This Friday, the world’s investors will turn their eyes to Jackson Hole, Wyo., and its annual gathering of central bankers, where Federal Reserve Board Chairman Ben Bernanke will give a Delphic speech about how the Fed now sees America’s economy.
Experts will dissect Bernanke’s words for any hint that the Fed might soon launch quantitative easing 3 (QE3) or some other conjuring of money from thin air to stimulate our economy.
Such is today’s American “capitalism” that money people now base their investment decisions on how much debased paper money the government or Fed is willing to manufacture through magic.
“We don’t have a market economy now,” the president of the Kansas City Federal Reserve Bank Thomas Hoenig told Time magazine last February.
Hoenig founded these Jackson Hole meetings and will host his last this week before retiring this October after 38 years of service to the Federal Reserve. “I hate to use this term,” Hoenig told Time, “but it’s almost crony capitalism — who you know, how big your political donation is.”
Open a politically incorrect economics dictionary to “crony capitalism” and the picture next to its definition might be that of General Electric Chief Executive Jeffrey Immelt, one of the most prominent corporate supporters of President Barack Obama and head of Obama’s panel on U.S. jobs and competitiveness.
Immelt’s name appeared Aug. 22 in a Washington Post story headlined “GE ‘All In’ on Aviation Deal with China.” This investigation by Howard Schneider was one of the few news reports about GE’s deal to share much of its most advanced avionics technology with Beijing’s state-owned Aviation Industry Corporation of China (AVIC).
GE through this deal will be a partner in building communist China’s first modern commercial airliner.
This airliner, reported The Washington Post, “is likely to become a rival to aircraft produced by U.S.-based Boeing and Europe’s Airbus.”
In other words, President Obama and the head of the president’s panel to increase American jobs have both given their approval to a deal that will cost Boeing jobs.
Yes, this is the same Boeing that President Obama’s National Labor Relations Board is brawling with over a new factory that would employ thousands of Americans in South Carolina — because in this right-to-work state those employees could not be compelled to join a union.
The unions in Boeing’s factory north of Seattle, Wash., give a hefty portion of dues coerced from their workers to the Democratic Party and its politicians.
Obama, however, appears to have no problem with Boeing’s American jobs being lost to communist China, where AVIC’s government-paid workers are not allowed to unionize.
AVIC also builds military aircraft for Red China, and the advanced technologies GE transfers to AVIC will, more than likely, be diverted to put added muscle and capability behind Bejing’s imperialist military ambitions.
As Lenin, the founder of the late Soviet Union, famously said, “The last capitalist will be hanged with rope sold to us by a capitalist.” As The Washington Post observed, even Immelt has privately “questioned China’s sincerity in developing a truly open economy.”
Then again, why should they? As Hoenig said, today’s United States no longer has “a market economy.”
The late Canadian-born Harvard economist John Kenneth Galbraith predicted “convergence” between the U.S. and the USSR — that our economies and societies would continue to grow more and more alike, both evolving into welfare states in which the government ran the marketplace.
Under President Obama, America is dissolving into what Harvard economic historian Niall Ferguson calls “Chimerica,” a kind of neo-colonial symbiotic merger with communist China.
In this brave new economic world, the spendaholic ways of our politicians — and China’s willingness to enable our self-destructive addiction to spending and debt — guarantee that in this relationship China will become the colonizer and America will, as it was to King George III in 1775, again be the colony.
John Adams was right: “There are two ways to conquer and enslave a nation. One is by the sword, the other is by debt.”
The U.S. government now borrows 42 cents of every dollar it spends, adding $58,000 every second to the debt your children and grandchildren must pay to maintain our illusory economy.
Lowell Ponte is co-author, with Craig R. Smith, of "Crashing the Dollar: How to Survive a Global Currency Collapse"; "The Inflation Deception: Six Ways Government Tricks Us . . . And Seven Ways to Stop It"; and "Re-Making Money: Ways to Restore America’s Optimistic Golden Age."
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