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Keystone Cops, Collapsing Nations & Caveat Emptor
|by Gaurang Bhatt, MD|
The rule of law is what separates a civil society from the jungle, where might is right. Darwin's theory of descent with modification (evolution) was philosophically paraphrased as survival of the fittest by Herbert Spencer. Despite poetic support from Tennyson's verse of 'nature red in tooth and claw', it was this concept of amorality, further amplified by Nietzsche (god is dead and ubermensch is born), which raised the ire of the Victorians and still continues to bother America, leading to rejection of evolution and promotion of the stupid ideas of creationism or its masquerading twin, intelligent design. Human history often begins with the lawgiver or controller.
The etymological derivation of the Hindu God of death 'Yama' comes from its literal meaning ' curb, suppress, control. From this root are derived the compound words 'Niyama' and 'Samyama' meaning law and self-control. The human neo-cortex which accounts for our ruling the earth has more inhibitory impulse connections than excitatory ones. For Hindus, Manu is the lawgiver. The Sanskrit Manu shares origins with the English word man and hence manual and mano of Italian. For the Jews, Moses is the lawgiver. It is the primacy of law that makes Hammurabi's code, Magna Carta and the 'Thingvellir', history.
In America, the congress allowed Fannie Mae and Freddie Mac to take on foolish risks while emasculating regulators, because of campaign contributions. The result is nearly 500 billion dollars loss to the taxpayer. Rescuing AIG and its Goldman Sachs connected credit default swaps cost us 200 billion dollars. 750 billion dollars was given to banks and wasted on toxic assets. Geithner and Bernanke have come up with a plan to give non-recourse loans to private equity firms to buy toxic assets from banks. Hedge funds put up six dollars, TALF puts up six dollars and the FDIC guarantees the rest to make it hundred. If the asset appreciates and there is a profit, the private equity firm keeps 50% of the profit. If the asset becomes worth zero, the private equity firm loses only six dollars and we the taxpayer lose 94 dollars. This is a giveaway to the congress and president's potential campaign contributors who will finance their next campaign.
A similar tragedy occurred when Brookesley Born in charge of the CFTC was denied regulation of the OTC derivative market which has landed us in the current mess from credit default swaps. Obama's reneging on his promise to withdraw from Iraq and sinking deeper into the Afghanistan quagmire, his refusal to have a single payer national health insurance, congress exempting itself from social security contributions are all despicable examples of subverting the rule of law or carving out selective exemptions for the rich and powerful. These are just as damaging as warlords, drug dealers and tyrants.
In other countries like India, Pakistan, Afghanistan, China and the third world, corruption of the police and petty government officials leads to anger, hostility and black markets. Afghanistan cannot be saved because of this burning of the candle at both ends. Eventually these lead to a collapse of civil society. America has not reached that stage as yet, but if the economy continues to deteriorate, unemployment worsens, we may be on that path.
In the meantime my age old warning is Caveat Emptor or buyer beware of this market bazaar, guarded by the Keystone Cops including the SEC, CFTC, FASB, Treasury, Federal Reserve, Congress and the President.
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