Wow, this is so horrible. I guess I shouldn’t be surprised because gambling is where all the employment in the state comes from. You don’t go to jail for not paying your mortgage.
It used to be called Fabian Socialism.
The economy is struggling, the unemployment rate is high, and many Americans are struggling to pay the bills, but one class of Americans is doing quite well: government workers. Their pay levels are soaring, they enjoy unmatched benefits, and they remain largely immune from layoffs, except for some overly publicized cutbacks around the margins. To make matters worse, government employees—thanks largely to the power of their unions—have carved out special protections that exempt them from many of the rules that other working Americans must live by. California has been on the cutting edge of this dangerous trend, which has essentially turned government employees into a special class of citizens.
The Banksters are still in charge.
Is there another country in which in full public view so few so blatantly use government for the enrichment of private interests, with a coterie of “free market” economists available to justify plunder on the grounds that “the market knows best”?
One conclusive hallmark of a failed state is that the crooks are inside the government, using government to protect and to advance their private interests.
THE PROBLEM OF USURY
By Martin Hattersley
A plea came to me over the Internet a while back from a Ph.D student in Switzerland, who needed help in preparing his thesis, by providing a translation from the Latin of a commentary by one Father Concina of an encyclical of Pope Benedict XIV on the subject of Usury entitled “Vix Pervenit”.
Having had an education in Latin and Greek, degrees and diplomas in Economics, Law and Theology, as well as a lifetime interest in monetary subjects, I felt called to offer my services, and in the light of today’s economic difficulties have found the experience, still far from complete, difficult but extremely rewarding.
Usury, as defined by Benedict and Aquinas and many other ancient writers, is not just the charging of excessive interest on a loan. It is the gaining of any reward at all for a loan of money (or other item that is not to be returned in its original form), other than return of an article of amount and value equal to the original advance. This definition is supported by Scripture (for loans within the Jewish community, though not to Gentiles: Deuteronomy 24.19,20) as well as Aristotle, but it was challenged by Calvin. Calvin and his followers maintained that there was no difference between asking payment for a rented house, for instance, and renting the money needed to buy the house, so long as the interest charge was not excessive – a view that is the accepted basis for banking and capitalism in the Western world today.
So what is wrong with Calvin’s approach? Three things at least – and there are more:
First: Charging interest on money lent is asking for reward without risk, so doubling the burden on the borrower. The farmer operating on borrowed money, for instance, is still expected to pay interest on his loan even if his crops fail or the market collapses. Countries saddled with National Debts (including Canada, but especially Third World countries) have to tax their citizens heavily, and beyond the amount of any international aid they receive, to pay interest on debts currently beyond their means to repay, causing starvation and distress as the International Monetary Fund and the World Bank insist on their pounds of flesh.
Secondly: Making profits using bank created money, for example by buying on margin on the stock market, does nothing to make the world richer in terms of real wealth. Money, contrasted with productive assets, is of itself sterile, but can be highly profitable to the speculators who expect the taxpayer to provide a bail out for them when the bubble bursts.
Thirdly: Usury is a way by which both banker and borrower can rob the public. A loan of new bank credit, say for buying a house or an industrial project, dilutes the value of the monetary unit, making the value of everyone else’s dollar that much the less. So we have a persistent erosion of the value of our money, so much so that the school principal who was “passing rich with forty pounds a year” two hundred and fifty years ago would need a salary of a thousand times as much to maintain that standard of living today. Bankers and borrowers print (and charge for) the tickets. We, the public, are expected to put on the show. Then, as we pay the bankers back and the credit is cancelled, we find we don’t any longer have the money available to buy products that are waiting for our dollars, and the economy goes into a slump.
Muslims still respect this prohibition on the charging of interest. Financing one’s house through a Muslim bank involves the bank using depositors’ funds to buy the house for the occupant, who pays rent, and contracts to pay additional monthly payments to build up a savings account by which the house will be paid for and transferred at the agreed price after a period of years. The risk of changes in house value is then borne by the lender, who is in the position of a landlord, and the borrower in financial difficulty has built up a cushion of savings that make it possible to renegotiate payments should he be temporarily unable to meet his obligations. The bank itself has physical assets that it owns, rather than paper promises to pay, to back up its balance sheet. So Muslim banks have been remarkably free from the monetary crisis that has struck the “Christian” world so severely.
In this connection, Pope Benedict XVI’s recent encyclical “Caritas in Veritate”, along with pleas from our own Anglican Bishops, especially in England, calling for morality and compassion in the economic sphere, need to be listened to. Salvation is not just a personal matter – it operates at the level of the community as well. We Christians have something to learn – or re-learn – when it comes to looking at the way we do business.
College Grad Can’t Find Job, Wants $$$ Back “She went to college to boost her chances of finding a great job once she got out of school, but now that that hasn’t happened, Trina Thompson wants her money back.
“Thompson, a graduate of Monroe College, is suing her school for the $70,000 she spent on tuition because she hasn’t found solid employment since receiving her bachelor’s degree in April, according to a published report.
“The business-oriented school in the Bronx didn’t do enough to help her find a job, Thompson alleges, so she wants a refund. The college says it does plenty for grads.”
She should get her money back. Colleges routinely practice fraud by publishing false employment statistics to trick people into enrolling. “Go to college and you’ll make more money” is the message. But really it’s “Go to college, get into debt, and we’ll get your tuition money.
The Government Doesn’t Want to Solve the Economic Crisis
By Arian Forrest Nevin, J.D.
Many obstacles to human progress stem from natural causes over which man has little or no control. Other obstacles, which are far more numerous, are entirely the result of man’s ignorance, stupidity, superstition, and greed. Once recognized, and if the people are determined, human made obstacles can be overcome. Unemployment and poverty are two of the most unnecessary manmade obstacles. If it really desired, any intelligent and honest government could overcome these twin obstacles to progress.
This begs the question: If the problems of unemployment and poverty are so easily solved, why has no solution yet been given? Solutions have been given. Effective answers have existed for over 100 years. However, these solutions can only become effective through their adoption by the government. It rests with the government to decide whether unemployment and poverty shall continue or whether they shall not, and there is reason to believe the government is not eager to find or adopt any of these solutions.
North Dakota Senator Byron Dorgan admitted the government does not understand what is wrong economically, nor does it have a solution: “[N]one of us have been here before. And nobody in the country really understands what is the right medicine to fix what is wrong with this economy [CNN Feb 10, 2009].” Yet the government makes no attempt to understand the problem or to solve it. If the government truly desired to resolve the economic crisis, one would expect it to thoroughly explore every possible avenue which promised salvation.
The government offers rewards for information leading to the arrest of criminals. If the government offers rewards to catch criminals, why not offer even larger rewards to anyone discovering the means to resolve the crisis? Since the government does not understand the crisis or have a solution, it should seek outside advice. If it is profitable for private firms to offer prizes for inventions that overcome technical difficulties in their business, surely it would benefit any government to discover a panacea for the economic crisis. Already the crisis has caused more damage than a hundred Al-Qaedas ever could. Yet since remedies have been offered and remain neglected, the inference is plain: So far as the government is concerned, it has no wish to explore or try them.
Our government “experts” have stated the economic crisis is incapable of being resolved, and the people should simply wait for the crisis to pass. We may be certain these “experts” are not likely to swallow their own words, no matter how plausible a remedy may be offered. They would never acknowledge fallibility in their economic pronouncements. No matter how serious our economic affairs become, no remedy will be permitted to interfere with the current order so long as we are governed by the present set of officials.
The orthodox school of economics has shown itself to be bankrupt. It has nothing to offer as a remedy or preventative for economic disasters. What solution do they propound? They suggest we all tighten our belts and endure a period of poverty until, hopefully, the economic storm passes and prosperity returns. This is no solution at all. The most amazing feature of their pronouncements is the lack of desire on their part to find a remedy for our present problems. On the contrary, they make it a principle to denounce, ignore, or throw contempt upon any proposed remedy. Orthodox economists represent the interests of the financial classes, who are quite satisfied with the system under which they reap enormous profits regardless of the state of the economy. In times of crisis, such as now, the government protects the financial classes and casts all the risk and cost onto the public’s shoulders. There is no reason why the economists should advocate any change. But, a change is inevitable. Our present situation is transitional, and we shall witness shortly either a radical change of policy or a complete collapse of the financial and economic system.
The subject of economics occurs to most people as hopelessly complicated, but it is not. It only appears to be. As Nobel laureate Frederick Soddy said, “Straightforward problems described by cork-screw terms demand for their apprehension cork-screw minds, whereas if described in plain terms they are hardly problems at all. There is today no problem in real economics unsolved.” So let us state the economic problem in simple terms. The real economy, consisting of agriculture, mining, and manufacturing, is engaged in producing and distributing goods necessary for human existence and comfort. Thanks to science, discoveries, and inventions we are able to produce goods of all types in abundance and with little effort. Yet these goods, which we are capable of producing in such abundance, cannot be sold. At all times wealth-producers find greater difficulty in selling goods than in producing them. We have vast amounts of unsold goods and an even larger unused productive capacity. Yet huge numbers of the populace are in want of these very goods, which cannot be sold. This is the paradox of poverty amidst plenty.
The employment of labor and productive machinery depends on constant supplies of raw materials, energy, and, most importantly, on the ability of the public to purchase goods as fast as they are produced. If the rate of consumption falls below the rate of production, a decrease in production and employment will result. The ability of the public to purchase goods primarily depends upon wages, salaries, and dividends which are paid in the process of producing goods. Any reduction in the rate of production must therefore tend to reduce the effective demand for goods.
The limiting factor to production and effective demand is money. Money is ultimately the means by which we distribute the wealth produced by the nation. It is also an artificial human construct that has no intrinsic value, but has tremendous value as a means by which we all agree to exchange goods and services. For historical political reasons, the creation and flow of money is not directly controlled by the government, but rather by the private financial industry. While not what the public commonly believes, it is true and has been written about extensively. It is, of course, not in the interest of the government or the private financial industry to inform the public of the true situation.
The main reason we cannot distribute the wealth of the nation and are in economic crisis is not due to a reduction in the nation’s ability to produce and consume wealth. It is in our inability to distribute wealth, i.e., a constriction in the flow of money. Unfortunately, the creation and flow of money is in the hands of private financial interests. Hence, private financial interests have inordinate power over the economy. The government can either confront these interests or protect them. Since we have the best government money can buy, the government protects them at the public’s expense. And the traditional economic schools of thought are based on the current system of private financial control. Therefore, neither the government nor the “experts” will ever develop or adopt a solution to these recurring economic crises that are caused by a constriction in the flow of money.
It must not be forgotten that the consumption of goods is essential to production and should be regarded as equally important to the economic system as production itself. As we have the physical part of economics down pat, production, the non-physical social aspect of distributing our great productive capacity should be a small effort in comparison. It is like the economy is a train with 300 seats. However, only 100 people can ride the train, though its capacity is much greater, because the ticket office is only allowed to issue 100 tickets to ride. Thus, the real economic problem is to discover a method of selling and consuming goods as fast as they are produced.
It is towards this end that all nations, governed by traditional economic theory, are clamoring to capture new markets. It is for this reason international commercial competition is so fierce. This creates a situation where companies, not guided by concerns over national economics, utilize outsourcing and other techniques to reduce their cost of labor and thereby create job losses. Job losses result in a decrease in the standard of living for the affected countries. Since this happens globally, the war over markets leads to a global race to the bottom of the standard of living. Unless a correct solution is found and adopted, the race to the bottom to reduce cost and future wars created to sustain traditional economic interests are inevitable.
Although we are capable of doing more economically, we do not because the current private financial system does not allow it. Simply and fundamentally this is at the heart of the world’s economic crisis. If governments truly desired to resolve the problem, they could do so, and if they did resolve the problem, the economic crisis along with poverty and unemployment would disappear.
The Impact of Globalization by Martin Hattersley
Globalization - is the outcome of a process that has been developing particularly since the inception of the Industrial Revolution, where improvements in manufacturing techniques, assisted by improved methods of transportation, led to the development of mass production and sales from a single producer over a greater market area. This process has now developed to a position where, in the case of a number of products, a single manufacturer – Microsoft, De Beers, OPEC – can have something approaching a monopoly power in controlling word wide production and setting a world wide price.
All the Answers You’ll Ever Need “When the GIs left Asia in ’73, the commie peaceniks thought they had won. And they had, for ten minutes. The grip of the military on the country loosened briefly.
“Unfortunately the soldiers learned. Not how to win wars, which they do poorly if at all, but how to keep a war going. Winning a war isn’t all it’s cracked up to be. The promotions and contracts stop. When you are paid to do something, it is in your interest not to finish doing it.
“The Pentagon’s first lesson learned was to avoid conscription, as the conscripted and their families will take to the streets. By using an army of volunteer suckers about whom nobody of importance cares, the military severs its wars from most of the country, which loses interest. The brass are then free to do as they choose.
“The second lesson learned was that while defeating the enemy is not necessary, and perhaps not desirable, controlling the press is everything. And they did it.
“So forty or so years after all the love-ins, the marches, the righteous dope (all of which may seem silly, but in my view preferable to watching a Cambodian mother screaming over the opened bleeding guts of her child) the Pentagon is at it again. Once more the jets howl over remote primitive countries, countries that did nothing to the US and couldn’t have, and promotions flow, and contracts, and generals demand more troops and more money to stop communism. Excuse me, terrorism. Soon, the Chinese, a better threat, coming to a theater near you. With the passing of years, one demon fades into another. Switching enemies is much easier now, what with search-and-replace.
“But it’s all about democracy and freedom and patriotism and Saving America from…from something. The hoopla changes little, and how well it works. Patriotic friends sometimes say to me of the military ardent things like, ‘When your country says go, you go!’ I seldom point out that no one in their families is in the slightest danger of having to go, nor that ‘the country’ is recruiting hard and they aren’t urging their children to enlist; nor do I ask, ‘What is your attitude toward having your daughter drafted onto the streets of Baghdad for five tours, perhaps coming back drooling and gurbling for life after having her brains scrambled by a roadside bomb?’ Patriotism is important to patriots. They are full of it, and I’m about a quart low. I shut up. I don’t want to lose friends.
“Yet…I think I must be a communist. It seems to me that when your country says ‘go,’ you should ask, ‘Why?’ Do you have a reason to kill whoever you are being sent to kill? Then go. Otherwise, don’t. If I told you to go to Ottawa and kill Canadians, you would think me mad, and think it correctly. Why then should you obediently kill them because a politician in Washington tells you to do it? I do not understand.
“And of course ‘your country’ doesn’t tell you anything at all. Countries are abstractions. Men tell you to go, and for their own purposes: Dick Cheney or George Bush, Nixon or Nitze, or the men who run the petroleum industry, or people in the Israeli lobby, or men in the military companies who want contracts, or officers who want to give war a try.
“Why are these people ‘my country’?”
Where Did All The Jobs Go? “Tables prepared by Charles McMillion of MBG Information Services from government data show employment in primary metals down 24 percent; machinery 21.6 percent; computer and peripheral equipment 28 percent; communications equipment 38.8 percent; semiconductors and electronic components 37 percent; electrical equipment and appliances 22.8 percent; textile mills 34.1 percent; apparel 37.3 percent; chemicals 8.3 percent; plastics and rubber products 13.8 percent; Internet publishing and broadcast 40 percent; telecommunications 19.4 percent; ISPs, search portals, data processing 22.6 percent; securities, commodity, investments 6.8 percent; computer systems design and related 17 percent.” [These numbers are fives years old. Just think how much worse it is now]
“This is not a picture of an economy that is doing well. Low income jobs in nontradable services are the only sources of employment, while high value-added jobs that pay good incomes continue to disappear.
“This job record is not one of a powerful U.S. economy dominating world markets and building consumer incomes for sustained recovery. It is not a record that promises jobs for university graduates. It is not a record that promises a future.
“Economists have apologies, but no real explanations, for the loss of jobs in tradable goods and services. They are careful not to blame outsourcing of manufacturing and service jobs, which they claim creates as many new jobs as it loses.
“Certainly, the people who are benefiting from outsourcing want us to think it is good for us.
“For years as U.S. multinationals moved manufacturing offshore, Americans were told that their future was in “knowledge jobs.” Today, knowledge jobs are being moved offshore more rapidly than manufacturing jobs were.
“What are the unemployed computer engineers and information technology workers supposed to retrain for? What high value-added job can’t be outsourced?
“Only those in the nontradable sector, such as dentists and surgeons. If everyone becomes a dentist or a surgeon, those incomes will be driven down.
“Many young engineering graduates have discovered that they invested in acquiring skills for which there are no jobs and are headed to law schools in an effort to retrieve their future. I know young software engineers who are substitute teachers in middle schools, and others who are trying to organize rock bands to play the club and bar circuits.
“They have no idea what to retrain for, and neither do the economists who tell them retraining is the answer.”
Yup, everyone did go to law school, and the trend continues. Now there are way too many lawyers, but universities are profiting hugely from law students, because law schools are cash cows for universities. People used to think legal jobs couldn’t be outsourced. Wrong. Legal work is getting outsourced to India.
Where Did All The Jobs Go?
The Silly Series – The Economy May Face Up to Five Years in Prison
WASHINGTON – The Economic Recovery Act passed today in the House by a vote of 349 to 62. The ERA makes it illegal for the economy to “do poorly.” Speaker of the House, Nancy Pelosi, said “We wanted to send a clear message to the economy that poor performance will not be tolerated.” If convicted of doing poorly the economy could face up to five years in prison. continue reading
How happens it then that in spite of so many miracles of industry, science, and art, comfort and culture have not become the inheritance of all?
—Pierre-Joseph Proudhon
Unemployment Timebomb “The Centre for Labour Market Studies (CLMS) in Boston says US unemployment is now 18.2pc, counting the old-fashioned way. The reason why this does not “feel” like the 1930s is that we tend to compress the chronology of the Depression. It takes time for people to deplete their savings and sink into destitution. Perhaps our greater cushion of wealth today will prevent another Grapes of Wrath, but 20m US homeowners are already in negative equity (zillow.com data). Evictions are running at a terrifying pace.
“Some 342,000 homes were foreclosed in April, pushing a small army of children into a network of charity shelters. This compares to 273,000 homes lost in the entire year of 1932. Sheriffs in Michigan and Illinois are quietly refusing to toss families on to the streets, like the non-compliance of Catholic police in the Slump.
“Europe is a year or so behind, but catching up fast. Unemployment has reached 18.7pc in Spain (37pc for youths), and 16.3pc in Latvia. Germany has delayed the cliff-edge effect by paying companies to keep furloughed workers through “Kurzarbeit”. Germany’s “Wise Men” fear that the jobless rate will jump from 3.7m to 5.1m by next year. The OECD expects unemployment to reach 57m in the rich countries by the end of next year.”
Yup, the official unemployment stats are a lie.
Nearly 60 years ago, in a speech entitled Monetary Reform as a Preliminary to All Reform, Frederick Soddy gave the perfect analogy for the “solutions” proffered by the government and economists to the current economic crisis.
“This sort of Banker-Finance is like, when a ship is sinking, setting all hands to the pumps and exhorting them to superhuman exertion, whilst not only neglecting to stop up the hole through which the waters are flooding in, but actually directing the water being pumped out overboard back into the ship. Poor old Brittania! sunk and by her own exertions, and with the best banking system and the best legal system in the world–according to the bankers and the lawyers.”
Yes! Let us all get out of debt by going more into debt. Pump the water out of the sinking ship so that it can be poured back in. Increase the National Debt to give the debt factories, commonly called banks, more money. If we keep going as we are eventually we shall drown in debt. It is time to plug the hole and pump the water out of the ship. That means we need an honest money system where the government creates money for the common good and the fictitious loans of banks are forever abolished.
Woman Kills Herself to Avoid Eviction
Short Bio of Muriel Mobley You can find 10 of her articles on this site.
Clothing Retailers Are Doing Terribly
One in Five Hotels May Defauly on Debt
473,000 Job Lost in June Don’t worry. I just heard Obama is planning to chant “change” 5,000 times. All will be solved. Manufacturing (the most important part of the economy) cut the most jobs. For the past 40 manufacturing jobs have been disappearing.
“Despite some recent indications that economic activity is stabilising, employment, which usually trails overall economic activity, is likely to decline for at least several more months.” They keep saying that. It could be two years from now and still we’d hear “couple more months.” That way people will be less likely to bother to do anything or get upset, because the recovery is right around the corner anyway, so what’s the point of doing anything?
Debt is Capitalism’s Dirty Little Secret Such a promising title and yet such a crappy article. This article well illustrates the errors in the thinking of orthodox economists, so it’s not a total waste.
“The debt burden has to come down, which means more saving and lower economic growth for many years to come. Along the way inflation is likely to return, probably sooner and more violently than most expect, which will prompt investors to demand a higher return and make it even harder for governments to tackle the debt. At best the debt will fall slowly over many cycles and simply trim otherwise resilient growth. At worst it could cause growth to lurch upwards before tumbling again, with all the attendant uncertainty that entails. At this point, no one can know which is more likely. I incline to the more benign view because of the size of household assets but, if the dollar’s reserve currency status should come under serious attack, rates would have to rise to defend it and that could itself cause a consumption crisis.”
“What can be done? First, although it is not ideal, we should not be too hasty about abandoning the capitalist model. It is less bad than any other system yet invented. But we should redouble our efforts to increase productivity through innovation and creating new markets; simply squeezing lower-income workers is a bad option, which helped get us into this mess in the first place. This requires investment in education and research. Second, we have to learn to live within our means. This means spending less than we earn, perhaps doing without the BMWs, flat-screen television sets and leather sofas. Third, we should be careful in distributing the higher tax burden that we will inevitably have to bear over the coming decade. Very high marginal tax rates did not work in the 1970s and will not work now. That said, income disparity at current levels is a political time-bomb that needs to be dealt with. Finally, we should all come to terms with the fact that these are structural issues needing structural solutions; they need to be enforced over a longer time period than any one government’s term. So we need a new political consensus, one aimed at reducing overall debt levels while reducing inequality by encouraging education, entrepreneurship and investment in innovation.”
More saving means less spending, and less spending means fewer jobs and less income for people, which means the economy will do even worse. This is exactly what the economic idiots preached during the Great Depression. We were suffering from “over-production.” While in truth we were suffering from under-consumption due to a shortage of money. Perhaps one way to get rid of debt is to have a national money system and to simply abolish much of the debt, and then our economy could start growing right away.
I do agree that we need to “learn to live within our means.” However, we should learn to live within our real means instead of the artificial financial pen we’re caged in now. The nation can produce even more BMWs, flat-screen TVs, and leather sofas, but the people can’t afford to buy them even though they want them.
This guy thinks that by increasing our productivity we can solve the crisis. Hmmm… Can anyone name the number one cause of job loss in the last 100 years? The answer is increases in productivity. If fewer people can produce more than before then fewer workers are needed. Efficiency eliminates jobs; it does not create jobs. Thus we have the growing paradox of increasing poverty amidst an ever expanding ability to produce. The more our productive potential increases the poorer we get. Soddy called it “the paradox of poverty amidst plenty,” which he set out to solve, and he did.
http://www.myfoxorlando.com/dpp/news/national/dpgo_woman_commits_suicide_avoid_eviction_lwf_070109_2629875
Five More Banks Fail The total bank failures for the year is now 45. Compared to past financial crises 45 isn’t that many. However, there are so few small banks now there aren’t that many left to fail. All of these small banks are being purchased by larger banks. The consolidation of the banking system continues.
Hotel Foreclosures in California The number of hotel foreclosures in California has increased by 125% in the last 60 days. Don’t worry. The economic recovery is right around the corner…
Red Roof Inn defaulted on $367 million of mortgage debt.
Japan’s exports are down 40% from this time last year. Japan’s imports are down 42% from this time last year.
In theory Parliament is stronger than the banks, but Parliament no longer counts as a real governing power. The banks are far more powerful than Parliament.
—Hilaire Belloc in 1924
Cooperative Games: A New Set of Rules
Christmas for me this year became an educational experience when my children introduced me to “cooperative games”.
Games, for me, have never been cooperative events. It’s completely contrary to my upbringing. They are there for one side to beat the other. They are a preparation for life, which is a struggle, red in tooth and claw. I enjoy the fight for positions and prizes. Was not the battle of Waterloo won on the playing fields of Eton? Just imagine what it would look like if, in the middle of a N.H.L. hockey game, the Oilers came up to the Flames and said “May we assist you in placing the puck in our net?” It’s just not cricket.
A “cooperative game” is different. It does not have winners or losers – or rather, we all win or lose together. For instance, suppose a board game where the task is to scale an imaginary mountain. In a competitive game, each player would try and get to the top first, and the one who did would be the winner. In a cooperative game, the task is for the players to unite in a team to get to the top and return before their supplies run out. Unless we help each other, we perish together in the attempt.
I recall the fiendish intensity with which, in my pre-teen years, I honed my entrepreneurial skills (and unknowingly educated myself in economics and monetary theory), in game after game of “Monopoly”. Day after day, in the Spartan atmosphere of our boarding-school, we boys spent our time crushing each other, or being crushed, in an economic free for all that represented all too well the business climate of the depression years. What joy would a young boy have had if, instead of relieving the frustrations of his life by economically pummelling opponents into the ground, the rules had been revised so as to make its objective the maximization of wealth through cooperation, and the distribution of a reasonable standard of living to all? Adam Smith would turn in his grave!
Just the same, there’s a thought here. When the economic world outside looks far too much like a game of Monopoly that Canada is losing – when the buzzword of the business community is to “meet international competition” – the question does arise: are we playing with the optimum set of rules? Organize the world on a competitive basis, and there is one winner, and a very large number of losers. This may give emotional satisfaction to the winners, but gives neither satisfaction nor bread on the table for the losers – and those losers are beginning to look a lot like us. Rewrite the rules so as to encourage all the desirable things – respect for the environment, basic economic security for all, minimum waste of human and physical resources, opportunities for freedom, education, culture and leisure – and the world as a whole would be a much happier and more contented place.
In the world we live in, I don’t see it happening. But maybe in a generation, after today’s children brought up on cooperative games have reached maturity, some genius may suggest a new set of rules for the modern day rat-race, and the world will say “Of course! That’s what we’ve been looking for all the time!” It won’t be a moment too soon.
If a man’s afraid to take some risks for his opinions, either his opinions are no good or he’s no good.
—Ezra Pound
US Government to Do Nothing Obama has declared that the government need do nothing further to solve the economic crisis, though unemployment is rising daily. Government action, such as reforms of the monetary system and the maintenance of an even trade balance, are in fact the only way to overcome the recession.
The Irish Economy is Doing the Worst “The lender forecast that Ireland’s economy would contract by 13.5pc between 2008 and 2010, and start to grow around 1pc in 2011 before it stabilizes around 2.5pc for several years.”
“Despite the bleak view, the fund said Ireland was taking the right steps to counter the economic and financial ’shocks’. Ashoka Mody, head of the IMF mission to Ireland, said there was “absolutely no reason” to think that the country will default on its debt.”
“Brian Lenihan, the Finance Minister, has proposed creating a “bad bank”, known as the National Asset Management Agency, to buy up such loans as a step toward restoring lending and reviving the economy.”
“‘We must ensure we have a viable banking system to protect jobs and our economy,’” Mr Lenihan said after the publication of the IMF report. ‘The one way of doing that is to clean up the balance sheets of the banks by removing the impaired assets and returning them to normal functionality.’”
Or we could have a national money system instead of a private money system, and then we wouldn’t have to worry about bank crises wrecking the economy. One has to wonder why it is that the Irish economy must contract by 13.5% and then begin to grow again. Physically, there isn’t any reason for this, and the Irish people would be much better off if the economy didn’t contract. It must be a natural law or something. I think I’ve heard experts in economics say such things before, so it must be true.
Citigroup Boosts Salaries Citigroup is planning to raise salaries by 50%. This is wonderful news! While unemployment is skyrocketing and salaries are being cut or raises halted the world over banks are increasing the salaries of their employees. There’s nothing better than rewarding failure.
I’ve put up a bio of a writer on this site: Martin Hattersley
Born in England in 1932, Martin Hattersley is a person who has spent much of an interesting life trying in many ways to set the world to rights, not always with as much result as he would like. He is a second generation monetary reformer. His father and mother shared a common interest in the Social Credit movement, having met at a Social Credit Convention in 1926. This led to their decision to emigrate to Alberta, then enjoying a highly successful Social Credit government, after World War II, in 1953.
I’ve also posted his Notes of Chairmanship.
The Official Unemployment Rate in California Hits 11.5% I’m sure the actual number is significantly higher.
Japan is Considering Adopting a Cashless Monetary System
Vincent Vickers was a Director of the Bank of England, a Director of the Vickers Ltd., and a Deputy-Liutenant of the City of London. He had exceptional inside knowledge and experience of trading and banking. This knowledge convinced him that the present economic system is so dangerously unwise that he felt it his duty during the later years of his life to work whole-heartedly for its reform.
In 1926 Vickers told the Governor of the Bank of England, Montagu Norman, that henceforth he would fight Montagu and the Gold Standard and the Bank of England Policy until Vickers died. And he did. Vincent Vickers died on November 3rd, 1939 after a long illness. All the while he was sick he was working and writing on economic reform.
Before his death Vickers started The Silly Series, which he intended to be a series of short humorous leaflets on economics. He never got beyond No. 1 before his death. I plan to continue The Silly Series started by Vickers. The first of the series is reproduced below.
The Silly Series No. 1 – Can You Believe It?
By Vincent Vickers
They kept it a profound secret. They said it was “not in the public interest” that the news should be broadcast. The fact remains, that I myself was present when the Great Logical Professor arrived here direct from Mars, and met the World’s leading orthodox economist.
* * *
“Well, boys” said the Logical Professor from Mars, “Everything O.K. up here?” “Alas! Far from it,” said our orthodox economist. “This world is in economic eruption! Wars and rumors of wars, millions of people unemployed, ill-fed, ill-clothed, suffering malnutrition and great poverty, and discontent everywhere!” “Oh,” said the Martian professor. “I suppose, then, that you are finding it impossible to produce sufficient to feed your increasing population, and supply them with what they need for a comfortable life?” “On the contrary,” said the orthodox economist, “we have wonderful machinery! We can produce far more than all the people need; in fact, we are actually destroying food.” Finish Reading
Carlyle on Life and Work
“My brother, the brave man has to give his Life away. Give it, I advise thee—thou dost not expect to sell thy Life in an adequate manner? What price, for example, would content thee? The just price of thy LIFE to thee—why, God’s entire Creation to thyself, the whole Universe of Space, the whole Eternity of Time, and what they hold: that is the price which would content thee; that, and if thou wilt be candid, nothing short of that! It is thy all; and for it thou wouldst have all. Thou art an unreasonable mortal—or rather thou art a poor infinite mortal, who, in thy narrow clay-prison here, seemest so unreasonable! Thou wilt never sell thy Life, or any part of thy Life, in a satisfactory manner. Give it, like a royal heart; let the price be Nothing: thou hast then, in a certain sense, got All for it! The heroic man—and is not every man, God be thanked, a potential hero?—has to do so, in all times and circumstances. In the most heroic age, as in the most unheroic, he will have to say, as Burns said proudly and humbly of his little Scottish Songs, little dewdrops of Celestial Melody in an age when so much was unmelodious: ‘By Heaven, they shall either be invaluable or of no value—I do not need your guineas for them!’ It is an element which should, and must, enter deeply into all settlements of wages here below. They never will be ’satisfactoy’ otherwise; they cannot, O Mammon Gospel, they never can! Money for my little piece of work ‘to the extent that will allow me to keep working’; yes, this—unless you mean that I shall go my ways before the work is all taken out of me: but as to ‘wages’!—!—”
The Debt Problem Nations are struggling with a choice of fate similar to that of being hanged or boiled in oil.
“At the personal level, and speaking now as a lawyer with a practice that involves a considerable amount of looking into the actual budgets of citizens of my Province, the aspect that concerns me most is the increasing degree to which the budget of the typical wage earner has been spent even before it is earned. Money is earmarked for payments on the house, on the car, on the furniture, on credit cards: furniture is sold on the promise of `no payments and no interest until next year.’ A month’s unemployment – the disability or pregnancy of the second breadwinner of the family – and the whole ramshackle structure of personal finance buckles like a house of cards. Again, the personal and social costs, and the costs in suicide, broken families and badly cared for children, are enormous.”
“Indeed, from the macro to the micro ends of the economic spectrum, from great nations to the ordinary citizen, nothing seems more flimsy, more likely to collapse, nothing is the cause of more unease, than this system of debts piled one on top of another, that threaten to tumble down from the wall like Humpty Dumpty, and
‘All the King’s horses and all the King’s men
Couldn’t put Humpty Dumpty together again.’”
“There is no particular difficulty in identifying the cause of the incredible permeation of debt through all levels of the economy. It is the direct result of the almost universal adoption of bank credit as the exchange medium of the civilized world.”
“Banking is essentially a way of making a small volume of gold, or other `official’ money, do the work of a much larger quantity, which depositors assume to exist to be withdrawn on demand, but in fact does not exist at all. This causes an increase in the effective amount of the circulating medium in an economy. A bank holds a small reserve of `official’ money, of whatever variety it may be, with which to back the likely demands for cash of those who have made deposits with it.”
“There are two particular results from this technique of money creation. The first, is instability in the economy. Gross National Product – the value of all the production in an economy – is closely related to the total credit supply. Even a small increase in the credit supply, therefore, leads to `boom’ conditions of high demand, high profit, and rising prices: the very conditions that make a fine scenario for even more bank lending, and even more demand, profit and inflation. The reverse is also true – even a small decrease in credit supply will lead to business conditions where profit disappears, output is restricted to keep up prices, and employment and standards of living decline. Such a downturn in the business cycle makes bank lending unsafe and unattractive. It therefore accentuates the very problem caused by the credit contraction in the first place.”
“The second problem arises from the first. A bank loan is in theory the advance of some depositor’s money. Since the bank has no authority to print new money, it must always cover its promise to pay cash on demand – its deposit liabilities – with the promise of some other party to pay cash to itself. It is therefore impossible to expand the money supply of an economy through the banking process, without the simultaneous expansion of debt.”
“Put these two factors together, and the world is in a `Catch 22′ situation. If we strive to reduce debt, we can only do it by repaying bank credit. To repay bank credit causes a shrinkage in the economy’s overall money supply. A shrinkage in the economy’s overall money supply leads to falling prices, an even greater fall in profits, business failure, a smaller Gross National Product, unemployment, stagnation and poverty. Not to repay bank credit leads to an ever increasing debt and interest load, and the danger of runaway inflation, with loss of the value of savings and of the monetary unit. Around the world, we see nations struggling with a choice of fate similar to that of being hanged or boiled in oil.”
“The possibilities of a global banking failure are serious enough to make it worth while on everyone’s part finding out how to devise a stable, debt free and failure proof alternate system.”
“The present world payments system, both internally and externally, is going to become more and more unstable until a radical underpinning of its foundations is achieved.”
Mowing the Sword of Damocles “OK, a brief excursion into cosmic truth. First, socialism. Hard-line conservatives with little grasp of economics refer to anything they don’t like—Hillary, national health care, regulation of anything if it might cost them money—as “socialist.” It’s a utility pejorative, devoid of meaning, as “racist” and “elitist” are for political south-paws. Socialism is of course a system in which the government owns the means of production. Check your dictionary.
“Ah! But in America, the means of production own the government. Inverted socialism it is. Here is a far better thing. If you are a means of production, anyway.
“Example: Bausch & Lomb makes ophthalmic salt water, useful in treating corneal edema, under the trade name “Muro.” In the Yankee Capital, it costs $23 for 1.8 ounces; in Wincherster, Va., $19; in Farmacias Guadalajara, about $6. The identical product. The generic here, Hipoton, comes in at about $3.
“You could call it price-fixing, but I prefer to think of it as governmental regulation of prices. It is perfectly legal, because Big Pharma owns the government.
“I believe that Econ textbooks say that price controls haven’t worked from Diocletian on. Wrong. They work splendidly. Ask Bausch & Lomb. If you could make over twenty-two bucks on a dime’s worth of salt water, wouldn’t you be in favor of governmental interference in the economy?
“Let me explain medicine briefly. It’s an unholy scam. Here in Mexico my wife occasionally gets ear infections. At any pharmacy, we pick up Amoxicillin, 250mg three times a day for ten days. Six bucks.
“Recently we were staying in Maryland with friends, and she got an ear ache. Amoxicillin is by prescription only in the US, which means that doctors have a monopoly on ear aches. It was Friday evening. It was either agony until Monday or go to one of those mall-based walk-in clinics, which wanted $150 for the appointment and prescribed $78 in medicines.
It’s a scam, pure and simple.”
It’s not only the producers, and it’s only certain producers. As we’ve seen two car companies recently go bankrupt who suffered from the problem of not have enough politicians in their pocket. Only certain producers, mostly pharmaceutical and military producers, manage to pull this off. TV manufacturers don’t have this same scam going. However, most of all, Wall Street and Banks own the government, and they don’t produce anything at all (except problems and misery).
Latvia Hit Hard The economy of Latvia has shrunk an estimated 18% in the first three months of this year. Valdis Dombrovskis, Latvia’s prime minister, says that, without additional foreign loans, the country could go bankrupt this month.
“Latvia’s descent into financial chaos is the result of a cocktail of fiscal imprudence, irresponsible lending and a failure to recognise the signs of an overheating economy, economists say.”
Of course the “cause” is always poor decisions and irresponsibility. GM was poorly managed. It’s not because auto sales were reduced by 50% due to the economic crisis caused by the government, Wall Street, and banks. Nope. Crappy management. Poor management was apparently also the case in Latvia. Those Latvians were stupid and irresponsible and thus brought this upon themselves. Of course the real cause is the unsound monetary system. Also, how does an economy “overheat”? Using words such as “overheat” is just a cover for a lack of understanding.
“Between 2005 and 2007, Latvia’s economy expanded faster than anywhere in Europe, recording double digit growth three years in a row.”
It almost sounds like the Latvian economy “overheated” from prosperity. Hmmm. Such a strange system we have where temporary prosperity inevitably leads to a crash.
“Soddy construed energy, especially the potentially unlimited supply stored within the atoms of matter, as nature’s special gift to humanity, available only through the mediation of science. It was both our common heritage and a real part of the wealth of nations.”
This is the article I mentioned yesterday. Check it out.
