(Week 7 - Thursday, Sept. 11)
It is a feature of the growing malaise in American politics that, no matter who we elect, they seem to do essentially the same thing once they get into office. The sharp distinctions the candidates were at pains to draw between themselves prove to be of little consequence because once they assume their duties their real mandate is to keep the bankruptcy re-organization process moving forward so the country can at least function while the "debt" continues to climb.
To make the game palatable to the electorate, they inherit a tacit public relations mandate, which is to deflect attention from the fact that the "debt" is a monetary problem that is caused by the nation having given up the power to create its own money supply. Instead, they will feel obliged to exhort the people endlessly that if only we adopted the right taxing and spending priorities, then budgets would be balanced, the economy would "grow," and the "debt" would start to be paid. Such rhetoric only obscures the real problem.
I have followed the pronouncements of both Obama and McCain carefully and have heard no evidence that either is at all aware that of the true nature of the "debt" problem, though that is not to assume that they don't have thoughts in private. Several of the other Presidential aspirants have given some indication that they possess a measure of understanding. These are Ron Paul, Dennis Kucinich and Ralph Nader. Unfortunately, none has demonstrated the level of urgency on the matter that would show that they realize that, without rectification of the monetary system, their otherwise laudable intentions will be in the end moot (to be fair, Ron Paul might be an exception, but his cure, the gold standard, is as bad as the disease).
This has not always been the case in American Presidential campaigns. At the Democratic Convention in Chicago in 1896, Williams Jennings Bryan declared, in what has come to be known as his "Cross of Gold" speech, "If they ask us why we do not embody in our platform all the things that we believe in, we reply that when we have restored the money of the Constitution, all other necessary reforms will be possible, but until this is done there is no other reform that can be accomplished."
The nominating conventions of that era were not choreographed media events. They were actual deliberative conclaves. The public at that time was savvy about the basic principles of money, and the delegates knew what Bryan was talking about (would the delegates of today?). In fact they were so moved that the speech propelled him from being the dark-horse candidate, to the party's nominee (the position Obama occupies now) for three election cycles.
What does all this say about the monetary knowledge, understanding and wisdom of, not only the current Presidential candidates, but also we the people who elect them? Shall we passively watch them on TV while they pour themselves out to pander for our approval, or would it be better to seek a way to help them become edified through this process? After all, one of them will be our next President. We the people certainly have no stake in their futility. Let us hope that whoever is elected will have a better chance to lead than merely manage the bankruptcy of our nation.
So, how might this be done? I would suggest that we the people take on the task of learning about money, and then work to open up a public discourse in which the candidates can feel free to join in. I have reason to believe that they have thoughts and questions about the subject, but do not feel free to give them voice. Many of us complain that they are scripted, but with our often gaff-obsessed, litmus-issued judgmental attitude, we keep them imprisoned in their script. Their evident failings notwithstanding, these are bright, talented and motivated people. Surely they are capable of the monetary conversation.
Richard Kotlarz
mailto:Kotlarzrichkotlarz@gmail.com
The complete set of columns from this series is posted at the following websites:
http://economictree.blogspot.com/
http://www.concordresolution.org/column.htm
Thursday, September 11, 2008
Wednesday, September 10, 2008
Column #39 WHAT OFFICE ARE OBAMA & McCAIN ACTUALLY RUNNING FOR?
(Week 7 - Wednesday, Sept. 10)
Barrack Obama and John McCain (as well as Ralph Nader, Cynthia McKinney, and others) have now gained the nomination of their respective parties as their candidate for the office of President of the United States, but, I would suggest, this is not an entirely accurate description of the office they are aspiring to.
Yesterday's column traced out the reasons why the U.S. has effectively ceased to be a sovereign economic nation, and has instead become a "business" in the portfolio of an extra-national financial order. It selected representatives (with the acquiescence of its people) have abdicated their power to create and issue the nation's own money to a private banking system, which then "loans" to the nation the money it needs to conduct its commerce, but on such terms that there is never enough in circulation to satisfy those "loans" without going further into "debt."
As an economic entity, the United States has allowed itself to become a "debtor" that can no longer pay its bills. Any economic enterprise that has no hope of financing its operations, except by borrowing ever greater amounts of money, is by definition in a state of bankruptcy. It can be truly stated, therefore, that whoever directs such an enterprise is not the chief executive officer of a viable organization, but rather the receiver in a bankruptcy re-organization.
It follows, then, that whoever gains the office of President of the United States will not be the executor of the democratic will of the nation, as outlined in the Constitution, but will serve instead as the elected receiver in the ongoing bankruptcy re-organization of "Enterprise U.S.A." (the American economy as a whole when seen as a "business," because it has given up its power to create its own money).
Admittedly, this is a startling assertion, but I think that it is justified. What is more, it has immense implications for all aspects of American life. If one starts with this observation as a point from which to reckon, one can begin to see why the problems of the nation are so intractable, and why money seems to control the government. A "debtor" is obliged to do what his "creditor" tells him to do, or he will not have the money he needs to survive. This applies to people, and nations.
This is a consideration that goes far deeper than who makes the campaign contributions, pays the lobbyists, or passes through the career revolving door between government and the corporate world. It is a foundational monetary problem built into the financial structure of the American nation itself.
I can imagine that the Presidential candidates have not thought of the position they are striving for in this way even for a moment, and yet given the economic realities of the situation, is it not an accurate description? One candidate will win the "Presidency," but it will be a hollow victory because the government he or she will head is without the essential prerogative of sovereignty; that is, the power to create and control the money of the nation. He or she will instead "win" the "office" of receiver for a national "business" that is in ongoing bankruptcy.
This is why, precisely, Nathan Mayer Rothschild, who gained control of the Bank of England, could boast, "I care not what puppet is placed upon the throne of England . . . The man that controls Britain's money supply controls the British Empire, and I control the British money supply." By the same principle, whoever controls America's money supply controls America.
Richard Kotlarz
richkotlarz@gmail.com
The complete set of columns from this series is posted at the following websites:
http://economictree.blogspot.com/
http://www.concordresolution.org/column.htm
Barrack Obama and John McCain (as well as Ralph Nader, Cynthia McKinney, and others) have now gained the nomination of their respective parties as their candidate for the office of President of the United States, but, I would suggest, this is not an entirely accurate description of the office they are aspiring to.
Yesterday's column traced out the reasons why the U.S. has effectively ceased to be a sovereign economic nation, and has instead become a "business" in the portfolio of an extra-national financial order. It selected representatives (with the acquiescence of its people) have abdicated their power to create and issue the nation's own money to a private banking system, which then "loans" to the nation the money it needs to conduct its commerce, but on such terms that there is never enough in circulation to satisfy those "loans" without going further into "debt."
As an economic entity, the United States has allowed itself to become a "debtor" that can no longer pay its bills. Any economic enterprise that has no hope of financing its operations, except by borrowing ever greater amounts of money, is by definition in a state of bankruptcy. It can be truly stated, therefore, that whoever directs such an enterprise is not the chief executive officer of a viable organization, but rather the receiver in a bankruptcy re-organization.
It follows, then, that whoever gains the office of President of the United States will not be the executor of the democratic will of the nation, as outlined in the Constitution, but will serve instead as the elected receiver in the ongoing bankruptcy re-organization of "Enterprise U.S.A." (the American economy as a whole when seen as a "business," because it has given up its power to create its own money).
Admittedly, this is a startling assertion, but I think that it is justified. What is more, it has immense implications for all aspects of American life. If one starts with this observation as a point from which to reckon, one can begin to see why the problems of the nation are so intractable, and why money seems to control the government. A "debtor" is obliged to do what his "creditor" tells him to do, or he will not have the money he needs to survive. This applies to people, and nations.
This is a consideration that goes far deeper than who makes the campaign contributions, pays the lobbyists, or passes through the career revolving door between government and the corporate world. It is a foundational monetary problem built into the financial structure of the American nation itself.
I can imagine that the Presidential candidates have not thought of the position they are striving for in this way even for a moment, and yet given the economic realities of the situation, is it not an accurate description? One candidate will win the "Presidency," but it will be a hollow victory because the government he or she will head is without the essential prerogative of sovereignty; that is, the power to create and control the money of the nation. He or she will instead "win" the "office" of receiver for a national "business" that is in ongoing bankruptcy.
This is why, precisely, Nathan Mayer Rothschild, who gained control of the Bank of England, could boast, "I care not what puppet is placed upon the throne of England . . . The man that controls Britain's money supply controls the British Empire, and I control the British money supply." By the same principle, whoever controls America's money supply controls America.
Richard Kotlarz
richkotlarz@gmail.com
The complete set of columns from this series is posted at the following websites:
http://economictree.blogspot.com/
http://www.concordresolution.org/column.htm
Tuesday, September 9, 2008
Column #38 THE UNITED STATES AS A "BUSINESS"
(Week 7 - Tuesday, Sept. 9)
The nominating conventions are over, we know who the candidates are, and now there begins a two-month media blitz in which they will make their best pitch as to why we should elect them. If the past is any indication, I expect to hear strident rhetoric about how we as a nation need to "balance the budget," "live within our means," "practice fiscal discipline," "pay off our debt" and otherwise run America more "like a business." After all, say even consummate insiders running for re-election, the problem in Washington is that all these politicians, lobbyists and bureaucrats have for the most part never run a "business," and so have no feel for the sort of sensibilities and skills it would take to "balance the budget" for the nation as a whole.
This is, in my view, a fundamental mischaracterization of the nation's chronic problem with "debt." The United States is ideally not a business. Rather, it is a sovereign nation within which businesses operate. To facilitate the people's commerce within its boundaries, it has the power to issue a public money supply, without cost. Businesses need a source of income to offset expenditures, but the nation, as a sovereign economic entity that can create its own money, does not.
Unfortunately, the sovereign power to create the people's own money (the most essential element of the commons) has been abdicated to an extra-national (outside national control) banking cartel. The net effect of this abdication is that the sovereign socio/political/economic nation we call the United States has, in effect, been transformed into a "business" in the portfolio of an extra-national financial order.
Our elected representatives, who hold the trust to safeguard the people's monetary prerogative, have (with the people's negligent acquiescence, if the full truth be told) abandoned their responsibility to "coin Money (and) regulate the Value thereof", and have instead set up a scheme (the Federal Reserve System) whereby the only source the American people have from which to drawn the currency they need to conduct their commerce is to "borrow" it at "interest" from private banks.
There are millions of businesses that exist within this economy, and they each have their respective revenue flows, but as a whole combined enterprise the American economy (let us call it "Enterprise U.S.A.")has only one source of operating funds, and that is the money supply it borrows from the Federal Reserve System. "Enterprise U.S.A." always owes more to the banks than is in the money supply due to the "compounding-interest" fee attached to all bank loans. It follows, then, that "Enterprise U.S.A." is always obliged to go further into "debt" in order to meet its expenses. In essence, it is living by borrowing.
Any financial enterprise that cannot stay in business except by continually borrowing more money to finance its operations is by definition in a state of bankruptcy. "Enterprise U.S.A." (the American economy as a whole when seen as a "business," because it has given up its power to create its own money) is, therefore, in a state of bankruptcy. This is not a play on words. It is economic actuality. Our economic life has been transformed from the free and lawful expression of a sovereign people, into a "business" which is perpetually beholden to its creditors.
There is a sort of perverse "Golden Rule" that is bandied about in the back corridors of power. It says, "He who has the Gold rules." A more relevant version is, "He who is the creditor rules the debtor." The people of the United States have allowed their country to be transformed into a "debtor" nation that, to a large extent, no longer governs itself.
Richard Kotlarz
richkotlarz@gmail.com
The complete set of columns from this series is posted at the following websites:
http://economictree.blogspot.com/
http://www.concordresolution.org/column.htm
The nominating conventions are over, we know who the candidates are, and now there begins a two-month media blitz in which they will make their best pitch as to why we should elect them. If the past is any indication, I expect to hear strident rhetoric about how we as a nation need to "balance the budget," "live within our means," "practice fiscal discipline," "pay off our debt" and otherwise run America more "like a business." After all, say even consummate insiders running for re-election, the problem in Washington is that all these politicians, lobbyists and bureaucrats have for the most part never run a "business," and so have no feel for the sort of sensibilities and skills it would take to "balance the budget" for the nation as a whole.
This is, in my view, a fundamental mischaracterization of the nation's chronic problem with "debt." The United States is ideally not a business. Rather, it is a sovereign nation within which businesses operate. To facilitate the people's commerce within its boundaries, it has the power to issue a public money supply, without cost. Businesses need a source of income to offset expenditures, but the nation, as a sovereign economic entity that can create its own money, does not.
Unfortunately, the sovereign power to create the people's own money (the most essential element of the commons) has been abdicated to an extra-national (outside national control) banking cartel. The net effect of this abdication is that the sovereign socio/political/economic nation we call the United States has, in effect, been transformed into a "business" in the portfolio of an extra-national financial order.
Our elected representatives, who hold the trust to safeguard the people's monetary prerogative, have (with the people's negligent acquiescence, if the full truth be told) abandoned their responsibility to "coin Money (and) regulate the Value thereof", and have instead set up a scheme (the Federal Reserve System) whereby the only source the American people have from which to drawn the currency they need to conduct their commerce is to "borrow" it at "interest" from private banks.
There are millions of businesses that exist within this economy, and they each have their respective revenue flows, but as a whole combined enterprise the American economy (let us call it "Enterprise U.S.A.")has only one source of operating funds, and that is the money supply it borrows from the Federal Reserve System. "Enterprise U.S.A." always owes more to the banks than is in the money supply due to the "compounding-interest" fee attached to all bank loans. It follows, then, that "Enterprise U.S.A." is always obliged to go further into "debt" in order to meet its expenses. In essence, it is living by borrowing.
Any financial enterprise that cannot stay in business except by continually borrowing more money to finance its operations is by definition in a state of bankruptcy. "Enterprise U.S.A." (the American economy as a whole when seen as a "business," because it has given up its power to create its own money) is, therefore, in a state of bankruptcy. This is not a play on words. It is economic actuality. Our economic life has been transformed from the free and lawful expression of a sovereign people, into a "business" which is perpetually beholden to its creditors.
There is a sort of perverse "Golden Rule" that is bandied about in the back corridors of power. It says, "He who has the Gold rules." A more relevant version is, "He who is the creditor rules the debtor." The people of the United States have allowed their country to be transformed into a "debtor" nation that, to a large extent, no longer governs itself.
Richard Kotlarz
richkotlarz@gmail.com
The complete set of columns from this series is posted at the following websites:
http://economictree.blogspot.com/
http://www.concordresolution.org/column.htm
Monday, September 8, 2008
Column #37 THE LESSON FOR LABOR FROM "FLINT"?
(Week 7 - Monday, Sept. 8)
In yesterday's column I suggested that not only management, but also the participants in the labor movement would perhaps benefit from examining more closely their roll in the whole Flint drama.
The laborer who lost his job may indeed, with justification, criticize the board and CEO of GM for what they perceive as the board's callous decision to move the majority of the plants to "cheap labor" locales. On the other hand, to even suggest that those who lost their jobs may have had a hand in the disaster may seem to many to be grossly insensitive, given the difference in the political power, monetary compensation and personal suffering experienced by those on the respective sides in the matter.
In last week's columns I offered the view that the Flint episode was a prime example of a phenomenon that is happening throughout the country, caused in large part by a lack of awareness in the corporate world of the effect of the private-bank-loan transaction by which our money is created and issued within our present monetary system.
It is only reasonable to ask, given that the unconsciousness about the monetary system is culture-wide, if the labor movement, like management, is not in its own way susceptible to a narrowed vision on the same subject, and thereby also an unwitting contributor to the calamities (like Flint) that have befallen its members.
The heroic pioneers of the unionization movement truly were the leading edge of a just attempt by working people to at last secure, among other things, a better-than-starvation share of the economic pie for their labors. The lot of, not only the strikers, but virtually all working people was transformed for the better, and the industries they worked for benefited as well because they now had customers for their products with money in their pockets. It was a win-win.
Over time, however, something began to change. That is that, for a variety of reasons, the "interest" payments necessary to keep a burgeoning cold-war, consumer-society superpower supplied with money began to double and redouble. This meant that, while the economy was expanding by leaps and bounds, and while it seemed to many (maybe most) citizens that it could go on doing so indefinitely, there was a growing shortfall in the ability of the citizens of the nation to, as consumers, purchase the full value of their own production in the nation's domestic marketplace.
For people who worked for a livelihood this meant that, because so much money was being lost to the "interest" payments required to service the "debt" against the large and growing money supply, there was certain to be a shortage of purchasing power circulating in the economy to pay their wages, regardless of how high or low they were (or how productive they were in their labors).
This shortage of buying power was at core, not a wage-price-and-productivity problem (important as these considerations are), but a monetary problem. Like the world of corporate management, the labor movement did not recognize that. The result was that, like management, they took measures that only made the matter worse, and hastened the crisis that culminated in the virtual abandonment of Flint by the auto industry.
Flush from their victories in the late thirties and forties, the more powerful unions struck for very high wages and benefits, thinking that there would be a ripple effect from their gains that workers in the rest of the economy would be caught up in. Gains were made for a time, and it seemed to be working, but then it all came undone. Wages and benefits have since plummeted, and the organized labor movement itself is greatly diminished and in disarray. The unions were criticized for using their new-found clout to make demands that proved to be too high to sustain, relative to other segments of the workforce. A strong case can be made for this argument.
I think, though, that whether their demands had been high or modest, a process similar to what happened at Flint would still have unfolded. This is because the real issue for the worker is not whether the numbers on his paycheck are big or small. It is, rather, whether there is enough money circulating in the economy for the consumer (who is just the worker when he goes home) in the aggregate to buy the full value of whatever the workforce (who is just the consumer when he goes to work) in the aggregate produces.
A problem arises because this nation's money supply is borrowed from a private banking system, and so a large part of the average worker's wage is lost to "interest" payments for which he does not receive anything of value. This makes it inevitable that unsold goods, equal in value to that lost purchasing power, will pile up in the marketplace.
The pressure caused by the disparity between production costs and consumer buying power can be relieved in the short term by participants in the economy (including the Federal government)borrowing more money into circulation from the private banking system, selling the surplus goods to foreign countries, laying off workers (the cost of which is picked up by a public welfare system), or by corporations cutting their "short-term financial costs" by closing plants in the U.S. and relocating them in locales that have "lower productions costs" (i.e. "cheaper labor").
If the nation had a system whereby its money supply was issued directly out of the public domain (i.e. U.S. Treasury), a balance between the costs of production and consumer buying power would be assured. Unions, like management, don't seem to understand that. Their strategy of striking for high wages and benefits for the particular part of the workforce they represent, and assuming that this would cause a tide that would lift all boats, has proven to be disastrous in practice. It is time, I suggest, to reassess this approach.
In the end, I think that what will be found is that management and labor are not natural adversaries, but rather productive compliments of the economic whole. If they could but realize that and join together in the quest for a just and equitable monetary system, tragic episodes such as what happened in Flint, Michigan could be a thing of the past. Michael Moore and the CEO of General Motors might even become fast friends. Wouldn't that be worth a movie?
Richard Kotlarz
richkotlarz@gmail.com
The complete set of columns from this series is posted at the following websites:
http://economictree.blogspot.com/
http://www.concordresolution.org/column.htm
In yesterday's column I suggested that not only management, but also the participants in the labor movement would perhaps benefit from examining more closely their roll in the whole Flint drama.
The laborer who lost his job may indeed, with justification, criticize the board and CEO of GM for what they perceive as the board's callous decision to move the majority of the plants to "cheap labor" locales. On the other hand, to even suggest that those who lost their jobs may have had a hand in the disaster may seem to many to be grossly insensitive, given the difference in the political power, monetary compensation and personal suffering experienced by those on the respective sides in the matter.
In last week's columns I offered the view that the Flint episode was a prime example of a phenomenon that is happening throughout the country, caused in large part by a lack of awareness in the corporate world of the effect of the private-bank-loan transaction by which our money is created and issued within our present monetary system.
It is only reasonable to ask, given that the unconsciousness about the monetary system is culture-wide, if the labor movement, like management, is not in its own way susceptible to a narrowed vision on the same subject, and thereby also an unwitting contributor to the calamities (like Flint) that have befallen its members.
The heroic pioneers of the unionization movement truly were the leading edge of a just attempt by working people to at last secure, among other things, a better-than-starvation share of the economic pie for their labors. The lot of, not only the strikers, but virtually all working people was transformed for the better, and the industries they worked for benefited as well because they now had customers for their products with money in their pockets. It was a win-win.
Over time, however, something began to change. That is that, for a variety of reasons, the "interest" payments necessary to keep a burgeoning cold-war, consumer-society superpower supplied with money began to double and redouble. This meant that, while the economy was expanding by leaps and bounds, and while it seemed to many (maybe most) citizens that it could go on doing so indefinitely, there was a growing shortfall in the ability of the citizens of the nation to, as consumers, purchase the full value of their own production in the nation's domestic marketplace.
For people who worked for a livelihood this meant that, because so much money was being lost to the "interest" payments required to service the "debt" against the large and growing money supply, there was certain to be a shortage of purchasing power circulating in the economy to pay their wages, regardless of how high or low they were (or how productive they were in their labors).
This shortage of buying power was at core, not a wage-price-and-productivity problem (important as these considerations are), but a monetary problem. Like the world of corporate management, the labor movement did not recognize that. The result was that, like management, they took measures that only made the matter worse, and hastened the crisis that culminated in the virtual abandonment of Flint by the auto industry.
Flush from their victories in the late thirties and forties, the more powerful unions struck for very high wages and benefits, thinking that there would be a ripple effect from their gains that workers in the rest of the economy would be caught up in. Gains were made for a time, and it seemed to be working, but then it all came undone. Wages and benefits have since plummeted, and the organized labor movement itself is greatly diminished and in disarray. The unions were criticized for using their new-found clout to make demands that proved to be too high to sustain, relative to other segments of the workforce. A strong case can be made for this argument.
I think, though, that whether their demands had been high or modest, a process similar to what happened at Flint would still have unfolded. This is because the real issue for the worker is not whether the numbers on his paycheck are big or small. It is, rather, whether there is enough money circulating in the economy for the consumer (who is just the worker when he goes home) in the aggregate to buy the full value of whatever the workforce (who is just the consumer when he goes to work) in the aggregate produces.
A problem arises because this nation's money supply is borrowed from a private banking system, and so a large part of the average worker's wage is lost to "interest" payments for which he does not receive anything of value. This makes it inevitable that unsold goods, equal in value to that lost purchasing power, will pile up in the marketplace.
The pressure caused by the disparity between production costs and consumer buying power can be relieved in the short term by participants in the economy (including the Federal government)borrowing more money into circulation from the private banking system, selling the surplus goods to foreign countries, laying off workers (the cost of which is picked up by a public welfare system), or by corporations cutting their "short-term financial costs" by closing plants in the U.S. and relocating them in locales that have "lower productions costs" (i.e. "cheaper labor").
If the nation had a system whereby its money supply was issued directly out of the public domain (i.e. U.S. Treasury), a balance between the costs of production and consumer buying power would be assured. Unions, like management, don't seem to understand that. Their strategy of striking for high wages and benefits for the particular part of the workforce they represent, and assuming that this would cause a tide that would lift all boats, has proven to be disastrous in practice. It is time, I suggest, to reassess this approach.
In the end, I think that what will be found is that management and labor are not natural adversaries, but rather productive compliments of the economic whole. If they could but realize that and join together in the quest for a just and equitable monetary system, tragic episodes such as what happened in Flint, Michigan could be a thing of the past. Michael Moore and the CEO of General Motors might even become fast friends. Wouldn't that be worth a movie?
Richard Kotlarz
richkotlarz@gmail.com
The complete set of columns from this series is posted at the following websites:
http://economictree.blogspot.com/
http://www.concordresolution.org/column.htm
Friday, September 5, 2008
Column #36 WHAT COULD THE EXECUTIVES AT GM HAVE BEEN THINKING?
(Week 6 - Saturday, Sept. 6)
The shutting down of the auto plants in Flint, Michigan, and their relocation to locales (like the desert along the American border in Mexico), in spite of the evidently overwhelming preponderance of physical and human reasons not to do so (see Col. #32), is often held up as a prime example of the "greed and stupidity" that supposedly has infected corporate America. To be sure, it would not be difficult to find justifications to criticize the move, but looked at from a wider perspective, is the matter really that simple?
I was not present at any of the board-room deliberations at which it was decided that the factories in Flint had to go, but I can well imagine that there were present expert accountants with flip-charts heavy with graphics and ledgers full of numbers that presented 'carefully researched facts' and 'reasoned arguments', the 'bottom line' of which gave 'incontrovertible testimony' that GM had no other financial option than to move those plants. Furthermore, I can well imagine that these human beings - accountants, board members, even Roger Smith himself - may have acted, more or less, in what they perceived as good faith. As they saw it, presumably, did they not have a company to save, and would not the continuing 'high cost of labor' that would be incurred by a decision to stay in Flint result in the closing of these plants, and the loss of local jobs, anyway? After all, they had only to look around them and see most of corporate world coming to a similar conclusion in their own respective spheres.
Is it possible that all these supposedly "best and brightest" people in the business world could be "greedy and stupid," or was there some greater reality (real or imagined) at work in this now global economy that they felt compelled to recognize and make the necessary adjustment to? In my experience I have had occasion to work, from time to time, with people from the executive suites (as well as many from the factory floor), and have found them generally to exhibit the same tendencies for human integrity and corruptibility that I find in any group of human beings. I have experienced them on the whole, in the terms of their own perceived worldview, to be fine and conscientious people.
Notwithstanding, the question still remains, how then could such a judgment (abandoning Flint and relocating the plants), which seemingly flies in the face of every physical, human and indeed economic reality that lies around them, seem to otherwise intelligent, knowledgeable and responsible people to be a necessary conclusion?
The answer, I believe, lies in the deceptiveness that is an inherent part of the private-bank-loan transaction. It arises because the transaction is not a common sense borrow-money-and-pay-it-back routine (as it purports to be), but rather a money-creation-and-issuance process by which a compounding fee (called "interest"), that is in a practical sense unpayable, is attached. Thus the terms used to describe this process, such as "borrow," "loan," "debt," "interest," "payback" and "satisfaction," all have a disarmingly familiar ring, but the actualities of the steps they identify do not fit the their common sense meanings or dictionary definitions.
The building of a whole monetary universe on the foundation of an unsound mode of creating and issuing currency, and an inaccurate use of language associated with the process, has spawned a financial culture that is skewed at virtually every turn. There is not room to do the topic justice here (it will be explored as these columns continue), but the extent to which this has compromised the ability of persons in our civilization to think clearly on matters concerning money is jarring to behold. I find this to be true across the full spectrum of society, white collar and blue included.
Not only management, but the participants in the labor movement in America as well, would, I suggest, benefit from examining more closely their roll in the whole Flint drama. Only then will they be able to come to grips fully with the tragedy that has befallen them, and move forward with confidence and clarity into the future. I will take up that thread in the next column.
Richard Kotlarz
richkotlarz@gmail.com
The complete set of columns from this series is posted at the following websites:
http://economictree.blogspot.com/
http://www.concordresolution.org/column.htm
The shutting down of the auto plants in Flint, Michigan, and their relocation to locales (like the desert along the American border in Mexico), in spite of the evidently overwhelming preponderance of physical and human reasons not to do so (see Col. #32), is often held up as a prime example of the "greed and stupidity" that supposedly has infected corporate America. To be sure, it would not be difficult to find justifications to criticize the move, but looked at from a wider perspective, is the matter really that simple?
I was not present at any of the board-room deliberations at which it was decided that the factories in Flint had to go, but I can well imagine that there were present expert accountants with flip-charts heavy with graphics and ledgers full of numbers that presented 'carefully researched facts' and 'reasoned arguments', the 'bottom line' of which gave 'incontrovertible testimony' that GM had no other financial option than to move those plants. Furthermore, I can well imagine that these human beings - accountants, board members, even Roger Smith himself - may have acted, more or less, in what they perceived as good faith. As they saw it, presumably, did they not have a company to save, and would not the continuing 'high cost of labor' that would be incurred by a decision to stay in Flint result in the closing of these plants, and the loss of local jobs, anyway? After all, they had only to look around them and see most of corporate world coming to a similar conclusion in their own respective spheres.
Is it possible that all these supposedly "best and brightest" people in the business world could be "greedy and stupid," or was there some greater reality (real or imagined) at work in this now global economy that they felt compelled to recognize and make the necessary adjustment to? In my experience I have had occasion to work, from time to time, with people from the executive suites (as well as many from the factory floor), and have found them generally to exhibit the same tendencies for human integrity and corruptibility that I find in any group of human beings. I have experienced them on the whole, in the terms of their own perceived worldview, to be fine and conscientious people.
Notwithstanding, the question still remains, how then could such a judgment (abandoning Flint and relocating the plants), which seemingly flies in the face of every physical, human and indeed economic reality that lies around them, seem to otherwise intelligent, knowledgeable and responsible people to be a necessary conclusion?
The answer, I believe, lies in the deceptiveness that is an inherent part of the private-bank-loan transaction. It arises because the transaction is not a common sense borrow-money-and-pay-it-back routine (as it purports to be), but rather a money-creation-and-issuance process by which a compounding fee (called "interest"), that is in a practical sense unpayable, is attached. Thus the terms used to describe this process, such as "borrow," "loan," "debt," "interest," "payback" and "satisfaction," all have a disarmingly familiar ring, but the actualities of the steps they identify do not fit the their common sense meanings or dictionary definitions.
The building of a whole monetary universe on the foundation of an unsound mode of creating and issuing currency, and an inaccurate use of language associated with the process, has spawned a financial culture that is skewed at virtually every turn. There is not room to do the topic justice here (it will be explored as these columns continue), but the extent to which this has compromised the ability of persons in our civilization to think clearly on matters concerning money is jarring to behold. I find this to be true across the full spectrum of society, white collar and blue included.
Not only management, but the participants in the labor movement in America as well, would, I suggest, benefit from examining more closely their roll in the whole Flint drama. Only then will they be able to come to grips fully with the tragedy that has befallen them, and move forward with confidence and clarity into the future. I will take up that thread in the next column.
Richard Kotlarz
richkotlarz@gmail.com
The complete set of columns from this series is posted at the following websites:
http://economictree.blogspot.com/
http://www.concordresolution.org/column.htm
Column #35 THE MAQUILADOROS: MEXICO'S "FLINT"
(Week 6 - Friday, Sept. 5)
The Maquiladoros is a huge industrial district in Mexico which stretches along the U.S./Mexican border. It consists of thousands of factories that are foreign-owned, and were attracted to the country mainly by the "lower production costs" (a euphemism for "cheap labor"). The output of these plants is largely exported to the United States and other countries. This is where many of the factories that used to be in Flint, Michigan were relocated.
It would be difficult to find a place in the world where the evident contrast between "first world" vs. "third world" economics (high-value vs. low-value currency) is more starkly drawn. In San Diego on the U.S. side of the border, the average home is priced at upwards of a half-million dollars, while wages in the often horrific working conditions of the Maquiladoros on the Mexican side average $3.70; not per hour, but per day.
Most of the Mexican labor force consists of hard-working folk who have been driven out of the countryside because, as farmers, they could not compete with the heavily bankrolled and highly-subsidized agribusiness production of basic farm commodities on the American size of the border (where, at the same time, American family farmers have been losing their farms in large numbers because they can't pay their loans to the banks).
Perhaps the most ironic outcome of this process is that many of the Maquiladoros industries are themselves now being closed and relocated to other locales (mostly to China) in the never-ending corporate search for even "cheaper labor." As the Maquiladoros is shut down, thousands of displaced Mexicans feel compelled to cross the border into the U.S., where, if they make it, they will likely find economic opportunity that is relatively better than the desperate options in their home country, but they will also find themselves in the position of being re-exploited, as they are obliged to do the most difficult, dirty and dangerous work for whatever wage and working condition they can find. They have little recourse because they have scant political rights, being that they are not only "cheap labor," but "illegal labor."
Where is all this going? We can see in the Flint-to-Maquiladoros-and-beyond economic progression a compressed view of what is happening under the influence of the private "debt"-money system. The world is dividing ever more starkly into the "rich" vs. the "poor," the "haves" vs. "have-nots"; those who use money to make money vs. those who earn money by doing the work. This is not a matter of good people vs. bad. It is rather the virtually inevitable outcome of an inequitable monetary order.
To put it simply, the "haves" are those who are the recipients of the "interest" payments on money that is issued as "debt." The "have-nots" are the ones who make what is increasingly a less-than-living wage doing the basic work necessary for the maintenance of society, while making the "interest" payments on money they are forced to borrow into circulation to live.
The vaunted American work ethic is increasingly being rendered moot, as wealth accrues, not to productive labor, but to the exploitation of labor (i.e. ownership of the contracts for "debt" which those who labor are obliged to take on merely to live).
We are becoming a "civilization," both in America and throughout the world, in which the wealthy few dominate, through their privileged niche in the monetary order, the working many. There is still enough distribution of wealth in America to make it look like a middle class society, but the middle is eroding, as the many who are struggling just to maintain their lifestyle (or stay in their home) often attest.
The jobs that pay a living wage are disappearing, the work is being done by immigrants who are working for inadequate wages, and the middle class is struggling to hang onto its lifestyle (for now) by taking on more "debt." There is a relatively small (and shrinking) percentage of the population that is growing wealthy by "living off the interest." All are basically good people, but they are caught up in a dysfunctional economic order they don't quite understand, and more-and-more can't seem to control. Its mounting inequities are ultimately a threat to everyone, and are rooted in how our money is created, issued and controlled. That is the lesson of the Maquiladoros and Flint.
Richard Kotlarz
richkotlarz@gmail.com
The complete set of columns from this series is posted at the following websites:
http://economictree.blogspot.com/
http://www.concordresolution.org/column.htm
The Maquiladoros is a huge industrial district in Mexico which stretches along the U.S./Mexican border. It consists of thousands of factories that are foreign-owned, and were attracted to the country mainly by the "lower production costs" (a euphemism for "cheap labor"). The output of these plants is largely exported to the United States and other countries. This is where many of the factories that used to be in Flint, Michigan were relocated.
It would be difficult to find a place in the world where the evident contrast between "first world" vs. "third world" economics (high-value vs. low-value currency) is more starkly drawn. In San Diego on the U.S. side of the border, the average home is priced at upwards of a half-million dollars, while wages in the often horrific working conditions of the Maquiladoros on the Mexican side average $3.70; not per hour, but per day.
Most of the Mexican labor force consists of hard-working folk who have been driven out of the countryside because, as farmers, they could not compete with the heavily bankrolled and highly-subsidized agribusiness production of basic farm commodities on the American size of the border (where, at the same time, American family farmers have been losing their farms in large numbers because they can't pay their loans to the banks).
Perhaps the most ironic outcome of this process is that many of the Maquiladoros industries are themselves now being closed and relocated to other locales (mostly to China) in the never-ending corporate search for even "cheaper labor." As the Maquiladoros is shut down, thousands of displaced Mexicans feel compelled to cross the border into the U.S., where, if they make it, they will likely find economic opportunity that is relatively better than the desperate options in their home country, but they will also find themselves in the position of being re-exploited, as they are obliged to do the most difficult, dirty and dangerous work for whatever wage and working condition they can find. They have little recourse because they have scant political rights, being that they are not only "cheap labor," but "illegal labor."
Where is all this going? We can see in the Flint-to-Maquiladoros-and-beyond economic progression a compressed view of what is happening under the influence of the private "debt"-money system. The world is dividing ever more starkly into the "rich" vs. the "poor," the "haves" vs. "have-nots"; those who use money to make money vs. those who earn money by doing the work. This is not a matter of good people vs. bad. It is rather the virtually inevitable outcome of an inequitable monetary order.
To put it simply, the "haves" are those who are the recipients of the "interest" payments on money that is issued as "debt." The "have-nots" are the ones who make what is increasingly a less-than-living wage doing the basic work necessary for the maintenance of society, while making the "interest" payments on money they are forced to borrow into circulation to live.
The vaunted American work ethic is increasingly being rendered moot, as wealth accrues, not to productive labor, but to the exploitation of labor (i.e. ownership of the contracts for "debt" which those who labor are obliged to take on merely to live).
We are becoming a "civilization," both in America and throughout the world, in which the wealthy few dominate, through their privileged niche in the monetary order, the working many. There is still enough distribution of wealth in America to make it look like a middle class society, but the middle is eroding, as the many who are struggling just to maintain their lifestyle (or stay in their home) often attest.
The jobs that pay a living wage are disappearing, the work is being done by immigrants who are working for inadequate wages, and the middle class is struggling to hang onto its lifestyle (for now) by taking on more "debt." There is a relatively small (and shrinking) percentage of the population that is growing wealthy by "living off the interest." All are basically good people, but they are caught up in a dysfunctional economic order they don't quite understand, and more-and-more can't seem to control. Its mounting inequities are ultimately a threat to everyone, and are rooted in how our money is created, issued and controlled. That is the lesson of the Maquiladoros and Flint.
Richard Kotlarz
richkotlarz@gmail.com
The complete set of columns from this series is posted at the following websites:
http://economictree.blogspot.com/
http://www.concordresolution.org/column.htm
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