Terrorists and Hostages

Terrorists and hostages: Since 2008, we have all been held hostage by financial terrorists, whose power derives from a combination of our dependence on financial markets and the instability and herd behavior of the stock and bond traders who run those markets. Everything that has been done by the President, the Federal Reserve Board and the Congress has been necessary to coddle and mollify those traders, lest they repeat the precipitous drop from 14,000+ Dow points to 7,000 following the demise of Lehman Brothers and the collapse of the credit markets. Bailouts, QE I and II, the failure to pursue and prosecute the perpetrators, the tolerance of their almost instant return to obscene profits and bonuses – all necessary to pump up the markets and pamper the traders. And all were successful for a while.

Until, that is, another group of terrorists emerged, political terrorists who call themselves the Tea Party. Angry at these policies and either ignorant of their purpose or not caring about the consequences, these terrorists, spurred on by sociopathic oligarchs like the Koch Brothers and political whores like Dick Armey, the founder and leader of Freedom Now, set out exploit the Debt Ceiling deadline in order to sabotage the government's strategy, regardless of the ultimate outcome. And they have succeeded, thanks largely to Obama”s inability/unwillingness to negotiate from strength. Besides which, as many columnists have been noting, he is well to the right of some elected Republicans.

Well, the Market and its traders responded as one might easily have anticipated. They hit the panic button. For those who may not be sufficiently informed about the modern financial marketplace, those same traders can make just as much money riding the market down as they do riding it up. They are essentially pimps, just carving out their piece of the action. Amoral at best; predatory at worst.

To summarize, we have two groups of terrorists, fighting over a corpse. And, by the way, nowhere in this scenario is there any strategy to resuscitate the real economy. Unemployment is actually beneficial for the business sector – much less likelihood of dangerous inflation – frightened, insecure workers don't dare even beg for higher wages to offset higher energy and food prices. Profits are up almost everywhere as automation, globalization and outsourcing enable higher “productivity,” which is really just more profit from less workers. Human labor is expensive and problematic. Intelligent people with serious money have no motivation to hire workers. There is no demand, anyway, because even those who have jobs are afraid to buy anything they don't need.

Let us pray that, as the pundits are finally acknowledging, next year's election will be about the true nature of this conflict: not the size of government, but its appropriate role. Many of us believe that an institution as powerful as government can only be justified if it serves to protect the powerless from powerful predators. Others have a medieval idea of government, that it should only protect the wealth and power of a privileged few at the expense of a desperate many. Those who are unwilling to pay the taxes necessary to maintain the first kind of government must be assumed to favor the second.