Over the course of the last decade to say things “have changed” would be an understatement. In some respects when it comes to civility in public discourse, and just as important, business ethics, one would have to agree that both have been spiraling down the drain.
The reason? Central banks interventionism into the capital markets. For without it: socialistic thoughts and ideas die at the alter of affordability, literally.
I know, I can hear you through my monitors yelling “No it’s politics!” However, I would need to rebut that assertion with, “It’s the central banks that are allowing for the politics of the day, not the other way around.” Case in point:
Last week chairwoman Maxine Waters of the House Financial Services Committee began lambasting bank CEO’s appearing before her panel on what they were going to do about the current student loan crisis. The problem?
Banks haven’t been administering student loans since the government took over the entire student lending program in 2010. In other words, student loan debt has become the national plague it is because the government socialized it nearly a decade ago. You know what else started back about this time? Hint: rhymes with quantitative easing. (QE)
I both listen and talk regularly with many of today’s “indebted student class.” To be clear: I feel for them, I get it. However, with that said, what I do not allow is their “The government needs to ________ (fill in the blank)” responses.
All I have to do to make most heads explode when they begin talking about fairness, opportunities, business and other things is politely state, “You understand that your problem really is that you’re already living part of the socialist dream and you don’t like it. And now you’re arguing that in order to make it all “better” you want even more of what you already can’t stand. You do know that, right?” (This is the moment I wish I donned a poncho before hand.)
When I begin hearing things like “Then the government needs to forgive student debt!” I just respond: So what about not only your healthcare, but everyone else that you say should have it for free? You know it’s your student loan profits that are a designated source for paying for all this socialized healthcare (aka Obamacare). So if you don’t pay your loans, then it is you that is responsible for not allowing the funds needed. That’s why it was taken over in the first place, but you knew that, right? Right?”
But they don’t. And it’s fair to say, neither do those that are in charge of it all, either. It’s a perpetual game of “Who can show they know nothing quicker than the other?” So far, the most “educated” seem to be winning. AOC anyone?
But this isn’t some left vs right argument, for there’s just as much “brilliance” on both sides of the aisle. Need I remind anyone with a stock market nearing “never before seen in human history highs” that none other than Mr. Kudlow, Director of the National Economic Council, is calling for an immediate rate cut?
Which brings us right back to where it all began: The central bank perversion of everything.
It is now fact, not conjecture, that if the central banks don’t allow for the charade to continue – everything collapses. And I do mean: everything.
We heard year after year that the policy of central banks intervening was always just some form of “emergency measure.” A one time type thing, temporary, etc., etc., etc. We now know (via their own recent actions) that without them – it all falls apart.
As I have stated ad nauseam: There has never been a time in recent history that so much power has been allocated to a handful of unelected individuals since the time of kings. Think about that very carefully, for it is not hyperbole.
The capital markets, once considered the greatest achievement for capital formation, has been turned into a parasitical, front running, headline reading, algorithmic cesspool of black box operations for skimming and defrauding. Can you say IPO’s? But that’s just one of the “table games” in the now desolate space known as “The casino.” aka Wall Street et al.
Now, everybody wants in on “the action.” So now say hello to a little known theory called MMT (modern monetary theory.)
What is that you say? Well, let me make this as easy to understand as possible: QE for the masses. That’s really about it.
You’ll hear all kinds of “educated” dissertations made by some academic scholar or some Ph.D’ whatever. But what it basically comes down to is following Mr Ben Bernanke’s philosophy of “the courage to print, then print some more.” For this is where it began to be defended as “prudent monetary policy.”
Now it’s shown itself for the sham that it always was, just no one now dares admit it, hence the game of propping everything up ends and the small business pop-ups for pitch forks and torches begin to emerge in earnest.
Speaking of “pitch forks and torches.” Do you think this is just me arguing another exercise in hyperbole? I would say: think again.
Others are so nervous about the current situation that they have already began floating trial balloons for the possibility of the Fed buying equities (i.e. stocks) directly.
Think about that for a moment. If you think the competitive landscape via the public markets is already perverted, just imagine when (and I firmly believe it is closer to when, not if) the Fed will publicly declare the winners and losers further immortalizing already zombie-fied businesses.
Former Chair Janet (never another crisis in her lifetime) Yellen is already out stating how the Fed now needs to do more, otherwise… Hint: cross out “never” in prior sentence.
The current Fed has already jettisoned any and all credibility with its complete and utter reversal on policy. i.e., Policy hawks have been reduced to unison cooing market doves.
All their prior projections and summations for reading and understanding the economy have been reduced (at least to those with any critical thinking skills) to outright joking material far funnier than most late-night standup routines. Albeit that’s already a low bar. But I digress.
Add to this we now have the likes of former Wall Street tycoons like Ray Dalio coming out and trying to buy “pitch-fork and torch insurance” for $100 Million while staging events across the media to perform in-person mea culpas against capitalism. All I have to say about that is this:
Dear Mr. Dalio, you weren’t engaging in capitalism, you were making yourself rich via suckling at the teat of crony capitalism made possible via the Fed and its QE programs by employing a greater, far more efficient parasitical vehicle to engorge yourself ever the more. And may I give you a heads up: $100 Million and mea culpas aren’t going to do it when it comes to “pitch fork and torch” insurance. Gates and Buffett have already set that level at $Billions. And that might not be enough. Just sayin’
It’s also now fair to say that “the father” of all this current central bank interventionism is none other than someone who was once an Ayn Rand devotee, Alan Greenspan.
Mr. Greenspan used to hold true to the underlying principles of capitalism. Then he was appointed to the Federal Reserve – and jettisoned it all. We are now living with the legacy that he started. Not a capitalist one, no, for remember – he jettisoned that. Again, it was under his tutelage that many of the growing perversions of capitalism began.
Remember when he used to tout gold was money before he was appointed, then once in control of the Fed said it wasn’t? Now that he’s no longer on the Fed, guess what? Need I say it?
Ayn Rand is both a revered as well as reviled touchstone for many when we think of anyone for explaining the principles of what capitalism truly is.
Yet, with that said, there has been no one that has been proven more correct in their projections for the how’s and why’s for it than her.
If you read her body of work (which I have and still do) what you find is a blueprint for precisely what could be projected should just a “little bit of socialism” was allowed to enter the capitalist domain. i.e., it had the ability to kill it without haste should capitalism not be ardently and consistently defended.
But what has also been profoundly spot on is her assertions that it (socialism) would be fostered, germinate and then propagated from within the universities.
Many have brushed her warnings aside when convenient (e.g., Greenspan and others) but the issue now facing us is the fermented results of doing just that.
The problem now is that her “last laugh” for the rest of us…
Is no joking matter, to say the least.
© 2019 Mark St.Cyr