The financial world is reeling from another body blow delivered by native son, Bernie Maddof , who stands accused of orchestrating a record breaking Ponzi scheme.
A Ponzi scheme involves paying established “investors” with money taken from new investors to perpetuate a ”business” that does not actually generate promised returns. The only way to prolong the scheme is to continually bring in new investor money. The sham collapses when “management” can no longer bring in new “investors.”
President Bush announced today that he will usurp the ”power of the purse” given to Congress by the Constitution, by giving $14 Billion to the auto industry.
Bush will take money from taxpayers ( investors ) and use the money to sustain two sham companies, GM and Chrysler, which, like Madoff Securities, exist not to enrich shareholders but to sustain the parasitic UAW. In 4 months they will need more cash or they will be forced to declare bankruptcy.
Absent the halo of government benevolence that accompanies all extra constitutional redistribution of wealth these days, what exactly is the difference between White House actions today the actions Bernie Madoff was arrested for?
