Thursday, July 21, 2011

the rich are the welfare class (reminder)

With the talk of cutting this deficit, this big bellied government, forswearing the candy bars, etc., I find it screamingly funny that big government's most astonishing expression of scale was the frenzied welfare program that went by various acronyms like TALF. It was managed by the Federal Reserve, in conjunction with the policies of the Department of Treasury. Here's a bloomberg story from last year, which picked at the surface of big government action:


But that story didn't really include other programs, your little one day or 21 day loans, that pumped the lending of the Fed towards the 9 trillion limit. Of course we have since learned that the details were even more astonishing - that is, if we take extraordinary care and shift through the news reports. For instance, on July 6, 2011, we learn all about the sweetness showered upon Goldman Sachs (which is inexplicable, as GS has consistently maintained they were just fine in 2008).

"Goldman Sachs & Co., a unit of the most profitable bank in Wall Street history, took $15 billion from the U.S. Federal Reserve on Dec. 9, 2008, the biggest single loan from a lending program whose details have been secret until today.

The program, which peaked at $80 billion in loans outstanding, was known as the Fed’s single-tranche open-market operations, or ST OMO. It made 28-day loans to units of 19 banks between March 7, 2008, and Dec. 30, 2008. Bloomberg reported on ST OMO in May, after the Fed released incomplete records on the program. In response to a subsequent Freedom of Information Act request for details, the central bank disclosed borrower names, amounts borrowed and interest rates.

ST OMO is the last known Fed crisis lending program to have its details made public. The central bank resisted previous FOIA requests on emergency lending for more than two years, disclosing details in March of its oldest loan facility, the discount window, only after the U.S. Supreme Court ruled it had to. When Congress mandated the December 2010 release of data on special initiatives the Fed created in its unprecedented $3.5 trillion response to the 2007-2009 collapse in credit markets, ST OMO -- an expansion of a longstanding program -- wasn’t included.

“The Fed has come a long way over a long period of time as far as transparency,” said Raymond W. Stone, managing director and economist with Stone & McCarthy Research Associates in Princeton, New Jersey. “They thought counterparties might be harmed, but now so much time has passed that the information is not as sensitive anymore.”

Primary Dealers

The 19 borrowers from the program are known as primary dealers, which are designated to trade government securities directly with Federal Reserve Bank of New York. They bid at auctions for ST OMO’s cash. While the rates they paid generally tracked the federal funds rate, the rate for some dipped as low as 0.01 percent in December 2008."

It is funny that we note that union members drive foreign cars and go na na na, and yet we never ever note that the private sector, and especially big banks, hedgefunds and other financial institutions, are the biggest welfare leeches in history, and continue to be, even as they decry 'big government." But how many people read the Bloomburg dispatch to understand what happened in 2008? I would guess maybe a couple thousand. Delay long enough, and you can make history disappear into a memory hole even when you become 'transparent" with your records.

What happened in the 2007-2010 period was a pilfering of government resources on an unprecedented scale by the predatory class. They are are now demanding cuts in the services that support the non-predatory class, or else they will pout. We can easily see through the comedy of this. And we can make it known. But who has any interest in doing so? Not the Dems. Not the Republicans. Not the media. Not the Fed. Not private enterprise. Not the 'neo-liberal' bloggers. Only cranks, simps, and the misbegotten. My people.

Biden's foreign policy: let's bet everything on authoritarianism!

  And watch it all slip away (Por fin se va acabar) Or leave a garden for your kids to play (Jamás van a alcanzar)  --- The Black Angels, El...