Here's a great email (slightly
edited) from CS to Mike Shedlock:
"I am almost shaking as I write this for what is happening
to the capital markets, this country, and the free world. The impact
of the past two weeks' action in the financial markets, if not reversed
by cooler heads, will have irreparably changed the world in a way
that only terrorist attacks and acts of war have in the past.
Nationalizing Fannie Mae and Freddie Mac, providing an emergency quasi-legal
bridge loan to AIG, temporarily banning short-selling on all stocks
in the US, and instituting an RTC-type entity to handle the toxic
waste of the financial system is economic violence on a grand scale.
The long-term cost of these actions to dollar holders will likely
be in excess of $1 trillion. The basic premise of a free economy is
one governed by laws and not men, where property rights are respected,
where individuals are free to make contracts with each other, and
where honesty and transparency exist in the marketplace. It's questionable
whether any of these currently exist in the economy of the United
States.
[L] et me provide a partial list of entities responsible for the financial
mess we find ourselves in:
Fractional-reserve banking, which is inherently unstable and
entirely a confidence game
Congress for passing the Federal Reserve Act and creating
the Federal Reserve, the third central bank in the history of
the US
Woodrow Wilson for using the Fed to finance World War 1
Benjamin Strong, the President of the Federal Reserve Bank
of New York from 1914-1928, for inflating the money supply in
the '20s to help out Great Britain which led to the Great Depression
Herbert Hoover for his economic intervention from 1929-1932.
He was not laissez-faire by any means.
John Maynard Keynes for laying the foundation of a miseducated
public
FDR for banning private ownership of gold, enacting the New
Deal, creating Social Security and Fannie Mae, and exacerbating
the Great Depression
The FDIC for lulling the American public into a false sense
of security regarding their bank deposits and training the public
to unquestionably trust the financial system
LBJ for the guns and butter of the '60s
Nixon for severing all ties between the US dollar and gold
Reagan's intellectual duplicity, using free market, small
government rhetoric while turning the US into a chronic debtor
nation
Alan Greenspan, one of the most duplicitous, arrogant, and
incompetent individuals in the history of the United States.
If I had to pin this crisis on any one man, it would be he.
George W. Bush for cutting taxes while raising spending and
his full embrace of Cheney's doctrine of "deficits don't matter"
Ben Bernanke for following the Greenspan doctrine to its inevitable
conclusion
The heads of Fannie Mae and Freddie Mac for using artificially
low borrowing costs to create systemically-dangerous housing
institutions
Christopher Dodd and Barney Frank for beating the socialist
drum
Christopher Cox for thinking a ban on short-selling will solve
anything
Hank Paulson for folding the hand he was dealt
The ratings agencies for rubber stamping garbage assets as
AAA
The heads of the major banks and brokerages on Wall Street
for turning a blind eye as their institutions were taking on
massive leverage that threatens to take down the financial system
The hedge funds that levered up structured finance to dangerous
levels
Generations of lawmakers for kicking the looming financial
crisis can down the road
Home buyers who lied about their income and creditworthiness
Predatory lenders who put people into mortgages they could
never afford
