Originally published on The Agonist

The US economy is on the road to recovery, right? That’s what all the economists and financial analysts say. Unemployment has dropped down to 8.3%, unemployment claims are now at a level last seen in 2008 before the economy fell off a cliff, almost all the TBTF banks have just passed the recent Fed stress tests and are now allowed to use their excess capital to pay dividends and buy back their stocks, inflation is tame if you go by official government statistics (especially core inflation that the Fed loves to look at because it removes the effects of food and oil price increases), and finally all major economic indicators are flashing green lights.

So why is Ben Bernanke saying that zero interest rates and his endless stream of quantitative easing programs are still essential? You would think the Fed would grab at any opportunity to pare back its balance sheet and restore interest rates to a more normal level. Several Fed officials have asked that same question. When Ben Bernanke was giving his speech yesterday in defense of his policies, Philadelphia Fed President Charles Plosser was giving an entirely different speech arguing that central banks should not have unlimited authority to expand their balance sheets, because all that does is enable their governments to rack up larger deficits. Another Fed President, Richard Fisher of Dallas, has said QE3 is unnecessary and is simply not going to happen, no matter what Wall Street wants.

Traders in New York this morning were greeted with this happy headline from The Wall Street Journal:

US Stock Futures Higher; Buoyed by Greece

Yes indeed, the Dow Jones index is set to open at least 70 points higher because the Greek parliament approved the additional austerity measures demanded by the European Union, the European Central Bank, and the International Monetary Fund. In exchange for €130 million in a second bailout by the “Troika”, as the three lending institutions are called, Greece will have to cut its minimum wage by 22% and the government will have to lay off an additional 150,000 workers. This is in a country that is in its fifth year of recession, with an official unemployment rate of 21%. Business has virtually collapsed, with many private sector companies on the verge of bankruptcy. The health system is so starved for funds that a bacteria resistant to all medicines is raging through hospitals, forcing the chronically ill to decide whether to even risk seeking professional care. Poverty is reaching extreme levels and is well-entrenched among what used to be the middle class. Children are sent to school so hungry that they are fainting in the classrooms. As of last night, the crowds that were storming through Athens and other large cities no longer were content to throw rocks at the police; Molotov cocktails were used to set at least forty buildings in Athens on fire. The police in Athens, facing crowds estimated from 80,000 to 100,000 people, were forced off Syntagma Square, and appeared to have run out of tear gas. Journalists described the business center of Athens as a war zone. The country is slipping into social disorder, if not anarchy. But stock markets in Europe were up today on the happy news that the Greek parliament approved the additional austerity measures.

I was telling someone earlier this week about my good friend Newt Gingrich. You didn’t know he was one of my friends? Neither did I, until I saw his television commercial attacking Mitt Romney for being a vulture capitalist. For at least five years, a lot of us in Leftist Blogoland have been decrying the equity extraction and asset stripping practices of people like Mitt Romney, the former CEO of Bain Capital. We’ve been joined in this crusade by writers with libertarian beliefs, and some of them, like Karl Denninger, are far more direct than we have ever been in calling a crime a crime, and demanding prison terms for the people who helped destroy America’s productive manufacturing base.

Now we have Newt Gingrich challenging Mitt Romney’s claim that he was a venture capitalist, creating jobs while he saved companies from certain bankruptcy. Newt sees it differently; he asks in his ad if it is acceptable for someone to come in to a community, manipulate people’s lives for the worse, and “walk off with the money.” Others have joined in on the Mitt Romney bashing. Ron Paul has said that the business practices of people like Mitt Romney have nothing to do with free market capitalism, and it was Rick Perry who has come up with the phrase “vulture capitalist”.

I was nine years old at the time. We were in school one morning when our teacher was called away. This was a very unusual occurrence. We sat quietly waiting, and when teacher returned, she was crying and shaking uncontrollably. All of us were worried and confused – teacher had never acted this way before. In fact we had never seen any emotion from her at all. “What has happened, teacher?”, someone called out. Sobbing, she replied – “Children, Great Teacher has died!”

It was as if you pushed a button in the room. Instantaneously all of us burst into tears, with many of us wailing “What is going to happen to us? Who is going to take care of us? How will we live?” It never occurred to any of us that our parents or some responsible adult would take care of us. From the moment we were aware of the outer world, we understood that all that was good, beautiful and intelligent in the world came from Great Teacher.

There is a story that appeared yesterday in The New York Times that would have been worth reading if it had been published five years ago. In the article, the reporter, Edward Wyatt, analyzes the propensity of the largest financial institutions to violate securities laws despite having previously violated these same laws and made promises to the Securities and Exchange Commission never to violate them again.

The New York Times has a portentous way of writing such stories, as if the information they have uncovered is revelatory if not earthshattering. Case after case is presented, experts are interviewed and asked to provide analysis, and some weighty conclusions are reached. Readers should be left with at least a slight feeling of outrage that such things have been going on in high finance.

As an ex-subscriber to The New York Times, I too have been outraged by such stories, but not because I read them in the paper of record, which is not simply very late to the game of reporting on this phenomenon - it is too late. I’ve been outraged by these stories because I have been reading about this for years on internet blogs. Some of the most persistent reporters and analysts who write about this problem include Glenn Greenwald at Salon.com, Yves Smith at the Naked Capitalist blog, and Karl Denninger at the Market Ticker blog. All three of these writers have no doubt lost some readers over the years because they write about these stories over and over, and manage to maintain a sustained fury over the debasement of the rule of law that is evidenced by the way the big banks operate, and the inability or refusal of the government to do much about it.