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The Untouchables

July 26, 2010

In his post on Daily Reckoning, Gerald Celente cuts through the crap and gets to the bottom of it:

The implicit rationale was that only those Harvard, Princeton and Yale MBAs, Ph.Ds. and LL.Ds. were qualified to pull the levers of power on Wall Street and in Washington. Only they — who had devised the derivative, and conjured up the synthetic credit default swap, and invented the enhanced structured investment vehicle – were equipped to deal with the complexities of contemporary business and finance. Thus, those who didn’t know nevertheless insisted they knew best. The Bigs had to be saved.

In the dying American Empire, there was no longer a place for the small:

* The Mom & Pop shop was as passé as the corner candy store.

* The family farm — penalized by big government’s “Get Big or Get Out” policies that subsidized factory farms — had become a quaint curiosity.

* The village hardware store was hammered by Lowe’s and Home Depot; Staples and Office Depot stomped out the stationery store.

* Across the spectrum… finance, defense, insurance, health, news and entertainment… virtually every business sector had been commandeered by the Bigs.

And the bigger they got, the more untouchable they became. TV Money Honeys, fast-talking finance finaglers, Nightly News anchors, Sunday Morning Beltway Blowhards, and Talk Show Tough Guys genuflected, scraped, kissed up and bowed down before those magnificent men in their money machines.

TV Money Honeys – I love it. Hey baby, wanna see my stock tips? Further on, he adds:

The very essence of functioning capitalism that by definition is “…the distribution of goods that are determined mainly by competition in a free market,” was violated and destroyed.

Not only was there no hard evidence demonstrating that saving the “too big to fails” was necessary to save the economy, the rescue plans themselves violated the most cherished tenets of capitalism, which hold that:

* Failures should be allowed to fail.

* The best will succeed.

* Competition is healthy.

* Market voids created by failures will be filled by competitors.

No individual, business, institution, nation or empire is too-big-to-fail. Had true capitalism been allowed to function unimpeded, the bloated, over-extended, inefficient and gluttonous firms and industries would have failed. There would have been hardships and losses but, finally rid of its financial tapeworms, the purged system could be restored to health.

Amen.

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