Article By: John Schettler - April, 2009

The soup line at the government bailout window is getting pretty long these days. Trillions go to the pockets of wealthy investors while Americans thin the soup of their lives to pay.

When times got hard during the last Great Depression the soup got thinner, but people still ate. Indeed, the whole concept of thinning the soup stands now as a metaphor for how we can come through these hard times to a new sense of ourselves—a new society. The image holds within it the necessity for frugality and simplicity, but also the importance of community. Soup is thinned so that it can feed more people, and perhaps each can contribute something to the brew, extending through the talents and abilities of all who come to sit at the table. And no matter how hard things got, people still ate. That last bit is essential to bolster our hope in times of crisis. The world isn’t ending, it’s changing.

This is what we have to do now to survive and carry on—we have to build new community with one another, gather in a harvest from each person, and thin the soup of our lives so that there will be enough for everyone, and all will be taken care of. It will not be anything like the old life we lived, where constant consumption on credit fed us a sense of false abundance. If we wanted something, we didn’t have to work or save for it. Instead we just swiped the plastic and used someone else’s money to buy it then and there. The operative energy of the Brave New World was to shorten, as much as possible, the interval between desire and fulfillment. All that is over now. We will rediscover patience, endurance.

There is a great deal of fear, anger and frustration out there now, because all the wealth investor wheeler dealers have staked out their place ahead of us in the soup line. The news is simply too bad to be ignored any longer. For many, those who have lost jobs, homes, retirement nest eggs, the “Great Recession” is very real indeed, not something they read or hear about in the news. It is ever more frustrating to hear about billions going to banks and insurance companies while you struggle to pay your bills, with no bailout in sight. But much of the news itself is often just a sideshow masking far graver circumstances that go unreported.

Take the media boil up over AIG bonus money as a good example—a red herring that masks the greater scandal that billions of taxpayer dollars have gone to pay off  “counterparty” investor fat cats at big financial institutions.

Tyler Durden of Zero Hedge explains what really happened: “AIG, knowing it would need to ask for much more capital from the Treasury imminently, decided to throw in the towel, and gifted major bank counter-parties with trades which were egregiously profitable to the banks, and even more egregiously money losing to the U.S. taxpayers, who had to dump more and more cash into AIG, without having the U.S. Treasury Secretary Tim Geithner disclose the real extent of this, for lack of a better word, fraudulent scam.... What this all means is that the statements by major banks, i.e. JPM, Citi, and BofA, regarding abnormal profitability in January and February were true, however these profits were a) one-time in nature due to wholesale unwinds of AIG portfolios, b) entirely at the expense of AIG, and thus taxpayers, c) executed with Tim Geithner's (and thus the administration's) full knowledge and intent, d) were basically a transfer of money from taxpayers to banks (in yet another form) using AIG as an intermediary.”

So, under this view, that massive fourth quarter loss reported by AIG was just a non stop heist of public funds with the money moving from the taxpayer, to Uncle Sam, to AIG and then to the banks. This was the so called “profit” reported by Citigroup and other banks for Jan and Feb of ‘09. And all this happened while congress put on a theatrical show in the hearing rooms over $165 million in bonus money payouts, a tiny fraction of one percent of the overall heist money diverted to the banks.

More Real News

Mike Larson of Money & Markets also reported this month: “The Fed said this week that it will ramp up its purchases of Fannie Mae and Freddie Mac Mortgage Backed Securities (MBS) from $500 billion to a whopping $1.25 TRILLION in the coming months. The Fed is also going to double its purchases of Fannie Mae, Freddie Mac, and Federal Home Loan Bank bonds to $200 billion from $100 billion. And for the icing on the cake …The Fed will buy as much as $300 billion in longer-term U.S. Treasury securities.” How does the Fed “buy” Treasury bonds? The answer is that it simply prints the money required. So the big news of the month was not that a handful of insiders made off with bonus money at AIG—it was that the Fed has begun the process of monetizing the massive US debt, and a loss of confidence in the dollar will soon follow. (In fact, the dollar took its worst plunge since 1985--see chart below.) There are only about $850 billion dollars currently in public circulation, most of that being held overseas, with about $250 billion circulating here in the US. Bernanke is about to thin the soup by about 33% when he prints $300 billion more!

John P. Hussman, of Hussman Funds thinks the situation is even worse: “Last week, the Federal Reserve announced its intention to purchase a trillion dollars worth of Treasury debt by creating the little pieces of paper in your pocket that have "Federal Reserve Note" inscribed at the top. In effect, the Fed intends to monetize the Treasury debt in an amount that exceeds the entire pre-2008 monetary base of the United States.”

Eric deCarbonnel of the Market Skeptic goes one step further: “The Fed is planning moves that would more than double its balance-sheet assets by September to $4.5 trillion from $1.9 trillion. Whether expressing approval or concern over the Fed’s intentions, most commentators fail to understand the real magnitude of the projected expansion of the US monetary base.” He claims the Fed moves will amount to an increase in the dollar supply by a factor of 15. The effect will be a debasement of the currency and a fire sale on good US assets, all lost in an effort to free the banks from the consequences of their bad securities debts.

There is already rumbling in the ranks concerning the dollar. Countries have been trying to wean themselves from having to pay dollars for their oil contracts for years. Then Vladimir Putin  called for an end to the dollar as the world’s reserve currency, and China has now seconded that motion. The UN is also recommending that the world ditch the dollar as a reserve currency. Something big is afoot. The April G20 meeting could be a harbinger of “change” that America may not like at all. Imagine a monopoly game where you’re the banker, and well ahead in the game, but the other players suddenly agree that there will be a new currency introduced, and a new central bank to govern transactions—a currency based on the collective wealth of their properties, and that all your cute stacks of colorful dollars are now virtually worthless. Get the picture? The folks that hold our debt are losing faith in the old greenback. The “full faith and credit” of the US government isn’t counting for much these days.

So look what happened to the dollar as soon as Bernanke announced his intention to buy $300. billion in Treasury Bonds, by simply printing the money required to make the purchase... an amount exceeding all dollars presently in circulation here in the US...

Yet mega news of this sort doesn’t even make it to the copy desks of our mainstream “press” these days, let alone reach the minds of the Average Joes and Soccer Moms struggling in the real economy. Real people count dollars in twenties and sometimes hundreds, not billions. The average person is too preoccupied with their own thinning soup to comprehend what is really going on, but the effects will be devastating when the currency debases in the months ahead.

Marketwatch reports: “The results of a bevy of surveys found a growing number of consumers are only a couple paychecks away from a household collapse even as many scramble to shore up savings. Rainy-day funds appear to be a distant memory as households burn cash to cover food and energy bills as well as mortgage and car payments .” These are the folks that provide all the bailout money the government is throwing into the pockets of the wealthy investor class. Then I see some petty financial advisor remarking that the supermarket chains may be “good plays” as people will spend for food first when they are at the end of their rope. There’s something obscene about that—a class of beings out there, who consider all the rest of  us to be “sub-prime,” is still gaming the system, like vultures looking to profit on the demise and hardship of others. The video headline read: “Put your money where the food is!”  Well I’d like to tell you where you can stuff your friendly investment advice, and so would millions of others.

The one truth in that ad is this: things will cost a good deal more when Bernanke is through expanding the Fed balance sheet later this year. Putting your money where the food is may not be a bad idea right now. And by this I mean stockpiling food itself, not buying stock in market chains. If the dollar collapses the shelves will be empty in most markets in just a matter of days. The soup may be hard to find.

For so many in the “real economy” the soup is already thin indeed. Over 50% of Americans have but a month in reserve if they lose a job. $40% say they still come up short each month even if they are working. 57% plan to spend less, but polls showed zero percent, no one, planned to spend more in the coming year. This statistic alone should put an end to any of this silly talk about a recovery starting this year. People aren’t just sitting on piles of cash and refusing to spend because they are worried about the future—they just don’t have the cash. Period. They can barely stretch one paycheck to the next—this while an executive at insurance giant AIG got paid an astounding $1 million per month as “retention salary” so the company would not lose his “expertise,” the same expertise that saw the company lose over $60 billion in a single quarter due to the man’s failed credit default swap schemes. What a job! Where do I sign up?

James Galbraith of the Washington Monthly hit the essence of the so called “credit crisis” --not just a problem of banks refusing to lend, but a crisis at the household level that will not soon be cured. “Credit is a contract. It requires a borrower as well as a lender, a customer as well as a bank. And the borrower must meet two conditions. One is creditworthiness, meaning a secure income and, usually, a house with equity in it. Asset prices therefore matter. With a chronic oversupply of houses, prices fall, collateral disappears, and even if borrowers are willing they can't qualify for loans. The other requirement is a willingness to borrow.... In a slump, such optimism is scarce. Even if people have collateral, they want the security of cash. And it is precisely because they want cash that they will not deplete their reserves by plunking down a payment on a new car. The credit flow metaphor implies that people came flocking to the new-car showrooms last November and were turned away because there were no loans to be had. This is not true -- what happened was that people stopped coming in. And they stopped coming in because, suddenly, they felt poor.”

The sad fact is that our economy was running on free and easy credit. What we are seeing now is what the real economy always was beneath the plastic. This is what it’s like without all that home equity lending and credit card spending. This is reality—people only able to spend what they actually earn, and still coming up short each month on basic necessities. Yesterday’s economy was delusional. You can throw “discretionary spending” out the door in this environment. But like banks stuck with securities they can no longer sell, average people are stuck with recurring bills and high rents based on life styles from the boom times.

The Economist, has a special “Economic Intelligence Unit” that just released a special report of what they see coming. The title was “Manning the Barricades,” and if that doesn’t get your attention, have a look at the table of contents! Their worst case scenario is about a dollar crash that leads to political and social instability across the world, particularly in the formerly “emerging” and now “submerging” markets.

We’ve been waiting so long, We’ve been waiting for the sun to rise and shine Shining still to give us the will Can you hear me, the sound of my voice? I am here to tell you I have made my choice I’ve been listening to what’s been going down There’s just too much talk and gossip going round You may think that I’m a fool, but I know the answer Words become a tool, anyone can use them Take the golden rule, as the best example Eyes that have seen will know what I mean The time has come to take the bull by the horns We’ve been so downhearted, we’ve been so forlorn We get weak and we want to give in But we still need each other if we want to win Hold that line, baby hold that line Get up boys and hit em one more time We may be losing now but we cant stop trying So hold that line, baby hold that line If you don’t know what to do about a world of trouble You can pull it through if you need to and if You believe its true, it will surely happen Shining still, to give us the will Bright as the day, to show us the way Somehow, someday, We need just one victory and were on our way Prayin’ for it all day and fightin’ for it all night Give us just one victory, it will be all right We may feel about to fall but we go down fighting You will hear the call if you only listen Underneath it all we are here together shining still --Todd Rundgren

I’ve been writing about the crisis we are now involved with for over a decade now, ever since I first published “Big Brother in the Brave New World” in 1998. That article talked about the vast social engineering of our society, and how Huxley seemed to triumph over Orwell in the way Western society was ordered. But behind the mind-numbing advertising, the endless flow of credit that fueled ever growing sales, I also argued that Orwell’s Big Brother was still alive and well. He was just wearing a kinder face, influencing by enticement instead of compulsion.

Yet under Bush and Cheney, we saw a return to the use of fear as a means of forcing public policy. The most powerful nation on earth was  supposedly beset by “enemies who wished us harm.” America was afraid of a rag-tag band of Arab terrorists, with a leader on kidney dialysis, hiding out in the Hundu Kush.

The so call “threat” posed by this boogie man prompted us to abandon the Geneva Conventions, abolish Habeus Corpus and Posse Comitatus, set up military tribunals to circumvent the courts, ignore the FISA laws, initiate programs of “rendition” and torture, set up massive surveillance operations aimed at our own citizens, build detention facilities all over the US, establish “NORTHCOM” and a “Department of Homeland Security,” assign special brigades of the Army for deployment on US soil, contemplate things like “Real ID,” a system of digital “papers” we would all have to carry, not to mention the aggressive wars launched all over the Middle East. And while all that was distracting the media and public, the real terrorists on Wall Street were quietly levering up to bankrupt the nation, with no motive greater than simple greed.

As Bush and Cheney prepared to depart, the all out looting of the public treasury began, by the trillions. It continues unabated. If you ever saw the popular HBO series “Rome” think of Pompey fleeing Rome with a wagon full of gold, and how the bullion was suddenly “lost.” What we have witnessed in the last six months is nothing less than a grand heist, and no one quite knows how the trillions of lost dollars will ever be recovered again--or who they all were paid to.

I’ve been making this argument for years, that the war on terror was nothing more than a misguided distraction, a charade, while the real threat to the nation wore three piece suits in the boardrooms of our banks and investment firms, in the trading pits and hedge funds that gambled so recklessly with our future.

Matt Taibbi agreed with a nice concise summation in an article for the Rolling Stone: “AIG admitted to having just posted the largest quarterly loss in American corporate history — some $61.7 billion. In the final three months of last year, the company lost more than $27 million every hour. That's $465,000 a minute, a yearly income for a median American household every six seconds, roughly $7,750 a second. And all this happened at the end of eight straight years that America devoted to frantically chasing the shadow of a terrorist threat to no avail, eight years spent stopping every citizen at every airport to search every purse, bag, crotch and briefcase for juice boxes and explosive tubes of toothpaste. Yet in the end, our government had no mechanism for searching the balance sheets of companies that held life-or-death power over our society and was unable to spot holes in the national economy the size of Libya (whose entire GDP last year was smaller than AIG's 2008 losses ). So it's time to admit it: We're fools, protagonists in a kind of gruesome comedy about the marriage of greed and stupidity.”

Now the wheels of the economy have finally stopped turning. There are some out there in the blogosphere who say they were stopped deliberately so so the delivery truck could be raided in this grand heist.

Jim Jubak of MSN Money commented: “The folks in power in Washington and on Wall Street want to pretend that the current global financial crisis -- you know, the one that reduced household net worth in the United States by $11.2 trillion in 2008, according to the Federal Reserve -- was an accident caused by some unfortunate confluence of greed and asleep-at-the-switch regulators. What we're now living through, though, is the result of a conscious, planned looting of the world economy. Its roots stretch back decades. And it wouldn't have been possible without the contrivances of the bought-and-paid-for folks who sit in Congress.”

Others take this notion to darker ground and believe the “crisis” was precipitated to destroy the United States, break down the freedoms inherent in Western culture and supplant them with a more controlled world order, but I tend to think that it was more about greed and stupidity, even if it was very likely planned by “insiders,” with a host of campaign contributions being par for the course as Jubak asserts. Certainly the Orwellian character of the Bush Administration led many to believe the Bildeburgers, or  other sinister organizations, were pulling all the strings behind the scenes.

While there may indeed be a global “elite” out there, what in the world would they want to bring on an economic calamity like this for, to establish a new world dictatorship, something that couldn’t be done even with all out war, death camps, and atomic bombs? A new world government? Such notions are ludicrous. Governments at every level, from Washington down to small town city councils, can barely manage their own affairs. All these super wealthy “elite” have so badly gamed their own system that it has completely collapsed. If put to the task, the global elite would have trouble running their own estates—let alone controlling the entire world as the conspiracy doomers believe. If Orwell ever does return to replace Huxley in our world, with FEMA camps and Blackwater Storm troopers, it will only be as a reaction to a complete breakdown of social order—a complete loss of faith in our tomorrows—and it would only serve to protect a few small enclaves of the super wealthy. No cabal of insiders can ever really rule the masses. They can, however, botch up the system so badly that it comes crashing down from their incompetence, and still find ways to make a buck off the pain of others. Hey, that’s what short selling is all about, eh?

So in my view, I believe the system failed all on its own, from a thousand points of darkness in the hearts of agents,  traders, hedge fund managers, and CEOs all through the financial and real estate businesses. It was an abundance of greed and an equal measure of sheer incompetence and lack of foresight. Did these financial geniuses, from Greenspan on down, think the debt could pile up indefinitely, always be rolled over, refinanced, restructured, hidden away off balance sheet? Now they are desperate to get back to the casino and restart the game, for gambling, at its core, is really a kind of addiction.

Back to the Game Tables

The game the “power elite” had going was simply too sweet for anyone in their right mind  to ever want it to end.  This is what all the bailouts under TARP and TALF, all the “Stimulus Packages” and “Quantitative Easing” are aimed at—simply restarting the old game again. The Big Boyz are like addicts without their opium now that they cannot dream up new securities to trade, and now that the credit markets have frozen, they shiver with shakes of withdrawal. As they plan their next short sales positions they reach desperately for the last few bonus dollars they can grasp before the real unwinding begins. What they want most now is to get the crap tables going again and restart the game in the hedge funds. A corollary effect will be to jump start “consumer spending,” but that is by no means the primary goal, and it will certainly fail. The real bucks on Wall Street come from the ceaseless wheeling and dealing in investment “vehicles,” and not the kind with four tires consumer spending would revive. Sorry Boyz. Happy days won’t be here again for a good long while.

Charles Hugh Smith wrote: “Was greed, fraud, lying, embezzlement and the debauchery of credit and leverage all rational? You can make that case, to be sure. But then you have to accept that the rational response to the implosion of the "game" is to tighten up, get real and live within our means. No matter how "rational" it might have seemed to exploit the game, it isn't rational to recklessly borrow trillions to avoid the consequences of the game ending.”

I must add that expecting any rational solution to the crisis now is as much of a pipe dream as one can imagine, but that does not stop Geithner and Summers from dreaming up plan after plan in an attempt to restart the old game tables. The latest offering is a plan that will see Uncle Sam trying to lure gamester investors back to the slot machines by offering to shoulder most of the risk in the purchase of “troubled assets.” The aim is to minimize risk to private investors, who have shunned these toxic securities for the last six months, and to entice them to buy them again, thus removing them from bank balance sheets. The government would match investors dollar for dollar in one plan, and put up over 85% of the money need to buy the  “assets.”.

Ilargi of Automatic Earth commented: “The hedge funds and private equity tycoons run zero risk. At those odds, you would invest as well. But you don't get the invite. Your money, whether you like it or not, is injected at the part of the deal where 100% of the risk resides…In short, it is no longer credible to maintain that Geithner and Summers are trying to find the solution that most benefits the American taxpayer. For a long time now, Washington politics have focused on a single goal: adding to the riches of the richest…The Wall Street-Washington revolving door crowd is getting closer with each single step and each single plan to its ultimate goal: limitless access to the public coffers.”

And so the heist of public funds just continues unabated. “Change.gov” was merely a pause in the action, like half time at a football game. It was a Bernanke-Paulson-Geithner bail out plan under Bush in the first half.. Summers was called in on the scrimmage and Geithner shifted left, but otherwise it’s the same team with the ball. Their game plan is to protect the investors, bond holders, share holders—you know, the guys with money.

Umair Hague wrote in Business Week: “Welcome to Looting 2.0. What does that financial system look like? In it, everything is a hedge fund. The Geithner economy ... puts the allocation of public resources in a very small number of almost totally hidden private hands.. .Never before in financial history has the richest country in the world actively, irreversibly, and so radically merged public expenditure with private investment.”

Change.Gov?

All these bailout bucks now stop in the oval office of President Obama, but sadly, he appears complicit in the whole process of this ongoing heist. Obama is either too preoccupied with the planning of all the programs and services he promised to deliver, or simply blind to the reality of what is happening. The appointment of men like Geithner and Summers, old financial insiders, has all but assured that no solution benefiting the public over private investors will ever be reached. Obama has made his first great mistake, at the very outset of his presidency, in failing to root out the old gamesters and put forward a radical new plan for reform. Change.gov has simply become “more of the above.”

James Kunstler characterizes the new president’s inability to really embrace the change we need this way: “I think, he is going along, for the moment, with a consensus of wishes to prop up life as we know it at all costs. This consensus emanates from the top down and the bottom up. The millions of "Joe-the-Plumber(s)" out there don't want to rethink the terms of existence anymore than the lords of Goldman Sachs. I also think that circumstances will force Mr. Obama's hand before long -- specifically that a moment will arrive when he goes on TV and tells the American public that things have changed way beyond the scope of what they even imagined when they pulled the levers last fall and voted for an uncharted future.”

Henry Blodget of the Business Insider commented: “What would be a better plan?  Seize the insolvent banks, write down the assets to market levels, and make the banks' bondholders pay for most of the losses by converting a percentage of the bonds to equity.  Then sell off and/or re-privatize the banks, which will now be well-capitalized. This latter plan would wipe out shareholders and hurt bondholders--which is what the Treasury is trying desperately to avoid.”

Paul Krugman offered this pointed assessment of the new Geithner plan: “The zombie ideas have won. The Obama administration is now completely wedded to the idea that there’s nothing fundamentally wrong with the financial system — that what we’re facing is the equivalent of a run on an essentially sound bank. As Tim Duy put it, there are no bad assets, only misunderstood assets. And if we get investors to understand that toxic waste is really, truly worth much more than anyone is willing to pay for it, all our problems will be solved.” In effect, our financial and political leaders still refuse to face reality, and do what is necessary to clean the bad investments from the system and start over. Just listen to the pronouncements of the Fed chairman as the crisis has played out and see if you feel inspired to newfound confidence.

Ben Bernanke the man at the helm of the Fed’s ballooning balance sheet, has made some amazingly stupid remarks at every stage of the collapse. As the housing market began to unravel he remarked: “At this point, a leveling out or a modest softening of housing activity seems more likely than a sharp contraction,” this while the sharpest contraction in housing for the last 80 years continues unabated. When the stock market went off a cliff he said: “A collapse in U.S. stock prices certainly would cause a lot of white knuckles on Wall Street. But what effect would it have on the broader U.S. economy? If Wall Street crashes, does Main Street follow? Not necessarily.” Wrong again, Ben. When the economy on Main Street began to tank he chimed: “It's been a resilient economy, it's responded well and job creation has proceeded apace.” Meanwhile unemployment topped 10% in eleven states, (That’s over 17% in real terms when you look hard at the U-6 number) The economy is not resilient, and pink slips continue to pile up like a train wreck. Now Bernanke is chirping about an imminent recovery later this year. He sounds much like many depression era leaders who also painted the dire economy in glowing terms.

Just before the 1929 Market crash Andrew W. Mellon, Secretary of the Treasury sounded much like Jim Cramer cheer leading for Bear Stearns when Mellon said: “There is no cause to worry. The high tide of prosperity will continue.” As the depression started in 1930 the Washington news stories read: “Definite signs that business and industry have turned the corner from the temporary period of emergency that followed deflation of the speculative market were seen today by President Hoover. The President said the reports to the Cabinet showed the tide of employment had changed in the right direction.”  On March 8, 1930 Washington Dispatch wrote:  “President Hoover predicted today that the worst effect of the crash upon unemployment will have been passed during the next sixty days.” Three months later unemployment began to skyrocket as the real effect of the depression finally hit the country.  In October of that year Charles M. Schwab, another of the “elite” from that era, looked to the inevitable faith in science as a way out of the crisis: “Looking to the future I see in the further acceleration of science continuous jobs for our workers. Science will cure unemployment.” In fact, after ten years of depression it was not science but the calamity of WWII that finally reversed unemployment in 1941

Is it any wonder that faith in our government and leaders will find itself in very short supply these days? The arc of hope and change Obama rode to the White House has now broken on the shore of reality, and the rocks on this coast are sharp. He is sitting on the shoreline contemplating how to reassemble the wreckage into something that floats and resembles, as much as possible, the old ship of state that brought us to this place, and with the same crew that wrecked the boat in the first place! This wasted effort, and the trillions of wasted dollars spent so far, could have been better directed at building a new America from the ground up. For the ten plus trillion thrown at the banks and their investor bets so far we could have paid off everyone’s mortgage, retired all their credit card debt to give the whole nation a clean start, and still had billions left over for roads, bridges, schools, health care, and alternative energy. As it stands, AIG got more money than most of the public works allocations in the new “stimulus package,” and all they did is piss the money away into the largest corporate loss in history, a whopping $61 billion in 3 months, which was actually just payouts to the folks who insured their securities bets with the company. Bucks for the Boyz.

The reason why people are in such psychological distress is that they perceive no benefit from any of the trillions they have been asked to pony up for the banks and big investors to save the system that has been deemed “too big to fail.” The operative state is that we are all in a kind of suspended animation while we wait for the trillions in economic medicine to try and restart the failing heart of our banking system. Then, so the logic goes, the banks will all start lending again, people will all start borrowing and spending again, securities will trade as before and we’ll all return to “normal.” Sorry folks. The soup in the bowls will be thin for a very long time. We had better get used to that fact

Matt Taibbi for The Rolling Stone pulled no punches in describing what we have been seeing as a kind of financial coup: “People are pissed off about this financial crisis, and about this bailout, but they're not pissed off enough. The reality is that the worldwide economic meltdown and the bailout that followed were together a kind of revolution, a coup d'état. They cemented and formalized a political trend that has been snowballing for decades: the gradual takeover of the government by a small class of connected insiders, who used money to control elections, buy influence and systematically weaken financial regulations. The crisis was the coup de grâce: Given virtually free rein over the economy, these same insiders first wrecked the financial world, then cunningly granted themselves nearly unlimited emergency powers to clean up their own mess. And so the gambling-addict leaders of companies like AIG end up not penniless and in jail, but with an Alien-style death grip on the Treasury and the Federal Reserve — "our partners in the government," as Liddy put it with a shockingly casual matter-of-factness after the most recent bailout.” (Taibbi’s whole article in the Rolling Stone is well worth a read.)

I’ve reached a conclusion with all of this, and one that many may feel in their bones. The little guy out there, upon whose back this nation was built, just doesn’t seem to matter any more. The decisions have been made by insiders at the top who have wormed their way into control of key government posts. They do what they want, enduring a theatrical scolding from congress now and then, but largely defying lawmakers at every turn. The big money goes to their friends, the Rich Dads, and the public trust, the common purse of millions of Poor Dads in this country, will provide it without asking too many embarrassing questions in congressional hearing rooms. Got that?

The Wall Street mafia, Rich Dads all, will take care of their own, so what does a Poor Dad do when he can’t pull down a multi-million dollar bonus for failing so badly at his job that his whole company is now bankrupt, and on public taxpayer life support like AIG? The only thing that really matters to most of us is what happens in the daily drama of our own small lives, and the lives of those we love. It comes down to what the soup in your bowl looks like, no matter where you live, and who you have around you to share it with. The question we will soon be faced with is how far that soup will stretch. How will we treat one another on both a personal and community level, as things get worse.

Take a look at Iceland, who once enjoyed one of the highest standards of living in Europe. Now soup kitchens have sprung up along formerly swank waterfront properties. Yet after the initial shock the people there have showed an amazing reserve of good will toward one another. “We all have something in common now,” said one Icelander. “So people are nicer, they are more thankful for help—there’s something going on here.”

What’s going on is community—the little island population is pulling together instead of preying upon one another or heading for the Icelandic hills with a stock of guns and ammo. Even the protests Icelanders mounted when things fell apart  created a spirit of togetherness and were not just a focal point for anger. What happened to their economy was a “slap in the face” said one citizen, but Icelanders found a new sense of camaraderie in the crisis. They turned toward one another, and not away from one another. They took care of each other. Will we?

We, the people, are daily faced with decisions that really matter: what to do about a friend who has lost their job, or fallen ill with no health insurance; how to lay aging parents to rest, where to go when the foreclosure notice puts us on the street, or the credit card bills, (now so weighty they must be delivered parcel post), threaten to take the last of our food money? Short of an all out insurrection there’s nothing to be done about the Boyz at the top. It should be clear by now that Change.gov is not going to solve the problem. It’s the people around you that will matter now—those you love from long association, and those you must come to love, even as strangers, when they falter and fail. The government isn’t going to fix things, nor will the Fed find some new magical acronym program that will make this crisis go away any time soon. It’s up to us, each and every one of us, to take care of each other.

I’m an old Todd Rundgren fan and his song “Fair Warning” sums up this sentiment:

You know, wishing wont make it so
Hoping wont do it, praying wont do it
Religion wont do it, philosophy wont do it
The supreme court wont do it,
The president and the congress wont do it
The U.N. wont do it, the h-bomb wont do it,
The sun and the moon wont do it
And God wont do it,
And I certainly wont do it
That leaves you, you’ll have to do it…

Yes Todd, we need “Just One Victory” now to get us out of the soup we’re in.  But remember that thinning the soup can also be a process that builds community, fosters volunteerism, creates new ways for us to see our interaction with others as inclusive, for “what you do to the least of these,” says the good book, “you do to me.”

Here’s a few places to start turning your thinking about the soup bowl of your life. You didn’t think it was all going to happen because of TARP did you? Nope. We’ll have to do it ourselves. Each and every one of us.

Frugality and Sustainability

• build it solar
• food storage calculator
• frugal abundance
• geopathfinder
• get rich slowly
• low cost home cooking from scratch
• on simplicity
• the modern luddite
• vegetable seed warehouse
• wisebread

Article by: John Schettler
April, 2009
 

“Make no mistake - we are selling off our future and the future of our children to prevent the bondholders of U.S. financial corporations from taking losses. We are using public funds to protect the bondholders of some of the most mismanaged companies in the history of capitalism, instead of allowing them to take losses that should have been their own. All our policy makers have done to date has been to squander public funds to protect the full interests of corporate bondholders.”

--John P. Hussman
  HussmanFunds.com