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The Greater Abomination: Washington’s Lies About TARP’s “Success” Are Worse Than The Original Bailouts
The Fed’s “No Banker Left Behind” Program
By David Stockman, Budget Director under President Reagan and author of the bestseller, The Great Deformation: The Corruption of Capitalism in America. This article originally appeared on David Stockman’s Contra Corner.
The mainstream economics narrative is so far down the monetary rabbit hole that the blinding clarity of the chart below has no chance whatsoever of seeing the light of day. That’s because it dramatizes the real truth regarding all the Fed gibberish about “accommodation” and “stimulus”. Namely, that what lies beneath its “extraordinary measures”, such as ZIRP, QE, wealth effects and the rest of the litany, is a central banking regime that systematically destroy savers. Period.
Just take the simple case of a worker who joined the labor force in 1969 at $100 per week or $5,200 annually, and worked at the average non-supervisory weekly wage posted by the BLS every year through 2009. By that point he or she would have attained an ending wage of $600 per week or $31k annually, and a 40-year average annual income of about $20k in nominal terms. With a normal load of payroll and state and local withholding, the latter would have left about $15,000 per year on an after-tax basis.
Upon retirement this BLS tracking worker could have possibly accumulated $100,000 in a savings nest egg – but only if he or she had been completely atypical and set aside an average of 17% of after-tax income each and every year. Needless to say, that would have precluded nearly all everyday “luxuries” such as a regular new car, an occasional trip to Disneyland, a bass boat for weekend fishing and most other like and similar modest indulgences. Instead, deep thrift would have been the omnipresent watchword of this household.
Next, suppose that after 40 years of skimping and penny pinching this now retired household wished to keep it’s funds in safe and liquid 6 month CDs. Well, as shown below, according to the writ of Bernanke and Yellen, the interest earned last year on $100,0000 would have amounted to the munificent sum of $1.07 per day – before bank fees, inflation and taxes. Yes, after 40 years of thrift, our retiree could afford – from the entire return on his nest egg – a Starbucks cappuccino about once every three days!
Reposted with permission
