In a debate about Obamacare, VP candidate Sarah Palin claimed the legislation would create a “death panel” of government bureaucrats who would decide whether Americans (citing her elderly mother and child with Down syndrome) were “worthy of medical care”. It was a highly controversial subject.
Whether it is individuals or businesses, the government should NOT be allowed to decide who lives and who dies.
Corporate Death Panels
The recent power grab by big banks and Federal Reserve has made them corporate death panels. They can decide which sick companies in corporate America are given life support while others die.
| “When we give government the power to make medical decisions for us, we in essence accept that the state owns our bodies.”
– Dr. Ron Paul |
Let’s start with the banks. Wall Street On Parade (WSOP) reports the big banks are playing favorites with the Paycheck Protection Program (PPP):
“Democratic members of the House of Representatives Select Subcommittee on the Coronavirus Crisis sent letters to…eight of the largest U.S. banks….
The letter to JPMorgan Chase read in part:
“The CARES Act specifically encouraged the SBA…’to ensure…disbursement of covered loans prioritizes small business concerns and entities in underserved and rural markets,’ including businesses owned by veterans, members of the military, socially and economically disadvantaged individuals, and women.
“Media reports indicate that some large lenders apparently created a two-tier system for processing PPP loan applications. The banks’ wealthiest clients had access to a personalized application process that ensured their applications were processed first. Other applicants had to use poor-performing electronic portals, faced significant processing delays, and sometimes needed to find another lender to consider their application.
One report found that JPMorgan Chase ‘provided loans to virtually all of its commercial banking customers’ that sought PPP loans ‘while the lender’s smallest customers were almost entirely shut out.'” (Emphasis mine)
We are already seeing reports where Pelosi’s husband and many politically connected Hollywood moguls have received millions in bailout money. I read an estimate where thousands of small, mom and pop businesses are unlikely to reopen.
Casino banks are sick once again and being bailed out for a second time in 12 years. Instead of a government clamp down, CNBC reports:
“Federal Deposit Insurance Commission officials said…they are loosening the restrictions from the Volcker Rule, allowing banks to more easily make large investments into venture capital and similar funds.
The banks will also be able to avoid setting aside cash for derivatives trades between different units of the same firm, potentially freeing up billions of dollars in capital for the industry.
…. The Volcker Rule was designed to prevent banks from acting like hedge funds. The general principle is that they are allowed to facilitate trades for clients, but not allowed to strap on risk for big proprietary bets. (Emphasis mine)
…. The rule…also barred banks from making potentially speculative investments using customers’ FDIC-insured deposits. That included venture capital funds….
…. Sheila Bair, who chaired the FDIC for a five-year term…called the two changes “ill-advised.”
“As a former chair of the FDIC, it won’t surprise you to hear me say that $40 billion dollars that will no longer be in banks to protect them against derivatives exposures” will likely increase risk to the government….”
…. The FDIC and the Office of the Comptroller of the Currency are set to vote on the rule changes, and the Federal Reserve and Securities and Exchange Commission must also sign off on it.”
The big banks can use depositor’s money to become venture capitalists and buy risky bonds, knowing the Fed will bail them out with taxpayer dollars if they bet wrong. Meanwhile, they keep paying dividends, buying back their stock and rewarding themselves with big bonuses.
| Remember the old saying, “If you owe the bank $1,000 and can’t pay, you are in trouble. If you owe the bank $100 million, the bank is in trouble.” Not anymore, today the TAXPAYER is in trouble…. |
Any company with a lot of bond debt, and risky credit rating, is likely courting the big banks to hold as much of their debt as possible, anticipating preferential treatment. I’d love to be a fly on the wall at some of the big boy cocktail parties.
Banks pass problems to the Fed
The Atlantic warns about Collateralized Loan Obligations (CLO):
“A CLO…are loans made to businesses-specifically, troubled businesses. CLOs bundle together so-called leveraged loans, the subprime mortgages of the corporate world. These are loans made to companies that have maxed out their borrowing and can no longer sell bonds directly to investors or qualify for a traditional bank loan. There are more than $1 trillion worth of leveraged loans currently outstanding.
…. In December, the Financial Stability Board estimated that, for the 30 “global systemically important banks,” the average exposure to leveraged loans and CLOs was roughly 60 percent of capital on hand.
…. The prices…tumbled in March, before the Federal Reserve announced that its additional $2.3 trillion of lending would include loans to CLOs.”
CNBC reports, “The Fed says it is going to start buying individual corporate bonds.”
“Under the latest guidelines, the Fed said it will buy,…individual bonds …. Those purchases will go along with the ETFs the Fed already has been buying…but also include some junk bond funds….”
Chuck Butler told us, “The Fed’s bylaws prohibit them from buying corporate stocks and bonds, and during this spring we’ve seen them do both! Where is Congress? The Fed is breaking the law and congress, so far, is letting them get away with it.”
Bill Blain adds:
“The Fed…has set its own list of names based on its own rating criteria and other metrics, which translates as it can buy any company that was investment grade before the crisis…and which remains investment grade in the Fed’s mind. It means the Fed will buy whatever it thinks it might need to buy in order to avoid corporate shocks dragging down the economy.
| Central banks are now de-facto guarantors of the corporate bond market. |
…. What has all this QE Infinity and ZIRP interest rates created? A global market economy where…market prices have become meaningless as a result of financial asset inflation? Where junk bonds are priced like AAA securities, allowing private equity funds to thrive?
Since 2008 we witnessed corporate binge borrowing, buying back their stock at high market prices, while they increase dividends. Chuck Butler has warned, the loans are coming due. Now the economy has slowed down, and many companies cannot pay off the loans. The Fed and banks pick which sick companies receive aid.
Where is congress?
I’ve only seen two members of congress raise hell about this, Elizabeth Warren and Bernie Sanders. They blame the concentration of wealth on crony capitalism, which is not true. The cause is government interference in the free market. It’s crony socialism!
Their proposed solution is more centralized government control, which is the exact wrong thing to do.
| “When the government makes loans or subsidies to business, what it does is to tax successful private business in order to support unsuccessful private business.”
– Henry Hazlitt |
Jared Dillian tells us:
“What the Fed is doing keeps zombie companies alive. Companies that should be bankrupt.
You can’t have capitalism without failure.
The reason the US economy is so spectacular is precisely because we allow failure to an extent not allowed anywhere else in the world. If older firms don’t die, younger, better ones can never take their place. When you don’t allow failure, you lose dynamism from your economy.
In a crisis, everyone wants to do something. Instead, we should do nothing. I am fond of saying, “don’t just do something, stand there.”
Everything the Fed has done has benefited the big over the small.
In middle school, I learned that the reason the Soviet Union failed was central planning-the idea that someone, somewhere can successfully direct the activity of millions of people. The invisible hand does a better job of that.”
Congress steadfastly refuses to oversee the Fed. Maybe they should all go back to middle school.
Expecting the fed to reign in the big banks is foolhardy. The Fed and big banks are so powerful they can operate as corporate death panels. Sick corporations will be propped up by the casino banks, also on life support themselves while taking undue risks with depositor’s and taxpayer dollars. If they bet wrong, they pass the debt along to the Fed.
The Fed can choose to let the zombies default, and they will probably die – with the taxpayer footing the bill. Or, they can “extend and pretend”, taking on new debt from poorly run companies.
The casino banks should never have been, “too big to fail”. They should have all gone the way of Lehman Brothers. Glass-Steagall must be reinstated with venom. While the government fiddles, our nation burns.
Allowing casino banks and the Fed to operate as death panels is like giving teenage boys booze and car keys. A recipe for disaster!
Jo and I participated in the DC Tea Party rally. Several hundred thousand “working class” citizens voiced their discontent – peacefully. Career politicians called it a “hissy fit”. The working class is getting fed up – politicos better wake up! Hopefully, the revolution will take place at the ballot box and they will all be sent packing.
For more information, check out my website or follow me on FaceBook.
Until next time…
Dennis
“Economic independence is the foundation of the only sort of freedom worth a damn.” – H. L. Mencken
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Term limits on Congress is the ONLY way to fix this. Congress is a self-perpetuating behemoth. Voting new, “fresh” blood in only means new, fresh greedy Senators and Reps for the lobbyists to bribe.
There is simply zero incentive for them to just do their damn job, and every incentive to enrich themselves at the expense of the American Taxpayer.
They live under own rules, and it takes the most egregious crimes to be UNCOVERED for them to be removed from office, and even then they face little to no penalty.
They insider trade, have free, top-of-the line health care for life, private security, private retirement with zero market exposure.
They enrich their family members and business associates with pork projects, grant money, insider deals, and trade agreements.
They gerrymander districts to be more favorable to their re-election.
They take foreign campaign money.
They have criminals like pedophiles, rapists, drug addicts and the like either in their immediate family or they themselves are such. Getting caught naked with a male prostitute high on meth might as well be a speeding ticket for them.
Their useless mouth breathing spawn serve on powerful boards in exchange for exorbitant salaries. They drive drunk and flip cars with women inside who they leave to drown. They send unsolicited dick pics to various women and minors. They associate with convicted sex traffickers and abusers. They praise crazy “Witches” who perform mock blood rituals. They endorse the wholesale taking of innocent life via abortion. They engage in sex orgies with staffers. They fly to private islands where underage girls are offered for sex.
They allow illegal criminals to cross our borders and harm our citizens, and then encourage cities to protect them from arrest, deportation, or prison time.
They lie about their heritage for college.
They own and live in multiple luxury housing while their citizens live amongst homeless, drug-addled criminals who shit on the street.
They have armed security while they pass laws to stop law abiding citizens from defending themselves.
EIGHTY FOUR members of Congress have been stopped for drunk driving but never convicted by claiming Congressional Immunity.
TWENTY NINE members of Congress have been accused of spousal abuse in either criminal or civil proceedings.
FIFTY THREE have personal and financial problems so serious they would be denied security clearances by the Department of Defense or the Department of Energy if they had to apply through normal channels (but, again, as members of Congress they get such clearances simply because they fooled enough people to get elected).
All because they can “serve” until they die. It’s more like we are serving them.
People cry and piss and moan about the Presidential powers, but in reality, the President has very little power in comparison to the Lich Kings and Queens that currently hold Congressional office. Four years, eight if they are lucky, is all they get, as opposed to 20, 30, FIFTY years on the public graft, spinning their tales of righteousness and crusades for the people.
They pretend to be the bulwark against the Orange Man, all the while ignoring rampant fraud by banks.
I would be amenable to 4 terms for Reps and Senators. Enough time to get real things done but not enough to dig in like the ticks they are.
The incentive for sociopaths and egomaniacs will be lessened considerably, and real servants of the people will be elected.
These are the people duly elected to represent the People’s Interests? Hardly. They serve their own. Anyone who reads through this list, and thinks we are being offered any kind of a choice, is delusional. Two bad choices is no choice at all.
Even if a they are decent people to start with, The party leaders change that quickly.
I think one 8 year term is enough. There’s no wasting time with getting reelected again. instead, they should concentrate on their job.
And judges should be removed by their 72nd birthday automatically.
A perfect summation.