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.

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.

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.

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.

“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.

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.

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.