Seven years ago, these men testified before Congress about their role in causing a collapse of the world’s economy. Many people lost their jobs and their homes because of what they and the organizations they ran did. They ran some of the largest financial organizations in the world. Some of those organizations are even larger and more powerful today. Many of these men still hold the same positions in their organizations as they did then. None has gone to jail.
They run your country. They can put you out of work. They can destroy the country’s economy. Each one has been either caught at or was responsible for actions that have cost the nation and the nation’s taxpayers trillions of dollars and in some cases were illegal or borderline so. They each make more than 50 times the income of the President of the United States. Yet, you collectively cannot remove any one of them from their position of almost absolute power. Nor, can you use the traditional free market means of expressing dislike or disapproval by not buying their products. This is neither a democracy nor a free market system. They are the enemy.
As Abraham Lincoln said:
“The money powers prey upon the nation in times of peace and conspire against it in times of adversity. The banking powers are more despotic than a monarchy, more insolent than autocracy, more selfish than bureaucracy. They denounce as public enemies all who question their methods or throw light upon their crimes. I have two great enemies, the Southern Army in front of me and the bankers in the rear. Of the two, the one at my rear is my greatest foe.”
Sometime in 2010 or 2011, the journal Nature mentioned, “A study conducted in Sweden gave women testosterone boosts in order to foster more risky behavior in them but… nothing.
The study gave rise to a theory that women should perhaps be in more control of global stock markets than men in order to make markets safer.’
What’s wrong with putting them in charge of everything and making the whole world safer?
“Despite its proclamation of the equality of all men, the imagined order established by the Americans in 1776 also established a hierarchy. It created a hierarchy between men, who benefited from it, and women, whom it left disempowered. It created a hierarchy between whites, who enjoyed liberty, and blacks and American Indians, who were considered humans of a lesser type and therefore did not share in the equal rights of men. Many of those who signed the Declaration of Independence were slaveholders. They did not release their slaves upon signing the Declaration, nor did they consider themselves hypocrites. In their view, the rights of men had little to do with Negroes.”
“The American order also consecrated the hierarchy between rich and poor. Most Americans at that time had little problem with the inequality caused by wealthy parents passing their money and businesses on to their children. In their view, equality meant simply that the same laws applied to rich and poor. It had nothing to do with unemployment benefits, integrated education or health insurance. Liberty, too, carried very different connotations than it does today. In 1776, it did not mean that the disempowered (certainly not blacks or Indians or, God forbid, women) could gain and exercise power. It meant simply that the state could not, except in unusual circumstances, confiscate a citizen’s private property or tell him what to do with it.
The American order thereby upheld the hierarchy of wealth, which some thought was mandated by God and others viewed as representing the immutable laws of nature. Nature, it was claimed, rewarded merit with wealth while penalizing indolence. All the above-mentioned distinctions — between free persons and slaves, between whites and blacks, between rich and poor — are rooted in fictions.
Yet, it is an iron rule of history that every imagined hierarchy disavows its fictional origins and claims to be natural and inevitable. For instance, many people who have viewed the hierarchy of free persons and slaves as natural and correct have argued that slavery is not a human invention. Hammurabi saw it as ordained by the gods. Aristotle argued that slaves have a ‘slavish nature’ whereas free people have a ‘free nature’. Their status in society is merely a reflection of their innate nature.
Ask white supremacists about the racial hierarchy, and you are in for a pseudoscientific lecture concerning the biological differences between the races. You are likely to be told that there is something in Caucasian blood or genes that makes whites naturally more intelligent, moral and hardworking. Ask a diehard capitalist about the hierarchy of wealth, and you are likely to hear that it is the inevitable outcome of objective differences in abilities. The rich have more money, in this view, because they are more capable and diligent. No one should be bothered, then, if the wealthy get better health care, better education and better nutrition. The rich richly deserve every perk they enjoy.
Harari, Yuval Noah . Sapiens: A Brief History of Humankind (p. 134). HarperCollins.
Adam Smith’s stated that “The profits of production must be reinvested in increasing production.”
I would assume from that that the good A. Smith may have agreed that if the profits of production go into building up wealth and not reinvested in increasing production, it is not Capitalism or a capitalist system but rather something else — perhaps something more like the royal system he lived in where the profits of production went to increasing the wealth of the entitled classes or into rent based assets.
Similarly, the debt and credit system are not Capitalism. They existed long before Capitalism developed. They proved exceptionally helpful and often assisted in increasing production but the bankers need for timely repayment is not the same as the investors wish for profit and may at times suppress production in order to satisfy the need for repayment. Also, as we have seen in the past 50 years or so, the bank based financial system encouraged the replacement of production with production-less wealth creation, thus requiring THE government to periodically step in to boost confidence by transferring public wealth in order to prop up the banks thereby making non-production based assets even more valuable. In effect, companies producing goods can fail but banks producing paper wealth cannot. I always felt that the banking system, since it often in the long run substitutes debt and credit for investment, risk and the reinvestment of the profits into increasing production is the anthesis of Capitalism.
Corporations are not Capitalism. They are a state sponsored scheme to encourage investment in production that investors would otherwise consider too risky. True, like debt and credit they may be helpful and perhaps essential in increasing production but they also have downsides. Investors having significantly limited liabilities as well as microscopic ownership interests leave operational oversight, to management, a few large investors, and various investor agents all of whom may have and often do have interests other than increasing production. They also, in the long run, substitute organizational preservation to production. Reinvestment of the profits of production in increasing production becomes a far lower priority to keeping Wall Street happy.
in Thailand, they have a King. I like the King. As Kings go he is pretty good. He is very old now and near death. Most people there love their King. Many of the country’s leaders claim they love the King too and are willing to root out anyone they believe does not love him as much as they claim they do.
The problem is that the King believes things like protecting the environment, eliminating poverty, aiding subsistence farmers, managing and maintaining the flood plains in order to diminish the scourge of floods and things like that. He spent a lot of his time going around the country doing those things that he says should be done to better the Kingdom and the lives of the people.
Those who claim to love the King the most, love him so much so that they are willing to imprison or even kill people they believe do not love the King as much as they do. I have seen these people all dressed up in their white uniforms whenever there is a televised function for the King.
The problem is, although these people love the King a lot, they do not love much of anything he tells them that they should be doing for the good of the kingdom. In fact, other people in the kingdom who believe what the King tells them and try to do those things he advises are often hunted down by the white uniformed lovers of the King and accused of disrespecting the King.
Now, why is that?
Jesus calls Levi. From the book: The Life of Jesus of Nazareth. Eighty Pictures. (Photo credit: Wikipedia)
In the US, we have a similar situation regarding the good gay messiah, Jesus of Nazareth. Many people say they love Him very much.
The problem is Jesus went on and on about things like helping the unfortunate, forgiveness, healing the sick and things like that. He liked women and hung out with them a lot. He did not think they should be punished if they happened to have done things other people did not like, even if it had to do with sex. He even often had a handsome man around him who he called his beloved and they would lay their heads on each other’s breast. He also said that unbelievers could be better in God’s eyes than believers if they behave kindly toward others. Jesus hated those who used religion to benefit themselves financially. He preached that it is the good things you do, not what you believe that matters to God.
Unfortunately, many of those who claim they love Jesus a lot, also believe that those who like what Jesus said they should do like oh, feed the poor, actually hate Jesus.
This seems to be a common situation among men to claim to love someone for no discernible reason but despise what the object of their adoration tells them to do whenever it benefits someone other than themselves.
Yes, this sounds like another screed about conservatives. And yes conservatives tend to behave like this in Thailand, back in Jesus’ time and even in the US and elsewhere today. And yes, their leaders are often the society’s rich and powerful.
Picture of Jesus with American flag (Photo credit: Wikipedia)
But liberals have their own problems. Liberals seem to often fall in love with a messiah whose words they agree with. If Jesus were alive today liberals probably would urge Him to run for office. And if He succeeded in getting elected, they would all go home and happily wait for their Messiah to perform His miracles and make everything like they think it should be. When that does not happen, they will become disappointed and would probably go to Him and complain. He would point out that He said that the miracles could happen only if they all changed their ways together and worked at it along with Him. The liberals would not like that and go home. This then would allow those who loved Jesus but not what He told them they should be doing to come in and toss Him into the garbage or worse.
In fact, that was what happened during Jesus time. The liberals, known then as the Apostles and Disciples, urged him to run for King, then when the shit hit the fan they all ran and hid. They only came out again after things quieted down.
Note: Everything written above applies to Men only. Remember, the women did not run and hide. They bravely appeared at the crucifixion and at the tomb despite the danger and, if I recall correctly, so did the beloved disciple
The senseless tragedy in Orlando Florida saddens me — people slaughtered only because of whom they chose to love. Once again in America, an angry young man armed with a gun murdered a bunch of people he did not know because he did not like or approve of them for some reason or other. Shame on us.
What is worse, I am neither shocked nor horrified. I fear I (and perhaps many of us) am becoming inured to this senseless mayhem. Mass murder with guns is to be expected in today’s America. It has become as constant as the tides. Yet, we do nothing. Shame on us.
We are urged by those who profit from the nation’s sorrow, to pick up guns to defend ourselves in order to be able to kill those we do not like and fear before they do so to us. Alas, in all likelihood, this will all end only when the last of us kills the last of them and they pry our guns from both of our cold dead hands. Shame on us.
We live in a reign of terror where we never know if or when some young man with hate in his heart and a gun will turn that gun on us or on our children. Shame on us.
And yet, our government that under the Constitution is charged with ensuring “domestic tranquility” does nothing while many of our elected representatives tell us that this same Constitution requires this reign of terror in order to preserve our freedom and liberty. Shame on us.
This is written in an effort to expand on the Federal Government debt-deficit definitions and history that I explored in previous posts (https://trenzpruca.wordpress.com/2016/04/27/national-debt-and-deficit/ and http://www.dailykos.com/story/2016/02/14/1485087/-National-Debt-and-Budget-Deficits ). This post examines the historical size of the interest payments on the Federal Debt and their impact on the Government’s ability to manage its budget. I hope it is easy to understand and possibly correct some of the hysteria and misstatements on all sides.
Perhaps the most significant concept to keep in mind is how the interest on this debt relates to income. One of the easiest ways to think about it is in reference to a person’s household debt. Basically, it is not how much debt you have but whether your income is sufficient to meet the periodic payments to pay off your debt and allow you to retain enough money live a good and decent life and you expect that income not to change dramatically for the worse all of a sudden.
Now, some recent history:
1. Interest rates as a percentage of total federal outlay. (https://www.whitehouse.gov/sites/default/files/omb/budget/fy2016/assets/ap_4_borrowing.pdf):
1950 (About end of Truman Administration) interest payment on federal debt amounted to 11.4 percent of all Federal Government spending.
By 1960 at the end of Eisenhower’s reign it had dropped to 8.5 percent.
1970 (through the Kennedy, Johnson, and half of Nixon’s administration) at the height of the Vietnam war it had decreased further to 7.9 percent.
1980, when Reagan assumed office, the ratio of interest payments to debt had increased to 10.6 percent largely because the inflation crisis of the 1970s increased borrowing costs.
Despite the end of the inflation crisis, by 1985, about half way through the Reagan administration, it had ballooned to 16.2 percent of Federal outlays where it remained until Clinton took office.
In 2000, when Clinton left office, it had fallen to 13 percent.
By 2014, it had further decreased to 7.4 percent where it has more or less hovered since.
So, today the ratio of interest payments on the Federal Debt to total federal outlays is among lowest it has ever been since 1950 (except for the early years of the Bush II administration as they used up the Clinton budget surplus).
2. Interest Rates as a percentage of Gross National Product (GNP).
Perhaps more significant is the ratio of interest payments to GNP.
Interest payments on the federal Debt as a percentage of GNP stood at 1.7 percent in 1950 and held relatively steady until 1980 when Reagan assumed the presidency. In 5 years it ballooned to 3.6 percent. Beginning with the Clinton Administration, It has steadily fallen until reaching 1.4 percent just before the Great Recession after which it grew to 1.8 percent by 2015. In great part, the recent growth was held in check by historically low interest rates.
To conclude, it appears the ability of the Federal Government to pay our debts remains more or less equivalent to any time in the last 65 years or so and substantially better than during the Reagan years. So, the sky is not falling.
If there is something to be worried about, it is the explosive growth of private debt especially household debt. Government debt has not grown much over the years and when it has it has been to bail out overextended Financial and Corporate interests.
So what about the future?
There are estimates that, if we do nothing, by 2020 Federal Debt interest payments as a percentage of total federal outlays will rise to 12.4 percent and to 2.7 percent of GNP. High but still lower than during the Reagan years when it was “Morning in America.”
Nevertheless, perhaps, something should be done to moderate that rise. Cutting Federal Spending seems unlikely. As the following chart indicates, Defense Spending, Medicare, and Social Security seem to make up an outsized portion of Federal spending. Cutting Food Stamps may please some people and assist others in their re-election but they have no significant effect on either the deficit or the debt. Democrats will riot in the streets to prevent tampering with Medicare and Social Security while Republicans, the Military Industrial Complex and a few Democrats will fight to the death to prevent the cutting of a favored military system.
So what to do?
Well, modestly raising taxes on non-productive income and wealth such as capital gains will probably do wonders.