Separating policy from politics

For the record, I think Obama seems a decent man and I am thrilled to have a president that can speak in complete sentences and does not have Dick Cheney as a vice president. All of these things are good and hopeful signs.

And it is good to finally see some heated debate erupt into this conversation about bailouts. It’s about time! If you are not taken aback by what is happening, you are not paying attention. A good, vigorous debate is exactly what is needed. Passions should be riled here.

There’s one thing in this discussion that I would like to set the record straight about. I have been a consistent and vocal critic of the bailout every step of the way. This spans a republican and now a democratic administration and you will not be able to detect any difference in how I approach my analysis of the policies of these adminstrations because that’s not how I work.

Folks, this is just not a partisan issue.

I don't see this as a matter of “left vs. right”, but rather “right vs. wrong.”

Anybody who injects partisan dialog into my writing is either confused about the situation or trying to confuse the situation. I am absolutely an equal-opportunity caller of B.S. when I see it. I really don’t care what race, religion or political affiliation a person holds. I will analyze their proposals on the merits as I see them.

What I am doing in analyzing the bailout plans of the new administration is absolutely no different than what I did with the past administration. I am cognizant that more people have placed their hopes for some sort of a rescue on the new administration and that analysis and careful examination of the details and impacts will not be welcomed by everybody, but that’s what I do. I really have no political dog in this fight, and no agenda beyond determining whether we are doing the right things with our precious time and money from this point forward. Because we don’t have much of either and it’s absolutely critical that we do the right things.

And it is a mischaracterization to suggest that folks around here have suddenly gotten worked up over this homeowner bailout. In fact, we have been very consistently decrying both the amounts and the moral hazard at every step of the process. In fact, I dare say this site and this blog was practically first on the scene and has not wavered in its positions.

Here’s a chronological view of my writings on these matters.

On September 21st 2008, I wrote about the What the Latest Bailout Plan Means which drew 19,379 reads and 31 comments (provided to give you a sense of the interest), and said:

Now that the details are out, we can safely state that the US political and financial leadership has completely sold out the taxpayers and has done so in a manner that is startling, both in its recklessness and its brazenness.

The reckless part I will spell out in the details below.

The brazen part is in how this is being spun out, as if the entire plan were hatched in a hurried rush, at the last minute, after events forced the issue. This is the spin, but it is completely false.

Because many financial commentators, ranging from Roubini to Roach to Calculated Risk to myself, foresaw these events, we can be completely confident that these events were both anticipated and planned for long in advance. The only question left was how they were going to be 'sold' to the public. What better way than in the midst of a "massive financial panic" that required urgent action?

And now that the details are out, the plan is even more insidious than I ever dreamed.

Yes, I was pretty worked up over the looting operation that I saw unfolding the minute I laid eyes on it. I knew what was coming. All manner of deceit and maneuvers were going to be used to cram a rotten piece of self-dealing legislation past a scared group of representatives. It would be fair to characterize my mood at the moment as “riled up”.

On September 24th, 2008 I did my level best to ignite some good old-fashioned interest in the situation with a strongly worded article entitled “The Greatest Looting Operation in History”. My hope was to get people actively involved. This piece drew 3606 views and 16 comments.

The recently proposed bailout of failed Wall Street banks represents the most brazen attempt at grand larceny ever in our nation’s history. Some have even likened it to financial terrorism, because Wall Street went so far as to repeatedly say; “Either we get this bailout or the entire system goes under.”

This echoes, more or less precisely, what happened in the years after Ronald Reagan deregulated the S&L industry in 1982. Within a few short years, excesses and fraud were rampant within the system, and taxpayers were forced to cover the inevitable bust that followed. Many well-connected individuals made out like bandits on sweetheart deals meted out by the Resolution Trust Corporation (RTC).

But this crisis, which has been presented as if it caught everyone by surprise, was no surprise at all. It was years in the making, and the response was carefully planned over the past year. The bailout proposal, as originally presented (on Sat. 9/20/08), was shocking.

On October 13th 2008 I wrote an article entitled Handouts to Wall Street Announced, which drew 2959 reads and 26 comments, I wrote:

Once again, the "will of the people" was overridden by Congress in their haste to respond to an "emergency," and, once again, it turns out the people's instincts were right.

Remember the initial $250 billion that was going to be used to buy troubled assets which "we had to do right away!" because otherwise there would have been untold misery and millions of jobs lost?

Even more startling to me is that, instead of slapping the banks firmly on the wrist for being reckless, the government is also "expected to guarantee new debt issued by banks for a period of three years." To put it bluntly, that is just not the way to combat the moral hazard that is clearly endemic to our current banking system. I think the banks should be kept fully on the hook for any loans they make from here on out....mess up again, and your institution goes under.

Next, if you read the list of handouts below, things get even more troublesome (if your measure is "enormous rewards for Wall Street for misbehaving bother me").

Here's a quote from October 14th remarking on the FDIC bending rules to suit Goldman Sachs. (3118 reads/33 comments)

As always, in this never-ending looting operation, the rules are bent and modified willy-nilly to support a favored class of institutions and individuals.

We now have an openly two-tiered system.

And on October 15th 2008 I was already highly alert to the fact that the prudent were going to be punished (3483 reads/36 comments). This was well before any homeowner bailouts were even on the radar:

One of the dominant myths of America is that we practice one of the freest forms of capitalism on the face of the planet. Hard work and prudence are rewarded, while Schumpeter's 'creative destruction' quickly cleans out the mistakes.

Unlike most myths, this one apparently lacks a kernel of truth at the core.

As the details emerge over the various bailouts and market distortions, it is becoming clearer that moral hazard has been increased, not lessened, and that those who behaved prudently during the credit bubble insanity are going to be punished.

And on November 10th in a piece entitled, “US Taxpayers are Violated - the Looting Operation Continues” (6893 reads/53 comments), I wrote:

I am trying to maintain a very level-headed approach to the changes that we are seeing. However, from time to time the looting operation becomes just a bit too obvious, a bit too overt, and I find my level of cool slipping.

This is one of those times.

Here are the dots that I am connecting that have me concerned, if not angry.

Remember, even prior to its passage, I called the bailout the greatest looting operation of our time. I did so because the language of the Bailout Act, as originally proposed by the former CEO of Goldman Sachs, er, I mean the Treasury Secretary, requested three things: unitary power, no review, and no limits.

Frankly, it was the most plainly-worded document of theft that I had ever seen, and probably ever will see, in my life (because it was too blatant and such mistakes are rarely made again).

And so on. There are actually a fair number of additional articles and comments in this vein throughout the fall and into December but I think the point is made. I have been a very consistent critic of what I saw as a transparent theft of funds by a web of self-interested parties.

So there you have it. This site has long been very actively examining the looting operation every step of the way, wallowing around in the details, and generally doing everything possible to stir up some interest in the most magnificent transfer of wealth and opportunity ever seen by anybody alive.

The homeowner bailout? That is just one more (thinly) disguised handout to mortgage companies and banks which will do little of consequence as it treats symptoms, not causes. But one thing it will do is erode what remains of our incentive to work hard and play by the rules.

I think it is one more brick in a path that leads to the destruction of the currency and economy of this country. I think we suffer from too much debt, not sinking house prices.

As a matter of policy, I think it stinks.

And from an analytical standpoint it doesn’t matter to me in the slightest who has proposed it.

This is a companion discussion topic for the original entry at

The reason I come here is because of your objectivity on the issues. The Crash Course should be broadcast in every high-school and college in America, because of your ability to convey the real issues that don’t get bogged down in political, racial, gender, or class bias. That is what makes you different from the Fox News, CNN’s, MSNBCs, and mainstream media that is born out of exploiting and sensationalizing our news. This site is based on rationality, not bias and sensationalism.

Anybody claiming bias on your part, obviously is not coming from a rational stand point. Hell, I’ve even changed my views completely based on the objective truth brought forth on this site.

Chris, what you do is a public service and I applaud you.

Bravo Chris!

Your consistent analysis is, in large part, what keeps me coming back!

Obviously, your message is breaking through… and touching nerves. Fear not though… criticism is a pathway from obscurity towards main street. Keep the pressure on!

I second that emotion Smile and would add that most of the reader comments on this site are much more intelligent than any other site I visit. Chris, you know you are making an impact when you get attacked (unfairly as it might be!). Keep up the excellent work; you are a shining star in a cloudy galaxy. (or, whatever)


Chris, Excellent post!!
I am still amazed that some people still flop back and forth between Republican andDemocratic leadership as if these are actually choices. They are merely two closing jaws of the same steel trap.


I discovered your site, just a a few weeks before the bottom fell out last fall. It’s amazing, and frankly scary how things are playing out. I do feel some solace in having a "heads up" on what’s happening, but my wife still thinks I’m doom and gloom man. I’m not sure where I read it, but the conservative man’s portfolio for 2009… 50% ammo, 50% canned goods.

  • JP

I am a big fan of Obama. I had a yard sign, a bumper sticker, and I gave him a bit of money. I stood out in the cold for 3 hours to hear him speak in my city. I took my kids to the caucus and I get choked up from his speeches. I think he is basically a good guy, very smart, respects the Constitution and wants to do the right thing.

But I totally disagree about the way he is dealing with our economic situation.

Just as I totally disagreed with the way the last #&( heads handled the situation.

So I hear what you’re saying Chris.

I don’t know what prompted you to do this post, and I don’t really want to know. I just want to say "Hooray for you, for stating it so clearly."
It has been perfectly clear to me all along that you are giving us information that has nothing to do with political leanings, but more to do with teaching us principles and keeping us abreast of news that can help us get through this nasty mess. I think we all know, or should know, that both sides of the aisle have been guilty of the craziness in D.C. that has fostered this mess. (My personal opinion is that they are all greedy crooks, working together in an oligarchy.)
Anyway, you Chris are an anchor in the storm, and the source of much that we have learned and are using daily to protect and preserve our family in these trying times. We thank you greatly!
Ben Andrews
P.S. We won’t be happy until you are the hour-long interview on Bill Moyers, as well as on some main stream media. But that may not happen until MSM decides to quit sucking up to Washington, or maybe decides to start putting out real facts, instead of just sensationalism.

Thanks Chris. As someone said above, what you do here is a public service. Anyone who spends anytime here will come away with a greater understanding of how the world works. That can only be a good thing.


Thank you.


Great to see this. I wasn’t here in those months and the posts are so good and come so fast that I haven’t been able to trawl into the past posts.
A few things I’d mention:
THE REAL ENEMY: Both parties serve national empire. Repubs claim need for bigger government for security purposes. Dems claim need for bigger government for economic purposes. Two sides of same coin. I despise both because they’ve killed the Constitution and destroyed local community. But I hope you take a look at how they both serve the interests of the true banking elite behind the Federal Reserve, BOE, ECB, BOJ, IMF, World Bank, UN. Those are the real powers. They are the ones that need to be exposed and their system needs to die. While focusing on the corrupt alignment of Wall St firms with DC is a great thing to do, it only goes after the banking elite’s front men…the public corporate officers and public politicians. It’s not so much that government is trying to help Goldman Sachs. It’s really about paying off the Rothschilds, Rockefellers, etc. who operate behind the scene with agents who own controlling preferred shares in Morgan, Goldman, JP… They need to be taken out. END THE FED…end our slavery to the banking oligarchs.
OBAMA: I can see why you think Obama is a step up, but a politician that’s more skilled from harvard law at making great presentations and stirring popular support isn’t necessarily a good thing. It just might mean he’s a far better demagogue than Bush. Bush lost momentum behind his agendas (luckily) because he couldn’t sell…people lost trust in him because he’s obviously clueless. A better salesman can get a bad agenda passed more effectively…that’s a very bad thing. Having said that, the way he handled the race issue was a beautiful moment that transcended right/left. I thought he was a new type of leader. Unfortunately he has since proven he’s not.
POLITICS: It’s clear you don’t think in terms of politics in your analyses, but you must consider how politicians will attack you if you give an impression their PR people can spin into "this is a rich joker who doesn’t want to help little people." The White House did that today…publicly crucifying a guy who was mad about the $75B. Rather than focusing on the folly of idiotic bureaucrats who continue destroying our nation with socialism and impossible debt levels, he ever so slightly made it seem he was saying "these homebuyers need to suffer." That’s a big mistake. There was some of that in your post saying people need to be accountable and suffer the consequences of their choices. I know you don’t mean that because you believe in local community, so your interest isn’t in making people suffer. You would help people in your neighborhood. Rather it’s that you correctly know that national government systemically eliminating risk from a market by trying to save people is yet another policy destroying our nation and it doesn’t save those people anyway. Notice the difference? It’s a subtle point, but crucial when it comes to politics.

Chris, it’s good to have all this roped together in one post, just to make the record clear (though unfortunate that it was necessary).

I can see why some people get the wrong idea. Clearly the right-wingers are trying to get people riled up only over this bailout, but only went through the motions of opposing previous ones which redistributed wealth directly upward (rather than indirectly, as this latest one does), since they weren’t really opposed to those at all. We’re certainly not in that category.

I hope this will once and for all now be clarified regarding the thinking at this site. However, we who have been consistently against every bailout on grounds of systemic unsustainability, to the extent we go to other sites, forums, etc. to oppose this bailout as well, should take care to stipulate that our opposition is part of a comprehensive anti-bailout framework. That should help prevent misunderstandings, stupid accusations, wrongful political associations, and also help convey the underlying idea that it’s the system itself which is inherently flawed, not particular policies within an otherwise sound system.

I think this government is at least trying to be more open about where the ‘stimulus’ money goes to.
At least if you think is a serious attempt.


For me it is important that you are apolitical. The CC is the most important message and I don't want politics keeping one from taking the CC.
As always, I am grateful for all you teach!

Agreed, thank you Chris for providing this post so that others can refer to it if they ever doubt your sentiments or motivations.

I know I get other people riled up sometimes when I begin popping their "hope bubble" regarding some of the new administration’s latest actions. But when I continue on to take shots at the previous administration, they simply become confused. It seems our society doesn’t allow us to criticize anyone without implicitly assuming that we belong to the opposite party.

In my opinion, blind allegiance to either one of the main parties without a true acceptance and understanding of the issues and actions they stand for is relinquishing the opportunity to deal with problems and solutions based on facts, evidence, and merits. The earth doesn’t care if its oil is being burned in a Republican or Democrat’s car. Neither do I. The issues that challenge us now are challenging the very way that our political machine operates. Viable solutions will require politics to be cast aside and statesmanship to be reinstated as the status quo for our leaders.


When I found this site I was reading very carefully trying to find the political bent. It completely eluded me because there is none. So many other sites and news organizations are pretty transparent and suffer credibility for it. All politics are the enemy here. I had great hopes for our new president, as he seemed to be smart and willing to, as I like too put it: "do the people’s work". This last stimulus bill though makes me remember that this is simply politics. Where is the ‘going though line-by-line to eliminate pork’ as we were promised? Of course Congress is highly to blame. Just the fact it was passed on virtual party lines makes it obvioius that this bill had no meaningful use.

Chris, we know where you stand - on our side! And I know by reading comments on this site that ‘our’ covers an amazingly wide political spectrum. Keep up the good work!


you might find interesting my comments regarding Obama that were posted a few days ago here:

And I also thnik you should start preparing seriously some scenarios in case of financial collapse.

We keep talking about that, but nobody actually thinks about what would happen the next day after all the banks close doors.

I would recommend you to take a look on these also:

I know it’s a matter of days, maybe months and I’m so curious why are we not talning more about what happends after…

I strongly endorse the idea that our political process has largely failed us, and would add that we have to judge the merits of public figures on their works. That said, I do not share the view that anything to date that has come from the new administration is in any way a "good and hopeful sign." It’s simply not enough to speak the queen’s English, welcome as that is. In fact, this administration seems to have begun as a continuation of the previous ones, only worse, with horrible appointments showing a lack of comprehension (or worse) on the part of the Chief Executive regarding the example to be set, what needs to be done, and how to do it. We cannot expect change to come as long as both parties are controlled by the same ruling kleptocracy. Signs to date indicate we may well have "jumped collectively out of the frying pan, and into the fire." We shall see.

I applaud Chris for his strong stance in opposition to the bail-out madness going back a very long time. We must focus on the message here; the continued travesties against the Constitution cannot and will not be tolerated. If the possible futures pointed toward at the conclusion of the Crash Course are indeed becoming more probable by the day, as they seem to be doing, we are going to need massive organization at the grass roots level to resist the coming tyranny from the Statist establishment and survive with a vestige of the freedoms that were our birthright.

I think Chris needs to become more, not less, "political." Just my two cents.

I may be wrong, but it seems to me that both Chris Martenson and Rick Santelli have been restrained in their comments today and yesterday respectively. It is clear there are 3 parties to blame here; The irresponsible consumer, the irresponsible lending institutions/brokers and the Government. The PC police have decided it is OK to criticize the latter 2, but irresponsible homebuyers are off limits. We will never fix the problem until we have honest discussion and all angles are addressed. This is not hatemongering, it is just honesty. If one cannot see that, he needs to learn to be honest with himself.

Chris it sickens us that read & understand what is truly going on. Too many of the masses are unfortunately like sheep. Too busy watching Obrah & feeding their faces stretched out in their LazyBoy recliners waiting for their next Govt handout. Give these type a 3&1/2 hour crash course DVD or 1 hour of Obrah I think we know what they will go for.

This was no doubt by design for votes to control the power. This is a BIG problem to turn around. It has to run its course of total failure I feel for people to finally get it (if they every will). Like Plato & Socrates said a democracy is doomed for failure as eventually the solvent are outnumbered by the insolvent (something like that). We have a t hand a bigger problem than an economic problem we have a societal problem which is much larger. Bailout & stimulus can never fix this IMHO let alone what they were intended to fix.

Our founding fathers did their best with much foresight in mind for the future of forming a Great Nation but this has been perverse or distorted by a bunch of professionally trained manipulators with only self serving short term immediate "feel good" interests in mind. Very few appear to have long range goals in mind for our future generations. They give it lip service to sell it but as we see their heart is truly not behind it.

Here is something I read.

We have watched and listened to the debate in Washington with deep concern. Our view continues to be that no one has made a convincing case for or against the stimulus bill just signed into law by President Barack Obama

The arguments continue to have the ring of partisan fervor without a broad technical consensus from economists, financial experts or politicians. Simply stated, it appears to us that we are throwing around trillions without understanding with any clarity the outcome, both long and short term.

As the same type of partisan fervor has heated up in California over the past three months, we note very similar arguments as state officials try to come to grips financially and politically with their budget issues. California is currently bordering on insolvency and the financial collapse of the state government. We wonder how far behind our federal government may be.

We believe there is something fundamental going on here that far exceeds typical partisanship. This, to us, is becoming a test of our basic form of government. When "we the people" demand more than can be produced by government, what happens? As a corollary, how can we tell when we have reached the limit of government’s ability to produce, and our demands must, out of necessity, be throttled back?

The second question is perhaps reasonably easy to answer. When government income (IRS revenues and other sources) is less than government expenditures for extended periods, it seems to us we have reached that point. Can anyone dispute that we passed that benchmark long ago and have no idea how or when we can bring our spending back to such a level? This is no longer a partisan issue. It is an issue of the survival of our current form of government and economy.

For almost two centuries, we were a country of limited government and (at least for some) unlimited individual initiative. Perhaps the Great Depression was the motive force to begin to change that model when government began to assume burdens for which, at least in the model of the Founding Fathers, it was never envisioned.

Having whetted the appetite of the public with government programs that relieved the burden of support from individuals and passed it to "society," government has lost the ability to "just say no."

If we cannot find the courage and leadership to control the scope of government, we must be willing to accept the burden of a different form of government. Are we at that point, or at least approaching it, where such choices must be made? We are beginning to think that is the case.

And we have great fear of the consequences of such choices.

I think this is an important video for everyone to watch