A letter from Alan Jacquemotte. He writes:
The following is in response to an interview of Mark Faber which can be found at http://www.lewrockwell.com/schiff/schiff12.html
And in the interview Faber says that the the inflation will FOLLOW the depression, not occur simultaneously. And that the depression may last as long as 10 years before the inflation kicks in.
So essentially what he is saying is that “things (prices) will go down for some indeterminate length of time…and then they will go up to higher than wherever they got down to”. Wow! Heavy stuff!
Anyway, whoever titled the piece is obviously “naming with an agenda”, just like the neo-cons do with their “wars” on drugs and “terror”. Very sad company in which to find yourself.
You, Schiff, Faber, et. al. should all just admit that: one, you were wrong about the inflation, and, two, that your model is flawed. Then start figuring out what is actually true.
You can start with this: before Cain (and his people) started “mixing labor” with the land, Abel (and his people) lived off that land and required free access to all of it to maintain their way of life. Having stolen Abel’s land, Cain’s descendants (that would be us) can never claim “just acquisition”, therefore there is NO “justly acquired” property. Not ever, not anywhere.
You can also figure out that even with gold-backed money we had fractional-reserve requirements on banks which is what leads to the leveraging that creates the booms and busts (and we had MANY devastating depressions while under the gold standard; gold’s main function has always been to make a currency unprofitable to counterfeit, but we have modern technology today that can do the same thing far less expensively).
If you had totally fiat currency (think “ration coupons”) and took out each month exactly as much as you put in (something we could easily do today with modern technology), you would NEVER have inflation, so obviously whether the currency is specie-backed or not is not what leads to inflation and is not the actual problem that has lead to the crash. The actual problem is that ALL land has been privatized by surrepticiously-owned governments (like our own) for the benefit of the surrepticious owners without those governments paying compensation to all the people whose free access to all of that land has been stolen, leading to a chronic condition of there being TOO LITTLE money around (which results in labor being kept as cheap as possible – again, to the benefit of our surrepticious owners). So the opening of the money spigot is just a necessity to keep the cash cows from having an uprising (ya know, like the one called “Shays Rebellion” that scared the banking interests enough to call for – and get – a rewrite the US Constitution).
The following plan addresses and conclusively handles the actual problem by completely revamping the economic resource distribution system that had been able to cover up the actual problem until today (flawed as it always been, the current distribution system passed as a workable system until cybernation technology began eliminating human employment faster than it could be created; the tipping point of human under-employment has been reached and the old system “is a goner”):
1. End the Federal monopoly on money and replace the Federal Reserve’s debt-money with US Government-printed “ration coupon” money backed by the combined property and wealth of the USA. (This new “money” could be completely electronic.)
2. Declare the U.S. National Debt “odious” and payable by the banksters and their representatives in Congress that ran up the tab for the benefit of themselves and their bankster bosses. (This goes all the way back to the 1787 Constitutional Convention, dominated by representatives of banking interests, which created the federal monopoly on money that flew in the face of the decades of economic stability provided by state-issued scrip; of Pennsylvania’s delegates alone, seven of eight, including Benjamin Franklin, were major stockholders in the Bank of North America, and three were BNA board members.)
3. Ration every legal resident $1000 per month of the new money with no qualification or strings attached. Everybody will be able to work and make as much additional money as they want. (For legal residents less than 18 years-old, half the amount should go into a trust, as below.)
In order to not incentivize “octomoms” (or any other prospective baby-farmers), beginning one year after implementation, the money ration of newborns should be held in trust until they reach age 18. The trustee of their account will be held jointly responsible (with their parents) for their proper care until they reach age 18.
4. All income-based federal taxation is replaced by an automaticaly-collected “economic infrastructure maintenance fee” of up to one percent on EVERY electronic debit transfer (whatever is required to keep prices stable; something less than one-half percent will probably prove sufficient). Like with the human body, as long as you take out as much as you put in, there is NO inflation. Cash and barter transactions will be federally untaxed and the U.S. federal government will “self-fund” with the new money. Besides eliminating the IRS and the inherent costs of “tax avoidance behavior”, this fee will also impede price distortions caused by market speculation.
5. The more decision points a system has, the more intelligent the decisions it can devise, therefore, in all other economic matters (besides the furnishing and regulating of liquidity rations “autonomically” by the federal government as described above), free market auction should be “the brain”; central planning is inherently stupid and always makes things worse.
As has been made obvious in recent days, mainly the administrators of a centrally-planned economy wind up helping themselves and their friends to the funds and credit in the national treasury at the expense of everyone else. “Regulation” merely provides the “false sense of security” necessary for the spider to get the fly to drop his guard.
Consequently we will need to get rid of every Federal law, policy or agency that discourages competition, unevenly distributes resources, or hides or socializes risk while privatizing profits (i.e., pretty much all of them), including all taxes on personal and corporate income and all personal and corporate subsidies (including all Minimum Wage laws, grants, tariffs, etc.).
6. Our current Constitution being “self-defining” (that is, the government gets to appoint the people who decide what the the words of the constitution actually MEAN; “self-definition” – also known as “lying” – is the defining characteristic of ALL National Socialists such as the German Nazis, and the American neo-cons, Federalists, and all other bank-backed U.S. political parties including today’s Republicans and Democrats), we will also need to replace the current U.S. Constitution with one with “some teeth in it”. For example, it should define all the terms it uses (like “person”) within the constitution itself rather than have those terms be totally subject to the political whim of the day.
Just for starters, the above plan will improve things regarding unemployment, poverty, crime, healthcare, urban blight, rural living affordability, childcare, etc., and will diminish incentives for crime, wars, illegal immigration, market volatility and speculation.
People in other countries will want to implement this plan once they see it working. We could offer statehood to countries that are willing to apply for it. (We already did this with Texas, so there is precedent.)
Everybody gets the same “bailout” amount, everybody pays the same percentage…and everybody’s balance sheet gets improved without specifically rewarding those who took the “free call option on rising real estate prices” bait.
Cars get sold or leased again and banks get people to whom to lend. On the other hand, no specific bailouts should be done just because a particular industry has costs that are too high for them to be market-competitive, and weak or broke banks and companies need to be bought up by the few still-strong ones or by private equity (rather than by the government).
Simple, fair, effective…and we will keep on “trending down” until something like it gets implemented.
Alan
P.S. The above may require the creation of a new political party that runs candidates who back this plan and who also DO NOT TAKE ANY MONEY FROM ANYONE. The party will have to handle all campaign expenses. If a politician takes “a little money” where does it stop? If we ever want to get our political system back, voting for people that “do not take money at all” has to become “the thing to do”. The only way we can expect to compete with the banks is by changing the game.
My Comment
OK…this will have to take place between dragging some machinery around and some house guests…so I will put things down as they occur. Before looking at specifics, just two philosophical “wonderings”:
1. I have a problem with anyone thinking “the economy”can be fixed.. Nothing wrong with a term like “economy” as a useful shorthand for a complex whole but grossly misleading if it allows us to think we can “fix” it. This relates back to the post Mike Martin sent about thinking of the economy as a machine rather than an ecological system.
2. I also wonder if the assumption that anyone has to fix what’s happening isn’t mistaken. Things can get better on their own without programs or plans on a macro level. That is, the problems we might end up creating with any program might be worse than what we would have without them. I think a micro approach is a better (and more individualistic) approach. That is, each person finds the best way to empower themselves, using existing tools and resources…..
3. Undo, before do...
More later on the specifics.
OK, Lila here.
Just found a good weight machine for $250. The seller was going through bankruptcy, job loss and other misfortunes, which I will refrain from making the subject of a blog post. I felt for him and at the same time was rubbing my hands in childish glee at the bargain I’d got (actually, he wasn’t selling at a loss, either, so my guilt was wasted. He’d paid exactly the same sum two years ago, had never really had time to use it, and now needed the money more than the machine).
The point of this digression is to show you that even a simple transaction can be seen in a number of ways – depending on where you’re standing. Think about it.
1) Obviously, his need was my gain.
2) Obviously, also, my gain did not subtract from his well being, but added to it; it improved his situation.
3) Not only that, it oiled the wheels for a future win-win transaction between us, since I feel well disposed toward him and also – quite unnecessarily – irrationally guilty to be taking something from him, even if I’m paying for it. That guilt means that when I start on an upcoming project, I will almost certainly turn to him for help.
3) Now I probably wouldn’t have thought of using someone for this project at all, if I hadn’t made a good deal now. That wouldn’t be because I didn’t have the money or didn’t need the extra help, but because it’ s human nature to restrict expenditure when things look bad. I’d have felt (again, irrationally) that I should be doing things myself and saving. But having already saved on this transaction, I’d feel I’d “made out” and that little impetus would encourage me to reward myself with a treat – a little extra help……which translates into work for an unemployed man. He, in turn, feels better for having parted with something without making a profit on it and eases up on any slight resentment he might be feeling (also, irrationally) toward me.
So what does this have to do with anything?
Just this. Even the smallest transaction is a complex affair. Even when it’s engaged in with as much rational self-interest as human beings can muster, it’s fraught with irrational consequences. The repercussions can hardly be foreseen, being so complex and extensive. Now think of the huge, unbelievably convoluted set of events in the financial world today, and it’s fairly certain that any sense we might have of where things will go from here has to be haphazard…..and any plan or program to change it even more so…..and any assurance that the change will be to the good fleeting at best…
( Despite the negative response it seems to be provoking and despite my own caveats, I still think this scheme has some merit. I might be wrong, of course, or simply ignorant of all the implications).
Last update: OK – I think this has become rather convoluted, so I’ll take it to a new post….
naomi wolf said…
9
Naomi W here — I am a big believer in crediting sources. I have not read your work before now. But I do want to note that the quote you use and attribute to me is actually a quote from Michael Ratner of the Center for Constitutional Rights. I was interviewing him in that piece.
But it is always good to have crosspartisan dialogue and I will certainly explore your work — yours Naomi
04/6/09 11:29 PM | Comment Link Edit This
Lila said…
10
Ms. Wolf –
I stand corrected.
And I apologize for the mistake (and have immediately corrected it), although I think it doesn’t alter my larger point about memes
Lila R