bubbling 30-year wealth
gap, where the top 1% went from owning 9% of America’s wealth to owning
23% during this dictatorship.

Bernanke’s ruling ideology is the culmination of a 30-year economic war
that has forged together Reaganomics for the super rich, former Fed
chairman Alan Greenspan’s toxic allegiance to Wall Street, the extreme
Ayn Rand’s capitalist dogma, culminating in the toxic bailouts of
Treasury Secretaries Hank Paulson and Tim Geithner, two Wall Street
Trojan Horses corrupting government from within.

Since 1981 this monetary dictatorship has caused enormous collateral
damage, systematically sabotaging democracy, capitalism and the American
dream while fueling the rise of our most dangerous new enemy, China.
See “Secret China war plan: trillions in U.S. debt.”

When Obama reappointed Bernanke a couple years ago, “Black Swan’s”
Nicholas Taleb was “stunned.” Bernanke “doesn’t even know that he
doesn’t understand how things work,” that Bernanke’s economic methods
are so inadequate they make “homeopath and alternative healers look
empirical and scientific.”

We called Bernanke, the “Captain of the Titanic,” warning that he was
setting up the third meltdown of the 21st century, predicted by
“Irrational Exuberance’s” Robert Shiller, a coming crash worse than the
2000 dot-com crash and the subprime credit meltdown of 2008 combined.
See “Capt. Bernanke sinks the U.S.S. Titanic.”

Inside the Fed: Cassandras, Chicken Littles, governors crying wolf

Unfortunately, as with Egypt’s dictator, the 30-year dictatorship now
headed by Bernanke must end soon: And this class war will not be pretty.
But it is no black swan; no one can claim they didn’t see a new crash
coming.

For several years before the 2008 meltdown we reported on money
managers, economists and financial gurus warning of a coming meltdown.
They included two Fed governors who warned Greenspan in the early Bush
years. And yet, as late as summer 2008 Bernanke, Paulson and Greenspan
were systematically dismissing mounting evidence of a mega crash dead
ahead.

That’s why Time magazine’s cover story about Thomas Hoenig, president of
the Federal Reserve Bank of Kansas City, grabbed me. David Von Drehle’s
“The Man Who Said No to Easy Money” is a warning to all America.

Like Ed Gramlich and William Poole, the two Fed Governors who warned
Greenspan during the Bush years, Hoenig regularly dissented from
Bernanke’s easy-money policies that have been favored by Wall Street
throughout this 30-year dictatorship.

We’re paraphrasing Drehle’s interview with Hoenig as 10 warnings because
it brilliantly reveals the broader historical tragedy of the Fed’s
30-year monetary dictatorship driving America to the edge of another
1930s economic revolution, one that will be triggered by a repeat of the
1929 wake-up call.

1. Commodity price inflation will soon end the Fed dictatorship

Hoenig consistently “cast his lonely ballot against the indefinite reign
of easy money. Eight meetings, eight no votes … an unyielding point of
view, one that has become ever more relevant now that rising commodity
prices have put inflation worries back on the economic radar screen.”

In short, global commodity inflation may soon do what Hoenig could not,
put an end to America’s self-destructive easy money reign of economic
terror, and more importantly finally end the Fed’s 30-year “monetary
dictatorship.”

2. Central bank dictatorship destroying America’s democracy

Hoenig was America’s lone voice against the Bernanke monetary
dictatorship, says Drehle: “For all the headlines over the past
quarter-century about the death of American manufacturing and the
twilight of community banks and the vanishing farmer, those humble
building blocks of a sound economy still figure significantly in
Hoenig’s perspective. The way to strengthen them … is not by pumping
money into a financial system that encourages megabanks to engage in
high-risk speculation. You build them up by encouraging savings, which
form capital for investment, which builds stronger businesses, which
hire workers and pay dividends, which leads to more savings and more
investment.”

3. Near-zero rates, banks richer, masses poorer, meltdown

Honenig’s opposition to Bernanke dictatorship is also clear, says
Drehle: “By keeping interest rates near zero indefinitely, the Fed is
asking savers to continue to subsidize borrowers. What incentive is
there to save and invest?”

Earlier in his long career, Hoenig was heartsick as an “irrationally
exuberant Alan Greenspan kept piling so much money onto the economic
bonfire that led to the Great Recession” in 2008. Now the “time’s come
to start sobering up.” Except Wall Street’s addicted to easy money,
won’t sober up.

4. Easy money blowing new speculation bubble … pops soon

“This is how bubbles are formed,” warns Hoenig, whose long career as
president of the Kansas City Federal Reserve Bank made him leery of the
power buildup by the central banks monetary dictatorship. So again,
“rocketing land and energy prices are telltale signs … too much money
sloshing around. When you put this much liquidity into the system, it
has to go somewhere.”

But with the Fed keeping interest rates near zero, easy money won’t go
into savings. Instead, “money starts chasing assets with higher yields —
like land, the once again booming stock market and energy” and “as more
money joins the chase, asset prices rise and keep rising until … pop,” a
new meltdown.

5. Bernanke’s narcissistic illusion of monetary power

The Fed has too much power: Hoenig “watched uncomfortably as the central
bank began playing a larger and larger role in the public’s perception
of the economy. Monetary policy came to be seen as the solution to more
and more economic issues. It has been used to deal with one crisis after
another,” stock .market crashes, recessions, the tech bubble, after the
9/11 attacks, during the Iraq war, then the 2008 meltdown.

Hoenig warns against the Fed’s power: “People came to feel that all you
had to do was ease interest rates and everything would be fine. But
that’s what gives us these bubbles.”

6. Easy money fueling worldwide inflation, and a new meltdown

Yes, Hoenig’s an inflation hawk: “The sequence of events that led to
runaway inflation in 1979 got started back in the mid-1960s. That’s …
long term.” Drehle captures the shift in Hoenig’s position: At first
backing “the Fed’s dramatic actions in 2008 and 2009 to pour trillions
into the staggering financial system.”

But now it is time to stop. As easy money chases higher returns across
the world, in places like Brazil and China, Hoenig warns that “inflation
is rising sharply. Global food prices have risen 25% in the past year,
according to the U.N., and many nations are starting to hoard
commodities.”

7. Fed policies favor the rich, sabotaging American Dream

In favoring Wall Street bankers, Bernanke’s monetary dictatorship is
clearly feeding the conditions that, as happened in Egypt, will ignite a
class war in America: “The poorest 60% of American households spend 12%
of their income on energy alone, compared with the 3% spent by the
richest 10% … Inflation is so unfair … it is the most regressive tax you
can impose on the public … eroding the buying power of the poor and
people on fixed incomes. The people who have money and are savvy come
out ahead. In fact, they end up stronger than before.”

8. Unfortunately, the Fed learned nothing from the 2008 crisis

A lot more than the Fed’s toxic alliance with Wall Street bothers
Hoenig: America “learned little from the crisis … government policy
continues to smile on Wall Street but not on Main Street. Instead of
breaking up the financial giants whose gambles crashed the economy, the
government has let the biggest banks grow even bigger. Now they’re
gorging on free money.”

9. Market economy? A joke, big-money lobbyists run America

Remember folks, 20 years ago in the S&L bank crisis 3,800 bankers
were jailed. This time? Wall Street robbed us, got away with it, are
still robbing us. Hoenig asks: “Where’s the penalty for failure? … We
don’t have a market economy.” American capitalism is now “crony
capitalism … who you know, how big your political donation is.”

10. America must end easy money, add new Glass-Steagall

What would Hoenig do as Fed chairman? “High savings rates, low leverage
and a strong currency.” Finally, Drehle says Hoenig would bring back the
Depression-era Glass-Steagall rule that barred commercial banks from
taking excessive risks. He would reduce government debt and promote a
manufacturing revival, but it won’t be easy, there is no painless
approach.”

Unfortunately, none of this will happen until America gets hit over the
head by brutal wake-up call, like 1929 and the Great Depression 2. Until
then, the 30-year monetary dictatorship now headed by Bernanke will
keep pushing its self-destructive easy-money policies, ignoring the
warnings of Thomas Hoenig and all of the other Cassandras, Chicken
Littles and Americans Crying Wolf, over and over again.

 

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Tue, 02/15/2011 - 10:48 | 963325 SheepDog-One
SheepDog-One's picture

OFF with The Bernank's HEAD!!

Tue, 02/15/2011 - 11:05 | 963399 Fish Gone Bad
Fish Gone Bad's picture

Bernanke is in his office reading this right now.  Unfortunately though, he thinks everyone here is talking about a different Bernanke.

Tue, 02/15/2011 - 11:12 | 963420 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

The irony is that Ben is fond of contributing to all of these economic and economic history books and will one day end up being described as one of the men involved in destroying the dollar.

 

Way to leave a legacy, Ben!

 

And THAT is what probably deeply disturbs him. Kinda sucks when you know history will ultimately cast you as the villain.

 

As usual theory, models and reality are different..where it Counts!

Tue, 02/15/2011 - 11:18 | 963438 SheepDog-One
SheepDog-One's picture

Yes, in the future they'll read about 'the Bernanke' in this revised textbook around the village bonfire...

Tue, 02/15/2011 - 11:35 | 963486 william the bastard
william the bastard's picture

They won't be reading, they'll be passing down verbal legendsfrom one generation to the next as the tale gains spice and proportion revealing the protagonist's character flaws in all it's fiery gore as a sheeple public were led to slaughter fools that they were.

Tue, 02/15/2011 - 12:07 | 963620 flacon
flacon's picture

Not really fair to the author of this piece to lump Ayn Rand in with bailouts. Ayn Rand was vehemently against the merger of public and private enterprise. She would say: "Let the banks fail!"

Tue, 02/15/2011 - 12:34 | 963719 Cash_is_Trash
Cash_is_Trash's picture

Here are some listed Bernanke's:

http://www.whitepages.com/search/MapView?lower=1&search_id=0115141304035...

Make ready the pitchforks

Tue, 02/15/2011 - 13:52 | 963978 Crime of the Century
Crime of the Century's picture

He also noted that Shiller wrote Irrational Exuberance, but somehow missed the fact that his Animal Spirits was mercilessly dog-eared and passed about the current Administration...

Tue, 02/15/2011 - 14:13 | 964081 gaoptimize
gaoptimize's picture

And more importantly, she was an advocate of sound money / the gold standard.  The falling out of Alan Greenspan with Ayn Rand and her ideas is one of the greatest tragedies of the 20th century.  Familiarize yourself with the work of Judy Shelton.

http://vodpod.com/watch/2846887-qa-with-judy-shelton-c-span-video-librar...

Tue, 02/15/2011 - 17:31 | 964950 forexskin
forexskin's picture

if greenspan hadn't fallen out with rand, we'd be saying 'who's alan greenspan?' right now. only players get to hold the levers

Tue, 02/15/2011 - 23:17 | 965752 sushi
sushi's picture

as one of the men involved in destroying the dollar.

 

CORRECTION:

As the man who destroyed the United States.

His impact is worse than all the taliban, worse than bin-ladin, worse than any other "threat" believed to be facing the US and her people.

Tue, 02/15/2011 - 14:53 | 964267 Alienated Serf
Alienated Serf's picture

ZH has been blocked in all Federal Reserve Offices.  If you don't see it, it doesn't exist.  Like in Iran.

Tue, 02/15/2011 - 15:28 | 964440 Technichel
Technichel's picture

Bernank just thinks he is above everyone else. He thinks he is much more intelligent and can't relate to all the dumb chumps all around him in the ranks below. He doesn't get it and never will. He thinks he's too smart to stoop down to our level. 

Tue, 02/15/2011 - 15:30 | 964442 Technichel
Technichel's picture

*

Tue, 02/15/2011 - 11:37 | 963487 DaveyJones
DaveyJones's picture

Heave Ho Hosni only stole 70 billion. childs play

Tue, 02/15/2011 - 12:37 | 963727 willien1derland
willien1derland's picture

Yo Bernank is DOWN with OPP!

Tue, 02/15/2011 - 13:19 | 963892 Rider
Rider's picture

 

Seek and Destroy.

We need an Special Forces mission to destroy the most dangerous human on earth!!

For America!

Tue, 02/15/2011 - 12:07 | 963622 VegasBob
VegasBob's picture

Hopefully, CNN will carry it live when starving masses here in the US decide it's time to string up Bernokio...

Tue, 02/15/2011 - 15:38 | 964469 limcagoldspot
limcagoldspot's picture

Actually last 30-100 years are an anomaly.. Middle class is an anomoly.. Rich have always been very rich and poor have always been poor since.. we are just going back to how it usually is.. you guys need to relax and have a drink till you can afford it

Tue, 02/15/2011 - 10:48 | 963327 Judge Judy Scheinlok
Judge Judy Scheinlok's picture

NICE THESIS. WHERE IS YOUR ACTION PLAN?

Tue, 02/15/2011 - 11:41 | 963507 kaiserhoff
kaiserhoff's picture

Good question.  I don't understand the junks.

I'm seeing more people who don't read ZH behave as if they do.

1 Creating alternate currencies for fun and profit.  Cigarettes work great with all the new taxes as does hooch (especially vodka) and, gotta love this..., viagra.

2 Hiding cash and capital destruction.  More on this later, but even those getting their income from the government don't trust it.  Lots of loot leaving the banks for collectables and hidables.

3 Voting with your feet.  No mass exodus from the States, but a real fear of cities and places perceived as crowded (even Florida).

Want to hear a really wild string of expletives.  Mention Obama in ANY PUBLIC PLACE.

The times, they are a changin'.

Tue, 02/15/2011 - 11:54 | 963564 Judge Judy Scheinlok
Judge Judy Scheinlok's picture

A CALL TO ACTION IS A DANGEROUS THING. THE SPOOKS DO NOT LIKE THIS AND JUNK TO CONTROL MINDS.

 

BLOOMBURGER GOES ALL OUT FOR DISARMING AMERICA:

http://www.voanews.com/english/news/usa/NYC-Mayor-Bloomberg-Activists-Ur...

Tue, 02/15/2011 - 12:02 | 963596 Rodent Freikorps
Rodent Freikorps's picture

Molon Labe, Bitch.

Tue, 02/15/2011 - 13:15 | 963877 medicalstudent
medicalstudent's picture

...and a 'cause of action' is what traffic courts lack since the state can not allege a violation of personal rights (its not a person). and since the judge represents the state the trial is a clear conflict of interest.

 

if everyone who got a traffic ticket argued this point there would be none.

new radar... i need...

 

maybe guns and a vest too.

Tue, 02/15/2011 - 13:32 | 963921 Judge Judy Scheinlok
Judge Judy Scheinlok's picture

TRY THAT FANCY FOOTWORK IN MY COURTROOM AND I'LL ARBITRATE YOU INTO OBLIVION.

Tue, 02/15/2011 - 13:29 | 963913 Blano
Blano's picture

The junking has gotten totally out of hand.  Time to remove it.

Tue, 02/15/2011 - 11:45 | 963518 Cognitive Dissonance
Cognitive Dissonance's picture

I understand you're new here. Welcome.

Please understand that all caps comments a la Yahoo doesn't work here. Please disable your caps lock mind.

Thank you for playing Zero Hedge the game. Come back soon.

Tue, 02/15/2011 - 11:48 | 963536 Judge Judy Scheinlok
Judge Judy Scheinlok's picture

GO BLATHER YOUR BLITHER SOMEWHERE ELSE SWEETHEART. THE JUDGE HAS RULED!

Tue, 02/15/2011 - 12:33 | 963716 B9K9
B9K9's picture

Thanx for the confirmation. Jeez, it's not just the old timers who have gone missing, it's the trolls who at least had a little wit, style & panache. Johnny B, where are you? You too, RNR. Christ, all we're left with now is Harry's troll, Hamy, and these Yahoo amateurs.

Tue, 02/15/2011 - 12:46 | 963770 Judge Judy Scheinlok
Judge Judy Scheinlok's picture

I AGREE, ALL THE ELITIST KROCKAROACHES NEED TO EMERGE FROM BETWEEN THE FLOOR JOISTS IN SHILL CITY TO EQUILIZE THE IMBALANCE.

 

EVER HEAR THE GOOD JUDGE BARK? WOOF-WOOF.

Tue, 02/15/2011 - 12:59 | 963822 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

CD has privileges here you don't, Judy so think about the caps thing.

 

Take your meds and remember the Fight Club rules.

 

Tue, 02/15/2011 - 13:18 | 963886 Judge Judy Scheinlok
Judge Judy Scheinlok's picture

ALL NEW MEMBERS HAVE TO FIGHT. CHECK BITCH.

 

SOME HAVE BEEN HERE FROM BEFORE THE ADVENT OF CD AND THE BENIGNCANINE.

 

PLEASE TRY TO ENGAGE YOUR BRAIN WHEN YOU ADDRESS ME, MADAM.

Tue, 02/15/2011 - 13:03 | 963837 aheady
aheady's picture

Please make it stop.

Tue, 02/15/2011 - 12:38 | 963735 willien1derland
willien1derland's picture

CD...making a better world one post at a time!

Tue, 02/15/2011 - 13:10 | 963863 Calmyourself
Calmyourself's picture

+

Tue, 02/15/2011 - 12:06 | 963617 Zero Govt
Zero Govt's picture

Plan? ..pitchforks and rope at the ready, it worked 300 years ago and will work again

Tue, 02/15/2011 - 12:09 | 963626 SheepDog-One
SheepDog-One's picture

Action plan? Portable guillotines.

Tue, 02/15/2011 - 12:54 | 963806 LFMayor
LFMayor's picture

I like that thing the Hatians did with car tires and a sitz-bath of low lead myself.

Tue, 02/15/2011 - 10:52 | 963342 Pants McPants
Pants McPants's picture

For several years before the 2008 meltdown we reported on money managers, economists and financial gurus warning of a coming meltdown. They included two Fed governors who warned Greenspan in the early Bush years. And yet, as late as summer 2008 Bernanke, Paulson and Greenspan were systematically dismissing mounting evidence of a mega crash dead ahead.

Here we go again with that damn blogosphere and its 19 crises.....

Tue, 02/15/2011 - 10:52 | 963347 dick cheneys ghost
dick cheneys ghost's picture

jpm, gs, ms, et al.....................and the rothschilds, lets not forget about them.

Tue, 02/15/2011 - 11:04 | 963394 Salvatore CFA
Salvatore CFA's picture

Bilderbergers, my friend !

Tue, 02/15/2011 - 11:20 | 963447 william the bastard
william the bastard's picture

Paul Farrell is not one of the Bilderberg group but he is the one redeeming feature of MarketWatch.

 

Tue, 02/15/2011 - 11:24 | 963457 Sean7k
Sean7k's picture

Which is owned by a bilderberger, thus begging the question...

Tue, 02/15/2011 - 11:39 | 963496 william the bastard
william the bastard's picture

Well you can't deny that Farrell's column today is a lacerated cold sore on their lip.

Tue, 02/15/2011 - 11:43 | 963509 Sean7k
Sean7k's picture

Sure I can and do, see my comment below.

Tue, 02/15/2011 - 10:53 | 963351 The Axe
The Axe's picture

Bernank is just like the drunken idiot that you had to catch a ride with in high school, from a kegger in some guys farm field. You need the ride, cause you don't want to be stuck 10 miles from town, you sit in the back of the car, just praying you make it home alive, but to scaried to say a word.

Tue, 02/15/2011 - 11:01 | 963381 Seasmoke
Seasmoke's picture

LOL...i did that a few times and i am still scarred from those experiences even 25 years later

Tue, 02/15/2011 - 11:54 | 963566 Salvatore CFA
Salvatore CFA's picture

Ben actually calls to mind the kid who spent all his after school time brown nosing in the computer lab, programming a Digital PDP-11: Levis's cords, Hush Puppies, one of those plaid shirts with the snaps on the pockets, no date for either junior or senior prom, scored over 700 on the math SAT, and reminded every kid in his senior year calculus class that he got into Princeton -- the kid who ended up as salutatorian, but nevertheless, always got pantsed in gym.

 

 

Tue, 02/15/2011 - 11:34 | 963352 jus_lite_reading
jus_lite_reading's picture

Well, well, well Dr. Deficit. It has come to pass. Like Jesus said, do onto others as you would want them to do onto you.

Silver to $40 in ~3 weeks.

Tue, 02/15/2011 - 10:55 | 963355 The Axe
The Axe's picture

FDX  warns   up 2      turn off the terminals     

Tue, 02/15/2011 - 10:55 | 963359 economessed
economessed's picture

Bernanke:  carbon-based, respirating manifestation of organic failure.  Fail, sweeet Ben, fail with the myopic determinism you've demonstrated so well.

Tue, 02/15/2011 - 11:19 | 963442 Rodent Freikorps
Rodent Freikorps's picture

The first thing we do is kill all the bankers....and lawyers.

Tue, 02/15/2011 - 12:38 | 963729 B9K9
B9K9's picture

What's in a name? That which we call a Bernank by any other name would smell as rank.

Tue, 02/15/2011 - 11:59 | 963581 hbjork1
hbjork1's picture

"Alas poor Fed." 

We did not know them well.

Tue, 02/15/2011 - 12:08 | 963623 Zero Govt
Zero Govt's picture

yes and best keep it impersonal, makes the culling of the parasites more clinical 

Tue, 02/15/2011 - 12:41 | 963748 willien1derland
willien1derland's picture

Can anyone imaging what a Fed Audit would uncover??? I do not think we know the Fed...nor would we want too....I think the parasites would be the least offensive issues uncovered...

Tue, 02/15/2011 - 13:11 | 963864 A_MacLaren
A_MacLaren's picture

But we knew them in The End(ing).

Tue, 02/15/2011 - 12:16 | 963653 Watauga
Watauga's picture

I'm calling the ADL--this has got to be anti-Semitic--right?

Tue, 02/15/2011 - 10:56 | 963365 Hubbs
Hubbs's picture

America’s bubbling 30-year wealth gap, where the top 1% went from owning 9% of America’s wealth to owning 23% during this dictatorship.

 

Please, Tyler. Don't give the superrich something to gloat about.

Tue, 02/15/2011 - 10:58 | 963370 overmedicatedun...
overmedicatedundersexed's picture

Ben is the spokeperson for the cartel of elite banksters also known as the Fed.

kill the fed and you get true results, remove a dime a dozen figure head you just get another puppet" bagdad ben bernake"

Tue, 02/15/2011 - 11:37 | 963490 Slayer
Slayer's picture

The same people who put this genius in charge would have to first remove him (highly unlikely) and then select a new genius. Unfortunately, the replacement would just be another minion whose sole purpose in life is to further enrich the elites and the expense of the American peons. Just ain't gonna happen.

Tue, 02/15/2011 - 13:37 | 963941 BigJim
BigJim's picture

”There are a thousand hacking at the branches of evil for every one striking at the root.” 

- Thoreau

Tue, 02/15/2011 - 10:59 | 963373 Oh regional Indian
Oh regional Indian's picture

And this is just what we know. If we know what we don't know, do we know what we would do?
Black money, black funds, black ops....
Income gap in Chindia actually BRIC's is obscene.

See this as an example:

"Between 2000 to 2008, GFI estimated that the outflow of illicit money from China was USD 2.2 trillion. Malaysia follows a distant second with USD 291 billion."

But Benbabwe is the distracting right hand.

Who's watching the left?
ORI

http://aadivaahan.wordpress.com/2011/02/14/oil-crisis-in-a-thousand-words/

Tue, 02/15/2011 - 10:59 | 963375 RobotTrader
RobotTrader's picture

Can't blame Farrell for being angry.

He was dreadfully wrong and missed one of the greatest stock market rallies in history.

His clients must be defecting in droves, moving their cash to more mo-mo oriented shops....

Of course, it is a little late in the game to be chasing momentum, but it is human nature, and eventually all the bears will cave in and go long stocks out of complete and total frustration.

That is probably when the market will top out.

Tue, 02/15/2011 - 11:14 | 963426 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

Farrell was making money while you were still having separation issues from your mother.

 

I doubt he gives a shit what you think.

Tue, 02/15/2011 - 11:47 | 963533 Cognitive Dissonance
Cognitive Dissonance's picture

"....while you were still having separation issues from your mother?"

As in past tense?

Tue, 02/15/2011 - 12:02 | 963597 aheady
aheady's picture

ha

Tue, 02/15/2011 - 12:21 | 963669 DaveyJones
DaveyJones's picture

watch out or he'll tell mom you said that

Tue, 02/15/2011 - 11:17 | 963435 The Axe
The Axe's picture

Of course, that is always how it plays out,,,,,like a Bloget AMZN call....

Tue, 02/15/2011 - 11:20 | 963450 Rodent Freikorps
Rodent Freikorps's picture

I'm only long pork bellies and hookers...and blow.

Tue, 02/15/2011 - 12:44 | 963758 willien1derland
willien1derland's picture

+100 - Pork Bellies, Hookers, & Blow - Ohhh My - In Cramerica you would win the Are you Diversified Round - Boooyah! - Open a Hedge Fund - I am all in!

Tue, 02/15/2011 - 11:23 | 963454 lieutenantjohnchard
lieutenantjohnchard's picture

another knee slapper from old catfish mouth robo uber bull bear wanna be. ya gotta love a man with the confidence to point out his own weaknesses in a public forum. the old catfish was wrong about gold and silver and wrong about the top in the major indexes. so it's only fitting that old catfish attempts to deflect his own wrong calls onto paul. but such is life for a fish with more mouth than brains.

in any event, have you heard back from gentleman jim sinclair? what was his response when you schooled his poor choice for being a gold bull?

Tue, 02/15/2011 - 12:03 | 963607 homersimpson
homersimpson's picture

In other words, you stupidly forgot to invest in gold and favored a stock market bubble instead fueled by monetized paper. I guess you and HarryWanger will post next about who had the tighter stops soon..

Tue, 02/15/2011 - 14:54 | 964273 Alienated Serf
Alienated Serf's picture

please tell me i am not the only one that caught harry wnger posting on the original marketwatch article (has the american flag icon):

hwagner 27 minutes ago He's been writing about this forever in different forms. Wrong then, wrong now.
Tue, 02/15/2011 - 11:00 | 963377 DavosSherman
DavosSherman's picture

BRAVO!

Tue, 02/15/2011 - 11:00 | 963378 ivana
ivana's picture

??? how come this is published on marketwatch?

Tue, 02/15/2011 - 11:11 | 963418 umop episdn
umop episdn's picture

Because most of the sheeple won't read it, or much else. Because those who will read it already know most of this stuff, and it cannot be denied much longer. Because Mr. Farrell lists the problems, but does not list the root causes, such as the corporate takeover of the goobermint and fractional reserve banking. But mainly because it will get Marketwatch some eyeball time that it would not get otherwise.

Tue, 02/15/2011 - 11:24 | 963455 Corduroy
Corduroy's picture

I also wonder what possessed Marketwatch to publish this story, though Farrell has been allowed to write increasingly 'pointed' comment pieces... maybe News Corp are hinting something to Benny ? :>)

Though it should also be said that unlike most of Farrells comments this one is not as easy to read so the 90% Marketwatch viewers who only look at what they can see on the front page would not find this story.

Tue, 02/15/2011 - 11:01 | 963382 jobs1234
jobs1234's picture

Its pointless, FDX is the example, just BTFD, there will never be a meaningful correction again in our lifetimes as that simply cannot be allowed.

Tue, 02/15/2011 - 14:33 | 964171 Clampit
Clampit's picture

I rather believe the only meaningful correction in our lifetimes is about to occur. To those that hold sway over the labor of others, beware. 

Tue, 02/15/2011 - 11:02 | 963384 lynnybee
lynnybee's picture

true story, yesterday.     I stopped into my bank to cash my rebate check for $20 for my new contact lenses (i can finally see !! ) .   I usually kid the bank manager about the interest rates, but yesterday there were 4 men in suits in the office !!!   ..... when i was done at the teller window, i popped my head into the door & said to them :

Hey guys !!  How are those interest rates doing today ! ?      One man said back to me,  ' Great time to borrow money! '  

& I said, ' No one wants to borrow money anymore !  The whole damn country is bankrupt & most of it's citizens, too !   The Federal Reserve Bank has created another credit collapse just like in 1929 !    I am feeling very powerful today, guys, I just bought another tube of silver !   

  You know what DR. FABER says !! ....... ' As long as BERNANKE & GEITNER are running the show he will never sell his gold ! '   "  

Their mouths dropped & I walked out with my $20 rebate money.

Tue, 02/15/2011 - 11:09 | 963411 sourgrapesson
sourgrapesson's picture

Love your spunk gurl!

Tue, 02/15/2011 - 11:10 | 963415 Judge Judy Scheinlok
Judge Judy Scheinlok's picture

KEEP POKING THE BEAST WITH THAT STICK AND YOUR GOING TO GET YOUR HAND BIT YOUNG LADY!

Tue, 02/15/2011 - 11:18 | 963437 lynnybee
lynnybee's picture

you know what ........... I don't give a shit anymore !   That is what happens when you become an old person .    Let them put an old woman in prison, at least I'll have a roof over my head.

 

Tue, 02/15/2011 - 12:07 | 963472 Judge Judy Scheinlok
Judge Judy Scheinlok's picture

TRUE, MS. LYNNYBEE. YOU'RE CREATIVE THINKING IS IN THE FEDS PLAYBOOK.

 

HOW TO DEAL WITH UNFUNDED LIABILITIES: INCARCEATION

 

DON'T FALL INTO THAT TRAP. MY PRESCRIPTION TO YOU IS HARMLESS. BRUSH YOUR TEETH 6 TIMES PER DAY TO INCREASE YOUR SODIUM FLORIDE INTAKE. PLEASE REPORT TO YOUR LOCAL REPROGRAMMING OFFICE.

 

HBO TEACHES US THAT EVEN HARDENED MOBSTERS CAN BENEFIT FROM COUNCILING. THE MAGIC, ALL KNOWING BOX.

Tue, 02/15/2011 - 18:16 | 965087 Arkadaba
Arkadaba's picture

COUNCILING

??? 

Tue, 02/15/2011 - 11:58 | 963577 aheady
aheady's picture

Lynny bee BADASS

Tue, 02/15/2011 - 12:14 | 963645 Kali
Kali's picture

Right on Lynnybee, the same words have popped out of my mouth.  What are they gonna do to an old woman?  Roof over my head!  Ha ha ha!

True story-in my credit union, that I dumped when they started pushing GS bonds to "get better interest rate than savings".  A friend who is teller, was asking why I wasn't keeping money in savings account anymore.  I pulled out a buffalo round of silver and told her "this is my savings now".   She oohed and aahed and asked me where I got it.  I told her that "yeah, I am one of THOSE people now!"

Ya know, "i don't give a shit old ladies" have done great things in the world.  The grandmas in Argentina re: the disappeared, for one.

I have always said it's great to get old.  The only other time in your life you can do/say anything like when a child.  You can run around in your underwear and people excuse it cuz "she's old".  I look forward to being the cranky, crazy old lady in the neighborhood.

Tue, 02/15/2011 - 11:17 | 963434 HoofHearted
HoofHearted's picture

Take their money at ridiculously low interest rates, go buy another tube of silver, and then make a ton of money from the increase in the price of silver.

Tue, 02/15/2011 - 11:03 | 963390 newworldorder
newworldorder's picture

Congress and or the President must take immediate action to remove Bennie and the Jets from power. For whatever reason they will not. There really is nothing more to be said on this subject.

God help us all.

Tue, 02/15/2011 - 12:37 | 963725 pods
pods's picture

CONgress and everyone in government needs the FED as much as the FED needs them. I used to think that the FED was a strict usurpation by bankers of the government.  But it is mutually beneficial.  Bankers get interest off of created debt money, government never has to worry about bouncing a check.  

The FED and the government are each happy that the other is around.

Can you imagine our government trying to survive on tax revenue alone?

 

pods

Tue, 02/15/2011 - 13:22 | 963899 newworldorder
newworldorder's picture

I agree with you. So ..........

We are on a run-away train which no one can stop and God is nowhere around to help.

Wow !!!!!!!!!!!!!!

Tue, 02/15/2011 - 13:42 | 963956 BigJim
BigJim's picture

Quite.

Tue, 02/15/2011 - 12:50 | 963785 willien1derland
willien1derland's picture

& the WHOLE congregation said AMEN - however, Bennie is Michelle Obama's Canasta partner - So this will not happen until after Canasta season - Though I totally agree with you...

Tue, 02/15/2011 - 11:04 | 963393 JoeStocks
JoeStocks's picture

We need a pissed off Google exec to organize us to protest in front of the Federal Reserve. Do it and I am there!!

Tue, 02/15/2011 - 11:23 | 963453 Trying to Understand
Trying to Understand's picture

http://standupamericaus.com/road-to-ruin-...-just-stop-event

The event is being planned already - but desparately  needs press - can you folks help with that??

 

Tue, 02/15/2011 - 11:24 | 963461 rookie
rookie's picture

"Never doubt that a small group of thoughtful, committed citizens can change the world.  Indeed, it is the only thing that ever has."

Margaret Mead

Tue, 02/15/2011 - 11:46 | 963523 NOTW777
NOTW777's picture

r u serious?  GOOG is part of our government - they have an office in the WH

Tue, 02/15/2011 - 11:05 | 963398 Fisherman7
Fisherman7's picture

Amen to this post, sad as the reality is.  These academians holding these personal experiments with economic policy, are destroying or have already destroyed capitalism...wit Mishkin this morning on CNBC...just clueless:  "inflation is not a real problem...we have avoided a crisis"  and Steve Leisman - just pathetic.  Why doesn't he just come in with a cheerleader's skirt on?  Thank God for Santelli.

Tue, 02/15/2011 - 11:17 | 963433 snowball777
snowball777's picture

i watched stupid people on TV today and you know what? they were stupid!

 

Tue, 02/15/2011 - 11:41 | 963505 Judge Judy Scheinlok
Judge Judy Scheinlok's picture

WATCH WHAT YOU SAY ALIEN OR THE BAILIFF WILL DRAG YOU OUT IN SHACKLES.

Tue, 02/15/2011 - 12:10 | 963630 snowball777
snowball777's picture

This is where teleportation really comes in handy.

Tue, 02/15/2011 - 11:06 | 963403 Jason T
Jason T's picture

The father of lies.. who is more dangerous than that?

Tue, 02/15/2011 - 11:24 | 963459 Rodent Freikorps
Rodent Freikorps's picture

A jealous woman. I mean...duh.

Tue, 02/15/2011 - 11:09 | 963412 Sean7k
Sean7k's picture

Pure, unadulterated propaganda. Bernanke is not the problem- he is the point man. His job is to absorb the blame, deflect the criticism and continue the wealth transfer. 

This article does nothing to identify the people behind the curtain. It does nothing to put the domestic political policy and global coordination by central bankers in the limelight.

It is typical look over here grandstanding, while the criminals operate in the shadows- out of sight and out of mind. Open your mind Paul and get to the root of the evil. Bernanke is just a minor dimon in the panoply of great satans.

Tue, 02/15/2011 - 11:26 | 963466 A Man without Q...
A Man without Qualities's picture

Exactly - you know, when I see Bernanke speak these days, it seems you can see fear and doubt gnawing away at his soul.  I think he's woken up to the fact that he is the patsy, and is being set up to take the blame for it all.  

Tue, 02/15/2011 - 11:30 | 963473 Sean7k
Sean7k's picture

Of course, he will be compensated generously, as Greenspan and Volker were before him.

Tue, 02/15/2011 - 11:44 | 963517 DaveyJones
DaveyJones's picture

the tell tale fart

Tue, 02/15/2011 - 18:20 | 965095 Arkadaba
Arkadaba's picture

+lol

Tue, 02/15/2011 - 18:46 | 965162 forexskin
forexskin's picture

+1000

 

just watching for the look of fear combined with a slight tip to the left.....

Tue, 02/15/2011 - 11:49 | 963541 lynnybee
lynnybee's picture

BINGO !!!   THANK YOU FOR POINT OUT THIS FACT !!   It isn't BERNANKE, he's just an employee of ,  of  who ?    The Rothschild's ?   The Warburgs ?   Goldman Sachs ?    You know, once & for all, will someone just tell me who the real Dr.Evil is ?     Is it Evelyn de Rothschild ?  When I was growing up in the 1950's bankers were respected members of the community !   Now, bankers are the lowest of the low !

Tue, 02/15/2011 - 12:41 | 963744 pods
pods's picture

Nail on the head lynnybee!  Sir Evelyn would be the face of evil.  To cover all bases I guess we could just say the entire City of London.  

pods

Tue, 02/15/2011 - 11:10 | 963414 gwar5
gwar5's picture

End the Fed, discontinue the Federal Reserve act

Move our gold from FRBNY to West Point.

Audit the Fed and all the gold

Break up the TBTF banks

Glass-Steagall

Create new Central Bank, print our own money

 

Tue, 02/15/2011 - 11:46 | 963527 A_MacLaren
A_MacLaren's picture

+1.4 Quadrillion

Don't forget to repeal the CFMA.  ;-)

Tue, 02/15/2011 - 11:11 | 963417 Cdad
Cdad's picture

Correct.

REAL CAPITAL WILL NOT FORM IN A FIANCIAL SYSTEM AS CORRUPT AS OURS!

Tue, 02/15/2011 - 12:16 | 963649 SheepDog-One
SheepDog-One's picture

The influence of the US is quickly reaching zero! Foreign people are sick of the US, and only figuring the best way out with the least loss to themselves. As banks stuff their vaults with worthless fiat, no one is borrowing. Its all imaginary but the Chairsatan has no alternative to keep throwing more worthless dollars in the fire until it all burns to the ground, probably not far off at all!

Tue, 02/15/2011 - 12:20 | 963663 Zero Govt
Zero Govt's picture

that's why they're replacing real capital with the Feds counterfeit stuff ...now i understand :)

Tue, 02/15/2011 - 11:11 | 963419 THE DORK OF CORK
THE DORK OF CORK's picture

Its too late - the damage has been done over 40+ years not 30 , he will have to continue to increase the base money supply if he believes the dollar is money.

Tue, 02/15/2011 - 11:17 | 963431 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

Thank you. Too many think this is fixable.

 

Not so.

Tue, 02/15/2011 - 11:25 | 963448 Cdad
Cdad's picture

Oh no...it is fixable.  But fixable portends fixing things.  In this case, about 100,000 criminal syndicate Wall Street bankers need to be fired [including Ben Bernanke], TBTF banks need to immediately post their mortgage losses followed by said banks being broken up, congress needs to act intelligently per financial reform [not that hack Dodd/Frank crap], reasonable interest rate policies need to be restored, the US dollar must be restored, etc, etc.

However, we of course are fighting against a well entrenched and corrupt syndicate of bankers backed by incompetent politicians [who continue to fail to recognize the problem of debt]...so no fixing is going on...yet.

Tue, 02/15/2011 - 12:08 | 963601 A_MacLaren
A_MacLaren's picture

I agree Cdad.  An honest system can emerge from what we have now, but real reform and restitution must occur first.  The tools to correct the systemically malignant forces are available, but just requires the political will to purge the parasites.  The Sherman Antitrust Act, Clayton Antitrust, Act, RICO statutes, etc.

As a meme, thought framework, paradigm shift enabler, I advocate changing and ending the use of TBTF, no firm is to big to fail.  Rather, they are Systemically Dangerous Organizations, SDOs.  I don't even want to call them "institutions", which has too much of an air of permanence and importance.

Tue, 02/15/2011 - 12:30 | 963709 zaknick
zaknick's picture

Fired? I think not. They who built Fraud St.'s prison industrial complex shall be housed in it.

That is justice.

Tue, 02/15/2011 - 13:56 | 964009 medicalstudent
medicalstudent's picture

its fixable-ish, moreso attenuable though.

 

we need andrew jackson spitting greenbacks.

 

governments = sanctioned extortion agents for international banks.

 

endostory.

 

 

Tue, 02/15/2011 - 14:18 | 964106 Translational Lift
Translational Lift's picture

Correct....since 1971..........

Tue, 02/15/2011 - 11:38 | 963421 Mercury
Mercury's picture

Fed policies don't just favor the super-rich, they favor public sector workers too - and there are a lot more people in that category than there are in any top single digit wealth percentile.

If you work for the government, first of all you're much less likely to lose your job than if you work in the private sector (that's huge) and you'll likely have an annuity stream for life and beyond.  Also, unlike a private sector worker, this salary/benefit annuity stream is much more likely to be COLA'd as needed (that's going to be quite huge).

With this kind of revenue (guaranteed by the biggest leg-breaker in the world) you don't need to save nearly as much as a private sector worker does or worry that your savings will be destroyed by Fed induced inflation (or confiscated).

It's nice to be super-rich, it always has been and it always will be.  But if you can't swing that, 'public sector' is the next best class status going forward. Because wealth isn't just what you have in the bank right now.

Find a government job to sit your ass down before the music stops.

Tue, 02/15/2011 - 11:47 | 963535 DaveyJones
DaveyJones's picture

"Fed policies don't just favor the super-rich, they favor public sector workers too"   - the public sector's quickly becoming relatively rich compared to the real middle class  

Tue, 02/15/2011 - 13:53 | 963986 BigJim
BigJim's picture

Yes, well put.

And then when you add in all the employees of nominally private-sector companies, that owe their existence to supplying goods and services to Leviathan, you get an enormous interest group that is sucking wealth from everyone else... and one that won't give up its privileges in a hurry.

Tue, 02/15/2011 - 14:38 | 964190 Crime of the Century
Crime of the Century's picture

You are misinformed. Fed workers have been shunted into SS based retirement for years now. Actual defined benefit pensions are much smaller than state/local. Also, salaries have been frozen for two years, but even if they weren't, they wouldn't stand a chance of keeping up with real inflation (not the index that also squeezes Granny). At least the private sector has the benefit of being nimble in labor negotiations. Weimar showed us that the civil servant goes under rather quickly. 

Tue, 02/15/2011 - 11:13 | 963423 ThorsteinVeblen
ThorsteinVeblen's picture

The Great Transformation is a book by Karl Polanyi from 1944.

He states that a capitalist economy required a strong state to mitigate its harsher effects. 

"The market, once it considers land, labor and money as "fictitious commodities" (fictitious because each possesses qualities that are not expressed in the formal rationality of the market) “subordinate[s] the substance of society itself to the laws of the market.”"  

Consider how well capitalism works in a stronger state, like China. Consider the destructive tendencies of the market on the false commodities of land, labor and money. Land prices are rising, labor prices are falling and money (which only facilitates bartering) is doomed as well.



Tue, 02/15/2011 - 11:20 | 963444 Sean7k
Sean7k's picture

You can't have capitalism in a strong state- it's an oxymoron. You only get market based tyranny- Polanyi was obviously a committed socialist.

Tue, 02/15/2011 - 11:42 | 963508 ThorsteinVeblen
ThorsteinVeblen's picture

We don't have market based tyranny? 

Tue, 02/15/2011 - 11:45 | 963519 Sean7k
Sean7k's picture

Yes we do, which is not capitalism. An economic dictionary is essential to understanding economic concepts.

Tue, 02/15/2011 - 11:49 | 963539 DaveyJones
DaveyJones's picture

that's an oxymoron

Tue, 02/15/2011 - 12:25 | 963683 Zero Govt
Zero Govt's picture

ThorsteinVeblen,  "We don't have market based tyranny?"

Cue US property, farm subsidies, centralised pensions, US healthcare, education, public transport, Marxist controls over the energy sector, bailout of the automotive sector.... what planet have you been on past 4 years, these US Govt made-disasters are staring you in the face???? 

 


Tue, 02/15/2011 - 13:14 | 963873 ThorsteinVeblen
ThorsteinVeblen's picture

Polanyi and others agree that the "problems" you point out are reactions to capitalism. The theme here is that land, labor and money are capital. If they are used in an economic system as commodities (something produced for sale http://www.merriam-webster.com/dictionary/commodity) it leads to its destruction/consumption. Ayn Rand and her capitalism god worshiping Friedman disciples believe that all would be well if left to the market mechanism.

In the '30's farmers dumped their product out on the road as it didn't pay to haul it to market. The aged were starving to death having no ability to save after a transformed economy - rural to urban. Land grant colleges fueled corporate research, Interstate highways connected the country, etc. This is a planet that reacts to the destructive tendencies of capitalism. Marx, as you know, stated that capitalism would fail because of its success. Where is the period of success in the United States where laissez faire capitalism ruled and all was well? Tell us how price theory values externalities like the toxins that you eat or the air that you breath. Tell us how it is just the best that we can do. And, Govt made disasters? Mortgages are sold and marketed to consumers  primarily by 20 something year olds that barely squeezed through high school. Mortgage pools and derivatives are sold and marketed to institutional investors who belong to the same yield chasing neoclassical fraternity. Junk pools of Freddy and Fannie never appeared until market forces compelled them to be complicit.

A bushel of wheat makes 45 pound and a half loaves of white bread or as many as 90 pound loaves of whole wheat bread. Is the price of wheat too high or are wages too low? Are consumers on a level playing field with producers without the aid of organized labor? Marxist controls over energy? Hopefully for you, an OPEC bowing capitalist like Chevron doesn't start fracking in your neighbor's back yard lest it turn you into a knee jerk regulation crazy liberal. 

Tue, 02/15/2011 - 14:02 | 963979 Sean7k
Sean7k's picture

You've done a better job here, but you still need to understand terms. Labor is not capital. Never has been, never will be. Land and money can not be used as commodities- you are again confused on terms.Land, labor nor money are produced for sale. The products of these inputs are, but they are not. So, you're entire assumption is wrong. 

Let's move on, In the 30's, the farmers dumped their product to increase prices by causing shortages and because they were ordered to by the government. The government was promoting cartels (socialism) to capture control of markets. I suggest you read Murray Rothbard on the depression. Interstate highways were another public works project (socialism or state intervention in markets). 

The best period to measure laissez faire economics in America is from 1870 to 1890, although this period suffered from banks being protected from bank runs when they printed too much currency. While many Keynsian texts refer to this time as volitile and depression plagued, when you look at the actual numbers, you find the american worker was best paid, most productive and the country generated more wealth than almost at any other period.

Real free markets do price in environmental costs through protection of private property laws, but we live in a socialistic state, so it doesn't happen. Financial derivitives are a creature of government supported bailoutonomics- again intervention rather than free markets. It is not market forces that cause these to appear but the absence of market discipline- deflation and malinvestment and bondholder haircuts.

Organized labor has been co- opted since the early 1900's, read Howard Zinns, "History of the United States". It is because of organized labor that we have high unemployment rates and distortions in pricing labor.

If you will take the time to read about economics, especially Austrian or anarcho-capitalism, you will develop a better understanding of the concepts and theories.

Tue, 02/15/2011 - 14:10 | 964071 BigJim
BigJim's picture

.

Tue, 02/15/2011 - 14:59 | 964309 ThorsteinVeblen
ThorsteinVeblen's picture

Adam Smith and others based observed capitalism and their theorized observations of economies upon assumptions that they made; man prefers more to less, man is by nature greedy, etc. Capitalism has to determines wages, land, and money by supply and demand--as they would any commodity. Capitalism treats them as commodities, that is the point. I understand that and believe it to be wrong headed. That is why I propose the viewpoint of Polanyi here, that tries to explain government intervention in labor markets, land markets and money markets and their exposure to the detrimental effects of those markets. You said, "Real free markets do price in environmental costs..." In fact, many of these costs are called externalities. The market does not take these into account in the instances I gave long or short term. Some things may be priceless or worthless, but in price theory, this can not be the case. You said, "Financial derivitives are a creature of government supported bailoutonomics..." In fact, Soloman Bros. began trading pools of mortgages in the early '80's with 5 point spreads ($50,000 per million each side of a transaction). Treasury bonds were "stripped" of principal and/or interest long ago. "Financial derivatives were created from home mortgages derived into MBS's  pools derived into CMO's derived into tranches morphing into markets for CDS's. Wall street runs out of things to sell so they invent--that's capitalism. It happens with corporate debt interchangeably. Having no economic knowledge, I still don't understand that the 8% of the workforce that is organized can ruin an entire labor market. Please splain that to me. No, better yet, sum up, at least you are capable of intelligent thought.

Tue, 02/15/2011 - 15:47 | 964496 Sean7k
Sean7k's picture

Adam Smith based his theories on capitalism on the works of Contillion. Yes, man prefers more to less and man is greedy.

Again, you need to learn definitions and how they are used. Labor, land (or rents) and capital are inputs. As an entrepreneur, the capitalist has no idea whether he will earn a profit or what the market will demand. He hopes that he has made a reasonable calculation of input costs and when he sells his product in the future- it will allow him to receive a profit. However, he may experience a loss or break even. This often happens when too many producers enter a market and supply is saturated, causing price to fall.

Commodities are an end product or part of an end product- they are not the means to create that product. 

As for environmental costs, you are using Keynsian terms- these are not free market terms. If I own my land and you pollute it, I should be able to sue for damages, but instead, we have government stepping in to protect the polluter and minimizing the cost of the damage or writing laws that make proof of damage next to impossible. There are NO interventions in a free market. Private property protections are sancrosact in a free market. For your information, Keynes was a socialist (Fabian). He was not a free market economist. 

All financial institutions since 1913 have been creatures if market intervention, government interaction and have been protected by the police power of the state. Wall Street does not function in a free market economy. They say they do, the media says they do and the schools teach they do, but here is the hard part- you need to look at what actually happens, you must understand the theories and then compare the actions and results. The Elites have commandeered the language for their own use. If you fail to study the actual definitions, you will fall for the same arguments and play into their hands. For example, Classical Liberalism is defined by minimum government, minimum taxation and free markets. How does that sound compared with the Democratic party platform or legislative output?

Finally, unions were a great idea. I suggested the reading, because you need to see how the early leadership was hijacked and used against the union members. That is too long a story to tell here. However, when a union sets labor costs the price can be too high, too low or just right. The problem is that it is a set price. If the supply of labor or demand for labor changes, the price needs to change as well. If the price is too high, then the producer will layoff workers to keep his costs in line with what he can sell a product for. If he was allowed to change the price, he could keep all the workers working at a lower wage. Unions create an unusual problem, convinced that solidarity is essential, the workers will stay unemployed, so others can remain at the old wage. Regardless of changes in the market for a given product. In fact, if the wage was low enough, more people could be employed and the producer could increase market share- making everyone's employment more secure and increasing capital that can then be spent on new projects, creating more employment.

This problem can be exacerbated by government intervention through guaranteed wage rates that then become price standards throughout entire industries or protected industries like plumbing or electricians which require a special license- in essense, a state sponsored monopoly.

Remember, unions were not always 8% of the labor force. Additionally, when you add in government employees, that number goes much higher. 

It seems you are looking for fairness in a system and identifying with the concepts without understanding the mechanics and through flow. Communism and Socialism sound great on paper, but the reality is much different. Free markets create liberty and anarchy. Socialism creates equality of poverty and state tyranny. Both systems have their benefits and drawbacks. Good luck in your choices.

Tue, 02/15/2011 - 16:40 | 964762 ThorsteinVeblen
ThorsteinVeblen's picture

8% going to 11% is not "much higher". Unions negotiate wage rates and working conditions. And is an institution (like collective bargaining) the main determinant of aggregate employment levels on the micro level without regard to the corporate institution's power or collusion? Doesn't one of your assumptions rely on the "fact" that labor is mobile? In the short run, isn't labor faced with the problem of the ease of mobility of production? Aren't these global corporations leaving Mexico for China for Vietnam? If you think that sending N. Dakota durum wheat to Vietnam to be squeazed into noodles then shipped back and sold by SuperValu to you is correct because price theory justifies it, you should rethink.

I can not debate and win the fact that equilibrium price levels for false commodities are determined by supply and demand. I can debate the merits of doing so based upon your theory's false assumptions and the consequences of democratic action. So often democracy is interchanged with capitalism and totalitarianism with socialism or communism. This cart/horse capitalism/intervention debate is about the assumptions price theory has to make in order to work, not the mathematics.

The answers to the budget problem aren't locked in an economic model where price dictates who spreads disease and who catches it.

 

Tue, 02/15/2011 - 23:28 | 964918 Sean7k
Sean7k's picture

Public service union (governement) are 36%. Teachers add another 37%. As government workers make up almost 40% of total employment, these are significant numbers. Your next sentence is nonsensical. 

I made no assumptions regarding labor being mobile. However, free markets are the most efficient mechanism for correcting dislocations. What you may be alluding to is another big subject- the use of off shore corporate structures to minimize taxes through import/export pricing. This type of laundering is very pervasive and government sanctioned by inaction and tax law written by corporations.

I do not understand your next two sentences. Why you would confuse democracy with capitalism is beyond me. You may want to check definitions. Capitalism is not compatible with interventional government and democracy is usually interventional.  

Government is the enemy of liberty. They exist at opposite ends of the spectrum. As all government seeks to control, as a government grows, liberty must diminish by definition. To the degree government develops control, it moves along a path from liberty to totalitarianism. This is the study of political philosophy and you will need another dictionary.

Price theory is simple, but you need to understand human action. Price equilibrium does not exist- it is fluid point that changes with each exchange. Exchanges that are voluntary interactions where both people profit- otherwise they would never make the exchange. This is the basis of all commerce. This is a very simple concept, but there are books that cover it.

Your last sentence again makes no sense to me. You seem to want to talk the talk, but with your limited understanding, you are having trouble making sense. I applaude your willingness to explore the subject, but you might want to expand your reading and include: Keynes General Theory, John Stuart Mill, Murray Rothbard- try something basic- his works can exceed 1000 pages. Economic history can help fill in blanks and give ideas a proper setting. 

 

Tue, 02/15/2011 - 14:13 | 964078 BigJim
BigJim's picture

See Sean7k's answers. Also:

"In the '30's farmers dumped their product out on the road as it didn't pay to haul it to market. The aged were starving to death having no ability to save after a transformed economy - rural to urban. "

I'm not sure why you're suggeting this is evidence of 'market-based tyranny'. In the 30's, FDR had instituted a virtual command economy. The Great Depression is a textbook case of what happens when the government sticks its nose too far into the running of an economy.

"Marx, as you know, stated that capitalism would fail because of its success. "

Well, Marx was wrong about a lot of things. Virtually every 'market failure' commonly attributed to 'capitalism' turns out to have been caused by the (usually) unintended, unforeseen consequences of government intervention.

"Junk pools of Freddy and Fannie never appeared until market forces compelled them to be complicit"

Just how did 'market forces' compell these GSEs to be complicit? What you are describing as 'market forces' are actually the result of corporate lobbying - ie, political forces.

"A bushel of wheat makes 45 pound and a half loaves of white bread or as many as 90 pound loaves of whole wheat bread. Is the price of wheat too high or are wages too low?"

You want to know what the price of wheat should be? Then let supply and demand determine who much it is valued vs everything else. No man or comittee can determine something's 'true' worth, because it's true worth is different to different people, who have to chose between it and a myriad of other things they need or want.

I suggest you read Thomas Sowell's Basic Economics. It's a fat book, but so well written it's a fairly easy read, and he has a wealth of historical data to back up his assertions.

 

 

Tue, 02/15/2011 - 14:27 | 964144 nihilist
nihilist's picture

Reactions to capitalism?  In a country that always rejected unfettered free-markets?  One must be delusional to think that most of the problems we have can be attributed to an economic system that has never been completely embraced and is always distrusted by people like, well, you.

Your revisionist version of history is complete and utter BS ... farmers no longer provided sustenance to people because the great gov't expansionist known as FDR instituted price controls that made it non-economical to sell their produce.  They're better off providing enough produce for their families and not every one else.  If the farmers did insist on some sort of "enforced altruism" who do you think will be starving to death first?

The interstate super highway was lobbied for by the "evil" car manufacturers to improve interstate commerce and endorsed by the "evil" Eisenhower because he saw the benefits of public roads during his Army days.  Can you really deny the importance of interstate highways?

Like a confused intellectual you go on to say that without government controls externalities like toxins on our food and water will be more rampant.  What makes you think that some other externality bourne out of free markets will not find an opportuninty to address this problem if it in fact arises.  Capital markets are very good at finding inefficiencies.  The FDA should not have a monopoly on food safety and the like.

Mortgages were wholesaled like candy to a baby because the likes of Countrywide and Mozillo knew they had a buyer on the other end in the form of the GSEs (Fannie, Freedie, and Ginnie).

So explain to me again how the "problems" we have are reactions to the "evils" of capitalism?  It seems to me that they are more reactions to perverse statist policies.  It also seems to me that you drank too much of the statist kool-aid your professors gave you and they have somehow convinced you that referring to Polanyi and regurgitating his ideas is what passes for critical thinking skills in the real world. 

Tue, 02/15/2011 - 14:28 | 964154 medicalstudent
medicalstudent's picture

polyani = communist pollyanna more than capitalist polymath

Tue, 02/15/2011 - 14:44 | 964225 Sean7k
Sean7k's picture

You might be referring to Michael, Karl was a fabian socialist who argued against Austrain economics and went on to write about economic sociology. 

Tue, 02/15/2011 - 11:14 | 963427 HoofHearted
HoofHearted's picture

It's not just the Bernank, it's the Fed in general.

There was a nice academic conference this weekend called, "The Fed was a bad idea." Several people gave statistical reasons that the Fed had screwed things up, but they even welcomed a couple of Fed-o-philes to try to say what a good job the Fed had done. (The audience was wholly unconvinced.)

Tue, 02/15/2011 - 11:15 | 963428 buzzsaw99
buzzsaw99's picture

good luck with that. the chairstain works for the alien lizard overlords. they are invincible.

Tue, 02/15/2011 - 11:21 | 963452 Sean7k
Sean7k's picture

It has been proposed they were defeated once before, but not by us...

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