When the Elite Take Over
We have reached the final stage of this process – when the financial economy has very little to do with the actual economy. In this model, the financial economy is simply subsidized to continue to exist in its enlarged state. The original concept of the banking and financial system was that it serviced the real economy. With $13 trillion so far pumped into the financial economy and only $400 billion in stimulus for the real economy we can see where the emphasis and political power resides. The main emphasis now is to come to the rescue of asset prices, not workers and not the physical economy. In the new philosophy, manufacturing is optional, however finance is primary.
Real Economy Craters
While the real economy is putting up its worst numbers since World War 2, the stock market has regained some life.
- The economy is losing 700,000 jobs per month
- Massive bankings losses continue to be hidden
- Supposed positive information on housing starts has been completely misinterpreted by analysts that need to go back to school to learn basic analysis
Supported by further decreasing already flexible accounting rules, a number of completely dead banks posted fake pro-forma earnings estimates that many financial anchors on television (who are glorified weathermen and weatherwomen) mistook and misrepresented as harbinger of good things to come. The major networks could hire non-twits to present financial information, however the major networks are themselves part of concentrated power, and concentrated power wants to pump up the banking sector because:
- The banks are big advertisers
- The banks know this is a critical time and need more political leverage to prevent a populist revolt – hence the fake pro-forma earnings announcements
It is not clear that any of these anchors are actually voicing their actual views. Like Glen Beck – the Fox News anchor who is an ex-alcoholic born again Mormon with a high school degree who clearly has no idea what he is talking about, talking points are most likely layed out for them. Anchors and commentators are clearly being selected because of their low mental capability and suggestibility. This is so they can be easily manipulated and serve a puppet for what the top advertisers at the network want to be repeated. This approach worked so well with Ronald Reagan, who had Alzheimers disease while in office, and had no idea what was going on for most of his presidency (Footnote1), that the power elite have been copying this strategy over and over.
This woman has no knowledge of finance, economics, history or any other topic related to financial reporting. We know this because we can observe the MSNBC icon in the lower right hand corner. She is most likely fed what to say by an editor or producer who is in constant communication with advertisers. In case anyone thinks this statement has sexist overtones, we have one name that should put an end to that speculation…Jim Cramer. Jim Cramer is no fool (although he appears to have either ADD or a cocaine addiction), however Jim Cramer is a con-artist and is continually being caught either misrepresenting his record or lying. Jim Cramer will pitch any stock or idea if he is paid.
Main Street vs. Wall Street
When this crisis first broke, the issue was framed in a way that supported the notion that Main Street was dependent upon Wall Street (or the real economy was dependent upon the financial economy) and that Wall Street would have to be saved in order to save the real economy. The fact that Wall Street has improved, while the real economy has cratered highlights the disconnect between these two economies. Wall Street is not servicing the real economy, Wall Street is parasitzing the real economy. In fact, Wall Street’s effect on business in the US is almost entirely negative. It promotes concentrations of power through mergers and acquisitions and causing executives to look to their short term stock options over the long term interests of their companies. Unknown to most, Wall Street is actually bad for business and bad for democracy.
A full explanation of the ridiculousness of the US stock market can be found here:
http://counterecon.com/2008/01/11/stock-an-unnecessary-illusion/
What is to Come
Michael Hudson has written extensively on the financialization of societies and how it has marked the decline of many major powers through history. Examples includes Rome, The Netherlands and Britain. Essentially what happens is that as a nation goes through its arc of power, its people and institutions move away from doing things that add value (shipbuilding, manufacturing, etc..) and move into things that are primarily focused on chicanery (real estate speculation, creating bizarre financial products and practicing law). We either collectively put a stop to the financialization of our economy, or we get ready for a steep decline in our living standards. It is that simple.
Footnote on Reagan
Strangely, though almost mentally retarded due to Alzheimers, Reagan is almost considered a god by Republican politicians. Actually Reagan’s complicity with power goes back to his tenure as president of the screen actor’s guild. Placed there by power broker Lew Wasserman of MCA – United Artists, Reagan traded his representation of the actor’s union for roles in Lew Wasserman’s movies. Prior to becoming governor he was a pitchman for General Electric. Thus Reagan began and ended his career as a pawn of the power elite. It is unlikely he hand an understanding of most the things he said.
References
http://www.cepr.net/index.php/op-eds-&-columns/op-eds-&-columns/false-hope-in-a-plunging-economy/
http://tpmcafe.talkingpointsmemo.com/2009/04/07/the_disaster_stage_of_us_financialization/
