A dingo ate their workers’ rights

Its like when WP columnist George Will wrote in protest to the minimum wage increase, that American workers were “commodities” to be used and fire like commodities.

When the GOP becomes the “conservative” guglag loving Party these days, THAN it is the GOP is synonymous with Russia style socialism.

When the Russian theater is flushed with posionous gas that kills the civilians the same as it kills the hostage taking terrorist – the civilians were merely a commodity when they died.

When the one of doors of a Russian airplane falls off and the Russian soldiers along with their wives are suck out of the plane – it was just the death of a miltiary commodity – they died for the mother land. It wasn’t a government for people, of the people or by the people – it was a government of the government, but the government for the government.

When the widower maker Russia submarine posioned all the crew with radioactive nuclear waste – the troops all died for motherland.

When a soldier dies in Iraq – he dies for Bush and Cheney and culture of corruption, not for Iraqi democracy, not for WMD but for Bush and Cheney’s lies.

Bush looked into Putin’s soul and saw himself – Bush’s own Russia style of socialism. Bush is not a conservative and conservative party doesn’t even know what it stands for any more – except to blindly follow what Bush says.

Revolution Happens

by John Merryman
Sparks, Maryland

Humanity is rapidly approaching a crossroads, where we will begin cooperating on a scale that we never have before, or we will descend into a state of warring tribes like we have never seen before. Appeals to the conscience only work on those willing to listen, while it is the less altruistic who need to pay the most attention. If there is one thing that does get people’s attention, it’s the money.

In 1996, Bob Dole had a campaign slogan, “We want you to keep more of your money in your pocket.” The first thought to cross my mind was, ‘Thank God it’s not my money, or it would be worthless.’ The logic of this is that the actual currency doesn’t belong to the holder, only its value. The monetary system is a function of government, which in a democracy is the people. Therefore money is actually a form of public commons, similar to a public road system. Instead of transportation, it’s a system of economic exchange. While you are in total possession of the section of road you’re driving on, its value is due to it being connected to those everyone else is on. So is the value of the money in your pocket due to its broad interchangeability. It is not an issue of socializing wealth, but of understanding what money is to begin with. Your home, business, car, etc. are private property, but the roads linking them are not. Money is more like the public road system, than private property. It provides a broad economic connectivity, without which the economy could not function.

Money has always been a form of public utility (Render unto Caesar…), but because it evolved out of barter and for much of history was minted out of precious metals to gave it inherent value, the issue of function has been confused with the issue of possession. Now all monetary value is a matter of public trust in government accountability and this is being abused to the breaking point. It was only a generation ago that the wealth of governments were still symbolized, if not based on the gold in the treasury. For many countries, it’s now how much US dollars and debt they are holding. This is not a stable situation. When the liquidity bubble does burst, faith in the concept of printed money will be shaken to its core. In order to restore faith in an invaluable economic tool, it would be useful to emphasize this public function. There is no longer a gold standard and it is the taxpayer who bears ultimate responsibility for government obligations.

Here is a little history to consider in understanding why we are where we are.

The money supply has to grow along with the economy. Inflation is caused by the supply of money growing too fast, so the law of supply and demand makes it worth less. Interest rates are raised to slow the growth of the money supply, when the economy is reaching peak potential, since the amount of money might expand faster then the economy is able to grow. During the late sixties and seventies, the money supply was allowed to grow faster then the economy in order to pay for Great Society programs, the Vietnam War and the oil crises. By the end of the seventies, inflation was spiraling out of control and Paul Volcker was given the job of taming it by raising interest rates as much as it would take to do the job. This led to a serious recession, but by 1982 inflation had peaked and he could take the pressure off.

There is a minor logical hitch to this scenario, though. By raising interest rates to the point of causing actual economic harm, he was reducing the growth of the economy and therefore the need for money. How do you reduce an oversupply, if you also reduce demand?

The Federal Reserve fine tunes the size of the money supply by buying and selling government debt. To put money into circulation, they buy government debt with fresh money and to take money out, they sell debt they are holding.

In 1980, Ronald Reagan was elected on a platform of what his primary opponent, George Bush, referred to as “Voodoo Economics,” i.e. increased spending and tax cuts. The result was a serious increase in deficit spending. Now ask yourself, if the Federal Reserve sells debt to reduce the money supply, wouldn’t the Treasury issuing fresh debt have the same effect? By 1982, the deficit was getting close to 200 billion and that was real money in those days. The dramatic growth in deficit spending by the US government was a significant factor in bringing inflation under control.

The borrower/producer/spender is the engine of the economy, with the saver/lender as the fuel tank. While it seems inflation is propelled by those who want to be paid more, both producers and labor, taking it out on borrowers doesn’t bring supply in line with demand. Inflation is caused by the government putting too much money into circulation and the reservoir of surplus money in the economy is what is held by the saver. Earnings are taxed more then savings, so tax cuts put money into production, rather than savings. Government borrowing draws money out of savings and spends it in ways that increase and support private sector investment, through increases in services, infrastructure, security, etc. This compounds the demand for money.

At the time, economists were concerned government borrowing would crowd out the private sector, but the government issues whatever people are willing to borrow at the short term rate it sets, by buying back government debt. The problem is long term rates are set by the market and with inflation, people are more inclined to buy assets, than lend money, so the supply of money to borrow is limited and the cost , interest rates, goes up. If there is a lot of money around, but inflation isn’t a concern, people lend it for whatever the market pays and long term rates go down. So the secret of our unstoppable prosperity is to have lots of money running through the system, to keep rates down and production up, but not have any start to clog the arteries and cause inflation to rise. The question is finding ever more places to invest and spend it, but the long term productivity of all this growth tends to decline. The result is fewer small business cycles in exchange for a large one.

Normally only as much money can be saved, as can be effectively invested, otherwise it causes inflation of asset prices. So where would all the money the government borrows be going, if the government didn’t borrow it? The stock market? Real estate? Inflate the derivatives balloon a little more? The economy is flooded with about as much money as it can hold. If the government wasn’t borrowing lots of money and recycling it through the public sector, there would be a lot less money needed all the way around and this would be inflationary. Government debt serves to support the value of the money, as well as the economy.

What will be the long term effect of this borrowing and how will it get paid down? Recently some mid-western states have sold public highways to private investors and they have been turned into toll roads. How soon until Yellowstone goes on the block? Private armies buying surplus warships? It would make sense to tax more savings from those most able to afford it, but this usually causes such people to find other ways of storing wealth. If we were to understand money as a public utility, it might better define how to manage wealth to help the larger community and environment.

In the seventies, the national economy was mostly based in the US, and inflation percolated through it, with prices and wages increasing together. Today the global economy keeps prices and wages in check, so consumer inflation is moderate, but low interest rates are creating an enormous speculative bubble among investors. Eventually it will pop and send a tidal wave of surplus money back into the regular economy, driving up prices far more then wages. Until then the gap between the rich and everyone else will continue to expand at ever increasing increasing rates, as inflated asset prices turn investment capital ever more rapidly into play money and more is needed.

In some third world countries, the politicians skim off enormous wealth, and we can see it is economically unproductive and socially destructive, yet those running our financial and industrial institutions to do the same and claim it is simply a cost of doing business. Only as much total money can be saved as can be effectively invested, otherwise it is inflationary. So these oceans of private money reduce the ability of the average person to save and invest. Endless wealth accruing to those in positions of power will eventually come to be understood as economically barbaric, and we will climb one more step up the evolutionary ladder.

Everyone needs some amount of wealth in order to both be secure and to have a commitment to the larger system. Some need more then others, like a truck needs more road then a car. Those with none have less consideration for society and are governed more by fear than respect. Those at the top need to remember that a stable society is as important to them as to everyone else. If money were thought of as a public utility, it would have definite psychological effects. People might be less inclined to define their personal ego in terms of the size of their bank account and start leaving natural wealth undisturbed, while investing more effort in their communities and environment. A healthy economy, a healthy society and a healthy environment do not have to be mutually exclusive.

Growth is bottom up, not top down, so capitalism is at its most vibrant when wealth is most evenly distributed. The problem with treating the economy like a game of Monopoly is that when one person controls everything, the game is over and you start again. In real life this stage is called revolution.

Money is a public utility, not private property. Pass it on.

http://www.exterminatingangel.com/index.php?option=com_content&task=view&id=203&Itemid=118