Bubba and the Socialist in South Carolina

By J.M. Hamilton (1-21-12)

“We are all socialist now.” – King Edward VII

I rang up Bubba this week to get his take on the South Carolina primaries.  I very much respect Bubba’s opinion on political matters, after all – he called the 2010 midterms.

My readers may recall that Bubba is my red meat inhaling, beer guzzling, mescal snorting best friend from Tejas.   Yes, Bubba has proven that you can snort mescal, but the worm does tend to get stuck in the straw.  Bubba and I go back to younger days and simpler times, summers spent water skiing, drinking PBR, and chasing skirt (not necessarily in that order).  I spent many a summer night looking up at the stars of Texas through bullet holes in Bubba’s trailer ceiling…. Lying on his living room couch in the middle of the night (yes, we drank responsibly), and at the right kind of angle, you could sometimes see satellites pass by.

“The socialist dream is over.  ObamaCare is dead.  Just wait until the Roberts court rules,” he yelled into the receiver.  “You can’t force people to buy insurance.”

“But Bubba by that same logic,” I responded, “shouldn’t all entitlement spending be eliminated then?  After all, what is social security?  It’s an insurance program we all pay into.   Ditto Medicare.   Why I don’t think there’s a single Republican candidate, save Mr. Perry, who favors elimination of social security.  And look what happened to your governor!  And didn’t Bush (W) expand Medicare with Part D?”

“Look,” Bubba rejoined, “Americans despise Euro-Socialism, period.  Comprende?”

“Bubba, Americans should not fear Euro-Socialism, but rather, they should fear American-Socialism, which is far more expensive and dangerous to any country’s health."

“What you talking about Willis?”

I’m talking about the most insidious kind of socialism, the kind that is rarely discussed and all but ignored in the South Carolina Republican debates:

Like the bailout of Wall Street and European Banks.

• Bloomberg recently put the Fed’s bailout lending to the Wall Street Cartel at $7.7 trillion.

• A GAO report of 7-21-11 placed the Fed’s lending to the banking cartel at $16.0 trillion.  Conveniently, that lending is at near zero percent interest.  Free money!

• TARP and Quantative Easing (QE1) transferred hundreds of billions in toxic assets (CDO’s and MBS) from the Wall Street Cartel’s balance sheets and onto the public’s balance sheet, that would be the Fed’s and GSE’s - like Freddie and Fannie.

• And the Fed is rolling over and reinvesting its earning in yet more toxic assets, as reported by Mr. Randall Forsyth in Barron’s magazine (New Call for the Fed to Spur Housing, 10-21-11).  Just another form of bank bailout.

• Now this same practice, American-style Socialism, is all the rage Europe, after the Germans swore they would never go there, courtesy of Mr. Mario Draghi - Goldman Sachs alum and European Central Bank head.

• Mr. Draghi has lent out $640 billion dollars to bailout European banks, which suddenly have better bond ratings than many of the sovereign nations they operate in.

• As in America, the European bank bailout was designed to encourage lending to individuals and small and mid-sized businesses (primary drivers of the economy, employment, and top line growth); but instead, European banks either deposited the money with the central bank or re-invested the money in sovereign debt.

• Meanwhile the Cartel (presently lead by Mr. Josef Ackermann as head of the IIF) has fought all legislation, regulation, and planned transparency and collateralization, governing derivatives and swaps, which are the very same products that nearly brought the global economy down in 2008.

• After all, if America regulates derivates and swaps, Wall Street may lose business to insolvent European banks. 

• By way of comparison, social spending - or entitlement spending within the U.S. Federal budget - is running just north of two trillion dollars per annum, a fraction of what has been given to Cartel and IIF members over the last couple of years.

• The Cartel all but refuses to refinance mortgages – which would spur the economy, as do the GSE’s, because it would crimp CDO and MBS earnings.

• Banks are given trillions, in both America and Europe, and the public is told by Republican candidates to suck it up and get a job!  

• Banks are given trillions, and the public will have to pay for those trillions through higher taxes and higher headline inflation.  Inflation the Fed conveniently refuses to recognize within its CPI calculation.

Republican candidates have a keen dislike for social spending for the elderly, disenfranchised and the poor  (what they have dubbed “Euro-Socialism”), but these same Republican candidates have little to say about America’s biggest – and most recent - export to European shores… American Socialism (aka Crony Capitalism).

“I need a beer,” said Bubba.

P.S.

And to see why American-style Socialism is alive and well let’s surf over to Opensecrets.org, and review 2012 campaign financing by economic sector.

Sector Totals, 2011-2012

http://www.opensecrets.org/industries/index.php

http://www.opensecrets.org/industries/indus.php?Ind=F

http://blog.jmhamiltonpublishing.com/2010/08/15/bubba-called.aspx