Swamp Drains US Treasury Via CARES Act

[georgephillip]

What do you get when a crony-capitalist POTUS and his Foreclosure King Treasury Secretary responds the latest of capitalism's many epic failures?

"The New York Fed’s own playbook involves dangling a shiny object for mainstream media in a 'look here but not there' operation.

"During the 2008 financial collapse on Wall Street that took down the U.S. economy in the worst crisis since the Great Depression, the shiny object was a four-letter acronym called TARP, short for Troubled Asset Relief Program...."

"This time around, the Fed and New York Fed have brazenly upped their game because they have a much bigger shiny object: a deadly pandemic that is dominating the news and effectively eliminating any network or newspaper coverage of what is happening behind the scenes at the New York Fed...."

"Even worse, in what is beginning to resemble a conspiracy of silence, no mainstream news outlet has reported on the more than $9 trillion in super cheap repo loans the New York Fed has pumped into Wall Street trading houses or the fact that those loans began on September 17, 2019 – four months before the first coronavirus case was reported in the United States and at a time when President Trump was bragging on TV about the unprecedented robustness of the U.S. economy."

Instead of Draining the Swamp, the Swamp Is Draining the U.S. Treasury via the New York Fed

"There is nothing in any law governing the Federal Reserve that says that if the taxpayer puts up $454 billion it is allowed to leverage that up by 10 to 1 to $4.54 trillion and use that money to buy up toxic waste from the banks and trading houses on Wall Street.

"The New York Fed has simply decided that this is what it needs to do to prop up Wall
Street and eat their bad bets."

 

[Sun Devil 92]

TDS thread 1,418

 

[georgephillip]

TDS thread 1,418

Trump and Mnuchin are Wall Street lackies:

Instead of Draining the Swamp, the Swamp Is Draining the U.S. Treasury via the New York Fed

"And this time around, Wall Street’s lackies in Congress are putting a gun to the head of the House and Senate members that are desperate to get relief to the small businesses and unemployed workers in their homes states by demanding, and getting, in exchange a new $4.54 trillion bailout for Wall Street where the taxpayer will eat $454 billion of losses.

"(When that $454 billion runs out, there is the clear expectation that Congress will be tapped to allocate more taxpayer money to absorb the losses.)"

 

[Bootney Lee Farnsworth]

What do you get when a crony-capitalist POTUS and his Foreclosure King Treasury Secretary responds the latest of capitalism's many epic failures?

"The New York Fed’s own playbook involves dangling a shiny object for mainstream media in a 'look here but not there' operation.

"During the 2008 financial collapse on Wall Street that took down the U.S. economy in the worst crisis since the Great Depression, the shiny object was a four-letter acronym called TARP, short for Troubled Asset Relief Program...."

"This time around, the Fed and New York Fed have brazenly upped their game because they have a much bigger shiny object: a deadly pandemic that is dominating the news and effectively eliminating any network or newspaper coverage of what is happening behind the scenes at the New York Fed...."

"Even worse, in what is beginning to resemble a conspiracy of silence, no mainstream news outlet has reported on the more than $9 trillion in super cheap repo loans the New York Fed has pumped into Wall Street trading houses or the fact that those loans began on September 17, 2019 – four months before the first coronavirus case was reported in the United States and at a time when President Trump was bragging on TV about the unprecedented robustness of the U.S. economy."

Instead of Draining the Swamp, the Swamp Is Draining the U.S. Treasury via the New York Fed

"There is nothing in any law governing the Federal Reserve that says that if the taxpayer puts up $454 billion it is allowed to leverage that up by 10 to 1 to $4.54 trillion and use that money to buy up toxic waste from the banks and trading houses on Wall Street.

"The New York Fed has simply decided that this is what it needs to do to prop up Wall
Street and eat their bad bets."

You will get not argument from me on "crony capitalism" and the like. That's total bullshit.

The problem is that "crony capitalism" is not capitalism. TRUE capitalists have been preaching about this for a century.

.

 

[georgephillip]

The problem is that "crony capitalism" is not capitalism. TRUE capitalists have been preaching about this for a century.

Crony capitalism - Wikipedia

"Crony capitalism is an economic system in which businesses thrive not as a result of risk, but rather as a return on money amassed through a nexus between a business class and the political class."

Capitalism has never existed without such a nexus between the business and political class, and the fish rots from the head (Wall Street) down:

"For example, the largest and most serially fined and prosecuted bank in America, JPMorgan Chase, is borrowing billions from the Fed’s discount window at ¼ of one percent interest.

"The Fed is offering its repo loans to trading houses on Wall Street at 1/10 of one percent interest.

"But the loans to small businesses under the CARES Act and Small Business Administration are being made at ten times that amount of interest."

Instead of Draining the Swamp, the Swamp Is Draining the U.S. Treasury via the New York Fed

"On March 17 of this year, U.S. Treasury Secretary Steve Mnuchin described the new rollout of the PDCF as a means to 'help facilitate the availability of credit to American workers and businesses.'

"But the parent banks of the trading houses that are borrowing from the PDCF at ¼ of one percent interest are continuing to charge upwards of 17 percent interest on their credit cards to millions of recently laid off workers."

 

[georgephillip]

"'Where will the government find the money?' is no longer a valid objection to providing an economic safety net for the people.

"The government can find the money in the same place it just found more than $5 trillion for Wall Street and Corporate America: the central bank can print it.

"In an April 9 post commenting on the $1.77 trillion handed to Wall Street under the CARES Act, Wolf Richter observed, 'If the Fed had sent that $1.77 Trillion to the 130 million households in the US, each household would have received $13,600. But no, this was helicopter money exclusively for Wall Street and for asset holders.'

"'Helicopter money' – money simply issued by the central bank and injected into the economy – could be used in many ways, including building infrastructure, capitalizing a national infrastructure and development bank, providing free state university tuition, or funding Medicare, social security, or a universal basic income."

A Universal Basic Income is Essential and Will Work - CounterPunch.org