The Federal Reserve Continues Its Redistributionist War on Savers

Today the United States Federal Reserve, according to the Wall Street Journal (link), "signaled it plans to keep its benchmark short-term interest rate close to zero for at least another two years as it sharply downgraded its view of the U.S. economy."

Who continues to benefit from this ultra-low interest rate environment?  Bankers, big net Obama contributors in 2008, who can continue to borrow at near-zero rates and lend at 5-6% or better.  As Larry Kudlow is wont to say on his CNBC show, "even a banker can make money this way." 

Whom does this hurt?  Savers.  Retirees on fixed income who live off the interest on their lifelong savings.  Their dollars are earning a pittance.  But I don't expect AARP, the American Association of Retired Persons, to protest, since it has long ago betrayed its ostensible constituents and gotten into bed with Obama and the Democrats to protect its real source of income that supports all those AARP administrative jobs -- selling insurance to seniors, now protected if not well-advantaged by its connection with Obama and the Democrats.  That is, at least for now, while Obama is in.  This may change. 

Who also benefits?  The US federal government, which at the present politically means Obama, which pays lower interest rates on its debt.

Continued ultra-low interest rates is a hidden, sneaky redistributionist tax on wealth – a tax on those who saved all their lives who now get little interest, now accompanied by the inflation which is how the federal government will resolve its big debt.  Both benefit not savers but debtors -- Obama's and his acolytes' core constituency.

John M Greco

The Obama/Democrat Spending Binge Comes Home to Roost

Markets are in turmoil in response to Standard & Poor's slight downgrading of American debt.  For over two years now the Democrat Party has gone on a national spending binge, with borrowed money, unprecedented in peacetime American history, most notably in the gargantuan special "stimulus", the bloated annual spending plans, and Obamacare.  Republicans, after going along, begrudgingly and with occasional moderate resistance, with Democrat spending for a generation, finally said enough, voted in vain almost to a person against this Democrat spending, and have refused to agree to raising taxes to feed the bloated government beast.  In response, elected Democrats, Senators representing all the citizens of their states, are throwing a tantrum -- calling those who disagree with them names like "terrorists" (link), and trying to silence them (link).  Typical fascist tactics from not very nice people.

Kurt Schlichter (link):  "The liberal dream of a perpetual social welfare state... is dying. There’s no doubt about that; the only question left is how long and hard the process will be as the hideous leviathan the utopian liberal establishment has created convulses and dies. It’s going to die hard. And ugly."

To paraphrase Margaret Thatcher, American liberalism has just run out of other people's money.

John M Greco 

Not To Miss -- Why We're Headed Back into Recession -- Victor Davis Hanson Explains It All

The inimitable Victor Davis Hanson at The Corner at National Review Online explains it all to us on how Barack Obama is bringing on another recession: How to Turn a Recovery into Another Recession.

Turns out -- it's easy.  Here're excerpts on how:

1.      Ensure uncertainty in the private sector so that it continues to cut back and hoard cash….

2.      Take both real and iconic measures that scare business and question the old rules of free enterprise, perhaps by trying to shut down a new Boeing aircraft plant or reversing the order of the Chrysler creditors or absorbing a private company or two.

3.      Create a psychological climate hostile to business that either scares employers or angers them into sitting out any perceived recovery….

4.      Send a message that subsidized companies, especially in so-called green industry, are noble and need help, while profit-making corporations, especially in energy, are suspect…..

5.      Be selective in targeting capitalist enemies of the people….

6.      Run up historical deficits in ‘gorge the beast’ style that will force at some point either massive new taxes or a Greece-like crack-up [JMG: which for Democrats, per Rahm Emanuel, would be a "crisis too good to waste"] ….

 John M Greco

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The Obama Chrysler Confiscation – One Year Later
Economic End of the Road in the West
The Sad and Tragic End of General Motors