1176 True News 2: Government Bailouts
A philosophical analysis of government bailouts - from Freedomain Radio, http://www.freedomainradio.com
Oct. 16, 2008 - Freedomain Radio - Stefan Molyneux
07:54
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| Hello, this is Stefan Molyneux from Free Domain Radio. | |
| It is time for True News, Episode 2. | |
| I'm sorry that I had to change the name from Naked News, but apparently that's taken, and people apparently were alarmed at the possibility that I might actually stand up. | |
| So this is Episode 2, October 16, 2008, Government Bailouts. | |
| Let's take a trip through this particular field of horrors. | |
| So what's the story that is being sold to you by the genuine regular old media? | |
| It is that government deregulation led to an explosion of greed and irresponsibility on Wall Street. | |
| The bankers and the traders got rich at the expense of Main Street through fordulent subprime mortgages being repackaged and bringing down the whole financial system. | |
| The government, you see, unfortunately had no idea what was going on and was unable to stop the feeding frenzy. | |
| Ah, but now that the bubble has burst, the government is going to step in and solve the problem. | |
| Well, let's pick apart this fairy tale and see if there is anything real in it at all. | |
| And let's start with an analogy which I hope will help to clarify the situation for you. | |
| Let's say you own a store and you have a manager who's responsible for profits and making sure that things don't get stolen, who sends you an enormous number of bills for a whole series of expensive alarm systems to prevent theft and shoplifting and shrinkage and so on. | |
| Sadly though, the thefts continue and in fact, after each one of these alarm systems is installed, the thefts get worse and worse, which of course is a bit of a problem. | |
| Oh, and by the way, it also turns out that your manager is stealing from you and also that those who are stealing from your store are paying a good chunk of the manager's salary. | |
| And then one day, your manager calls you up and says, I'm sorry, man, half your inventory has been ripped off, and you gotta pay me a couple of million bucks to solve the problem, but don't worry, I'm on it, man. | |
| All right. So let's have a look at your manager's performance. | |
| This is the value of your store over the past few decades. | |
| You appointed this manager at this point, and then after a brief increase in the store value back to slightly above average, it has been a catastrophic plummet to a loss of value. | |
| This, of course, is the value of the US dollar since the 19th century. | |
| How much debt has been rung up by your fabulous manager in the name of your store? | |
| Well, you're appointed your manager, let's say, in 1971, and this is the debt that he has accumulated since then. | |
| 1971, of course, was the last shred of the gold standard when Nixon took us off the gold standard. | |
| So here's another example of just how well your manager has been doing. | |
| Ah yes, and then he predicts all this spending and results, right? | |
| So he predicts spending, but unfortunately he has a consistent habit of wildly underestimating project costs. | |
| For instance, he said, look, if we take over this one foreign store in what used to be Mesopotamia, it's going to cost us maybe 50 to 60k. | |
| Sadly though, it's ended up costing you a couple of million dollars. | |
| The cost of an employee drug benefit plan that he put in place turned out to be more than twice as high as his original estimate, and it turned out that he knew that when he was proposing the costs to you. | |
| You now owe almost $30 million in unfunded liabilities, so this is how your store manager has been treating your valuable asset. | |
| So, let's have a look at some of the financial alarm systems to merge the metaphor. | |
| Securities and Exchange Commission. | |
| The Office of the Comptroller of the Currency. | |
| Federal Reserve Board, of course. | |
| We have Federal Deposit Insurance Corporation. | |
| We have the Commodities Future Trading Commission. | |
| National Credit Union Administration. | |
| We have the Sarbanes-Oxley Act, the Home Mortgage Disclosure Act, the Community Reinvestment Act. | |
| Tip of the iceberg. It goes on and on and on. | |
| These are all of the alarm systems that are supposed to prevent financial problems in your store or in your economy. | |
| Loosen regulations? Well, let's look at the facts. | |
| For the regulatory category of finance and banking, inflation-adjusted expenditures have risen 43.5% from 1990 to 2008. | |
| Now it's true that that increase has declined since the early 2000s, but still it didn't exactly become negative. | |
| So you have installed more and more and spent more and more on alarm systems and this is the result. | |
| The Federal Register often publishes 70,000 or more pages of financial regulations every single year. | |
| We're not short of laws, of course. | |
| And remember I said that the thieves actually pay your manager? | |
| Well, over the past five years, banks and securities firms gave an average of 231,877 in campaign contributions to each representative voting in favor of the bailout, compared to only 150,000 and change to each one of those who voted against The bailout. | |
| 54% more money was given to those who voted yes. | |
| So the thieves are paying your manager as they continue to rob the store. | |
| This is ridiculous. | |
| I mean, come on. | |
| People. People. This is simply an appeal for reason. | |
| If you're watching this video, you're old enough and wise enough and smart enough to know exactly What is going on? | |
| That the thieves are in charge of the Treasury. | |
| That there is a massive collusion between the predators on Wall Street and the criminals in Congress. | |
| Government spending has gone up 40% in the last seven years. | |
| There is a war, in fact two wars, going on that have not been paid for. | |
| Have your taxes increased as a result of the, quote, need for the Homeland Security Department? | |
| No. Government is corrupt. | |
| It is bought and paid for. | |
| This is not something that should come as a shock to you. | |
| And if it does come as a shock to you, I don't believe you. | |
| Even for a moment. You're getting all Blanche Dubois, you know. | |
| Oh, law sakes, I can't eat an unpeeled grape! | |
| I mean, this is a ridiculous amount of self-deception that is going on if you claim not to know this. | |
| And if you claim to believe that the government is going to help regulate us out of this financial mess. | |
| Expecting the most corrupt and exploitive financial agency on the planet To tackle corrupt financial agencies like Wallsbreed brokerage firms and so on is lunatic. | |
| If you continue to believe this nonsense, if you continue to buy into this fairy tales, if you manage your anxiety about being kind of like a tax livestock to a pretty corrupt organization by pretending that there is virtue in there, that the cavalry is riding over the horizon to protect you from the mess that it has created itself, Then you absolutely deserve what you get. | |
| I hate to say it, but it's just a fact. | |
| You deserve what you get. You deserve all the losses in your stock portfolio. | |
| I just wish that your illusions weren't dragging the rest of us down with you. | |
| So I hope that this helps you understand where this fantasy is coming from, how ridiculous this fantasy is. | |
| This store manager needs to be fired, and in fact you need to take over ownership of your store again yourself. | |
| Thank you so much again. |
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