"If you're after getting the honey, hey, then don't go killing all the bees"

It's true and alarming that the bee population of the United States is diminishing. Bees remain an indispensable component of stable agriculture systems.

It's also a fact that the value of an average American's estate--mostly the equity of his or her home--has diminished precipitously in the last forty years. Now the Federal government will bail out publicly traded firms (privately held) whose toxic debts average Americans will ultimately pay off in a deflationary economy over the coming years. It appears that market players have not been discouraged from gaming the system because they understand 1) they will not be seriously monitored or regulated, and 2) when they ultimately break the bank after taking their gains, the government will step in and help put the game back together.

Remember Savings and Loan "S & L bailout" nearly twenty years ago? According to Timothy Curry and Lynn Shibut, "the savings and loan crisis of the 1980s and early 1990s produced the greatest collapse of U.S. financial institutions since the Great Depression. Over the 1986–1995 period, 1,043 thrifts with total assets of over $500 billion failed. The large number of failures overwhelmed the resources of the FSLIC, so U.S. taxpayers were required to back up the commitment extended to insured depositors of the failed institutions. As of December 31, 1999, the thrift crisis had cost taxpayers approximately $124 billion and the thrift industry another $29 billion, for an estimated total loss of approximately $153 billion." It appears that Americans have a lethal case of political amnesia. Either that, or they are very forgiving, particularly to those who have great wealth and power and who use them as "back stops" (see below) when the casino runs out of money.

It is presently clear that socialism funds capitalism, non market spectators fund the speculators. Great game.

This past September 15th, 2008, the Dow Jones Average lost "only" 500 points. Some remain sanguine. After all, the U.S. economy is a $15 trillion economy. The United States can even absorb a $2 trillion bill for war in Iraq not to mention bailing out the two federally instituted and publicly traded investment Goliaths Fanny Mae and Freddy Mac.

Larry Summers, who together with Robert Rubin (a principal architect of the present Russian economy) helped deregulate the market in the Bill Clinton years. Presently, they feel chastened. "We need regulators regulating risk, transparency not opaqueness. The buyer and seller need equal views of the real price of an asset. Real disclosure, not opacity" they now say. A little late. These insights would have been put to better use when they enjoyed political power.

Prognosticators are saying that we are at the beginning of an economic recession in Europe and Japan with the risk of global recession. Market won't return to equilibrium until 2010, economy in 2011. They might wish to blame "toxic CDO's."

Toxic CDO's (Collateralized Debt Obligations from Derivatives) sold by Goldman Sachs and other investment banks in a deregulated market environment(See Glass-Steagall Act) have reached other parts of the globe like viral birds. Politicians and journalists have termed any "bailouts" by tax payers a moral hazard issue. Translation: Deregulated market gamblers who have disrupted the market will be salvaged by the very people they hurt most, average citizens. That is, the people are bailing out capitalists who are gaming the market taking big wins up front until the bubble market collapses. Warren Buffet and others saw this coming. Few listened.

Capitalism is supposed to be a system in which players have the freedom to succeed as well fail according Tom Petruno, market beat writer for the Los Angeles Times. We may ask: Is it also a "moral hazard" to take away one of those "freedoms" from the rich and powerful?

An important bit of history: The Glass-Steagall Act Provisions of the 1930s in the wake of market corruption and the Great Depression prohibited a bank holding company from owning other financial companies. The reason, conflict of interest, too easy to cheat. However, these measures were repealed on November 12, 1999, by the Gramm-Leach-Bliley Act, which ultimately passed in the Senate by a 90-8-1 vote, and in the House by a 362-57-15 vote. The bill was signed by President Bill Clinton, but could have been signed by Ronald Reagen or any of the Bush's. Warning: Phil Gramm now counsels "reformer" John McCain on economic matters.

More on the term "back stop": According to Andrew Sorkin of the New York Times, Lehman wanted the the FED (read tax payers) to "back stop" the losses of Bear Stearns, Lehman, Merrill Lynch, Morgan Stanley, Goldman Sacks, which were never depository banks serving common people. Yet common people will "back stop" the failures of these giants whose executives made deca millions and who, with their witty share holders will walk away with many billions of dollars. Bernie Sanders, Independent Senator from Vermont, thinks they ought to help pay for the bail out. What fair-minded person will disagree?


Nevertheless, Morgan Stanley and Goldman are the only two large firms left standing, "back stopped" by the people, uh, government. So...the people do subsidize capitalism--capitalism is socialized. is that be right?! If this is so, how many Americans really understand capitalism as it plays out in America?

Capitalism generally refers to an economic system in which the means of production are all or mostly privately owned and operated for profit. Why not private equity bailing out private players? Clearly, that's not the American way.

Unless the House of Representatives turns down the bill sent to it by the Senate, Secretary of the Treasury Henry Paulson and his boys have the rest of us by the throats. That's a great game they've got going. The plutocrats use ordinary people to save their bacon. Paulson and his cronies got us into this mess, and now, for our own good, we must pay the ransom to salvaging the credit market they helped destroy while getting rich. (Paulson is worth roughly $500 million. It's scandalous, but the bewildered and quietly angry populous does nothing, having forgotten how to participate in a democracy. The capitalists take all the benefits in the form of profits (except for the shareholders who didn't sell in time) and the people get to socialize the losses: public money is put at stake to bail out private gambles in the market largely in the form of exotically packaged derivatives, mortgages placed in the world market as a speculative asset class. When it fails, the lenders get bailed out, not the distressed borrowers who "deserve" to take the hit because they should have "done their due diligence."

Bees don't "do due diligence." They generally work hard and trust that everyone is pulling for the common good. Huh. Silly bees. More truly, silly bee keepers. They're going to lose the hive eventually. As the song goes: "If you're after getting the honey, hey, then don't go killing all the bees."

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