The Captive American

File this one under “Y,” for “You Couldn’t Make This Stuff Up If You Tried.”

Remember back in October of last year when Hank Paulson said he needed three-quarters of a trillion dollars in taxpayer money to buy up “toxic” mortgage bonds RIGHT NOW! or the economy would crash, the terrorists would win, defenestrated bankers would rain down on lower Manhattan like Armani-clad hailstones, Santa Claus would stop paying his elves, and we’d all get socks and underwear for Christmas?

And remember all the sturm and drang in Congress that followed? The back and forth, the endless partisan posturing, the amendments, the 24 hour media panic over it?

Okay, good. Now remember how, days after Congress finally handed over the cash, Paulson cried “psyche!” and decided to spend the money nationalizing our banking system instead of buying up worthless bonds?

Did you ever wonder what happened to all that subprime paper and why Paulson decided he didn’t need to spend our tax money on it after all? We did. And now we have our answer. Paulson didn’t have to pay for it because the Tweedle-Dum to his Tweedle-Dee, Fed Chairman Ben Bernanke, was planning on doing it for him.

But don’t expect much media notice or congressional handwringing over this new Wall Street rescue. Big Ben says he ‘don’t need no stinkin’ Congress’ to authorize his bailout. All he has to do is run off a quick $500 billion in new money himself. From Bloomberg:

That’s comforting. Our government “plans to create” half a TRILLION dollars out of thin air to buy a bunch of bonds no one else wants to own. But don’t sweat it, say Ben and his boys, we’re only going to buy the good bonds that no one else wants to own:

To recap: the Fed is going to use its newly minted money to buy up worthless junk. But that worthless junk will be guaranteed by trustworthy agencies like Fannie Mae and Freddie Mac. Gee. What could go wrong with that plan?

To top it all off, Bloomberg informs us that the Fed has hired Goldman Sachs–that’s right, that Goldman Sachs–and three other Wall Street firms to help it decide which bonds it should buy and to manage its holdings.

Let’s see, Goldman Sachs, Fannie Mae, and Freddie Mac. Three of the biggest players in bringing on the economic collapse. Who is Bernanke going to hire next? Bernie Madoff? And, seriously, is the entire financial oversight apparatus of our government now primarily dedicated to the health and welfare of Goldman Sachs?

The other day, we posted on the pride of Illinois, newly-appointed senator Roland Burris and the marble mausoleum he’s already constructed for himself. As far as we know, at least Burris paid for this homage to his own self-love out of his own pocket. The same can’t be said for New York Rep. Charles Rangel. The cash for the monument he wants to build to please his, er, monumental ego is coming out of our pockets. From Time magazine:

Rangel has been in office since 1970. When someone questioned the wisdom of an elected official spending taxpayer money on something named after himself, he gave us all a glimpse at the inner workings of the career politician’s brain:

This is how these lifetime leeches think. They spend decades on the public dole, spending the public’s money. Eventually, the line starts to blur and they start seeing our money as their money. Rangel is an extreme example of this phenomenon, but he is far from unique.

BTW: Rangel’s item is part of Time’s Top 10 Outrageous Earmarks in 2008. Amazingly, his only rates second place!