The Creature from Jekyll Island: financial markets bailout

If you want to know why the towers of American capitalism are crumbling, I recommend reading “The Creature from Jekyll Island” by G. Edward Griffin. It’s not an easy book to find, but once you start reading it’s hard to put down. In fact, in many ways it’s a murder mystery about the financial “murder” of the middle class.

A very important lesson in the book is how political leaders use financial spin to deceive the public. The very, very rich use the system to legally steal from the rest of us by appealing to our sense of patriotism. When our leaders say, “We’re bailing out Fannie Mae and Freddie Mac because we want to protect the American people,” they really mean “We’re saving our rich friends.”

A bailout can be different things. First, printing more money is a kind of bailout that leads to higher inflation. Rather than protecting people, it makes life for the poor and middle class more expensive. The other kind of bailout is protection for our rich and incompetent friends. If you or I fail at business, we fail. No one bails us out or forgives our indebtedness.  If we cheat and get caught, we go to jail. However, if you’re rich and politically connected, your incompetence may likely be protected by a government bailout.  Some would say that this is the antithesis of capitalism.  Some would say this is communistic.

What many people don’t know is that the securities that the government bought from these ailing financial giants at full price (the bailout) will later be sold back to these same companies for ten cents on the dollar and these companies will then sell them again on the secondary market for 30-40 cents on the dollar; allowing these companies to get rich again while the American public is left with the crippling debt.


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