Unholy alliances lead to economic catastrophe

1981, the year deficits grew faster than GDP (ability to pay), politicians bought into Reagonomics.

Then, because of lower capital gains people sold off assets and we were led to believe “there is a free lunch after all,” tax breaks always bring in more revenue and jobs. Then it was free trade, world economy, deregulate laws on the environmental, energy and banking. That gave us Enron , B.P. and the banking crisis.

Jobs were outsourced, our corporations were and are making more profit than any time in history (cheap labor). The banks and Wall Street were also making huge profits by high risk investments, “liar loans” sold as AAA securities then they bought derivatives betting they would fail.

Now we have a demand problem due to job losses and capital destruction in the trillions. We are told the very people who caused the problem needed to be bailed out and we did, and trillions more go out the back door of the FED with $10,000,000 bonuses, oil companies get millions in subsidies, the defense industries clean up, wealthy get major loopholes and we spend as much as the world combined on our military, banks get free money and we are told the problem is entitlements for the working class.

Now (today) they tell us the answer is more deregulation and more tax breaks for these same people, we should layoff government workers and privatize everything. Sell the national parks as “they want it all.” “The corporate nanny state 1984 is here.”

“Throughout history it is the serial and intentional abuse of financial markets and the unholy alliances that are formed between banking and governments that lead to the worst economic catastrophes.”

Karl Denninger (tea party founder)

Author, “Leverage”

DENNIS SHELLHORN

Sandpoint