Transcript: Thom Hartmann: The Big Picture: The Holes in the Economic Dam can't be plugged anymore, 25 April '11

This week - the Federal Reserve is expected to announce that it’s winding down its efforts to jump start our economy

And despite trillions of dollars of cash that the Fed has secretly lent out - and hundreds of billions of dollars of debt purchased - economic growth is still painfully slow - jobs are still nowhere to be found - and more and more economists are starting to worry that America will slide back into another recession

As an article yesterday in the New York Times headlined - “Stimulus by Fed is Disappointing.”

So why didn’t the Fed’s strategy work?

It didn't work because there’s really not much the Federal Reserve CAN do

It can lower interest rates - but right now - interest rates are close to zero - so that’s off the table

It can buy up huge amounts of debt - what’s known as “quantitative easing” - which basically unleashes a tidal wave of money into the economy

In the last few years - the Fed has done this twice - most recently dumping $600 billion into our money supply at the end of last year

This helps banksters on Wall Street - but doesn’t do jack for people on Main Street

And finally - the Fed can open up a secret lending window and give away trillions of dollars with practically no interest

This is what they’ve been doing for years now - giving away massive piles of cash to the biggest transnational corporations in the world - foreign banks - and even ruthless dictators like Moammar Gadhafi

That’s right - the Fed gave Gadhafi’s bank $3.2 billion in 2008

3 years later - we’re bombing the guy - don’t ask me how that stimulated our economy

The Fed also gave out a quarter of a billion dollars to a couple of wives of some Morgan Stanley banksters

As Matt Taibbi pointed out in a recent Rolling Stone article - Christy Mack - the wife of a high profile bankster on Wall Street - John Mack - was given $220 million by the Fed to prop up an investment firm that she and her friend Susan started up

Neither of the two women had any experience in finance - yet the Fed figured they were a safe investment and threw a boatload of essentially free cash at them

And all of this - all the secret lending to major foreign corporations - dictators - and Wall Street wives - would have gone down in complete secrecy had it not been for the efforts of Senator Bernie Sanders to make the Fed open up their books - and let us - the taxpayers - take a look

So are you still wondering why the Fed’s actions aren’t fixing our economy?

Let’s imagine for a second that this Wall is keeping our economy from collapsing - think of it as a giant dam

But this dam is starting to crack - and holes are starting to form due to all the pressure behind it - the pressure of joblessness - massive student loan and credit card debt - millions of home foreclosures - rising healthcare costs - enormous trade deficits - all the things that are pushing our economy to the breaking point

Now think of Fed Chairman Ben Bernanke as the little Dutch boy with his finger in the dyke

All he can do is plug up some of these holes with money - that’s all the Fed can do is manipulate money - that’s it

Plug up a few holes by buying up debt

Plug up a few holes by giving away a trillion dollars to banksters on Wall Street

Plug up a hole by giving a few billion to Gadhafi

Plug up a hole by giving a quarter billion to Christy Mack and her buddy Susan who feel like gambling with our money in an upstart investment firm

But with each hole that Bernanke plugs up - the pressure is growing and growing - and sooner or later - Ben Bernanke’s fingers won’t be able to prevent the dam from collapsing

We can’t keep plugging the holes - we need to either do something about the pressure building behind the dam - or rebuild the dam back to where it was before Reaganomics started drilling holes into it

The Fed can’t do that stuff - it only can mess with the money supply

To fix the structural problems - to address why the dam is cracking to begin with - and how we can go about building a new - stronger dam - Congress needs to step up

We need to start helping people on Main Street - and try to relieve some of the pressure on our damn

Help people stay in their homes - throw out a lifeline for the unemployed - close corporate tax loopholes that allow companies to ship US jobs overseas by the millions - get our students out of debt and into a job

But more importantly - to fix the problem for good - we need to build a new dam

A dam with the solid foundation of a protective trade policy that allows US industries to prosper and not have to compete with cheap labor around the world

A dam pieced together by a reasonable tax policy that helps grow the middle-class and not just the top 1% of wealthiest Americans - or just the 400 oligarchs

A dam that's not dependent upon the military industrial complex and endless wars around the world

A dam that's agile and can bend and move according to the pressure behind it - in other words - a dam built by lawmakers who know what's best for America - and aren't afraid of telling big corporate donors "No"

We need to give Ben Bernanke a rest - and call on Congress to fix our economy by rolling back Reagan's insane taxing and borrowing policies, and Clinton's failed so-called "free trade" policies

It's the only way to keep our nation from being washed away when the dam finally bursts

That's The Big Picture

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