Ho Hum. Another Week. Another Bailout

I was almost convinced to not call this a bailout.  But then the Fed started talking about how it was saving "Main Street" by buying up unsecured credit between businesses.

Excerpt Washington Post report "Fed Moves to Thaw Credit Markets ":

The Federal Reserve said today it is establishing a special fund to lend money directly to businesses so they have adequate cash to operate, a major move by the central bank to ensure that "main street" companies are not crippled by the financial crisis gripping Wall Street and other money centers around the world.

Under the new program, the Fed will buy up commercial paper, the short-term debt that large companies across the country use to fund their day-to-day operations. That puts the Fed in the unprecedented position of, in effect, funding individual companies by buying their debt.

The Post says the money should come from that allowed by last week's bailout bill, but also mentions printing more.  A New York Times report "Fed Considers Plan to Buy Companies’ Unsecured Debt " says it expects newly printed money to help cover the costs.   The WP notes that doing so could hurt countries that hold US debt, like China:

Some fear inflation as a result of lower interest rates and a flood of money, much of it simply printed by the U.S. government, pushed into the financial system. That would have the effect of reducing the value of U.S. debts, harming countries like China but benefiting Americans. 

I know some people don't worry about that so much, but I doubt China is going to continue to buy our debt at the rate of 2 billion dollars a day if it's getting clobbered by doing so.  Chinese refusal to buy our debt could nail the coffin shut on the American economy. 

The Republicans and other Conservatives are just waiting for a chance to throw the US back into a thirties style Depression which would allow an anti new deal where Main Street becomes third world.  Hungry people demonstrating about their plight meet troops determined to keep them from stopping the flow of commerce (stopping traffic), and incarcerating the trouble makers for up to 7 years for daring bring the public's attention to the problems. (In fact, they have jailed members of the RNC Welcoming Committee in St Paul, for allegedly just planning to block traffic and possibly break some windows.  The arrested members face charges that could bring 7 years prison time.)

The fat cats have 4 months with this president who is gol durn eager to do whatever the fat cats want him too so they will keep supporting him on the lecture and book circuit and pour money into his post presidency Democracy Foundation ("Look out Clintons.  George and Laura are gonna be richer'n you soon!) .

But even better would be to have a new Republican president who is so eager to be the Big Cheese he always knew he should be, that he will bend which ever way he must to win and fulfill the promises he made and more to keep those economic fundamentals that make the economy work from getting uppity and asking for more pay or even their Medicare or Social Security rights acted upon.  And with his VP acting even more so, and thinking maybe even Cheney doesn't have enough power they'd be in seventh heaven. 

What I've heard is that the fat cats who've outsourced their businesses aren't really happy living so much of their time in foreign lands where wages are so cheap.  They're foreign and the fat cats have to learn a new language.  Also foreign courts don't always favor the American business person over their own.  

So, what fat cats really want is a less affluent, more Dicksonian "middle and working classes" which can be milked for more profits while they stay home, play on the golf courses they love, and flirt with American celebrities at parties.

tags: bailout  paper debt  inflation  recession  depression  

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