The Secret Federal Government Capitalist System

Trading on information is the lifeblood of the capitalist system. Successful stock analysts and mutual fund managers are the rock stars of the financial world. In recent years, large hedge fund managers have been elevated to superstar status. So where does this market savvy come from?

The Federal Reserve: The Biggest Scam In History

Last week, CBS News’ 60 Minutes had a story that exposed the insider information being dealt in the halls of congress. While the headline was about members of congress who profited from insider deals, the story also mentions the industry of “political intelligence” that profits on inside the beltway information. The funders of this industry are the hedge funds and Wall Street traders.

The next group to profit from insider deals were large US and international banks through a secret loan process set up by the Federal Reserve. The banks pocketed $13 billion in profits from $7.77 trillion in loans guaranteed by the Fed during the financial crisis.

Finally, Treasury Secretary Henry Paulson had a meeting with hedge fund managers and Wall Street insiders where he discussed a plan to put Fannie Mae and Freddie Mac into “conservatorship”. This would have been fine except that Paulson had pubicly signaled confidence in the finances of the two institutions.

This all points to a system where insiders get preferential treatment from the Federal government. This system known as “crony capitalism” has diminished our faith in free markets and government. This is probably the one area where the Occupy movement and the Tea Party agree.

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2 Responses to The Secret Federal Government Capitalist System

  1. I agree. When the government and businessmen become a corrupt ball of one-in-the-same all of the rules of a capitalistic environment go out the window.

    The old rules of free markets where the government promote fair play no longer apply when it is the government breaking the rules…

  2. I agree. The United States government is widely corrupted. The power of the federal government needs to shrink and the FED needs to be abolished so that this type of injustice stops.

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