Re: Economic+Social Safety net ready: if chaos/panic comes, hop in.

On Wed, 26 Sep 2007 11:58:56 +0000, J.H.Boersema wrote:

The Trucker <mikcob@xxxxxxxxxxx> wrote:
On Tue, 25 Sep 2007 13:57:33 +0000, J.H.Boersema wrote:
http://www.xs4all.nl/~joshb/democracy.html
[...]
The
other is a silk glove way through sensitive and slow moving political
reforms, which starts with gutting the finance sector,
and donating it to democratic Politics [...]

I would like everyone to note that the financial sector is doing a pretty
good job of "gutting" itself were it not for the Fed dousing them with
free money.

The whole financial sector is completely mismanaged, even from a
Capitalist perspective. Pure Capitalism would mean people (banks)
lend the money they have, and profit from its return plus usury.

That is not necessarily a fixed piece of furniture for what I call
capitalism. It is that "capital" is not money in classical economics and
it is not money in real economics. Real capitalism is a system aimed at
increasing technological innovation and real capital development, where:
capital is roads, dams, electrical power grids, tractors, irrigation
systems, habitation structures of all kinds, factories, tools, machinery,
catscan machines, hospitals, medical equipment, and the like. THAT is
capitalism. Money and natural resources are something entirely
different.

This would ensure investors who take excessive risk go under,
this going under of high risk takers happens continuously.

It is not essential that banks lend money they have and it is not
essential that banks even by privately owned in order to have a system of
capitalism as discussed above. Money is not capital. For a good look at
the very rational "money creating" bank scenario I suggest the following:

http://www.greatervoice.org/essays/Credit.php

But
Capitalism is never stable in the long term, because the money
gets invested in the worst people abusers that can still manage
a business, at least from its own perspective it is set up reasonably.
The economy is already being mismanaged in pure Capitalism, but
what we have is not pure Capitalism.

Notice that the created money in the GreaterVoice example is secured by
proper collateral. Money is not being created for a new tube of lip gloss
or a trip to the islands. But that may also turn out to be irrelevant in
that the cost of credit will increase to cover the losses from those who
do not repay loans. So money creation (or at least "apparent" money
creation) is not the real problem. The real problem is the creation of
money for the sole purpose of financial gain from interest; the creation
of money for money's own sake. So to the creation of money for political
gains; deficit spending. These operations are pure theft.

Then comes real life <starts grinding axe>: the Government starts
to wrap its arms around the big financial investors, and feed them
straight out of the treasury. Banks are allowed to lend money from
Government, banks are allowed to lend money /cheaply/ from Government,
they get buy-outs if they mess up (at least sometimes), they are
allowed to lend out more money then they have (fractional reserve
banking). All this `drugs' prevent the bad high risk investors to
be weeded, burned off, so we get an excessive volume of investors
and banks that should already have gone under, but have been kept
alive on the drugs. The Government drug is profitable, and hence the
structurally more sane investors are faced with undue competition
with access to cheap gambling money, which will put them out of
business. The finance sector transfers more and more into a financial
addict, all these investors that should have gone under have to be
kept afloat artificially, and if they are to face their justified
fate they do it all together, causing some kind of a collective shock,
depending on the size of the bubble it could be a serious problem.

That is a rather confused muddle but the overall gist is correct. The Fed
should not have thrown $100B at the bad guys in order to "rescue the
larcenous". This is the Bush Regime and the Republicon crime syndicate at
work attempting to loot the society through the use of rightarded
economic drivel as taught and practiced by the neoclassical nut cases.
The proper address of the this problem is to, in most cases, let the loans
fail. The people who were granted these loans in most cases will not be
harmed. They put no money DOWN on the homes and they used the homes for a
period while paying about what they would have paid for rent. They will
now have to move back to a rent house but it isn't like they have lost
their life's savings. I say this without regard to tax laws and the newly
rigged bankruptcy laws. The real reason behind these laws are in fact the
protection of the larcenous money creators. These laws allow the
government to bring out the crying towels and talk about all the little
guys that will be harmed if government doesn't cough up money to the
oinking pigs. It is these rightarded Republican supported laws that are
making the bailout of the Republican cronies politically possible.

So the Fed may be keeping things up in the short term, but its drug
running is causing the problem to occur in the first place. This is
a very long term problem, because the laws for fractional reserve
banking, bank loans from tax money to gamble with, buy outs, they
are not new at all. They might be more then 100 years or more old,
just never stopped, the early gold-smith's were already lending out
more then they had, through their notes.

In a proper banking system, banks CANNOT make speculative unsecured loans
and mortgages require a 20% down payment. With those safeguards and
with bankruptcy laws they way they were before the Republicans took
over the government there is no problem with credit money creation. The
risk takers are forced to use their own money while the normal economy
runs very well, thank you. Glass-Steagall had a purpose in separating
"investment banking" from commercial banking. That law needs to be
strengthened and speculative loans, as you say, need to be 100% reserved.
But do not confuse these speculative loans with loans for homes and
durable goods. Mortgage loans are not to be abused as they have been and
sufficient down payments and credit worthiness must be regulated and
enforced. That is NOT pure capitalism but it is sane capitalism.

If you look at it from a state policy perspective, it can be a way
of attack on a vanilla Capitalist finance sector: it first makes it
dependent on its drugs, and once you have something depending on your
drug, you can control it, and most people affected will have to go
along with it. To fight it would have to be done through popular
pressure, many financials would fight to keep getting the drug.

That is the REAL problem, isn't it. The people have no voice and they
have no real education. The government is therefore controlled by the
thieves with a bull horn.

I think this problem is not foreign to vanilla Capitalism, because
vanilla Capitalism (`lend out your own money, if you fail then you
are out, can not create your own money and can not lend for gambling
from the state') will bring the worst people to power: investing
in nice people who give workers fair wages is less profitable.
Hence, vanilla Capitalism is likely to one day degenerate into some
kind of additional poblem, for instance Capitalism on drugs (a form
of state/legal corruption). These worst people provoked to power in
both industry (media) and finance, will want to control Government
for its power, and then use it for more profit.

So it cannot be allowed. On this we agree. But this fall into
disfunction can only be prevented with an aware and empowered middle
class. REAL economics is not all that tough to understand. The current
"schools" of economics, however, are primarily involved in creating
disinformation and smoke screens to protect the rich. Yet it has always
been thus. The rich will inevitably fund the schools of economics and
produce a pseudo "science" that ensconces them as the "good".

Now we are perhaps in the later stages of this drug Capitalism, where
the bubble it has inflated over the many decades is starting to be some
kind of annoyance or something (?), and they want to get rid of it and
map out a road to even greater wealth and power for themselves, cut out
the drug addicted financials. Going further along the road to gain
wealth and power without working for it.

I think you assign too much intelligence to "them". I am not all that
convinced that there is a "them". Wealthy people want to stay wealthy
and get more wealthy. That is human nature and there need be no collusion
or conspiring to give money to the Republican party. It is the takers of
the money that are the true conspirators. The liars and the betrayers of
the common people who continue to mislead for the sake of the wealthy. So
to the so called "schools" of neoclassical economics supported by all the
wealthy. Wealthy people need not "conspire" to support such apologists
as the universities that teach financial drivel as economics or the "Cato
Institute" and other groups of professional liars. It is in their
individual best interests to do so.

Going further a road would have to plunge much of the country in misery,
which motivates people to work for next to nothing, hence greater
wealth/power for the top. A reasonable way to get into a dark ages style
class society, is being a savior for an even greater problem - that
would likely get you the support of enough of the people. You may also
want to have armed forces on high wages that are willing to oppress the
People to get those wages. Waging some violent wars may give you good
indications of who to trust and promote, and who to remove and demote.
Keep the torturers, keep the killers, flush out the good people. Same
with the police, these two groups would become the force that keeps the
public in line, so you want them to consist of `bad people' (like the
Capitalist leaders themselves). The wars serve other purposes, clearing
the way for an oppressive post drug Capitalism regime, such as
oppressive wars, national world supremacy or some kind of superiority
ideology against `the evil enemy,' etc, etc. War is always a good thing
to generate oppression.

You continue to conflate latter day Republicanism with Capitalism. I would
submit that I have probably misused the word "aristocracy" somewhat but
that the following link illustrates the true nature of latter day
Republicanism:

http://www.greatervoice.org/econ/glossary/aristocracy.php


Since the drug Capitalism is generating a bubble compared to vanilla
Capitalism, and this bubble depends on the state policies, it gives the
state an interesting way to cause serious economic problems, perhaps
serious enough to declare marshal law and/or play a role in such a
take-down of normal society. Then money-drug infested Capitalism could
degenerate further into dictatorial Capitalism.

This could also be a natural law, because money-drug-Capitalism presumes
some form of government corruption, brought in turn to power through
vanilla Capitalism, and it is the nature of corruption to want benefits
without working, to want power and luxury and have others pay and create
it. The line between state corruption and state dictatorship is thin.

Here's the real news flash, pal. We are ALL infected with this very human
disease and it is called "ego". Some of us are more afflicted than others
but it is a part of the human condition. Even the left wing moonbats seek
the respect and admiration of others. And it is this need to dominate
lest we be dominated that drives us all to compete and to gain the respect
of others. IN some of our species this ego gets out of hand and becomes
malicious and even psychopathic. Representative forms of government are
designed to arrest this behavior by virtue of majority rule. To be sure,
representative forms of government can be corrupted. There must be
structural supports to stop it or representative government will fail:

http://greatervoice.org/econ/The_Mob.php

If democracy breaks and dictatorship wins, the economy is already
severely exploitive and oppressive through both vanilla Capitalism and
drug Capitalism, it would be a small step to go yet further. That would
yield `state Capitalism,' which looks similar to what I'm proposing
(public finance), but without the public having a real say in it
(pretence public finance maybe, or just ignore it or pretend something).
This would focus all financial power in who controls the essentially
more/less dictatorial state. The workings of vanilla Capitalism
(investing in the worst people abusers) goes on, because it maintains
naturally the stability of bad people as a middle class, on top of which
the real kingpins can stay afloat ...

This seems to be the current path. We will probably see an FDR like
figure gain the (P)residency and he will command the rest of the
conversion of the Senate into the "central committee". The House will be
made even more powerless than it already is simply by authoritarian lying
and spin and deception as well as the use of very good "actors" as
candidates for office. Both major political parties operate in this
fashion. The "party" chooses the candidate that will be able to raise the
most money to insure the dominance of the party. The candidates are
unknown to the people other than through their staged appearances. This
insures that all potential representatives will represent the people with
money. The people have no other real choice but to vote for one of the
two money raisers. Game over.

http://en.wikipedia.org/wiki/Article_The_First

And then all one needs is a `splendid little war' or a `major global
conflict,' for every generation, to amuse and occupy, terrify the
masses, maintain strong laws that prevent revolution and the like - the
good old art of maintaining a capitalist dictatorship, complete with
claims of democracy and human rights, national superiority, and torture
chambers etc.

You are simply describing the current state of affairs for us.

Unfortunately, this is by no means the end of the road anymore. That was
the past. Today, with high tech stuff, there are yet new opportunities
to increase power beyond traditional style dictatorship. It has never
been possible to chain every single person all of the time. Real world
problems, like the weight of the chains making work impossible. But
technology is solving these problems. This makes it possible for `the
parasites' to become parasites that actually bury themselves into the
brain (Government) of society with physical hooks to maintain control -
such as chipping each individual, and controlling lives through computer
generated reward/punishment programs. This seems easy enough in
principle, and could become the next endeavor after the step to
`state/dictatorial Capitalism' from `corrupt/money-drug Capitalism'
which is naturally induced by `vanilla Capitalism.' It all flows rather
natural, so it seems, an increasing degeneration of society through bad
laws.

Yet the root of the problem is not the economic system itself. The root
is totally political. Given proper information and the chance to actually
elect real representatives from among more locally known candidates there
is no way that what you describe can happen or could have happened. The
check on government power and the power of corporations and special
interests must be the people themselves. All else WILL BE CORRUPTED.

After that control would be total and unavoidable, revolution more or
less impossible: one press on the button kills all revolutionaries,
forced murders would give indication of who is suitable leadership
material, like in the Mafia initiation rites. Then you would also see
the mask of pleasantness being dropped, because ideological control is
no longer an issue, power comes from physical force (again, just as it
was in pre-technical times). At that point, Earth would have to be
classified as a hell, as opposed to just sliding toward hell. Then we
better pray hard that aliens or G.d comes down from heaven. This is the
greatest new strategic threat we face: high tech computer stuff used
against us (as opposed to Usenet in our favor), and things like unmanned
combat vehicles. One might say I see too much SciFi, I'd say people see
too little, because things will be possible, and they could be used
against the People. When have weapons not been used against the People
sooner or later. People are too complacent about their society, IMHO. If
these horrid days come, we would regret not spending more time studying.

http://greatervoice.org/extend/Representation.php

I hope that the people wake up somewhere before that happens, while
power is still essentially ideological. These are the good times, never
been better for many people, so instead of wasting time on drinking and
parties, they should study the fundamentals of the economy. Then we
should pass better laws which would roll back all the above forms of
Capitalism, institute a sane market based public finance economy. The
markets would provoke good and capable people to power in industry, and
democracy would provoke good and capable people to power in Government
and therefore finance.

I actually agree with the sentiment. I just don't agree with the proposed
solution. The way I see it is that if the people have good local leaders
and they are empowered through those leaders then the education becomes
absolutely essential. It is only through such education that the concepts
of property rights so essential to real trade and real gains for all of us
can be protected. And capital development is a part of that. If
privatization of capital ownership enhances capital development then such
privatization should be maintained. You should be much more concerned
with the privatization of natural resources than you are with the
privatization of capital.

Sh*t has happened before and is happening now, we can't ignore the
potential problems we might have to face. We should face them now while
we have the time, or we are possibly going to have to pay for that
neglect. We are already paing it. These problems can all be fixed, at
least in theory.

Yep. All is possible in theory. But you must have a political system to
support an economic system. I think you are putting the cart before the
horse. It may well be that proper involvement and education will lead us
toward your ideals. I will not venture a guess. But you must have some
way of politically supporting the economic structure. That includes
enforcement.

--
"I know no safe depository of the ultimate powers
of society but the people themselves; and
if we think them not enlightened enough to
exercise their control with a wholesome
discretion, the remedy is not to take it from
them, but to inform their discretion by
education." - Thomas Jefferson
http://GreaterVoice.org

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