You want conspiracy theory? I’ll give you conspiracy theory.

Personally, I saw this coming quite awhile ago. I was probably one of the few that were paying attention when the Bush Administration was trying to enact stricter controls in the mortgage lending industry. By applying the old political axiom that the only time a liberal politician lies is whenever his lips move, I just knew we were in for trouble when Barney Frank said that there was essentially nothing wrong with Fannie and Freddie back in 2004.

The payoff came in 2009. When the ‘mortgage crisis’ solidified; the government rode in as a ‘white knight’; supposedly to protect the people. They didn’t fix one mortgage. Rather; they shoveled billions at the banks in TARP funds, ostensibly to ‘remove’ toxic assets from the financial institution’s balance sheets. Curious; that those toxic assets still remain on the balance sheets of these banks. The TARP money, for the most part, is on deposit with the Fed at one quarter of one percent. So, the credit crisis continues unabated, money has come full-circle back to government deposit, and to the public, the banks look solvent

The only thing that’s really changed is the fact that the banks used to be subject to indirect coercion by the government through laws such as the Community Reinvestment Act. Now that coercion is direct. Congress and the Treasury call the bank CEO’s into a closed room and threaten the boards of these companies if they don’t acquiesce to government demands.

Furthermore; I’m convinced that there would have been some ‘short-term’ pain had we allowed AIG to go under. $185 billion later and AIG is still a sick concern. However; the US government has another level of influence with the financial sector. Has anyone stopped to wonder exactly where that $185 billion has gone? AIG was probably the world’s largest holder of credit default swaps. These are essentially insurance policies on debt. Fannie & Freddie bundle loans into CDO’s (Collateralized Debt Obligations). Banks and pension funds buy the CDO’s, and they also purchase CDS’s (credit default swaps) as a hedge against the CDO failing.

The mortgage industry folds up (see paragraph two) the CDO’s go bad, the funds cash in their insurance, the CDS’s, and AIG goes ‘dead-bug’! This action poses two opportunities. First it is license for House Democrats to demonize “Those greedy capitalists.” giving Congress and Treasury the opening to exert direct control over another aspect of the financial markets. Second, all these private investment concerns should now implicitly realize exactly who (read government) saved their bacon with their customers.

An ancillary prospect of all this meddling is that the ‘manufactured’ credit crisis would logically trickle down to effect shorter term obligations. They (Congress) knew it would. As short term credit dried up, auto sales plunged, putting the final nails in the coffins as two of America’s largest manufacturing concerns watched sales plummet 45% or more. Anyone who has been paying attention for any length of time has known for quite awhile that both GM and Chrysler were teetering on the edge. They just needed a proper push.

Bank bailouts became auto bailouts, and within weeks of taking the government proffered funds; POTUS personally dismisses the CEO of GM. As the government began the restructuring of Chrysler, it had two goals in mind. Directly influence the future ‘shape’ of the company, and ensure that union contracts; especially those relating to pension and benefits, were held sacrosanct. This is why out of twenty persons on the government’s Auto Task Force, none of them have any industry specific experience. Hell; only three of them have ever owned a car! These are just the right people to be telling these auto manufacturers what types of cars to build in the future. This was also why the UAW never made more than a token effort at negotiations. Why agree to give up anything when the person really pulling the strings was the recipient of over $35 million of your campaign contributions last year. POTUS was certain the he could get the banks to kick their investors to the curb because they owed him money. He was also certain that he could get the other investors who held secured loans against the hard assets of Chrysler to take a 70% haircut because of the ‘protection’ he had offered previously (see paragraphs four and five).

He was shocked when the lenders failed to cooperate. He commandeered national network time to excoriate them as ‘vultures’. He insisted that they ‘sacrifice’ for the greater good. When they refused, Chrysler went into ‘pre-packaged’ bankruptcy with the federal government using its influence to attempt to get the UAW standing in front of the secured creditors, turning 100 years of bankruptcy law on its head!

The secured creditors of GM saw all that happened and were happy to take the required 65% hit to their collective bottom line after seeing what the federal government had done to the Chrysler investors.

Credit is still tight; unemployment is now at 9.4% and fixin’ to climb when another 100,000 lose their jobs during the closing of the Chrysler and GM dealerships. The only difference from this point in time and the 2008 election is; now the US government owns America’s largest insurance company, 25 banks, two auto manufacturers and another $1.5 trillion in debt.

Currently, the Congress is debating on how best to seize control of 1/7th of the US economy through the enactment of a mandatory single payer health care system. On another front, cap & trade is currently being bandied about. When this is enacted, I suspect it will be only a matter of time before an energy company is purchased by the federal government with taxpayer bailout funds. That will be the “Trifecta”! Government will own the banks, the major manufacturers, and energy. They will be able to guide the futures of all these areas according to their vision. A super-majority in Congress will ensure the passage of Card-Check guaranteeing the unionization of a Wal-Mart near you.

All that has happened, and all that may be predicted from it, will continue to put the squeeze on the economy. Credit will remain tight; investors will continue to sit on the sidelines as they cannot be assured that the government won’t ‘take over’ their investments. The public will discover less choice in health care and the type of car they drive as government begins to ‘force’ more unappealing choices on the American people in these areas. Prices will skyrocket. Energy will become much more expensive. As will many other things. I wonder how much the average weekly grocery bill will have to go up in order for Wal-Mart to pay future union demands for salary and benefits. Unemployment will settle at @ 8.6% if we’re lucky; about that of the EU. But the liberal vision will be realized; we’ll all be the same, because we’ll all be poor and beholden to government to partially ease the pain of our lives.

Not a pretty sight, unless you’re a liberal holding the levers of power. For them it will be Nirvana! They’ll not only run it all, but will have license to ‘exclude’ any individual or group that fails to play ball. What can men of good conscious do? 233 years ago the path of our Founding Fathers was clear; secession may be Liberty’s only hope.