USA. The Day After Barack Obama

By Chandrashekar (Chandra) Tamirisa, (On Twitter) @c_tamirisa

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Charles Keating and John McCain have something in common. They both were investigated for the Savings and Loan (S&L) debacle in the 1980s. Keating went to jail. McCain’s senate career was saved after being accused of improperly interfering on behalf of Keating.

Bill Clinton’s Deputy Secretary of the Treasury, Roger Altman, a reported Bilderberg attendee along with the likes of Bill Clinton, Barack Obama, Hillary Clinton, Tim Geithner and Ben Bernanke, had resigned after a public congressional grilling in relation to the linkages between S&L, Whitewater and the Resolution Trust Corporation (RTC) in 1994 (The Bilderberg Meetings, with its purported linkages to the US Central Intelligence Agency, now has a more transparent listing of its participants on the web, though it is unclear if the group leaves out some participants who do not wish to be publicly listed because of the group’s commitment to privacy, a problematic practice from the standpoint of transparency in democratic governments).

Michael Milken of the Milken Institute, a think tank in California, who had invented junk or high-yielding bonds to finance corporations in distress while a trader at Drexel Burnham Lambert went to jail for securities fraud in 1990. They all made mistakes and paid the price.

This financial crisis has not yielded any such deserving scalps yet besides, of course, the relatively insignificant ponzi scheme of Bernard Madoff.

When US economic outlook is bleak because of non-transparent monetary policy and excessive and inefficient government borrowing and spending compounded by a bad credit rating because of it, the continuing stock market sell-off since Obama’s budget deal is normal market behavior.

This lame duck administration’s response, however, is abnormal.

This abnormality does not smell well. Tim Geithner was on air accusing S&P of bad judgment for its downgrade of US debt. The Guardian newspaper of the United Kingdom, a voice of the left, is reporting a gathering sentiment that markets must be better regulated to ensure that the bond market response to fiscal imbalances in countries is not disproportionate.

Obama appears to be urging world governments, particularly the United States and Europe, to reform regulation (once again, as if he forgot what he did thus far in his administration with Dodd-Frank) along the lines of The Guardian report rather than enjoining budget constraints even after acknowledging that the United States has a deficit problem.

This president, instead of honorably deciding not to run again, appears to be garnering the support of the European-American left to deliver for his Bilderberg handlers.

The governments of Europe and America want to be in control of their capacity to borrow, controlling the normal response of markets to their borrowings, the equivalent of needle exchanges for confessed drug addicts.

Bond markets sell-off has not happened yet. When that follows the stock market declines, the bond-ratings agencies (being accused of collusion by implication in The Guardian), may have to downgrade US Treasuries once again if no commitment to fiscal sanity, besides the rhetoric of the acknowledgement of the deficit problem, materializes soon enough.

Economic expectations will not improve unless the Republican majority in the United States House of Representatives and the substantial Republican minority in the Senate can legislate the budget constraint and discipline the Federal Reserve to follow the law under these extraordinary circumstances, albeit being a normal market reaction to government dysfunction.

Bilderberg’s ever higher debt ceiling or 1776 budget discipline, monetary legality, transparency and government reform: what does Congress want?


About Chandrashekar (Chandra) Tamirisa
This entry was posted in Economics, Politics, Transformations LLC, World and tagged , , , , , . Bookmark the permalink.

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