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CHAIRMAN BERNANKE'S DREAM
Economic reflections of David Arthur Walters during the Great Recession The current financial and economic crisis is the symptom of a mental or moral disorder that began with immorality at the top of our top-down corporate society. President George W. Bush saw the Wall Street casino reeling with irrational exuberance long before it passed out. Federal Reserve Board Chairman Alan Greenspan, intoxicated by free market fundamentalism, had not taken the punchbowl away. It was no coincidence that his successor Ben Bernanke took office as the great boom in play money was accelerating, that his favorite subject was the Great Depression, and that he wanted to let the public in on the mystical proceedings of the top-secret policy-setting conventicles at the Fed. Love does not a secret abhor. All great religions including secular ones need mysteries to endure misery, to keep up confidence in the face of absurdities, to maintain faith in spite of the logical contradictions in the sacred text emanating from the singular holy logos. Competing dogmas must not be debated when faith in ultimate authority is needed during utter crises. Thus far the democratic criticism of the Obama administration’s transparent plans to treat the money disease is not boosting confidence – the contradictions
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cause the seasick passengers to believe that the pilot house on the bridge to nowhere is manned by fools. If it were not for the fact that Mr. Bernanke had not had a hand in forging the circumstances that made him the fitting person for the circumstances, we might fault his "transparency" and blame him for pushing the panic button by clearly mouthing certain signals of impending disaster, warnings that cued Treasury Secretary Henry Paulson to make secondary, knee-jerking motions. Others blame Mr. Bernanke for hiking up the price of monetary liquor somewhat after letting it run freely for awhile, which caused the parties to sober up quite a bit – now that the drinks are becoming cheaper again, all along the treasured yield curve, runaway inflation is expected to set in some time in the future. Mr. Bernanke's academic dream of the Roaring Twenties followed by the Great Depression and his version of the Salvation Plan has almost come true. No doubt he intuited that the expectations had greatly exceeded the possibilities for realization, and that a bust was impending, that doom was nigh yet again, that something had to be done to keep the balloons in the air. Time and time again the ancient gods have warned man of the dire consequences of his overconfidence in himself; wherefore he should know his limits well and give credit for his daily bread to transcendental unitary authority. The manic-depressive capitalist business cycle is nothing new: miserable man is bound to pursue his own happiness and swell his vanity with pride until crushed flat as matzo by reality. Having experienced the awful weight of the Almighty upon him, he shall be duly humiliated for awhile, and then shall eventually leaven himself and rise ever more arrogantly until duly chastised yet again. Yes, Mr. Bernanke let the party continue run wild for awhile longer before hiking interest rates, perhaps unnecessarily, just as the Fed had done prior to the Great Depression – paradoxically, the Federal Reserve system, created to avert booms and busts, or financial madness and panic, lends a hand in creating them. We fondly recall Franklin Delano Roosevelt, a name that still brings tears of gratitude to the eyes of old folks who suffered the Great Depression. His administration gave unemployed people something to produce and paid them for it. But as far as Mr. Bernanke is concerned, President Roosevelt’s Fed had not put enough yeast in the dough, or rather enough dough into the programs, so the Great Depression was unnecessarily prolonged for a decade, until World War II united the country against a common enemy, the diabolical Hitler and his minions. It is ironic, is it not, that a reaction to demon inflation and consequent depression was a major factor in bringing Hitler and his Nazis to power, and that he chose world war for world dominion to revive the economy.
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President Roosevelt is known as America’s legendary big spender, but he did not throw around as much money as people think. Government spending today, as a percentage of the economy, is roughly 35%, or 175% of the 20% average over the Depression years. During those years, as is the case now, the banks were apparently not loaning out the government credits provided to them - bank loans can result in an expansion of the money supply up to ten times the original loan amounts. Loan volume was roughly only half of what it had been in the 20s. Unemployment remained stubbornly in the double digits. Therefore, perhaps confusing effect with cause, current opinion has it that government did not spend enough to save the economy until it was ramped up to 70% of the economy, for the war that rendered unemployment nil. Pseudo-conservatives complain about big spending liberals, but they actually take the grand prize for excessive expenditures. They like to cut taxes for the wealthy and to run up the public debt in times of peace until drastic steps have to be taken to control the deficit, like cutting public services where they are mostly needed while protecting their own kith and kin. Virtual vultures are not real vultures: they naturally love crises provided that they and their children can stay off the battlefields, feeding on the gore at a distance. Now that they have brought this great nation of theirs to the brink of ruin, we may expect history to repeat itself with a greater depression than the Great Depression, and a greater war than the Great War and World War II combined. America’s greatness, say the frustrated hawks, is due to war and not to the peaceful preparation for more war between wars, and only bloodletting can revitalize its moral fiber and stiffen its backbone. Wherefore their militaryindustrial-oil complex must be kept well greased with dollars. Since globalism has connected the livelihoods of everyone, everyone must soon commit themselves to the colossal struggle between Good (life) and Evil (death) now impending. The world war this time shall be of the greatest biblical proportion imaginable: fundamentalists claim that the ultimate apocalypse is nigh. Tel Aviv is expected to be one of the first nuclear holocaust offerings to the respective gods of war – of course Athens, Rome, London, and Miami among other far-clung ports, shall be offered up as incense as well. If Bernanke’s nightmare comes true instead of his dream of pacific salvation, and if an external threat does not appear to give the masses a unifying cause to fight a common enemy instead of worry over a money supply that does not employ excess capacity and distribute the produce, the crucial issue may be resolved in an internal quarrel, a Great Terror that might destroy the nation from within, along with other nations of the First World that do likewise, thus yet
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another civilization might fall on top of Toynbee’s long list of fallen civilizations, and the survivors shall be found in the rubble renting their garments. We voted for the dream instead of the nightmare, and to that end we think that the black-and-white messiah should be more mystical and less transparent. Mr. Obama idolizes Abraham Lincoln, who presided over civil war and was assassinated. Would he have history repeat itself? History is a mistake. Teams of rivals whose consensus make history shall avail him not. He must put his ear to the ground and assay the truth advancing from eternity. Only then shall he know what he must do to assuage the Revolution within the American Revolution. Only than shall he be much more than a bright young man who needs more experience.
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