Great new ad from the Obama camp:

My good friend Joe Costello sends an email:

John Thain, Kenneth Lewis, Dick Fuld, Hank Paulson, Ben Bernanke, Robert Rubin, Sandy Weill, Alan Greenspan, and let's not forget the Clintons, indeed, the list is quite long. In fact, you could stand for weeks beneath Washington's statue on the steps of Federal Hall, armed with several containers of lipstick just unloaded from Shanghai, and attempt to cover the faces of everyone walking past, and still be unable to dress-up the flatulence and gluttony of the animals mired in Wall Street's slop.

Squealing like a stuck pig might be more appropriate. Day after day, squeals of panic rise from the former august institutions of finance. So, this is how the Age of Neo–Laissez Faire ends, not from popular disgust, but with trembling fear and pleadings for Federal help from Wall Street's former masters of the universe. We are witnessing the deleveraging of what the financial press likes to call the “shadow banking system,” and this is fast threatening the banking system -- if one can tell them apart.

Another Sunday, and as we have now come to expect, more bad moves by the Fed and Treasury. Two very important things happened yesterday. First, Bank of America, one of the nations largest banks, was allowed to takeover Merrill Lynch, one of the nation's largest brokerages. The financial press talked about how great an idea this was because B of A had such a large “deposit base.” Isn't that great! What they're talking about, that deposit base, is your bank account. Yes, the federal government just allowed the deposits of millions of Americans to now directly prop up the stock market and tons of other worthless paper.

Secondly, the Fed announced it would now accept, not only Mortgage Backed Securities and other “exotic” valueless paper as collateral, they would also accept equities. Since March, when the Fed opened its window to investment banks in an attempt to prop-up not just the financial system, but the stock market, the Fed has swapped 2/3 of its Treasuries for worthless paper. By accepting plummeting equities, the last 250 billion of Fed assets will not last long.

This leads to many existential financial questions. Can you swap Fannie and Freddie equities with the Fed? Can the Fed become insolvent? Finally, just what exactly does full faith and credit of the Federal government mean when the Federal government is 10 trillion dollars in debt? Faith is being shaken -- “I know that thou canst do all things, and that no purpose of thine can be thwarted,” so believed Job anyway.

What we are witnessing is the results of the damage to our system of self-government caused by the last century's complete disregard for a fundamental democratic-republican tenet – separation of powers -- not simply, separation of powers in the architecture of government, but in our social and economic systems, the entire body politic. The concept of “too big to fail,” that an institution must be saved for the health of the system, is anathema to any republic. How can a people, who overthrew a monarchy, the single greatest institution of the day, now accept “too big to fail” as reason for any course of action?

The sickly condition of our republic is self-evident, but we are quickly approaching an even graver condition. With a series of bailouts and unprecedented entwining of the federal government with financial and corporate power, we are fast locking into place permanent decline. We are institutionalizing the status quo and making it impenetrable to forces of healthy change. We are creating ever bigger pigs. The antithesis of “too big to fail” is to begin a restoration of this republic by bringing the troops home and closing the bases across the globe, taking government power out of DC and placing it in cities and counties and connecting them in a distributed network, limiting the size of any economic entity, and resurrecting the citizen.

Technorati Tags: economy, politics, elections.