The European Union, often derided by the US reactionary press as a "Socialist Union" sent Tim Geithner scurrying home this weekend, as they couldn't stomach his policy prescription of a massive pool of taxpayer money to be given away condition free to any and all banks that should need it.
In fact most of the European Finance ministers were appalled at what has been the United States' abject socialist reaction to any bank problem for the last forty years.
"It seems peculiar to be lectured by a country whose Debt to GDP ration is much higher than our own," commented Mari Fekter, Austrian Finance Minister.
The Europeans understand what seems to be unfathomable to politicians of both parties in this country (Ron Paul excepted): That once you bail out a large failing institution it can - and will - return ad infinitum to demand more money, knowing full well that each new demand is tougher and tougher to deny, as it implies all the previous charity was an abject failure.
For some reason in the Socialist United States when a poor single mother on drugs gets fifty bucks for food - that socialism. But when Goldman Sachs gets a hundred billion dollars to pay bonuses and gamble in the markets - that's not socialism.
In Socialist Europe that doesn't make sense. They told Geithner so. And the Socialist US Markets reacted predictably - the futures are down 200 points as I write. We'll see what the "Markets" do. But since the "Markets" are a rigged casino operated by the banks, chances are they'll send the markets reeling in punishment for the politicians who refused their demand for every more tax payer money.
And when they drive the markets low enough, they'll get all the taxpayer money they want - At least, here in America. QE3, QE4, QE5 etc....
AND IF YOU DON"T BELIEVE QE3 IS AROUND THE CORNER:
Bernanke Joins King Tolerating Inflation to Revice Economy (I don't think re-vice is a typo either)
Inflation flashing red may be less of a green light for higher interest rates as global growth falters.
Some Federal Reserve policy makers favor keeping their benchmark rate close to zero until price increases reach a level Vincent Reinhart, a former top official, says could be 3 percent. The Bank of England has held its key rate at a record low even as U.K. inflation breached its 2 percent target for 21 months. Brazil executed a surprise cut Aug. 31 to safeguard its economy even after inflation quickened to a six-year high.
Policy makers such as Fed Chairman Ben S. Bernanke and Bank of England Governor Mervyn King may be challenging central-bank orthodoxy to replenish depleted toolkits and support recoveries at risk of sliding back into recession. Tolerating higher inflation may make long-term Treasuries less attractive while supporting stocks and commodity prices, said Jim Kochan, chief fixed-income strategist at Wells Fargo Advantage Funds.
“There’s a hint of desperation here,” said Kochan, who helps manage $216 billion in Menomonee Falls, Wisconsin. “They’re clearly concerned that monetary policy to date hasn’t really accomplished what they expected it to. So they ask themselves, why? And what could we do about it?”
Meanwhile in Germany: Angela Merkel and her "Center-Right" government lost the recent election by a landslide as:
Social Democrats won23.3% of the votes; the Greens won 17.6% and the Left
Party won 11.7%, for a total of 52.6% of the votes cast.
This compares to 47.8% won by the same three parties in elections five years ago. On the centre-right, the Christian Democrats won 28.2% of the votes cast.
the most ardently free market,pro-capitalist of the political parties in German… won but
1.8% of the votes cast, falling below the mandatory 5% needed to win any seats in the local government.
What is extraordinary here is that the "Right Wing Free market" parties were precisely those advocating a socialist bailout of the European Banks while the Left Wing Socialist Parties are advocating a stop to the lunacy of handing tax payer money over for bailouts.