Progressive Coalition

In part one we discussed the first act of the confiscation of individual property rights over one’s own production based on axiomatic natural law:

In a “barter” system, your product is your “money” with which you buy (trade, acquire) the goods-services of others. Notice the dynamics of this system, which is the root system from which other more convenient systems must be derived: The person or group of persons have absolute, exclusive right of ownership, to do with whatever he pleases, for the pursuit of happiness, and such.

In modern banking all money is generated through debt (a promise to return the money with interest to the entity who issued those AR’s, namely banks and financial institutions.)

The dynamics of ownership change instantly. The producer no longer has absolute and exclusive rights to his wealth; and the bank has acquired a degree of power when it dictates the terms of transactions.

The second confiscatory practice is the creation of money by the “fractional reserve” system.

The basic principle of money (acquisition rights, or right to claim goods and services from others), which must always be kept in mind when analyzing any economic problem, is:

Money is back by the productive capacity of a population. This is products. Real wealth in physical form, food, buildings, cars, houses. It is NOT back by services. In fact, services are possible ONLY through a sufficient surplus of real products to distribute through the service sector of the economy.

When a bank lends money or gives “credit,” which is the same as the right to acquire goods and services,” it does so by increasing the money supply. The existing money supply is already slated for the existing productive capacity of the population. Therefore, it MUST BE “new money” for products that do not exist. (see Federal Reserve MODERN MONEY MECHANICS, booklet obtainable in any library or Internet research-here is one.)

The history if this confiscation method is couched in the romantic tale of the goldsmith-updated:

It started with goldsmiths. As early bankers, they initially provided safekeeping services, making a profit from vault storage fees for gold and coins deposited with them. People would redeem their “deposit receipts” whenever they needed gold or coins to purchase something, and physically take the gold or coins to the seller who, in turn, would deposit them for safekeeping, often with the same banker. Everyone soon found that it was a lot easier simply to use the deposit receipts directly as a means of payment. These receipts, which became known as notes, were acceptable as money since whoever held them could go to the banker and exchange them for metallic money.

Then, bankers discovered that they could make loans merely by giving their promises to pay, or bank notes, to borrowers. In this way, banks began to create money. More notes could be issued than the gold and coin on hand because only a portion of the notes outstanding would be presented for payment at any one time. Enough metallic money had to be kept on hand, of course, to redeem whatever volume of notes was presented for payment.

It sounds so incredibly reasonable and clever, that the underlying fraud escapes most people, since we’ve been educated over 700 years to accept this as a rational system of money creation.

Keep in mind that, whether gold, silver, paper, or whatever the currency is, it is still “backed by the productive capacity of a population.”

The booklet details how 10,000 reserves can produce 100,000 in loans. Now “fractional reserve” means you can do what the goldsmith did, except you must keep a certain percentage decreed by law, (on the assumption that there should be enough with the bank to cover any runs or threats of runs; not as a result of logical economic theory.) In the Fed booklet example the required fraction required reserve is 10%. In modern times, this has all but disappeared. The number changes periodically, and over the last few years, the reserve was zero for most types of deposits, with 1, 2, or 3% on some types.

Conventional economics explains that this is necessary because that’s how the economy is caused or allowed to grow. It is true that money must be injected into an economic system so exchanges can take place, and productivity can grow.

But again, keep in mind that ALL THAT NEW MONEY is “backed by the productive capacity of a population;” and the money is an investment belonging to the population, which must ONLY inure gain to the population, those on whose productivity the worth of the money is based, NOT to the banker or the government or anyone else.

(As production increases, services can be added to the system to support and increase the productive capacity. In this way, as people move from the production of real things, into the service sector, money distributes accordingly.)

In the current system, repaid loans are returned to the control of the bank, interest is returned to the bank. When loans are defaulted, the losses are charged to the community through higher service fees, inflation, and taxes.

This further drastically alters the dynamics of ownership, where large percentages of wealth are confiscated by banking on the guise of fees for services. A service is time spent performing a task to the benefit of another. After the loan is processed, how much more time is spent on providing a service? If this fraud and deception of property confiscation is not clear then you indeed deserve to be poor.

Next part, we’ll review how confiscation is perpetrated through planned inflation and depressions.

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The Greatest Shell Game of All Time

We will attempt a clearer way to express the underlying insanity in modern economic system that is passed for economic wisdom, and taken for granted as a basic truth of economics.

With this root understanding, the reader should feel compelled to think-through process, and recognize the facts, to be able to analyze the inequities that generate all economic catastrophes, since the inception of the roots of modern economics.

However, an in-depth understanding must begin with a clear grasp of the axiom that all wealth is created by human labor. Let’s call “real” wealth the actual physical thing, the object, the house, the bread, the consumable item that has been produced, as well as knowledge discovered and generated by human thought. (For definition sake, lets include wealth provided by nature in our definition, which does require human intervention to become useful wealth, whether by ‘harvesting’ or the simple exposure to natural beauty.)

Let’s define pseudo-wealth, anything that is NOT real, but is viewed as wealth from the point of view that it allows the owner to claim real wealth. Here we have promissory notes, stocks and bonds, all type of financial instruments or paper.

Now let’s bring our entire economic system to zero currency. There is no money with which to accomplish trading. Anyone can immediately recognize that we would have to revert to barter. In a “barter” system, your product is your “money” with which you buy (trade, acquire) the goods-services of others.

Notice the dynamics of this system, which is the root system from which other more convenient systems must be derived: The person or group of persons have absolute, exclusive right of ownership, to do with whatever he pleases, for the pursuit of happiness, and such.

To the un-indoctrinated and uneducated, there are clear pathways of how a trading system should work, and how it should be created: give the owners of the goods-services a document which is certified to truly represent all products and services that entity owns. Let’s call these AR’s (Acquisition Rights).

The dynamics of ownership will not have changed. The producer will use his certificates to transfer them to others, thereby acquiring others’ good-services, exercising absolute and exclusive right to his production, his wealth.

Comparison to Modern Banking

All money (AR’s) is generated by a debt or a promise to return the money with interest to the entity who issued those AR’s, namely banks and financial institutions.

The dynamics of ownership change instantly. The producer no longer has absolute and exclusive rights to his wealth. He must now share it with the banker who asserts his ownership by collecting a percentage of his goods-services, if he does return the AR’s issued to him. He encumbers his entire wealth: he must “pledge” ALL his good-services to the bank, in the event that he is unable to return the AR’s with interest.

A further dynamic change comes into place: The bank now has acquired a degree of power to dictate the terms of the transactions. Now you say, well, they can go to another bank. Not when they are all the same, and there’s pretty much of a monopoly. But thinking of going to another bank is just a distraction to the vital fact that power has shelled away to banks without any rational or innate right, no matter how small or innocuous that power may seem.

So the institution of the banking system as it is today is in direct violation of the 14^th Amendment of the US constitution, i.e.: ” No State shall make or enforce any law which shall abridge the privileges or immunities of citizens …; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”

Now there are a few more shells here: No banker ever lends the entire collateral value of the pledged goods-services. Depending on economics times and economic policies, he will ONLY LEND 80-95% of the value of the collateral.

Now do the math, and simplify it to 3 entities: 2 traders and the bank. Start with a given amount of real wealth, and the loans which would be issued to make trading possible. Then have the bank issue 80%-95% of the real wealth, and see a) how the trading itself becomes affected, b) What happens when it’s time to pay the AR’s back to the bank; what’s the wealth distribution at the end of one cycle. I’m not going to show you the math here, because if you don’t do it yourself, it will never dawn on you what’s really happening.

If you do the math, you won’t be able to miss how wealth is shifted gradually, year after year, decade after decade, and after a half a century of work, you begin to think you were too stupid to get rich. But that’s not true; you were only too stupid by staying so busy as not to catch on the scam.

Why Is this Basic Point Dismissed?

Every one who is alive today came into the system after it had been going on for thousands of years. We are taught in schools, elementary, and advanced, that this is the way things are, and all illogic is explained with the same kind of insane explanations that we’ve learned to accept because, “we’re too stupid to understand” the wise men from the Ivory Tower.

In the intervening time between barter, and today’s system, we’ve been continuously distracted with not just the 3 little shells on the carnival street table, but with thousands of little shells, millions of pages explaining why the problems happened, and millions more of corrective measures that will finally fix the system, all of which has only succeeded in complicating it, obscuring it, and failing to avert the disasters which occur every ten to twenty years, for millennia.

When you fully understand this usurpation of property rights, and basic violation of personal right, and how we have effectively have gone back to the feudal system, the answers begin to unravel, as they become obvious.

A first one that would come to mind to almost anyone is that any monetary system can’t be at the exclusive control and benefit of the few. It is a public utility, and short and long term benefits must inure all the citizens of a country.

There are many more solutions, and you will see them as you start digging through the system, and begin to discover the myriad of problems which are generated by this, ostensibly innocuous, greatest shell game of all time.

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We are continuous targets of the ideas of others, but few have a far reaching public forum, where one’s personal realities can help shape conventional wisdom. The first act of teaching is not in the generally assumed principle of logical presentation of new information, but in the constant repetition of hitherto meaningless ideas. Reality is created through constant repetition, which cements the framework upon which logical discourse can then be applied. While you will not find these concepts in teaching textbooks, they will appear prominent in “Managing Public Opinion,” and political science manuals.

Whether left, right or center, communist, fascist, democratic or imperialist, the words have been predefined, and the meanings convey to the masses through the “trained-in” repetition of the concepts you are expected to respond to, and words are designed to stir the emotion to a pitch designed to produce chronic catatonia, disconnection, and paralysis.

We support the organizations and activities that already parallel or parrot our trained-in realities; we read, and listen, and post in blogs and forums where we can find people of like minds, and we’re loath to read or listen to other opposing ideas, befuddled by what we see as spurious and unfounded logic, being kept in our chronic paralysis. We rarely if ever, conceive new thoughts from our independent observation. Our progressive or right wing leaders and speakers are powerfully eloquent in expressing what we think are our views, and we are comforted in the idea that “there are so many of us” that some day, somebody will take some action, while we are relatively complacent in our paralysis. How can things change when all of them have trained in the same school, and can only stir our emotions, but can’t begin any concerted action. And our leaders do nothing… living in the same paralysis they keep us locked in with their emotional punditry.

Today is this story, tomorrow another, and we are fed our superficial daily bread of emotional titillation and paralytic medication, to come back for more yet another wallowing in the deception that in time things will change.

Today the world belongs to and is run by the few who run the schools that teach our leaders on the left, right, center, communist, fascist, imperialist, and otherwise, and we all accept the underlying principles of the economic tyranny, the very underlying beliefs we hold in common with our foes keep tugs of war unchanged, and too unthinking to take up our own inspection of the underlying truths that keeps our social train in the same track it’s been on since ancient time.

This is the final lesson. Unless you are willing to abandon your paralytic realities, and start thinking new thoughts, you can expect no more than the continual repetition of the deceitful soothing of the same old stories, and same old realities. It takes courage to see one’s own incompetence, and be willing to set aside the ‘standard realities’ and think independent of the factions and “isms.”

You’ll know when you are effective because only then you’ll start getting attacked. If you’re harmless, and remain paralyzed, you can exercise free speech to your hearts content without fear of reprisal.

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We must now confront the root of our social, political, and ecological problems by addressing its root cause: the economic system itself. We are operating on an economic system with the mentality of a feudal society, and it’s time for economic democracy, particularly for a nation that has declared independence some centuries ago.

The general public is baffled with obscure concepts and inane statistics and made to believe that the economic gurus have at the heart of their interest the concepts we learned in Economics 101:

The money supply must be expanded and contracted in relationship to the population, goods and services available in the market place. Products and services must be expanded and contracted in relationship to populations’ needs. The expansion of the money supply should be distributed in relationship to the economic entities affected. The contraction of the money supply should be applied to the economic entities affected.

Our current woes are nothing more than the sustained violations of these basic principles, and the accelerated obfuscation of the economic processes from the unthinking super-majority who sees the subject as far too daunting to study and understand, and continue to let the enlightened few manage the controls, hoping for something that will never come.

An economic system is in reality nothing more than a mechanical engineering problem, and it should be relegated to the engineers and taken away from the economist. The latter have already failed, and in concert they’ve only achieved a planetary chaos which they intend to keep out of the reach of the unthinking majority.

There are numerous economic practices that are in direct violation of a free people’s constitution, in violation of property right laws, in violation of very economic basics they tout to apply, from the creation of money processes to the distribution of currency, and balancing the basic equation given above.

Our current crisis is the direct result of those unrestrained violations, and it seems nobody is making it the major political issue, which is fact it is, and must be, before any other political, social, environmental problems can be truly resolve.

For our own sanity and certainty of our own observation of what’s going on around us, we have no choice but to start learning right now.

The most immediate solutions to keep things from getting worse, is to immediately REVERSE the trickle down system by applying it to the tax system. Why hasn’t anyone ever thought of trickling wealth up? We’ve seen that trickling it down simply doesn’t happen. The first reversal has to be to increase the taxes at the top and reduce them at the bottom, with generous refunds and subsidies to the lower 70% of the population. This will start re-distributing the wealth down through the social echelons to where a more equitable distribution is in place.

Equitable is a double-edge sword, because its meaning depends on who is speaking about it. But there is a base that can be easily recognized by anyone:

All production, services, intellectual advances, that is to say, the wealth of a society is generated by the entire able-bodied population of a country. When 80% of that wealth is in the hands and in control of less than 20% of that population, even when allowing for skill diversity, it’s not difficult to see the disparity and inequity.

Concurrently, with the reversal of the trickle down system, get a team of bright mechanical engineers and have they study the system as it now works, and revise it to achieve the intended Economics 101 results.

These two starting points for solutions are not only possible, they are necessary. Although there are many other requisites changes, they are too extensive, and complex to at this time.

There are many who do not believe there is a way back from where we are now, like Morris Berman, in “Dark Ages America: The Final Phase of Empire.” I don’t want to believe it, but it’s too compelling to dismiss.

The folks in charge can truly resolve this without much problem… if they wanted… How far will they let it go before they act? Each time in the past, they let it go far enough until the wealth shifter up another notch, and twist the yoke just another turn, enough to bring the rambunctious unthinking masses into a little more submission. Most folks who will read are already aware of a lot, so the question is: how do we get the message to the unthinking masses? Will they ever think? So the message is to the few bright engineers who are willing to take on the challenge…

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The Ethics of Economics

I propose to present a new rational basis for modern economic systems that should replace existing systems for the purpose of a rational distribution of wealth, and resource control, and management. I will present what I have concluded are untenable fundamentals, and explain why with reasoning anyone can understand; and show with the same reasoning what are logical fundamentals for a sound system. All of which is something I’ve been pondering since 1968.

I spent more than forty years re-examining a large body economic theory, from Pre-Classical, Anglo-American, Heterodox, Classical, Continental, Keynesian and others, all of which can be classified as macro-economics; and likened to a Push Button System of hyper-broad remote-control-activation, too distant from the effect arena, to achieve precise controls. The reactions are delayed to such point that overcompensation is unavoidable.

There is no lack of brilliance in the field of economics, much of it little known outside academic circles.

We can trace the development of economics to Socrates, Greek and Roman cultures, into the middle ages with Thomas Aquinas economic theory based on theological and religious or ‘theological’ doctrinal concepts. The assumption in this review of past ideologies is that the underlying premise, having been essentially the same through most of western history, would likely repeat themselves in other lands and other cultures, and would likely lead to the same general observations herein:

Definition Era: Throughout all historical information available, the common thread underlying economic policy from which theory and practice is then derived, in their formative stage, is the concepts of Ethics and morality, and what must necessarily be an underlying rationale to justify them, i.e.: natural law. There are conflicts in the definition and basis for natural law. Nevertheless, the philosophy is an attempt to realize an underlying logical foundation to human behavior.

Management Era: Following the cementing of basic practice and economic philosophy, the modern economist focus on managing the reality of the times, and this is where I believe Adam Smith’s “An Inquiry into the Nature and Causes of the Wealth of Nations” sets the beginning of modern thought.

The differences between scholars lie on each school’s control button(s) of preference to exercise macro or micro management, which is generally derived from the behavior of economic entities within their historical background and setting. In other words, in attempting to arrive to the “push button” control at a high level in the system (macro), they estimate the importance, behavior, and motion of each component (money, investment, labor, capital, output, etc.), from which they conclude and propose what they consider the optimum element to control that will maintain an economic balance. There is merit and validity in these examinations when viewed against their specific frame of reference.

Nevertheless, the thrust of study and discovery, from antiquity until the modern-most “Game Theory” of economics (with its many variables) is in predicting behavior within the then existing methodologies, and attempting to channel that behavior. This falls apart when it becomes clear that the most significant entity, the human actor and observer becomes yet another variable in the equation; thus expanding its complexity to infinity. Yet, said ideology taken for grated as the single valid foundation for economic thought. Thinkers that deviate are marginalized and little known.

This review of past authors yields various obvious observations, which can be seen as common denominators to the foundation of their work for the various periods:

a) During the early times when economic was becoming a definable activity, it fell upon theologians and philosophers to resolve economic issues and rules, yielding to public demand for protection from unscrupulous agents.

b) After the root patterns of economic activity has been established, economists were, and are now, no longer concerned with philosophical theory of Ethics, but with management of established basic elements rooted in practice;

c) The system they have built and continue to build and expand, rest on a foundation of the wealth protection of monarchies, and rulers; and this, within the backdrop of elite-elite struggle for control, and retention of power; it is visible that these writers were well versed in their respective contemporary ideologies; and would naturally gravitate to the ruling strata. They are considerations of what was viewed as the natural order of things, based purely on prevailing elitism: for example, Malthus’ acceptance of poverty as the part of the ‘natural’ order of things.

To be continued

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This Category is where they would appear…When an author or contributor has items of vital important, he can categorize them as “urgent issues” and it would probably end up under this heading.

As I said, we’re still building, so we don’t know where it will end up, but I’m sure you can still read information that is posted and available to everyone.

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If you stumbled here by accident, think of it a peeping through the ply boards in a construction site. I’ve not bother to cover the holes, nor to write signs saying: “Post on Bills.”

Therefore, I welcome you to join even while we are under construction. I’m following an unusual practice that I learned in China: They start selling the condos that are finished, even if they have not finished building the upper floors.

Works in China… May not be a good idea for safety, but I promise you there are no safety risks to join and start shaping this place… What will happen is that some of the cracks will show well before inauguration time.

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I hope to use this section for economic news, and articles, but particularly, basic economics concepts which are little understood, and broadly misunderstood. For example, we all know what causes inflation… we say, prices go up when demand for the product or service goes up, while the supply remain the same. On the other hand, I can’t get a clear answer from anyone as to who is the first business or activity to raise the prices and why? Somebody has to make a decision on raising the prices… right?

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