(Week 8 - Monday, Sept. 15)
With six weeks worth of this column having gone out, it is perhaps time to take a look at how it has been received so far, and how it might proceed into the future. The response has been gratifying; more so than I could have expected. I say this with respect to numbers of people who have opted-in, and the many thoughtful questions, comments and critiques received. This is all greatly appreciated.
There are at least two places on the net where these columns are posted (on the initiative of others) as they come out, and a complete set maintained. These are listed at the bottom of this page. Others have offered to do the same, set up a dedicated website, or otherwise help to get these and other of my writings out. There have been more offers than I have been able to follow up on so far, but I am grateful for every one. I am moved by the news that a number of people have indicated that they make hard copies of the columns and give them to people they know who might be interested.
The greatest challenge with the columns so far, I am informed, is that some folks are having a difficult time keeping up with the volume of reading. These articles are meant to be short enough in length to read over the proverbial "morning cup of coffee," but people today often lead harried lives (got to keep up with the monthly "interest" payments, after all), and have a difficult time in finding place for even the smallest tasks. Many are indeed keeping up with whatever they hope to get out of the content, but others are not.
The content is designed to be a tightly reasoned and integrally connected discourse that can (supposedly) in a step-by-step manner help the reader awaken to a wholly different perspective about money than is offered in the conventional dialogue. I write each article in mindfulness that there may well be readers who are joining in for the first time, or rejoining after an absence. Consequently, each installment has to be at least minimally decipherable to the uninitiated within the terms and context presented in any given piece. That said, much groundwork for understanding is laid as the series unfolds, and if parts are missed something is inevitably lost. There are many readers who, according to the feedback I am getting, feel the same way, and experience frustration if they "fall behind." There are others who work to consolidate their understanding by going back over past installments.
In light of these considerations, plus other commitments coming up in the near future, I am contemplating taking a two-week breather from October 5 through 19 during which no new installments will come out. The series would pick up again starting October 20, and presumably focus on the issues that have gained public attention during the run-up to election day on November 4. I would welcome whatever thoughts anyone has about this.
There is yet much that needs to be said about money and the economic times that we live in. I don't anticipate that subject will ever be exhausted. Accordingly my commitment to getting this dialogue out, through New View on Money and other channels, remains ongoing. Thank you for your patience with this process and continuing interest.
I close with a monetary thought for the day:
"I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."
Thomas Jefferson, letter to the Secretary of the Treasury Albert Gallatin (1802)
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 15, 2008
Saturday, September 13, 2008
Column #42 THE WRONG ANSWER TO THE MORTGAGE CRISIS
(Week 7 - Saturday, Sept. 13)
Over that last year, the reading and viewing public has been increasingly regaled with personal horror stories about vulnerable people being lured by shady mortgage brokers into signing contracts using deceptive practices and on falsified terms. Such contracts typically were loaded with questionable financial gimmicks such as "adjustable rate mortgages," "balloon payments" and "zero-principal mortgages," and had principal loan balances that were simply beyond the financial reach of the borrower.
It is becoming evident that the "sub-prime housing crisis" is only the tip of the proverbial iceberg. Now it appears that the nation's two largest mortgage finance companies, Fannie Mae and Freddie Mac, will need a massive injection of capital (some reports say as high as $300 billion dollars), or an outright takeover by the Federal government, to keep them in business.
So, what has gone wrong? The media is filled with finger-pointing and recrimination about how with the "sub-prime," and now the "prime," mortgage industries have been driven to the verge of collapse. There seems to be a growing consensus that the politically ballyhooed deregulation of the financial industry over the last three decades has allowed unscrupulous financial entrepreneurs to run amok, and that this is the prime cause of the crisis. If only, so the wistful thinking goes, there had been sound financial management in the industry this crisis would never have happened.
That unscrupulous financial entrepreneurs have run amok is beyond doubt, but does it follow that had more prudent financial stewardship been in place, then arriving at a point of crisis would have been avoided? Let us examine the question.
Suppose that the financial industry had not been deregulated and/or had been more conservatively managed. Then hundreds of thousands, if not millions, of these reckless loans would presumably not have been made. This also means, it should be noted, that many billions of dollars of new money would not have been created by the banking system, and loaned into circulation.
When a bank makes a loan for a mortgage, the new money this transaction generates goes from the pocket of the buyer, to that of the seller, and then continues to circulate as he spends it into the money supply. Over the last several decades, the mortgage market has been flogged by government policy and financial practice for all it is worth as an engine of new money generation for the economy. If there had not been all this bloated "prime" and "sub-prime" borrowing, hundreds of billions of dollars that are circulating in the economy right now would not exist. That means that much of the money in the typical person's wallet or bank account would not be there. With a greatly diminished monetary pool, there would be much less money in circulation to make payments on mortgages that had been contracted before the latest wave of borrowing, and less circulating to meet the needs of commerce.
This is a classic catch-22 situation. If we borrow more money from the banks, then we experience a bubble of prosperity, followed by a crisis of excessive "debt" when the payments come due. If we refrain from borrowing, then not enough money enters into circulation to meet old "debts," plus maintain an adequate money supply to do our business. For the last half-century we have chosen the path of rapidly increasing borrowing. The more frugal option, then, is the road not taken, and so we do not experience its effects. Nonetheless, there is a "debt" crisis at the end of either scenario.
The answer to the mortgage crisis is to stop borrowing our money supply at "interest" from a private banking system, and start issuing it publicly through the U.S. Treasury. This would take away the impetus to manipulate the housing market towards higher prices decade-after-decade as the primary engine for "debt"-money creation. Publicly-issued money is the path, I suggest, to a stable market with prices that are consistent with the actual physical cost and human effort required to build and maintain the housing we live in.
None of this is to say that the cavalier conduct of unscrupulous financial entrepreneurs is in any way justified, or that it has not greatly exacerbated the cost in personal suffering of the "debt" crisis. The reality, though, is that a "debt" crisis was sure to emerge, in one form or another, regardless of their conduct. Fiscal stewardship is an administrative problem, but the mortgage crisis is at root a consequence of faulty money creation.
Already in the newspapers I see proposed various schemes to fix the mortgage industry, virtually all of which involve borrowing ever more massive quantities of money to finance so-called "bailouts," and giving yet more control to the people and institutions that have presided over the present fiasco. This is the wrong answer.
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
Over that last year, the reading and viewing public has been increasingly regaled with personal horror stories about vulnerable people being lured by shady mortgage brokers into signing contracts using deceptive practices and on falsified terms. Such contracts typically were loaded with questionable financial gimmicks such as "adjustable rate mortgages," "balloon payments" and "zero-principal mortgages," and had principal loan balances that were simply beyond the financial reach of the borrower.
It is becoming evident that the "sub-prime housing crisis" is only the tip of the proverbial iceberg. Now it appears that the nation's two largest mortgage finance companies, Fannie Mae and Freddie Mac, will need a massive injection of capital (some reports say as high as $300 billion dollars), or an outright takeover by the Federal government, to keep them in business.
So, what has gone wrong? The media is filled with finger-pointing and recrimination about how with the "sub-prime," and now the "prime," mortgage industries have been driven to the verge of collapse. There seems to be a growing consensus that the politically ballyhooed deregulation of the financial industry over the last three decades has allowed unscrupulous financial entrepreneurs to run amok, and that this is the prime cause of the crisis. If only, so the wistful thinking goes, there had been sound financial management in the industry this crisis would never have happened.
That unscrupulous financial entrepreneurs have run amok is beyond doubt, but does it follow that had more prudent financial stewardship been in place, then arriving at a point of crisis would have been avoided? Let us examine the question.
Suppose that the financial industry had not been deregulated and/or had been more conservatively managed. Then hundreds of thousands, if not millions, of these reckless loans would presumably not have been made. This also means, it should be noted, that many billions of dollars of new money would not have been created by the banking system, and loaned into circulation.
When a bank makes a loan for a mortgage, the new money this transaction generates goes from the pocket of the buyer, to that of the seller, and then continues to circulate as he spends it into the money supply. Over the last several decades, the mortgage market has been flogged by government policy and financial practice for all it is worth as an engine of new money generation for the economy. If there had not been all this bloated "prime" and "sub-prime" borrowing, hundreds of billions of dollars that are circulating in the economy right now would not exist. That means that much of the money in the typical person's wallet or bank account would not be there. With a greatly diminished monetary pool, there would be much less money in circulation to make payments on mortgages that had been contracted before the latest wave of borrowing, and less circulating to meet the needs of commerce.
This is a classic catch-22 situation. If we borrow more money from the banks, then we experience a bubble of prosperity, followed by a crisis of excessive "debt" when the payments come due. If we refrain from borrowing, then not enough money enters into circulation to meet old "debts," plus maintain an adequate money supply to do our business. For the last half-century we have chosen the path of rapidly increasing borrowing. The more frugal option, then, is the road not taken, and so we do not experience its effects. Nonetheless, there is a "debt" crisis at the end of either scenario.
The answer to the mortgage crisis is to stop borrowing our money supply at "interest" from a private banking system, and start issuing it publicly through the U.S. Treasury. This would take away the impetus to manipulate the housing market towards higher prices decade-after-decade as the primary engine for "debt"-money creation. Publicly-issued money is the path, I suggest, to a stable market with prices that are consistent with the actual physical cost and human effort required to build and maintain the housing we live in.
None of this is to say that the cavalier conduct of unscrupulous financial entrepreneurs is in any way justified, or that it has not greatly exacerbated the cost in personal suffering of the "debt" crisis. The reality, though, is that a "debt" crisis was sure to emerge, in one form or another, regardless of their conduct. Fiscal stewardship is an administrative problem, but the mortgage crisis is at root a consequence of faulty money creation.
Already in the newspapers I see proposed various schemes to fix the mortgage industry, virtually all of which involve borrowing ever more massive quantities of money to finance so-called "bailouts," and giving yet more control to the people and institutions that have presided over the present fiasco. This is the wrong answer.
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 12, 2008
Column #41 POST-SEPTEMBER 11 REFELCTIONS
(Week 7 - Friday, Sept. 12)
On September 11, 2001 two hijacked airliners slammed into the Twin Towers of the World Trade Center in New York City, another into the Pentagon in Washington DC, and a fourth went down in a field in Pennsylvania. This cathartic event is destined to define the world for our time, perhaps for all time, contingent upon whether we choose to be merely reactive, or to grow in the face of the reckoning it presents. Do the commonly invoked religious/ideological arguments, a supposed "clash of civilizations," or even the phenomenon of terrorism constitute the most fundamental questions presented by this event? Is it not, rather, about whether humanity is able take a quantum evolutionary step up upon this calamity, or instead succumb to a descent into deepening acrimony, violence and darkness. Fear ripples out, the Constitution is subverted, military forces deploy, dark specters haunt the media, and World War III is talked about by pundits as a foregone conclusion. America, many fear, slides towards losing its principles, its mission, and its destiny, much to the detriment of the world at large.
Seven years have passed. The task of civilization now is to redeem horror of "9/11" to a new meaning. In a veritable sense, this tragic event was a culminating convergence of an unrecognized historical malady that has its roots in ancient times. To a great extent, it arose out of the failure of humankind to come to a profound realization of the true nature of "Money." To be sure, heated debate in the public discourse that touches upon money swirls around the event, but because it rarely talks about how and by whom it is created and issued, it is for the most part a distraction that misses the mark. The blessing that the medium of money potentially represents has been co-opted for gain, much to the undoing of human well-being and edification.
Those gleaming towers were magnificent structures, but to many of the impoverished masses around the world they seemed to mock their desperate plight. In an address to the nation shortly after the catastrophe our President, George W. Bush, asked rhetorically "Why do they hate us?", and then answered, "They hate our freedoms." I have no doubt that there are those who peer at America with hateful, envious eyes, and covet the intention of doing it violence, but we are a nation of providence, constituted to bring something new to the world.
The American Revolution was a three-legged stool. Two of the legs any schoolboy who does his lessons is familiar with; i.e. (1) personal freedom within the context of (2) democratically-determined law. But, what was the third leg? It was the bringing of a new economic order founded on the ideal that the people are sovereign, and endowed with the essential right of the sovereign; 'to coin our own money and regulate the value thereof,' and thereby possessed of the means to not fall under the heel of the moneylender.
Our consciousness of that third mandate has slipped, almost to nothing, until we are become the world agent of the Bank-of-England (now Federal-Reserve) "debt-money" system; the very foe that our colonial forebears defeated on the battlefield, and the people have through episodes of our history striven to eradicate.
I would suggest that "they" (the resentful millions of the world, to the extent that that is the case) do not hate us for our freedom, but for our failure to live up to its promise. We have let our nation become the instrument for exporting the private-debt-money tyranny that those who came before us once had the inspiration and common sense to resist. Fortunately, the dream does not die easily, as the people of the world still await the awakening of America to its authentic calling.
The world is now one world, and faces all-together a convergence to a terrible 'end-of-time'; or the opening up to a liberating new dispensation. The providential moment of ultimate choosing is at hand, and the 911 event was a throwing down of the gauntlet. This assault was meant to take the world from us; let us resolve to take it back, and this time rectified to a more perfect truth.
Emphatically, none of this is to absolve the heinous acts that were committed on that terrible September morning, nor to say that those responsible need not be brought to justice. Rather, it is a call to regain our destiny as individuals, as a nation and as a world community.
In holy writ we are admonished to "get wisdom; and with all thy getting get understanding." Horrific images of 9/11 and its fallout have been burned into the hearts and minds of people in every niche of the globe. It is necessary now that they be informed with new understanding. Rather than seek vengeance out of a feeling of being victimized, it is imperative that we the people of this nation, and indeed the world, embrace the opportunity for maturation that this crisis presents, and step up upon it to a new vision; one founded upon true brotherhood in a just social order, and that made manifest in a transformed economic life.
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
On September 11, 2001 two hijacked airliners slammed into the Twin Towers of the World Trade Center in New York City, another into the Pentagon in Washington DC, and a fourth went down in a field in Pennsylvania. This cathartic event is destined to define the world for our time, perhaps for all time, contingent upon whether we choose to be merely reactive, or to grow in the face of the reckoning it presents. Do the commonly invoked religious/ideological arguments, a supposed "clash of civilizations," or even the phenomenon of terrorism constitute the most fundamental questions presented by this event? Is it not, rather, about whether humanity is able take a quantum evolutionary step up upon this calamity, or instead succumb to a descent into deepening acrimony, violence and darkness. Fear ripples out, the Constitution is subverted, military forces deploy, dark specters haunt the media, and World War III is talked about by pundits as a foregone conclusion. America, many fear, slides towards losing its principles, its mission, and its destiny, much to the detriment of the world at large.
Seven years have passed. The task of civilization now is to redeem horror of "9/11" to a new meaning. In a veritable sense, this tragic event was a culminating convergence of an unrecognized historical malady that has its roots in ancient times. To a great extent, it arose out of the failure of humankind to come to a profound realization of the true nature of "Money." To be sure, heated debate in the public discourse that touches upon money swirls around the event, but because it rarely talks about how and by whom it is created and issued, it is for the most part a distraction that misses the mark. The blessing that the medium of money potentially represents has been co-opted for gain, much to the undoing of human well-being and edification.
Those gleaming towers were magnificent structures, but to many of the impoverished masses around the world they seemed to mock their desperate plight. In an address to the nation shortly after the catastrophe our President, George W. Bush, asked rhetorically "Why do they hate us?", and then answered, "They hate our freedoms." I have no doubt that there are those who peer at America with hateful, envious eyes, and covet the intention of doing it violence, but we are a nation of providence, constituted to bring something new to the world.
The American Revolution was a three-legged stool. Two of the legs any schoolboy who does his lessons is familiar with; i.e. (1) personal freedom within the context of (2) democratically-determined law. But, what was the third leg? It was the bringing of a new economic order founded on the ideal that the people are sovereign, and endowed with the essential right of the sovereign; 'to coin our own money and regulate the value thereof,' and thereby possessed of the means to not fall under the heel of the moneylender.
Our consciousness of that third mandate has slipped, almost to nothing, until we are become the world agent of the Bank-of-England (now Federal-Reserve) "debt-money" system; the very foe that our colonial forebears defeated on the battlefield, and the people have through episodes of our history striven to eradicate.
I would suggest that "they" (the resentful millions of the world, to the extent that that is the case) do not hate us for our freedom, but for our failure to live up to its promise. We have let our nation become the instrument for exporting the private-debt-money tyranny that those who came before us once had the inspiration and common sense to resist. Fortunately, the dream does not die easily, as the people of the world still await the awakening of America to its authentic calling.
The world is now one world, and faces all-together a convergence to a terrible 'end-of-time'; or the opening up to a liberating new dispensation. The providential moment of ultimate choosing is at hand, and the 911 event was a throwing down of the gauntlet. This assault was meant to take the world from us; let us resolve to take it back, and this time rectified to a more perfect truth.
Emphatically, none of this is to absolve the heinous acts that were committed on that terrible September morning, nor to say that those responsible need not be brought to justice. Rather, it is a call to regain our destiny as individuals, as a nation and as a world community.
In holy writ we are admonished to "get wisdom; and with all thy getting get understanding." Horrific images of 9/11 and its fallout have been burned into the hearts and minds of people in every niche of the globe. It is necessary now that they be informed with new understanding. Rather than seek vengeance out of a feeling of being victimized, it is imperative that we the people of this nation, and indeed the world, embrace the opportunity for maturation that this crisis presents, and step up upon it to a new vision; one founded upon true brotherhood in a just social order, and that made manifest in a transformed economic life.
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
Thursday, September 11, 2008
Column #40 HOW CAN WE HELP THE CANDIDATES?
(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
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
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
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