Fed projects foreign workers help fuel more bailouts spoof

July 28, 2009

Ben Bernanke, known as Chinese Ben around Princeton, testified to Congress on the need for more foreign workers to take jobs Americans want to do and take salaries Americans want to earn.

Dem in Chief:  But won’t that cause more mortgages to default?

Ben: We can replace those mortgages.

Dem in Chief: You mean those are mortgages Americans don’t want to pay?

Ben:  Now you are thinking like an economist.

Dem in Chief: But aren’t those mortgages Goldman wants to get paid on?

Ben: That’s where taking over FNMA and FHLMC come in.  Goldman only owns mortgages from them.  It sells mortgages insured by others.  We have nationalized FNMA and FHLMC so every mortgage that defaults because an American lost his job doesn’t hurt Goldman.

Dem in Chief: But what if Goldman sells a credit default swap on the mortgages of some other issuer.  They do that don’t they, for the huge fee?

Ben: Of course, but we have that covered.

Dem: What’s your plan?

Ben: We own AIG which has backstopped the credit defaults GS sells.  When GS sells a credit default swap on a mortgage pool not insured by FNMA or FHLMC or beyond the reach of fed bailouts —

Dem: Is that possible?

Ben:  We pretend it is when we have another more convoluted way to save Goldman.

Dem: More sneaky?

Ben: At the fed we don’t say sneaky, we say rational expectations of fed action to support the banking system.

Dem: So go on.  How do you save Goldman this time?

Ben: We pay off the credit default swaps AIG issued to Goldman.  So Goldman is made whole.

Dem: But what about new credit default swaps.  Isn’t Goldman doing that?

Ben: They have another patsy.

Dem: Who?

Ben: Wait for bailout 2.

Dem: How do you distinguish where bailout 1 ends and bailout 2 starts?

Ben:  For me to know and you never to find out.

Dem: That’s what you call transparency?

Ben: Now you are thinking like a Goldman man.

Dem: I’m reading this stuff at Vdare about no net new jobs for 5 years.

http://blog.vdare.com/archives/2009/07/28/jobless-recovery-no-net-new-jobs-for-the-next-four-or-five-years/

Ben: You mean you read that at WaPo don’t you?  You don’t actually read Vdare.  You just misspoke.

http://www.washingtonpost.com/wp-dyn/content/article/2009/07/15/AR2009071500997.html

Dem: My constituents read Vdare.

Ben: I thought you were from the North someplace.

Dem: They read it there too.

Ben: Not at Princeton.

Dem: Not everyone went to Princeton.  Also you might be surprised.  There are secret white societies at Princeton.

Ben: Not when I was there.

Dem: You might be surprised.

Ben: Sotomayor went to Princeton.  She will clean it up.

Dem: She will try I hope.

Ben: She goes after Italians, so she shows she is going after New Jersey.

Dem: Don’t say that too openly.  A lot of my voters are Italians.

Ben: Still?  I thought the Dems were now independent of the Italian vote.

Dem: We need some more immigration and then we are.

Ben: Well the fed supports replacement immigration.  We replace the mortgages that default from replacement immigration.

Dem: If Goldman somehow is on the hook for them.

Ben: Exactly.  You think like an economist trained at Princeton.

Dem: Or president of Harvard.

Ben:  That too.

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