Laissez-Welfare and the Goldman Gang


[Editor’s note: Trend forecaster Gerald Celente describes the events of 2009 as if he were writing economic history from the future. Read on to see how he portrays the fateful past year.]

Early in 2008, with the global equity markets in free fall and financial conditions rapidly deteriorating, most Americans were persuaded to accept the necessity of government bailouts of brokerage firm Bear Stearns and the Fannie Mae/Freddie Mac mortgage lenders. 

But in late September, when the TARP (Troubled Asset Relief Program) was proposed by George W. Bush, both the near trillion dollar size of the package and the encroachment of government into free enterprise provoked intense public opposition. Polls showed that as many as 90 percent of those who contacted their representatives and senators were against the passage of TARP, but TARP was passed.

The “Land of the Free” and “The Home of the Brave” had become the “Land of the Federally Subjugated” and “The Home of the Meekly Subservient.” The socioeconomic landscape of America had been so dramatically altered that it bore little resemblance to the nation of their forefathers or even their grandfathers. 

Not only was TARP foisted upon the nation, when the inspector-general in charge of overseeing the bailouts demanded to know where the money went, the US Treasury refused to tell him! “It is not possible to say that investment of TARP dollars resulted in particular loans, investments or other activities by the recipient,” said the head of the Treasury program. 

Why was it “not possible”? What could be more possible? The banks were given vast amounts of taxpayer money. What did they do with it? They refused to tell the American people that gave them the money, where the money went!  The arrogance, the gall, the disrespect; the flagrant “to hell with the people” attitude was more than a simple disconnect between government and the people. Wall Street had hijacked Washington.

A democracy in name only, America was not a representative government. Elected officials represented those who paid the most to buy their votes.  While it was illegal to openly buy a vote for a couple of dollars, anybody’s vote could be, and was bought … but only if the price was right. Money spoke louder than any words spoken by the majority. In 2008, financial and real estate interests spent $345.4 million to buy politicians and control legislation. Washington called it “campaign financing” and “lobbying.” Anywhere else it was called “bribery.”

Prior to the “Panic of ’08,” there had been government bailouts of private enterprise (Chrysler Corp. in 1979; the 1989-1990s Savings and Loan crisis; the 1998 Long Term Capital Management rescue). Considered substantial at the time, they were not enough to undermine the economy and threaten the free enterprise system which was the nation’s cornerstone. Nor did they lead to the government holding equity stakes in the rescued firms.  And the dollar amounts involved paled in comparison to the trillions confiscated from the public by the Bush/Obama stick-ups.

Long before 2012, people had forgotten what the original purpose of TARP was. Secretary of the Treasury, Henry Paulson (former CEO of Goldman Sachs) baited the public and Congress into believing the money would go to help homeowners facing foreclosure and free up credit markets so small businesses could borrow. But with TARP passed and the money in hand — and having demanded and been granted full power to spend it at his discretion — Paulson switched the game.  Instead, hundreds of billions went to the Treasury Czar’s banking and brokerage buddies … the perpetrators of the financial crimes. 

With banks and financial firms reporting “boffo” profits thanks to the tax-payer funded wind-falls and once again showering themselves with bonuses bigger than the GDPs of many small nations, infuriated citizens held their representatives responsible for the giveaway.

But Congress copped the plea: “In retrospect, Congress felt bullied by Mr. Paulson last year. Many of them fervently believed they should not prop up the banks that had led us to this crisis — yet they were pushed by Mr. Paulson and Mr. Bernanke into passing the $700 billion TARP, which was then used to bail out those very banks.” (The New York Times, 16 July 2009.)

“Bullied”? Bullied by whom? Henry “The Don” Paulson, the Wall Street Enforcer? It was the Golden Rule in action: those with the gold ruled.  And, Goldman ruled the gold. 

With Paulson in control, the Goldman Sachs Gang held the keys to the national treasury. And nothing would change when the new President and new crew of political prostitutes took over. There was no denying the extent of the Goldman Gang’s infiltration and its influence in both Washington and abroad.

From Atlantic to Pacific, it was mob rule. Americans were being forced to pay “protection money,” but the money went to protect the crime families, not the American people.

[The above is excerpted from The Trends Journal, which is published by Gerald Celente. The Trends Journal distills the ongoing research of The Trends Research Institute into a concise, readily accessible form. Click here to learn more about The Trends Journal.]

The Daily Reckoning