By Michael McCune
The federal government keeps pumping out the news they want you to hear, mass media seldom questions what officialdom is saying until a Solyndra-type mess occurs and the Federal Reserve keeps the whole thing afloat with its green-inked printing press. But if you want a true picture, take a ride through America’s dead industrial cities.
One example is Baltimore. Yes Baltimore, where the Orioles play in the spring and summer while the Ravens play in the fall and winter. In the 1960s Baltimore had a booming industrial base and a correspondingly large unionized workforce. It boasted a bustling harbor and while few were “rich” most were comfortably middle class in Baltimore.
Today the big employers–General Motors and Bethlehem Steel are long gone–and Baltimore’s proud producing legacy is rusting, molding history. The work force is gone or fading into rust itself.
You can pick almost any industrial city and find the same sad story. But Wall Street and Washington haven’t gotten the news, they are flourishing. How can that be when their base is dead and gone?
It is complicated but in essence the printing press of the Federal Reserve does not boost normal economic growth but skews it to bolster the highlighted or talking points.
A month ago it looked like Bank of America stock would drop below the $5 per share mark. If BOA imploded because everybody was abandoning its stock offerings, the whole U.S.A. financial system would have been in jeopardy. Before the next light of day, the Federal Reserve pumped more money into BOA stock and the price zoomed 16% in one day! BOA, and top investor Warren Buffett, were saved. Buffett, for his $5 billion investment grabbed $800 million in that one trading day when he could have lost the whole investment if his friends in Washington hadn’t saved his bacon.
That’s what’s basically wrong with government largesse. It picks winners and losers. It doesn’t let anything fail that might bring immediate harm to the Administration. So we are still fighting the same problem that started in 2007, the financial system is delusionally strong. It can’t survive without periodic booster shots from the Federal Reserve.
This selective process quashes innovation from start-up companies because they don’t qualify as too-big-to-fail. It tilts the playing field toward the same policies that fail as the top dogs play musical chairs in the established companies because of their past “successes” when in reality they have overseen failures if not for government handouts.
Isn’t it ironic that the same Administration that trumpets its support for the middle class is actually tearing it down daily without fear of reprisal because it owns the economic bottom with its handouts and owns the Too-Big-To-Fail group with its printing press? The only ones left out of the mix are the ones who used to operate the factories that are now closed. Washington is counting on their support in the future as they slide towards the economic bottom and become dependent on the government teat for sustenance.
Despite Washington’s intervention, more and more cities are becoming a Baltimore. Monuments to a past that was and an omniscient government that is. Main Street America will not long survive the economic
assault anywhere.
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As usual you always hit the nail on the head. Bravo for such a great website and really thought provoking blogs. Love it!!
I think you hit a bulls-eye there fellas!
You might want to think long and hard bferoe challenging Pat Robertson. That guy can bench press about a billion pounds.