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The War On Capitalism Continues May 8, 2009

Posted by Daniel Downs in capitalism, Constitution, economy, Federal Reserve, news, politics, taxes, war.

According to financial adviser Bill Bonner, the U.S. government via the Federal Reserve has been at war against capitalism for over 50 years. An example of how the feds wage their dirty campaign is as follows:

“Instead of permitting willing lenders and borrowers to set the price of credit, for example, the Federal Reserve imposed its own short-term rates many times over the last 50 years. Eleven times during that period, capitalism tried to correct the “borrow and spend” economy. Each time, the feds rushed in with more credit on even easier terms. By the recession of 2001-2002, the feds were intervening with such heavy hands that it set off the bubble in housing prices in the 2002-2007 period. When the bubble [finally] exploded, the fed’s dirty campaign turned into a major war with huge pitched battles…and millions of casualties.”

Anyone listening to the news heard about the bank stress testing results. The poor stress out banks that failied the test included Bank of America, Wells Fargo, GMAC, and Citi. They all need billions of more taxpayer money to become strong and healthy players in the feds campaign.

“If capitalism had its way,” wrote Bonner, “it would sort out the banks quickly. Banks that couldn’t raise the money they needed would go out of business. Their assets would be bought up by the solid banks. Life would go on.”

As Bonner points out, “the feds’ war against capitalism prevents this kind of simple resolution. Instead, weak, mismanaged institutions are kept alive with taxpayers’ money.”

How are we the privileged taxpayer going to pay for the feds’ war against capitalism? We will have to sacrifice the cause by accepting less funding of health care, education, highway repairs, and other non-essential government services and/or welcome higher taxes.

At one point in his commentary, Bonner made a very troubling statement.

“This year, the U.S. stopped being the United States of America. Yesterday, it was reported that the states now get most of their money from the feds.”

This is certainly the ever increasing trend. As Democrats attempt to take-over government all levels, it will become fully true.

And “[t]hat’s the end of the federal system…the end of the system announced in the U.S. Constitution…which was a union of sovereign states. Now, it’s a fully centralized system…a popular democracy of the worse sort…in which celebrity hacks are elected and rule without any real shame or limit. Even Louis 14th, France’s Sun King…an absolute monarch…knew he was subject as well as monarch. He was God’s man on the throne of France. Now, America’s leaders answer to no one…except the mob of TV-addled voters.”

I guess it takes an objective viewer from London to see it.

Credit for the title and most of the content of this post belongs to The Daily Reckoning by Bill Bonner, which is published by Agora Financial.



1. linusstephens - May 11, 2009

Should taxes be raised on the middle class or should governments be forced to spend less? Voice your opinion at: http://www.friendsoftheuschamber.com/takeaction/index.cfm?ID=351

2. Linus S. - May 19, 2009

Americans basically have two options: raise taxes on the middle class, or demand that federal, state and local governments spend less… what’s your opinion? Voice it at http://www.friendsoftheuschamber.com/takeaction/index.cfm?ID=351

3. Tim - May 19, 2009

Unrelated, but thought Daniel might like this site:


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