When Being Rich Makes Us Poor, People Should Occupy Wall Street
from Dean Baker
The Very Serious People in Washington are busy trying to find creative ways to cut Social Security and Medicare and take other benefits from middle-class and moderate-income families. The refrain here is that we just can’t afford this level of generosity any more.
There are two parts of this story that should drive the rest of us crazy. And it is difficult to determine which one is the more infuriating.
The first is that we know that many people in this country are fabulously rich. And as Elizabeth Warren beautifully reminded us, none of them did it on their own. But Professor Warren is actually far too generous in her account.
While some number of the wealthy may have succeeded by working hard and being smart or creative, many of the very wealthy got their money directly or indirectly through the big hand of the government tilting the playing field in their direction. Their hard work involved rigging the rules to ensure that they ended up on top.
Nowhere is this better seen than on Wall Street, which is chock full of multi-millionaires and billionaires who got to the top by taking advantage of items like “too-big-to-fail insurance” for their banks, gambling with government-insured deposits, ripping off state and local governments on pension management fees, and of course the trillion dollars in bailout bucks given at interest rates that were way below market levels. These people know the role of government very well, even if they pretend this is all about a free market.
But the banks are not the only ones who rig the rules. The drug companies profit enormously from government-granted patent monopolies. Drugs are generally cheap, that is why it is possible to buy hundreds of generic drugs for $5 or $6 per prescription at chain drug stores. Drug companies are able to charge hundreds or even thousands of dollars for prescriptions because they have patent protection. As a result we spend close to $300 billion (at $1,000 per person) a year for drugs that would cost around $30 billion a year in a free market.
The government rigs the deck for the rich and powerful in other ways as well. Under the current enforcement pattern in labor law, the government comes down like a ton of bricks on any union that breaks the rules – for example by having an unlawful strike. By contrast, companies get away with a slap on the wrist for even the most flagrant violations of labor law.
Our trade policy was designed to put downward pressure on wages for the bulk of the country’s workforce by putting them in direct competition with low-paid workers in the developing world. This effect is exacerbated by the over-valued dollar. Meanwhile, those in relatively privileged professions, like doctors and lawyers, remain largely protected from international competition.
The list of ways in which the wealthy have structured the rules to ensure that they stay rich and get richer is lengthy. But the fact that the Very Serious People are looking to cut Social Security for the elderly and Medicaid for the unemployed at a time when Countrywide’s Angelo Mozilo and Citigroup’s Robert Rubin are still immensely rich is only the first reason that the public should be furious at those in power.
The second is the cause of the current downturn. The reason that we have 26 million people unemployed, underemployed or out of the work force altogether is not that we are poor, but rather that we are rich. The immediate problem facing our economy is not one of too few goods and resources; it is a problem of too little demand. And this is what should make the Wall Street Occupiers and everyone else absolutely furious at our leaders.
If people had more money in their pockets, then they would buy more goods and services. Companies would then hire more people to produce these goods and services and we would then have more jobs. The unemployment and poverty that the country is experiencing today is overwhelming the result of a failure of political will.
If the federal government increased spending on infrastructure, gave teens jobs cleaning up their neighborhoods, gave state and local governments the funds to keep teachers and firefighters employed and encouraged employers to shorten work hours rather than lay off workers, we could quickly get the economy back to full employment. Economists have known this story for more than 70 years, but somehow creating jobs doesn’t rank as high on the priority list in Washington as cutting Social Security and Medicare.
In short we have an economic system that, even when it is working, has been rigged to redistribute income to rich. And we have a political system that at a time of immense economic distress is more focused on undercutting the means of support for working families than fixing the economy. It is hard to understand why everyone is not occupying Wall Street.
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Dean, this is yet another great distillation of symptoms ofThe Problem. Unfortunately, it is no longer hard for me to understand why there is still no mass movement for taking the cure. The roots of The Problem go far deeper than the symptoms. Since we have a deficient paradigm with a deficient & warped concept of wealth; and an apparently total lack of understanding of “value” and credit, how could there ever be a serious reconsideration of The Problem? We, the vast majority lack the basic elements of deep understanding.
Even “fixing” the American money system will, on its own, fail to turn the rising tide of pervasive corruption, greed, sociopathic narcissism, apathetic bewilderment & numb complacency ensuring the sustainability of the causes.
As long as we the sheeple are clueless about the importance of integrity, ethics, empathy, compassion, and their relation to karma (the universal law of interdependent interaction), then “we” (as a whole) will remain vulnerable to a replay of Plutonomy, the world game AKA Demonocracy.
Why are the elite Plutocrats & their minions doing all this infuriating stuff?
For the same reason they set up the good Germans after World War 1 & Club Fed’s global Great Depression.
Still, if it’s not just rehabbing & cleaning up the game board, you might wonder, where’s the prescription for The Cure?
A real & sustainable cure requires a pervasive paradigm upgrade. We need a new system of values based on what is positive, healthy, good for people, culture & the biosphere. We can start a nonprofit transistional credit system that rewards people in direct proportion to their real, positive, healthy, enjoyable contributions to other people, to civilization, to the biosphere & future generations. How could it possibly work? You think it too wildly fanciful or unrealistic?
Well, incredibility, implausibility, infeasibility, and total unreality never prevented or stopped the Fed or any other phase of plutonomy over it multi-millennial ascention (or descent into hell, depending on your perspective). In fact, the Shadow “Banking” system keeps its largely hidden ocean of derivatives swirling (for the sake of sheer liquidity) not because of any real, tangible, intrinsic values. In fact, we all may as well agree that the whole maelstrom of virtual liquidity keeping the Big (con) Game going is truly insolvent. It’s also based on disvalues that guarantee corporate opposition to sustainability, which in the current system of disvalues is counter-productive, anti-growth & anti-profitable. Several wakeful observers have noticed that (in general) the worse the ecocidal atrocity, the greater the rewards & accolades for the corporate Perps.
Jared Diamond has convincingly shown that societies, we people, decide either to fail & fall or succeed and thrive (despite former episodes of ecocidal mania and/or ignorance). The Cure will start with each of us choosing to foster collective success. That starts with healthy, biocentric values, compassionate wisdom, and nondual ethics, which will require a commitment to self-honesty, realistic modesty (appropriate humility), and loving respect for life, nature, people, and other animals.
How much worse must it get before we choose not to fail, not to let human culture (us) destroy itself (ourselves, possibly, all of us)? Is there some real, valid excuse for not starting The Cure — and the nonprofit cooperative community credit system we need to empower the transition to a healthy, sustainable future?
Dean, You are good. Have just discovered your body of work through RWER. The problem is all of these financial outrages that you so expertly describe are “second effect ” problems.
The underlying problem is that the money does not work. It does not work for three reasons:
1.In a fair economy money can not be created as a loan with the interest being paid to some privileged group. You can’t pay a loan with another loan in a fair economy.
2.Money can not be allowed to be accumulated through the process of compound lending.
3.Lent money does not automatically go to the most productive transactions in an economy. There is an opportunity cost of lending. The choice is: Is the lender going to be paid for the use of “Their” money or is the producer going to get paid the actual value that someone will bid for his product. You can”t have both. Get paid or get credit. That is the choice.
If the money does not work, we are back to the “hobbesian” state of stealing to transfer property. Hence all of the “crimes against society” that you describe.
I am really sorry to see these “occupiers’ running into the machine gun fire of the money interests with no ammunition or backing from the learned economics profession.
Thanks, Robert
Robert, Dean, et al, I hope I’m not coming across as too grumpy, impatient, or petulant, but as a Buddhist, a semi-retired entrepreneur, and survivor of many close calls with death, I can’t believe in time. So, a certain urgency is 2nd nature. Forgive any seemingly deliberate slight or offense. I harbor no contempt of people.
Ego demons and bad ideas are fair game though, and we’re all serious adults here, right? So, if you see any coming via me, blast away!
Anyway, while I agree with the intent of the above posts, as Robert points out the “2nd effect problems” mentioned (which I called symptoms) are just that. Yet, the uses of terms describing Robert’s 3 main “reasons” seem based on notions springing from secondary principles, instead of causal principles.
For instance, the first causal principle as I see it is stated first, “the money does not work” and that means that what passes for money is not money. If a money system is not viable, it is not valid, i.e., not money. In asserted “reason” # 1, “money” is used as a synonym for currency, whereas money is the system not the currency, the tangible media of exchange. As long as the masses are kept confused about the nature of money (the system) and currency (the media) they will remain vulnerable to thinking of “money” as a commodity. The whole legion of financial demons are spawned from & feed on that basic mistake.
Re: reason # 2, money (the system) can never accumulate, especially not via the financial “miracle” of compound interest nor via multiple loans upon loans. Those aberrations can only occur in a perverted system, which we agree does not work, is disfunctional, invalid. What remains is a pseudo-money system that makes currency a commodity for the sake of legalized fraud. So, financial literacy, economic justice & real equity (fairness) begin with the epistemics, semantics, and mechanics of money.
Re: reason # 3, Let’s consider the specifics:
> 3.1 “Lent money does not automatically go to the most productive transactions in an economy.” 3.2 “There is an opportunity cost of lending.” 3.3 “The choice is: Is the lender going to be paid for the use of “Their” money or is the producer going to get paid the actual value that someone will bid for his product. You can”t have both. Get paid or get credit. That is the choice.” < Except for the use of the words "their" and "money" in a confabulated way there are some good points here, but they are embedded in the perverse, confusing context of the abusers. What the lender wants to be paid for is the "use" of his/her notional credit, which can only represent contractual obligations based on erroneous notions of money & value assigned to bogus currency. There seems to be a sizable leap from the loan issues to the exchange of tangible goods for bogus financial abstractions involving a complicated system of legalized fraud (Club Fed's fractional reserve banking with fiat currency of floating bogus value in a plutonomy ). Yet, most of us have probably gone over the problems of usury, etc. What though — in this hyper-virtualized derivative credit bubble/plutonomy — is there to get 'paid' with but bogus instrument of credit. What real difference does it make to anybody which kind of bogus credit instrument is used? Right, none, leaving no real choice to anyone outside the inner circle Top Dog elitists, the 1%ers.
Robert, your basic critique of the fundamental injustice and immorality of the plutonomy is right on. I hope you find my attempted upgrades sensible & helpful. I think we should all start going much further, and start making some healthy value jusdgements, calling immoral fraudulently legal abuses of bamboozled victims just plain wrong, bad, and/or evil. We might even start calling for deeper, more extensive investigations, and a truly independent RWE audit of Club Fed. We can surely support the snowballing movement to abolish the Fed, but collaborating on the alternative, a healthy new system is what seems most important & appealing to me.
FYI: When I start seeing the preliminary brainstorming i'll quit requesting & suggesting it.
I learned long ago that for economists anything that happened a year ago is history, ten years ago, ancient history – to be erased from their professional memory –which reminds me that all the patter about protecting the “German” banks is too late. They have already been eaten up systemiclly and by – you guessed it – Anglo-America — after the fall of Communism and the internet permitted the unprecedented expansion of US & UK investment banking.
In Germany commercial banks under pressure started to abandon their traditional “Hausbank” functions Their representatives ceased sitting on the boards of directors of client firms, so that, whereas in 1974 senior executives from German commercial banks occupied over 20 percent of the supervisory board seats in the 100 largest German companies, in 1993 this percentage dropped to a mere 6.3 percent. Simultaneously, German commercial banks started market oriented investment banking practices. Deutsche Bank turned to the UK and the USA to recruit staff well-versed in the methods of capital market financing and it bought Morgan Grenfeld, the British merchant bank, in 1989, and Bankers Trust, the US specialist in hedge funds and derivatives, in 1998. Dresdner Bank acquired UK-based Kleinwort Benson in 1995 and US based Wasserstein Parella in 2000, attempting thereby to expand into the global big leagues of underwriting sales and trading, engaging in merger counseling, and the marketing of financial products. These were heady years (saturnalia meets juvenilia!) for American and British investment managers as they spread out globally from their traditional bailiwicks. But they were not very heady days for the German banks that were really only acting in self-defense, most not succeeding very well.
Probably the most successful transformation took place at Deutsche Bank, but could it be called a “German” bank, thereafter. After DB acquisitions it hired high-profile figures from major competitors. It was listed on the NYSE (2001) and it moved its investment banking headquarters to London. The bank became one of the major drivers of the CDO market, creating 32 billion between 2004-2008 — a case study in investment bank involvement in the mortgage bubble CDO market.
So DB transformed itself between 2003-9 from a German centered organization that was renowned for its retail and commercial presence into a global investment bank less reliant on its tradition market for its profitability, a profitability that included billion of $ paid by the US insurer AIG, including $11 billion from TARP funds.
The Anglo-American finance system was the transformation driver. The German government is trying much more strenuously than the American government to make the German banks absorb some of the losses they have incurred by getting in bed with the Brits and Americans.
Some truth in the article and the comments.But the fundamental fact is that our system is not sustainable.It is inherently fragile and unstable and this is the basic reason for the recurring and ever more frequent crises in the system.
However,the oligarchy (the 1%),being the principal benficiaries of the system,will not willingly give up their privilege or even any part of it.Even a cursory reading of ancient and modern history will make this amply clear to even the most stubborn believer in the status quo.
The only way to deal with the oligarchy is to apply some form of force and pain to the offenders.Only when an effective proportion of the 99% realize this and begin to put words into action will we see some progress.
Thanks Podargus, et al. I think that physical force will inevitably appeal to some activists, as in the Arab Spring movement, but its hard to imagine a coherent global mobilization against the multinational plutocracy & its Oiligarchs [sic]. The Occupy Wall Street trend is very diffuse and poorly informed, of course.
Few of us have a deep enough grasp of the basics to make a cogent case, but theoretically — since there are only 1% of them and 99% of us victims, and many of the children and mothers among the plutocratic elitists, must be about ready to jump ship — violence may be almost completely unnecessary. The 1%ers must be starting to feel alot like the happy upper deck elitists on the unsinkable Titanic as their titanic party was ending — when they realized that the situation was really pretty awful, even for them.
No, it must be much worse, because they painted themselves into their tiny little corner and know that sooner or later an unstoppable majority of us 99%ers are going to know that the 1%ers are the iceberg that ripped into the ship of state. Yet, instead of most of us drowning in locked lower decks or scrambling for anything that will float and plunging to quick deaths in a frigid sea, we will soon be 8,910,000,000 or so mostly pissed off enemies ready for revenge and total regime change.
Let’s try to put ourselves in their pitiful situation. They know better than most of us how much faster everything is getting worse, they get real news. They know that they deserve most of the blame and that it looks as though they (and their family members) will have to pay their karmic debts within the next 18 years or so. How would you feel? What would you do? Pray for mercy or indulge in more drunken, twisted fun, status games, and ecocidal mania out of spite to the bitter end?
I don’t know. I think we’d have to have gone to and through the same perverting extremes to know what the warped, inhumane mind of an ecocidal plutocratic Oiligarch is really like. Really, what is it really like to experience the mental-emotional illness of a Hitler, Stalin, Mao, Pol Pot, Rupert Murdoch, Glenn Beck, Rush Limbaugh, or the 70,000,000 other sociopathic parasites infesting the decaying body of human culture? It seems to hideously hellish for me to contemplate for more than a few seconds at a time. I start thinking of the smell of rotting flesh and recurrent nightmares like the Zombie movies. In this case though, the 1%ers are the real flesh eating zombies and most of us 99%ers are the lively survivors.
But I suggest exorcism and education and therapeutic rehabilitation instead of violent revenge in a destructive rampage. We should let South Africa’s painful, post-Apartheid transition be an example. Naturally, we would want to have an initial round up, indictments of the ring leaders, thorough investigations and diagnoses, followed by a Nuremburg-like public trial for ecocidal crimes against peace, nature, and humanity, equivalent to war crimes for mass-murder and mass-torture. Some will probably need many years worth of diagnoses, observation, reeducation, retraining, and rehab. After all, most of the Top Dog Oiligarchs have probably never done any honest work, nor had many really human relationships, feelings or values.
Back to the main point — when critical mass is reached, and a vast majority is in favor of deposing the Oiligarchs and ending the plutonomy in order to establish a healthy, sustainable culture, we will then be able to convince the 1%ers and their legion of military/police dupes (about 5%) that resistance is futile and possibly fatal. The sooner we get started the less damage ecological and economic damage we’ll have to remedy. Clearly, we have no time to waste.
When people complain, they need to have some clear idea about what to do about their complaint. So far the level of suggestions on this blog run from do-nothing discouragement to “off with their heads,” storm the evil citadel. People don’t seem to know the difference between a “riot” and a revolution. And its the job of the intellectuals to explain that to them. If we stay within the economists bailliwick, we won’t be able to do so. That is why I think the real-world economists need to have lots of people aboard, including historians, like myself. So let the dialogue begin, or continue. We are talking about defining the source of our problems and then seeking remedies short of just rioting. I’ve tried in Confronting Managerialism to do just that and suggested reforms in the concluding chapter. If we don’t confront the institutionalization of the management philosophy from hell that has been spread throughout the world, then we won’t be able to do anything about what is happening to us. It will be like “bread riots” in France before the revolution. The bread riots accomplished nothing, but the revolution got rid of the monarchy and a society based on estates. We have to get rid of a society run by stockmarket speculators and the investor class, casino capitalism. And there are ways this can be done. I think.
Michael, Thanks for your comments . You are right in that it is impossible to describe principles with “symptom terminology”. I will work on describing these things in a more accurate way.
Podargus, You are right in that it has to come to a face to face standoff. I hope it can be non violent. It is not the top 1% that are the primary beneficiaries of the ponzi stock market and the lender created debt. Everyone with any financial investment, pension, retirement plan or income is invested in, and are depending on wall street crime for their payoff. Who is going to tell them the money is not coming. They are depending on spending the pay that should go to the working producer.
The ratio is closer to 50-50.
Robert, Your historical background is appreciated. It is important to learn from history that a lot of meaningless deadly conflict can easily occur without accomplishing anything good.
Thanks, Robert
Re: the latest comments from both Roberts: Great stuff, though RL, if you reread my Green Credit & Commonwealth section of the Greenbook, you’ll see a practical proposal for a truly long-term sustainable alternative to the single-system Casino Capitalism, my hybrid system.
The proposed Cooperative Community Credit System (CCCS) provides a nonprofit alternative to the Ponzinomics of Club Fed for all us relatively simple folk who just want a nice little, modestly affluent life, good education & jobs for our kids, and a healthy biosphere. The CCCS and its Trust Units (TU) will enable that without disrupting Club Fed’s game, in fact, it will enhance it in several ways:
1) liberating all the repressed/suppressed/dormant “human capital”
2) stabilizing sociopolitical & cultural activity with middle class affluence
3) generating more production/consumption, import/export trade, etc.
4) enabling optimum/maximum employment
5) indirectly causing rapid growth in new checking & savings accounts
6) stimulating many new business startups & new job creation
7) acting as a counter-balance to volatility & bubble dynamics
8) saving the for-profit economy & culture without extreme measures
Each of those major benefits are as good for the market economy as they are for the communities that support it, acting as both stimulus and stable buffer for protecting wealth, real value and reserves. The 8th benefit is huge, because the dangers and difficulties involved with any radical attempt at “fixing” the system or worse abuse of 99% of the human race would be very costly for all of us, especially the plutocratic marketeers (all 1% of them).
The CCCS is an effective, virtually cost-free solution, that will enable billions of new bank accounts and many trillion$ worth of real, tangible value, goods & services, as it frees ordinary people from poverty, joblessness, under-employment, ill health due to poverty & malnutrition, deficient education, the negative effects of hopelessness, etc. It will do all that without increasing tax burdens, political quagmires, and counterproductive delays.
Clearly, the Green Star credit system will soon be the new international, nonprofit community credit system that all people and businesses can use for nonmonetary exchange or, simply, to directly reward somebody or some organization for contributing real, life-enhancing value (inspiration, art, healing, humor, joy, etc.) to civilization, or the environment, or other people and/or future generations.
As soon as it’s in use by a few million Facebook users, et al, it will be embraced by most businesses off & online for promotions, etc. Then it will be embraced by VISA, the World Bank, etc…Soon after that, the 4 billion folks now locked out of the debt-money Plutonomy Game will have acquired enough of their national currency (or gold or whatever) that they can open bank accounts for their debt-money transactions, etc.
That process will probably happen in the more affluent, more web-enabled countries more rapidly. I predict exteremely rapid adoption in California, North Dakota, Wyoming, Michigan, Florida, Arizona, Texas, and Hawaii, among other states.
Wanna bet?
PS: BTW, why are “they” doing the Plutonomy Game? The modern template was created during the Pilot Project in Japan. It’s called “a colossal transfer of wealth” from the poor, nearly poor, and middle-class to the exploitive, but very cunning parasites who fleece them, cyclically. What they failed to realize, apparently, is that they triggered the End Game scenario — the inevitably final winding down of Casino Capitalism. If you still don’t believe me, again, just go get your Monopoly set and try playing by Club Fed (NeoLib N-CE) rules.
tick tock tick tock tick tock tick… (time out for a round Plutonomy, the board game)
That didn’t take long, did it? Now, you see. Absurd isn’t it? No fun at all.
It’s truly a wonder it lasted so long. So, let’s not have any more ridiculous nonsense about bogus economics. OK?
In fact, let’s start an organization like Concerned Scientists for the Abolition of Nuclear Weapons, maybe call it Responsible Economists for the Abolition of Notional Weapons of Mass Delusion?
PPS: I glossed and then reconsidered a few things in the main post, especially the prognosis of chronic doom, etc. Peter, you said…
PR: “We are doomed because there will be no resolution any time soon to the division. The clash of ideologies is now crippling.”
Nobody knows when the Plutonomy Game and its subsidiary conflicts will end. Nor can we know for sure whether the damaging effects are curable or not. Nobody knows what “soon” is or how much more time we have to save ourselves from ourselves. Nobody knows for sure that Schon’s Law* won’t kick in to save us.
* FYI: Schon’s Law is the principle (discovered & described by Donald Schon) that makes dysfunctional groups tend progressively toward radical change as the progressively counter-productive effects of negative homeostasis (status quo) become more generally destructive and/or intolerable. Schon found that as any social group, regardless of size, gets closer to total dysfunctionality or in effect opposing or counteracting its purpose or reason for being, it becomes increasingly irrelevant, even to the most entrenched “power” elite obsessed with maintaining the ways and means that caused the problem. The worse it gets, the faster it will get better or fail and disintegrate. Another great discovery by Schon is the tendency of groups to develop a supra-egoic “dynamic conservatism” that seems to give a group a mind of its own, greater than the sum of the parts. In many cases, the agenda of a group pseudo-mind is opposed to the interests of most of its members and the original mission because, in most cases, group agendas drift toward homeostasis as the prime value — existing to exist — regardless of actual success or progress.
PR: “The crescendo of right wing radicalism has reached its peak as the attempt to roll back the New Deal and Great Society has spiked to fever pitch. The right senses the immediacy of this crisis.”
Thank you, Peter. I agree. The Casino Capitalists (NeoFascist Corporatists in stealth mode) have climaxed, shot their wad, blown their minds in the euphoric frenzy of acquisition and spectacular scoring. Yet, though semi-stuporous, they have the keen senses of jungle animals. Like all highly intelligent, omnivorous predators and scavengers, they are not only extremely cunning, they can smell fear, blood, and death from a great distance. It must be something like being the last of the great predatory dinosaurs who looked around after one of their last big feeds and sensed something was very, very wrong. Despite the scent of all that blood and death, there wasn’t much around to see or chase or eat, except each other; and there were all those fast little rodents and weasels eating their eggs…
PR: “The mess created by our binge of debt and the extraordinary stupidity and greed of our banks has opened an opportunity to fulfill every right winger’s dream: smash social programs and let every citizen fight for themselves. This they call individual freedom.”
The analogies breakdown, but the 1%ers and their minions are pathetically out of touch with the changes that they engineered. The sleeping giant, the 99% is waking up, hungry, and mad as hell, but this is not pre-Nazi Germany, prepped for tyranny by Club Fed’s first Great Depression, and this is not the 1930s. The vast majority of us sheeple now understand the basics of the game, we’ve all seen enough of the pattern, the cycle, and who runs it.
PR: “It will devolve further into plutocracy. It always does. Which is why our ancestors fought so hard to establish a democratic system to offset the concentration of power and wealth that inevitably accompanies unfettered capitalism.”
We, the sheeple, have been repeatedly fleeced by the plutocracy in stealth mode for decades, Peter. But again, this time is not like other times. Time is not an arrow, and history is not a circle. The illusion of time and history are more like an infinite double helical vortex, spiraling through creative evolution. The Top Dog exploiters stupidly thought that they would be able to control the 99% of us with computers and electronic gadgets for their police surveillance state, but that was another Pandora’s Box, with a twist in our favor. Among other things, it accelerated our natural distributed learning process while exposing us to many more paradigms and models of reality than we would have encountered otherwise. So, most know or are rapidly realizing that “unfettered capitalism” is a negative game that always runs down to a painful End Game in a world rigged for a corrupt society. Democracy was a nice idea, but it has never been a substantial defense against the “soft tyranny” of pervasive corruption courtesy of our corporate sponsors.
“The world will not be destroyed by those who do evil, but by those who watch them without doing anything.” – Albert Einstein
Deep, extensive dialogue is essential, but effective, well orchestrated action is much more important now, and that is what’s happening. It reminds me of the emergent behavior of “swarming” botnet programs, which are undoutedly what infected the UAV drones with a keylogger virus, and allegedly keep reinfecting them despite clean wipes of the systems. Human-net intelligence has infinitely more creative potential for exponentially accelerated learning and development than computer systems. We are clearly approaching the post-critical mass stage of acceleration & expansion. Our collective consciousness is ascending to the next level, fast.
“The mess created by our binge of debt and the extraordinary stupidity and greed of our banks has opened an opportunity to fulfill every right winger’s dream: smash social programs and let every citizen fight for themselves. This they call individual freedom.”
Banks are not greedy; it is people – the directors of and investors in banks and the stock exchanges – who are greedy. Isn’t it time to turn their own game on themselves and start “naming and shaming”?
MM: “I suggest exorcism and education and therapeutic rehabilitation instead of violent revenge …. We should let South Africa’s painful, post-Apartheid transition be an example.
RL: “We are talking about defining the source of our problems and then seeking remedies short of just rioting”.
MM: “When critical mass is reached, and a vast majority is in favor of deposing the Oiligarchs and ending the plutonomy [Rule of dumb dog Pluto?] in order to establish a healthy, sustainable culture, we will then be able to convince the 1%ers and their legion of military/police dupes (about 5%) that resistance is futile and possibly fatal.”
RD: “It is not the top 1% that are the primary beneficiaries of the ponzi stock market and the lender created debt. Everyone with any financial investment, pension, retirement plan or income is invested in, and are depending on wall street crime for their payoff.”
RL here raises the two questions I’ve had difficulty doing justice to.
South Africa hasn’t resolved the political problem of injustice, but the people there made the transition without bloodshed by putting Truth first and letting it speak for itself.
From a British perspective the source of the problem has been the financing of central government by monetary taxation in lieu of inflexible feudal duties, provoking rebellion (and the Magna Carta), revolutions (Henry VIII and Charles I), take-over by foreigners financed with communally-guaranteed credit (William III backed by the Bank of Amsterdam), and the Glorious [Banking] Revolution whereby in exchange for an easy life the King’s government accepted (a) limited taxation and raising exceptional expenditure by selling ‘bonds’ committing the nation to a National Debt, and (b) Reserve Banking whereby the [private] Bank of England underwrote a limited proportion of credit notes printed by commercial banks for speculative trading and wholesale investment (by limited liability companies), on a scale that dwarfed the coinage still understood as being the money supply by domestic users. The credit notes themselves are not the problem, as (in the US) Lincoln later demonstrated with his Greenbacks. The problem is the banks continuing to demand interest and securities for them in the form of mortgaged property entitlements, on the pretence that they are not “printing paper” but renting out other people’s gold. In France, John Law’s bank led as in Britain to the engrossment of the landed estates, the Revolution, the Napoleonic wars, and an astute Rothschild acquiring commanding interests. Some of us fled to the United States to avoid this, but after a Bank of America and a Second Bank of America were ejected, the un-Constitutional Federal Reserve Bank obtained legal status by fraud in 1913, and has sadly dominated international finance since, in 1945, the US overtook a UK bankrupt by the Hitler war.
The remedy is to tell the truth, and act accordingly. Money is merely the authorisation of a ration of credit, and all the problems go away if (like Lincoln’s Greenbacks) it is issued not by the banks but constitutionally by government, and either spent into circulation by government or (in our era of automated banking) written off once its proper use has been accounted for – since it can be regenerated if needed.
If everybody is given a livelihood in the form of a more than adequate ration of credit, then no tax, interest, casino or insurance is needed to fund the livelihoods of government employees, students and retirees: we simply share what we have. Instead of having high wages to bribe the talented, fixed awards of credit can honour actual achievement. With their livelihood thus guaranteed if they regenerate what they consume, people are free to timeshare between doing what they like and what needs doing. That might include local hydroponic food production, to reduce demands on land and transport, and – an old and popular remedy – working holidays for towns-people, helping gather in the harvests. Machinery financed from surplus is paid for by being built; no longer needing to earn its keep, it can be multiplied locally, shared, and left idle when there is no need of it. If people want to do great things, then no accumulated profit is needed; it is up to the ambitious to justify to locals any investment of land and materials and to make work such that people want to join them. Unnecessary acquisition will remain a debt to society until repaid, but genuine misfortune or failure can be written off as “water under the bridge”.
The other crucial truth is that centralised (even democratic) government – whether of geographical regions or of corporations – is a problem, not least because it takes too long for relevant information to be transmitted, processed and acted upon. Ceding legal powers of control to those who so lack them corrupts them and the system absolutely. Inability to meet responsibilities is transformed into denial that one has them.
Authority to govern (i.e. to control) has been conflated with legal ownership and office, with elected representatives acting as though they were free to dispose of the country’s assets and nominal owners as though they could dictate to its inhabitants. Freedom to trade internationally has been interpreted as licence for money-printers and wholesale traders to indebt some countries at the expense of others, leaving governments unable to maintain a reasonable international balance of trade and mutual aid.
The rational response has to be two-fold: to improve communication and reduce the impact of misjudgement by localising, and to hold private as well as public decision-makers responsible for the consequences of their decisions, rejecting the withholding of information via the doctrines of collective responsibility and civil service anonymity in Government. Clearly no-one would wish to govern on this basis, and that is precisely the point; people need to become self-governing. However, they cannot do that without information, including that of wide and long-term as well as that of local and timely significance. The intellectual problem goes away if the different levels of government and enterprise management are conceived in information rather than power terms: as being authoritive advisers rather than powerful dictators, “commending” rather than “commanding” action. The practical problem is that some people are ignorant bullies, and we really need to understand that pathology, and personality differences generally, much better than we do.
On phrase of Dave’s really strikes me as essential here is Dave’s comment about modern banks “The problem is the banks continuing to demand interest and securities for them in the form of mortgaged property entitlements, on the pretence that they are not “printing paper” but renting out other people’s gold”
Oh indeed it is a pretense. The banks have been printing paper by writing derivatives and using the shadow banking world to do it.
I read tonight that Greece is now shutdown with very widespread strikes. What amazes me is the pretense that Greece is broke…when it has had a thriving tourist economy for decades and is the favoured destination for many europeans.
Now tell me which corporations that flew the tourists in and which corporations that ran the tourism and which of the hotel chain owners actually paid their tax in Greece, despite making a fortune out of Greece.
And this is happening in many nations (precisely because capital was freed to go anywhere and to hell with the consequences) and the people working in Greece should not have to pay now, because those who should have been paying taxes into the Greek economy have been allowed to fleece it.
I might be wrong but I dont think so. Tax evasion is widespread on a global scale and part of the problem is we have global tax evasion yet local laws and local jusrisdictions, so those corporations and wealthy individuals use this dichotomy to free themselves of all taxes.
No its not fair and on top there is the unconscionable imposition of austerity measures on the Greek people. The Greeks people are not lazy. They have been conned by the old hand of laissez faire (like many other nations).