Month: September 2012

I have been in a short correspondance with Ben Dyson, of Positive Money.  I am very much supportive of the educational work they are doing with respect to pointing out the inflationary–and hence redistributive–nature of fractional reserve banking.  You cannot, as one example they use often, understand housing inflation without realizing that the money to buy houses is created ex nihilo.

At the same time, I cannot support their proposed solution, which involves putting all private money in accounts at the Bank of England, and which involves setting up what amounts to an “inflation commission” dedicated to determining “scientifically” what the proposed rate of inflation should be, then passing the “money” along to Parliament.

He proposes that banks, as they receive payments for loans made, in effect pay down their own balances–which he would put in the Bank of England–such that all the money they have created gradually disappears.  They would make their money from money invested in them, and then reinvested.  I have no objection to that, of course.

The gradualistic idea has some merit, as all gradualistic ideas tend to, but as I state below, I don’t feel we will do much of ANYTHING substantive until are backs are to the wall, which is where my proposal comes in.

Ben,

I’ve read your proposal, and unfortunately I still believe that your proposal will act to consolidate governmental power, without corresponding benefits to ordinary citizens which could not be achieved in another way.

Regardless of other specifics, I think it MUST be understood that ALL money creation, aka monetary inflation, is redistributive. I tend to call it theft, but since you are in effect making it a tax, I will simply point out that such taxes have both winners and losers.

You posit that there is a “normal” or acceptable, or economically justifiable amount of inflation, which can be assessed by a group of apolitical experts. Yet, how can this be? Logically, if we are becoming more efficient technologically, we should be working less, and the value of our labor as expressed in monetary units should be increasing. Not only, in other words, is inflation not normal, it is the OPPOSITE of what should be happening, which is a steady increase in the value of our currency. You should literally see returns on money buried in your back yard, given Capitalist-driven increases in efficiency.

We have not seen that since, as you point out, banks have stolen large sections of the wealth of our respective nations through the fractional reserve banking system. However, allowing the government to continue this function to any extent merely means that those who receive the money win, and those who do not lose. Yes, you can pay down the debt with this money, or hand it out to the “people”, but in so doing you are simultaneously devaluing the currency, such that those who have savings, or fixed investments, see net declines in their wealth. More importantly, this interrupts the natural process of wealth accumulation that would attend constant innovation and sound money.

I do not disagree that checking accounts should be separated from investment accounts, but I would suggest that the individua’ banks could do so themselves, without the need to place ALL private liquid wealth in the hands of an organization that is already either nationalized or which could easily be nationalized. The direct control of money is and long has been a core Fascist aim, and I use that word carefully, and in the sense that Mussolini praised Keynes calls for this outcome.

There is no inherent benefit to centralizing the repository function, and large potential risks to liberty. All that needs to happen is that the banks separate these functions internally, by charging fees for checking and savings functions, and paying out for investment accounts, which is exactly how Certificates of Deposit work currently in the United States.

As far as how we get the debt out of the system, this is more ambiguous. Your proposal that banks more or less be required to “pay back” money they created is perhaps the right one, but one that could be done within their own ledgers. It is gradualistic.

At the same time, I fully anticipate financial disasters which will arise in the next ten years as a result of the graft, incompetence, stupidity, cupidity and unprincipled behavior of our politicians–both in the UK and here. Gradualism will not work then, and at that point I think something like what I have proposed will be needed.

I will note in that regard that defaults have been common throughout history. Greece has defaulted a number of times, as have many of the nations of Latin America. China defaulted, if memory serves, back in the 1920’s.

Money is not real, not even gold money. It is a symbol, and a pact we make with one another. It can be made and it can vanish. My proposal fixes everything, and in a way which no one has ever attempted. When nations default, they normally default as governments. The default is normally the result of the public sector buying too much, spending too much– often in the service of war, or unsustainable handouts to the people in order to win votes, and secure power.

No nation has tried to eliminate its private sector debt. I say “why not”? The answer, of course, is that most people do not understand how money works. In some respects, it does grow on trees, if you are a licensed “gardener”.

You objected to giving the millionaires their homes with mortgages. I thought about this, and came to this conclusion: there are only three groups which could get the home–the government, the bank, and the tenant; given that the goal is wealth generalization and redistribution, there is only one group which would not centralize wealth in getting the proceeds, which of course is the tenants, or mortgagees.

Logically, there is no reason that ALL property held by EITHER the government or the banks could not be passed over to the tenants. All public housing could be converted to condominiums. Most Federal agencies devoted to one social program or another could be abolished, and their offices donated to local or State governments, who if they chose could then reinstate the programs.

We are going to have economic chaos. It is in my view inevitable. We have debts skyrocketing, and at a time when the Basel 2 accords call for deflationary banking policy. We will see calls for tyranny, and rioting in the streets. What I have proposed is far less radical than the sorts of things which have already been tried, like Fascism and Communism, and has the salient advantage that I understand basic economics.

I would be curious as to any thoughts you may have on this. I made detailed notes on your proposal, and am only responding in general fashion, which I hope addresses most of the important points.

Your educational work on the predatory nature of the fractional reserve banking system is very useful, but I want to do what I can to support movement towards solutions which will work to support liberty, and on-going increases in prosperity.
 
P.S. As far as money, I thought about this too, and decided that physical money is the best solution. It occurred to me we would put gold threads in it, and perhaps radioactive identifications. Banks would warehouse the money, which would more or less be treated like gold in the past, wherein ownership of specific notes could be passed around electronically, but where the “owner” of specific currency could always pick it up at the bank and carry it around.

As I stated in the piece, I see no value in ANY fluctuation in the quantity of money, as it is inherently and ineluctably redistributive in invisible and thus dangerous ways. I would see the creation of a currency, once, and no change EVER thereafter.

More people choose to end their lives in this country than die in car crashes: http://www.dailymail.co.uk/news/article-2207089/56-million-suicide-prevention-programme-launched-study-reveals-Americans-lives-die-car-crashes.html

I don’t often simply repeat stories, but I thought this data point worth sharing here, as it touches on much of what I write about.  Suicide is a failure of a meaning system.  Conversely, a meaning system is an answer to the question of why to live.

What I feel is happening is that we are increasingly surrounded by darkness in our media, of violence, and the hopelessness that violence leads to.  We are also suffering from the high suicide rates among combat veterans.

Here is a list of suicide rates among countries.  Greece is the lowest and South Korea is the highest.  Low stress (at least until recently) and high stress. Hungary and Japan are way up there too.

I don’t have time to ponder this more fully.  There are many reasons meaning systems fail, but one of them is that in shame-based cultures, the meaning of life is in meeting certain standards.  Failing to meet those standards means that life is meaningless.

There is a lot of room for thought here, but I need to go.

I think the word “understanding” better gets at my sense of what true love is than the word love itself.  To love someone, you must SEE them as they are, and wish them well.

To the point here, you cannot love in the abstract.  When you see “love is all you need” it is an attractive sentiment, but I think what such people are loving is the self image they form of themselves as loving people.

True love does not have ego involvement.  It does not involve me looking at myself looking at you.  You are the whole picture, one that is separate from me, and one which has its own direction and purpose which must be seen prior to any effort at me helping.  Many people don’t need help, even if they want it; and many are hurt by it, even though they think they need it.

Sometimes the path of decency is watching a ship drift by in the night, without saying or doing anything.

There is this compulsion among many I see to feed their anxiety, to satiate it, by finding someone or something to help.  This is the root dynamic of the “Daily Cause” movement, and the reason silly ideas like Global Warming have such staying power.

But the people being helped–and I have said this many times–are the people more or less forcing themselves on others, who might well have done better unmolested.

Take food stamps.  It is not actually an act of charity to spend taxpayer money on advertisements intended to increase their use.  Handouts damage self respect, which damages independence, which leads over time to greatly increased risks of depression, and overall societal dysfunction.

Even when my children were little, when they were confronted with some challenge the rule was they had to struggle with it for a while.  More often than not, they were more able than they thought.  Occasionally they would come to me and say “I struggled for five minutes with X, and I still need help”.  Then they would get help.  In my view, this basic dynamic needs to be the social dynamic in any emotionally healthy culture.  It is not presently the dynamic in the United States, and we are paying the cost, literally and figuratively.

Posted on the HuffPo, in response to this article: http://www.huffingtonpost.com/2012/09/22/voter-id-laws-gop-college-student_n_1791568.html

How’s this: if you are too ignorant to understand that you need to bring your ID to the polls, you are too ignorant to cast an informed vote.  People do not get smarter in masses, if every person in that mass is ill informed.  The Democrat model is herding people into cattle cars and telling them who to vote for.  The Republican model is to assume that the informed and responsible will vote Republican, and generally they are correct.

Leftists may not want to admit this, but most Americans GET that preventing voter fraud is a pretty basic element in any democracy.

And as far as the good Democrats do, show me one city in America that is running off the rails–Toledo, Detroit, Chicago–that has not been run by Democrats for 40 years or more. 

Show me where the Senate Democrats have performed their Constitutional duty and passed a budget under Obama.  Show me where Bush’s spending was somehow bad, but Obama’s is fine.  BOTH WERE HORRIBLE. 

What we need are REAL conservatives.  If implemented their policies will work nearly instantly and those of you who depend on the Leftist religion for your sense of purpose will have to go on a long hike in the mountains to find a new meaning for what have thus far been wasted lives.

I keep seeing a leftwing talking point–and they clearly do use talking points–that either tax rates are at their lowest in forever, or that the government is getting smaller.

The core issue with regard to taxes is: how much money is being taken out of the private sector?

The core issue with regard to government size is: how much money is the government spending? 

This should be simple, but as always the Left is able to make traps for fools through disciplined repetition.

Here are the numbers:

You will note that receipts under Obama are less than under Bush in his second term (no one disputes tax cuts take a few years to grow the tax base, and 2002-2003 were largely affected by the recession Bush inherited combined with the 9/11 attacks), since the economy has sucked for his entire Presidency, but that expenditures have gone up steadily.  You will note that we first spent $2 trillion in 2000, under Clinton, but that we collected $2.3 trillion, which is why we had a budget surplus.  Obama in his FIRST year spent $3 trillion, which is a 50% increase over Clinton and his Republican Congress.

Putting a stick in the spokes of the Obama “narrative” is not hard, since there is no narrative other than hating ideological others, and trying to distract people with smoke and mirrors.

Here is a sample, from a post I made at the HuffPo, responding to the farcical continued efforts to make it an issue that a rich man pays taxes at the rate we would expect:

Do you all realize that your children will have to live in the world we
are making, and that we are going BANKRUPT rapidly? For all intents and
purposes, Obama has blocked every budget attempted since the
Republicans took control of the House in 2011. He has grown our
national debt more in four years than Bush did in eight, and Bush’s
spending was ALREADY indefensible. Obama is the first President in
American history to spend $3 trillion. The problem is not a lack of
taxation, but a growing government payroll.

We have not had unemployment this high for this long since the Great Depression.

We have lost most of the Middle East to anti-American zealots, and
invested American lives and treasure to do so. Obama’s foreign policy
has been a dreadful joke.

And we have not even reached the important chunks of Obamacare, which
will cut the profits of many small business in half, and which has
caused 83% of doctors to think about leaving the field.

And you think it news that a rich man whose money mainly comes from
investments is taxed at the rate ALL people are taxed on who make money
on investments? Of course not: you just hope it will distract from
Obama’s failures, and patent refusal to live up to his own promise to do
the job in four years or quit.

Apparently the thesis in “Dreams from my Real Father” is that Obama’s maternal grandfather, Stanley Dunham, was a CIA agent.  But if he were a staunch anti-Communist, as anyone doing that job in the early 1960’s would have needed to be, why grant Obama regular access to a known Soviet agent?  It makes no sense at all, even as a grandfatherly duty.  He would have known what Davis would do to a young mind, cut off from his mother.

It seems more likely that Dunham HIMSELF was a Soviet agent, or even a double agent.  If he was investigated by the FBI, that would have been the reason. 

Obama quite literally spent his entire childhood, in my view, surrounded by people who hated America, and who wanted to impose the tyranny of the few upon the many.

Here
is the analysis of the picture by a professional. The photo was taken
from “Barack Obama’s” Facebook page. 

When you start to think about the
implications of this, they are huge. His name perhaps ought to be Frank
Marshall Davis, Jr. 

We have a President whose mother allowed
pornographic images to be taken of her by a black Communist back in the
early sixties, and who allowed him to impregnate her outside of wedlock
with her (he was apparently already married). You can’t get farther
outside the mainstream than that. 

We have a President who spent a lot
of time with this actual father, who was greatly influenced by his
actual father, and whose actual father was a Comintern agent and card
carrying member of the American Communist Party long after Stalin’s
atrocities were well known. That man sits in the White House, privy to
all our secrets, and capable of controlling large segments of our
private economic lives through fiats not being blocked effectively by
Congress.

We have a media complex which has allowed this to happen.

 Finally, for now at least, we have to consider that the Obama campaign ITSELF might have started the rumor Obama was born in Kenya, to distract attention from the truth that he WAS born in Hawaii, does have a birth certificate, and that on that birth certificate it lists Frank Marshall Davis as the father.  As stupid as the American people are, that would have been too much even for the complicit media to spin into a positive, not once the pictures of Obama’s mother came out, and people started reading “Sex Rebel: Black”, and some of Davis’ old columns.

Plus, the very name Barack Obama would have been shown to have been a conscious fabrication, a deception launched at the very outset of Barry’s life, and continued ever since. 

With a father like that, though, one can readily see why the Ayers would like him.

 

I
am going to go on record as believing that it is more plausible that
Frank Davis was “Obama’s” father than the Kenyan. I say this based upon this piece, summarizing the book “Dreams from my Real Father”. It answers a lot of
otherwise challenging questions. Two pieces of evidence I find
particularly solid: the airbrushed picture; and the fact that Obama’s
mother was apparently photographed naked on a couch we have a picture of
Davis sitting on; and that Snopes has apparently backed off their claim
that these nudes represent another woman, since while their faces are
similar, their breasts are apparently not.  I remember reading their treatment of it some time ago, and just Searched “naked pictures of Obama’s mother”, and nothing popped up.

 If we survive this period, we
will someday look back in wonder at how we could trust so much power to
someone we knew so little about.

 To be clear, the Communist ideas likely filling Obama’s still-adolescent and unformed mind to this day will, if implemented, HURT most those he claims to want to help.  They will generalize misery, not alleviate it.

 

As I think about it, why not go directly for the jugular: ask lifelong poor Democrats in the inner city: what have the Democrats DONE for you in your lifetime?  Yes, you get little dribbles and drabs of money, but do you have a GOOD LIFE?  Do you see any HOPE of a good life?  Barack Obama promised you hope and change.  Do you really think he EVER thought he could make that much of a difference in your lives?  You’ve been voting Democrat for 40 years.  Were you aware Martin Luther King, Jr. was a Republican, as were most civil rights leaders back then?

Do you think voting Democrat for ANOTHER 40 years is going to get you a good life?  What do you think, honestly?  My goal is to facilitate, to broker, to enable, to generate new JOBS that pay well, to foster economic growth, and I am quite willing to focus the attention on these areas that Obama has NOT.

Nobody’s food stamps or Medicaid or public housing is going to get cut.  What I want to do is give you an ALTERNATIVE, to having your own house in a neighborhood you choose, to picking a job you want, to paying you own way, and beginning to live a better life.

What do you think? 

As I see it, the worst outcome is complete rejection–which is the status quo anyway, as he more or less rightly noted–but the best outcome is fostering thought in people Obama can count on to vote against their own self interest in every election.

I want to be clear: if we reelect Obama, our economic decline will continue and worsen.  There will be no recovery.  High unemployment will become the new normal, since we are transitioning to a European welfare State, and that at a time when the bank is already broken.  The continued malaise will hurt the already poor the worst, and large segments of our ghettos will become much more hellish than they already are.  Death will walk the streets, and elitists like Obama will not see it, since they sit in the back of limousines, vacation in Martha’s Vineyard and the like, send their kids to private schools, and don’t go within 10 miles of the worst ghettos.