How much did Obama know about the $26 trillion in loans the Federal Reserve gave the banks? That money wasn’t used to save the banks. It was used to save rich investors. The Fed claims most of the loans have been repaid. However, statistically, that’s highly unlikely. Okay, it’s impossible.
We can only speculate on how much the president knew about the loans, but it is apparent he knew a lot.
Take the Obama stimulus package of 2009. Obama pushed the so-called American Recovery and Reinvestment Act through congress in 2009. The stimulus package was large, $787 billion, but most of it was spread out over a few years, and a large chunk of it was in tax cuts that in the past had proven to be unsuccessful in stimulating the economy.
Given the massive tanking of the economy beginning officially in December 2007, many economists thought the president’s package needed to be two to three times larger. This included economic Noble Prize winners Paul Krugman and Joseph Stiglitz. Furthermore, every economist with their brains in their heads thought most or all of the stimulus should have been injected into the economy in a much shorter period of time, not spread out over three years.
So why didn’t Obama pursue a greater stimulus package, and why spread it out over three years, when the Democrats held the House of the Representatives and had 59 votes in the Senate. Why would he risk prolonging the catastrophe with such a relative small, spread out, stimulus compared to the size of the economic disaster the Republicans and Bill Clinton had led the nation into?
Obama had to have known of the secret $26 trillion stimulus of the Federal Reserve. And he had to have approved of it. This leads us to another conclusion. To one degree or another Obama is a believer in supply side economics; he apparently believed that the Federal Reserves secret $26 trillion in loans to the banks was going to stimulate lending and the economy would magically grow, even if demand for everything was plummeting; and therefore we can speculate that Obama may have believed that the Fed’s actions meant the stimulus for the real economy didn’t need to be very large or swiftly implemented. He must have believed that forking over trillions of dollars to the rich was sufficient to stimulate the wrecked economy.
This suggests Obama agreed with the Fed and its actions. Otherwise, he would have done something about it, like propose a bigger stimulus package.
This means the repercussions of the loans are enormous. Okay, their bigger than that. You can’t overstate how gigantic the repercussions are for the 99 percent.
The financial markets always have to move upward in value. The same is true of individual corporate stock prices. That means corporate profits mostly need to move in an upward trajectory. Otherwise, the system will collapse. Falling corporate earnings results in falling stock prices and dividends. You can’t let the value of the markets drop for too long or the system will become valueless.
The financial markets are the primary conduit through which income and wealth are redistributed to the rich from the 99 percent. Ship jobs overseas and the difference between the higher wages here and the lower wages there wind up in the pockets of the rich via higher dividends, share prices and CEO compensation. The people that lose their jobs, well, they’re out of luck. There are dozens of ways to redistribute income and wealth from working people to the rich via the financial markets, but there’s no need to go into it here.
If the financial markets are allowed to die, the income redistribution scam would die. That means if you’re rich and you want to keep the scam going, then you need to find a way to keep corporate earnings marching upward, even if the marching means smashing the middle class into the ground under the massive wheels of your political powers.
But what happens when draining sufficient profits out of the middle class is impossible to keep the financial markets moving higher because those folks in the middle have been drained dry? Such as when their home equity has already been spent, and enough of their jobs have been shipped overseas. During a recession, what happens when corporations have cut their labor costs to the bones? What happens when there’s insufficient demand to keep profits soaring ever higher? which is most likely what has occurred during the last few years of the worst Depression since the Great Depression.
The answer is simple. The Federal Reserve’s loans that were most likely never paid back are being used to prop up the big banks. That also means the profits the banks get are no longer 100 percent related to the way they do business with the middle class, like giving home and car loans.
The Fed can simply print trillions of dollars and hand it over to the banksters. All parties can then fix their books to make it appear as if the loans have been repaid even though they have not. The banks can then fix their books to make the loans look like profits. The profits can then be released as dividends to rich shareholders in whatever amounts are necessary over the ensuing years. The stock markets can then continue to move up in value. The scam is saved.
Maybe this is why Obama didn’t care about the creation of jobs until we got close to the election of 2012. Maybe that’s why Obama didn’t give a fiddler’s fart about the size of the stimulus package despite large Democratic majorities in both houses of congress. Maybe this scam is why there was no need to provide any serious relief to homeowners who are underwater on their loans. Maybe this is why Obama pretended to be concerned about job creation, but he was only too happy to ship hundreds of thousands of jobs away last fall when he signed the South Korea free trade treaty. Maybe this is why Obama has not felt a need to fix the real economy, at least not in any serious way.
The existence and desire of the Federal Reserve, as well as its ability to print money on demand and secretly disburse it to the rich, means the 99 percent of us are no longer necessary to maintain the upward trajectory of the financial markets. We the people have become dispensible. The United States can now become a banana republic because the demand for goods and services by the middle class may no longer be necessary to keep the financial markets flying higher. The affluent only need the Federal Reserve.