Ms. Yellen Doth Protest Too Much, Obama for the Rich

The recent testimony by the Fed Chair in Congress was very troublesome the more I think about it.  Pressed by Jeb Hensarling, the House Financial Services Committe Chair, about weekly meetings with the Treasury Department, she repeated over and over how independent the Fed is and how important that is.  Well, if she is taking such pains to make the point, what that means is that precisely the opposite is true.  The mere disclosure of such meetings is an aha moment.  It is clear that that is the avenue through which the Dear Leader decides monetary policy.  He may let the Fed think that it is arriving at its policies on its own, and maybe they do come up with the actual mechanisms of policy, but it is obvious to me that Obama calls the shots.  In other words the Fed is not independent at all.  This is another reason that the Fed should be disbanded or pared way back to the emergency liquidity provision function for which it was formed after the Panic of 1907, stripping it of all the superfluous crud that has encrusted its bloated corpse of failure over the 100 years since it was formed.   Do I really expect that to happen?  Not until the sclerosis kills the staggering patient at some point.  But such an outcome will allow for a re-architecture of the system, probably with architects not nearly up to the task unfortunately.

Whether it is Obama or Yellen or Bernanke or anyone else undertaking to float asset markets in a way that does little for the real economy, it is clear to anyone watching what is going on that it is precisely these policies that create a widening rift between Wall Street and main street.  Those who already have wealth are disproportionately benefiting from the policies to repair the banks.  Obama has no one to blame but himself.  And that is not the only way that his policies benefit the rich at the expense of the poor.  ZIRP is allowing corporate executives to borrow at no cost to buy back stock in order to goose the P/E ratios which puts their stock compensation packages in the money so they can do it again, and all without creating one iota of real value or helping the real economy in any way.  It is frankly embarrassing and outrageous.  Not only that but the tens and hundreds of billions of government handouts to politically favored cronies has exploded under Obama, some in the guise of stimulus, the rest in blatant and open disregard for propriety.  It takes only a small amount of that flowing back to the politicians to make the system work.  It is appalling.  Solyndra is becoming business as usual.  This is why there is a half-hearted fight over the Ex-Im bank, as that is one of the slush funds for political patronage.

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