AIG Bonus Issue Is Just A Red Herring

So how does one run across the backs of alligators without getting eaten? First chum the waters with some red meat and while the critters are munching on the screaming bait you hot-foot across their backs.

Now use "AIG bonus issue" for the screaming red meat and use the snarling congressional panel for the alligators and the hot-footed one will be Goldman Sachs a.k.a. Government Sachs who will escape the glare and jaws of government, public and the news media.

Cui bono? Who profited from the enabling Commodity Futures Modernization Act of 2000? Goldman Sachs et all were the ones who introduced these financial derivatives products from hell that took down brokers, bankers and now threatens the world financial system. The products by law couldn't be regulated or have oversight by any agency including state gaming commissions! They planned well. The bonus babies at AIG are mere fodder at $160 million. AIG alone cost the taxpayers $180 billion for being Goldman Sachs' favorite customer who would say "yes" to any product that Goldman proposed.

But Goldman needed help from the federal government to get the Modernization Act of 2000 into law. For that job they recruited former Senator Phil Gramm of Texas, Senator Richard Lugar of Indiana and others. So government was equally criminally irresponsible for passing this law. That's why the bonus babies at AIG are being scapegoated.

Why Do We Need Banks?

Today Federal Reserve Chairman Ben Bernanke was pleading for more money. He said banks need more capital if the economy is to recover.

Why do we need banks? What's their value-added? Let them fail. They use other peoples assets and skim more than their fair share for themselves. So why not eliminate these bad managers and their stockholders who can't be trusted and let people be responsible for their own assets? I'm sure people can more carefully protect their assets than the over-paid predators that run our banks. Individuals can loan people money and collect interest just as easily as a bank can. And if they can't, then that's their own problem.

There is way too much financial linkage between people. By definition that linkage grows till it fails because of it's unwieldly size. Time for a new paradigm. I suggest a barter system. Let's get rid of the parasites like the greasers in government and Wall Street that script Bernanke's message.