The Great No Inflation Hoax

Kevin Phillips, HuffPost

Americans are now beginning to understand that the
government's vaunted Consumer Price Index has its own share of gimmicks not
unlike a sub-prime mortgage or the six pages of fine print that accompanies
your credit card agreement.

Wall Street Socialism
I am talking, of course, about the collectivization of financial risk being
promulgated by the Federal Reserve Board and the U.S. Treasury Department and
applauded in pin-striped precincts from Park Avenue to Pacific Heights.
Described as Wall Street Socialism by the gauche and more precisely identified
as the "socialization of risk" by sophisticates, the new fashion
leaves the profits of finance in private hands as of yore. It is only the
"risk" -- of collapsed currencies, flawed speculation, busted hedge
funds or the greedy misjudgments of large banks or brokerage firms -- that is
quietly taken up by government entities and all too often shifted to taxpayers
who do not understand the pompous phraseology but know full well that
Washington will never bail out their hardware store or the widget plant where
their son works.
This has been going on for decades -- a major reason why finance has grown
and prospered so much compared with most other industries. But it's only been
so boldly and shamelessly embraced in the last few weeks. The Federal Reserve
insists that "inter-connections" require rescuing large institutions
that might knock down other entangled financial dominoes. However, these would
not have been so cocky or so inter-connected in their web-spinning if the Fed
had not allowed so much greed and gamesmanship for so long. Ex-Fed Chairman
Alan Greenspan is often singled out as a culprit, but most of what he did was
what most of the financial sector wanted. They, too, loved making 4th of July
speeches about the glories of free enterprise and free -- market profits while
counting on the government to collectivize the perils of risk. Big, fat and
dumb financial institutions could count on being big, fat and bailed-out.