Normally, I do not make commentary on specific candidates for any office other than those candidates (of any political party), which support and uphold individual liberty and sound economic policy.  FedUpUSA in general is apolitical, since economics is based upon MATH, not politics.  However, as events are unfolding, I feel compelled to make the following statement:

Anyone considering voting for Romney had better watch this video.  Have we as Americans learned NOTHING in the past 5 years?!  How many times are we going to elect the SAME fascist oligarchs and expect a different outcome?!

If this happens, we deserve everything we get.  Romney is NOT better than Obama – in many ways he is far worse.  The only bright spot about a Romney nomination is that he will be at the helm when the Republican party goes the way of the Whigs and what remains of this country is destroyed.

For crying out loud, wake up America, you’re being herded like sheep to the candidate pre-chosen by those who already control our lives and this country – the same people who have eroded our liberties through discarding the US Constitution.  If you can’t figure this out, we apparently don’t deserve to be saved.

http://www.youtube.com/watch?v=rVfwvgz_IMc

My fellow Americans;

Four years ago, on this day in 2008, Bear Stearns stood on the edge of collapse.  We did not know this, of course, as other than their two hedge funds’ failure their internal condition was hidden — by the company and by the regulators who were charged with keeping our financial system safe.

Over the next six months we came close to losing America.

Today, we’re not in much better shape.

We have failed to address the first, and only, reason we find ourselves mired in an economic situation where we cannot grow and we cannot prosper.  Where The Senate has failed to pass a budget for nearly three years.  Where The House has proved unable to put forward a set of spending and revenue bills that balance.

The reason for our economic malaise, for the near-collapse in our economy in 2008 and the inability to exit the job recession of the last four years is that those who you vote for are incapable of telling you the truth.

The truth of a nation’s financial situation is no different than that of your household.  You cannot spend more than you earn in your household for a long period of time.

We all have short-term challenges in life; a sudden illness, the loss of a job, a leaking roof.   The wise family socks away some percentage of their earnings — their personal economic surplus — to buffer itself from these ordinary and expected calamities.  The less-wise depends on the ability to pull out a credit card and charge that new refrigerator when the need arises.

It is a time-honored practice in America for politicians to make promises they cannot keep.  We promise to build a gleaming new school, brimming with high technology, but we did not put aside the tax money to construct it in advance.  We promise that you will have medical care in retirement, but we never funded that program.  We promise that you have a “lock box” in Social Security, but then we raid it to make the budget deficit look smaller.  And we all want to drive cars, but we don’t want oil rigs off our shores, we don’t want pipelines and refineries across our land, and we don’t have either the money or the moral right to invade all those nations in the world that have the energy resources we need.

Our medical system has increased in cost at a compounded 8% rate for the last 30 years.  In 1980 the Federal Government spent $53 billion on all medical programs combined.  Last year it spent over $800 billion.  Politicians on both sides of the aisle have taken the  “gold-standard” position that nobody over the age of 50 will see their Medicare tampered with, as they know that you, the voter, will fire them if they tell you the truth.

The truth is that Medicare cannot be fixed and neither can Medicaid, standing alone.  Instead we must repair the medical system itself.  EMTALA, which mandates that hospitals must treat everyone irrespective of the ability to pay, must be revisited and either modified or abolished.  The practices of cost-shifting, where what you pay for a medical procedure, drug or device is set based only on how you pay for it or where you live, all exempted from laws that make this conduct illegal in other lines of business, must end.  The provision of taxpayer-funded medical care to those who are in this nation illegally must be abolished.  These changes must take place now, not tomorrow and definitely not “somewhere down the road.”  If they do not our medical costs will double in another six years, and we do not have the money to pay that cost.  The result of inaction today, as a matter of mathematical certainty, will be rationing of medical care and collapse of these programs.

The same rot that has infested our medical system must be excised from the rest of our Federal Budget.  The simple fact of the matter is that we are borrowing more than one third of every dollar the federal government spends.  This will double the national debt in less than a decade — again.  We have added more than 50% to our federal debt in three years, and we cannot continue on this path.  Eventually, foreign and domestic creditors who have lent the government that money will go on strike, dramatically raising the cost of financing.  When this occurs we will be forced to cut the size of government by more than 50% in an afternoon, instantly collapsing all of our federal social programs.

There are people on the right side of the aisle who say that we have to “grow the economy” to get out of the current fiscal mess.  They’re lying.  This mantra has been repeated for 30 years, and yet not once has this actually produced economic growth that exceeds the growth in debt through the economy.  The economic bubble in Internet stocks in the 1990s and the housing bubble of the 2000s were both caused by outrageously-fraudulent acts — first through making of knowingly-false statements about exponential growth of the Internet that could not possibly be true for more than a couple of years, and then again through the making of “fog-a-mirror” loans that were packaged up and sold as “solid AAA credits” through the financial system.  Both bubbles were driven by knowing lies.

The tax system at the corporate and personal level favors debt instead of equity, leverage over thrift and industry.  This must end.  The Fair Tax is one such way to do so; by zeroing the corporate tax and rendering all taxes on consumption it removes the preference for debt over equity, makes lobbying for special preferences impossible and makes the cost of government instantly visible and transparent to everyone in the nation.  The Internal Revenue Code should be burned to ash and replaced with The Fair Tax tomorrow morning.

The right also says that we need to return to “sound money.”  But sound money means no more fiscal deficits — period — and no unbacked credit emission.  Yet none of the people on the right side of the aisle — or the left — are actually proposing to cut off that fraudulent emission of credit nor are they proposing a balanced budget.  Yet this is a necessary condition in order to have “sound money.”

The left says that the rich must pay their “fair share.”  But what is their “fair share”?  Nobody on their side of the aisle will tell you.  The fact is that the “rich” pay nearly all of the income taxes now and yet the federal government spends all of that money and then more than a third more — which it doesn’t have.  The lesson is simple — no matter how much money we shovel into Washington it will spend every penny and then continue to spend more, even though Congress doesn’t have it.  There can be no fiscal discipline nor a resolution to this problem until the Congress stops spending money that it has not been able to first tax from someone.

Government tax receipts are, in the main, entirely dependent on the employment participation rate.  That rate is back to where it was in the 1970s and has not budged despite the alleged “recovery” since early 2009.  The fact of the matter is that behind this problem is the offshoring of labor; we temporarily made possible the appearance of prosperity through excessive borrowing at all levels of the economy — federal, state, local and personal.

But those days have now come to an end and we must deal with what our fiscal and employment situation is on-balance, not what we would like it to be.

Either our wage and environmental laws are just or they are not.  If they are not then they must be repealed.  If they are then they must be enforced.  Since we cannot police every nation in the world on either a practical or moral basis the only means of policing those laws beyond our borders are through the imposition of tariffs on all goods and services sold in the United States. This is both a lawful and Constitutional means of enforcing our labor and environmental standards.  Companies can either construct their goods and provide their services with labor and materials from the United States, employing Americans, or they can cover the social spending necessitated by exploiting our markets with slave labor and environmental destruction abroad through tariffs imposed on their activity.  The choice is theirs, but this mandate must be ours, without fear or favor.

Companies such as Apple often claim that they cannot fill the jobs they need filled in America, and that our educational system is failing.  More than fifty years of federal involvement in the education of our children has proved to be an abject failure.  “No Child Left Behind” in fact has left all children behind.  In the 1800s and early 1900s we powered ahead with innovation unmatched anywhere in the world, culminating with putting men on the moon.  We did it all, building this nation literally from the ground up, without Title I.  The Education Department must be de-funded and abolished tomorrow morning and Title I must be stricken from the books along with the rest of federal involvement in education.  We have 50 state laboratories on purpose and our federalist system ensures that our population is free to both vote for the state educational system desired in an area and that the people can move to states that fulfill their own individual mandates in this regard.  At the same time federal involvement in post-secondary education is an abomination; we must both remove the non-dischargable status of student loan debt and in fact remove all federal subsidy and support of higher education.  30 years of interference has proved that all of the “benefit” accrues to university bloat rather than educational outcome with costs increasing at more than three times the rate of inflation.  In 1980 you could flip pizzas to put yourself through college; today that is impossible.  This is not due to market forces; rather, it is due to intentional government interference that must be withdrawn.

America was founded on the rule of law.  Yet while it is illegal for you or I to defraud someone and we will be arrested, tried and imprisoned if we do, over a half-million citizens in Jefferson County Alabama were ripped off and had their water and sewer bills quadrupled through a series of fraudulent schemes.  Several county officials and others involved in the scams were tried and imprisoned.  But the banksters and companies who ultimately funded those bribes, and who benefited financially from these schemes and scams, were neither indicted or forced to give back their ill-gotten gains, and the bills have remained at the quadrupled level, effectively stealing from the citizens each and every month.  Other big firms who have made illicit profits through money laundering for Mexican drug gangs or the off-label promotion of prescription drugs have been fined some portion of their “excess profit”, which simply turns the breaking of the law into a business risk.  Again, if our laws are just then they must be enforced evenly against every entity, irrespective of their size or alleged “importance” to the nation.  The CEO and other corporate officers and board members must be held to account through personal liability when they either are aware of such violations of the law or willfully avert their eyes.  Sarbanes-Oxley allegedly addressed this failing in the white-collar world yet not one financial executive has been charged under this law.

America has the ability to be a great capitalist nation.  But today America is not a bastion of capitalism.  Many have claimed that we now have “crony capitalism” but that too is a misnomer.  Capitalism is the premise that one succeeds or fails through the wisdom of one’s investment, predicated on capital formation (that is, the investment of economic surplus into various economic activities.)  While the vestiges of this system remain in America, what has replaced it is a feudalistic system of scams, frauds, allegedly “lent” funds that do not in fact exist and bribery of various forms, both legal and not.

Later this year America will go to the polls to select a President and all 435 members of The House, along with one third of The Senate.  A vote for those candidates who are currently in office is a vote to continue the policies of theft, fraud and scam.  Neither major political party has shown any interest in reform or putting a stop to the scams, nor has either been willing to tell the truth.  It is often said that nobody other than a Democrat or Republican can win a major political office, yet this is simply untrue.  I have never in my life voted in an election in which only two names were on the ballot for President, and any of those on the ballot is capable of winning.

That which we vote for and demand we cannot complain about.  That which we refuse to admit to yet which is nonetheless true remains our responsibility.  With the cliff of fiscal insolvency and a forced and disorderly contraction in the size of the Federal Government by more than half now in view before us, we have the choice to either change course or drive straight toward certain government and economic ruin.

The responsibility for our political and economic future is in fact individually ours.  We can either focus on the political minutia such as abortion and gay marriage, or we can demand and vote only for candidates that will stop the deficit spending, put a final and complete end to the offshoring of our labor through the exploitation of the environment and slavery in foreign nations, and imprison the fraudsters in our financial system without regard to who they are, restoring the rule of law.

The choice is yours America, and so are the consequences.

On April 1st 2007 the very first Tickers were written.  In just a bit over two months, The Market Ticker will be five years of age.

And through that time The Market Ticker has pointed out one central fact behind everything published here: You cannot spend more than you take in on an indefinite basis.

This, of course, is anathema to a nation — and a world, really — that has done exactly that for more than three decades.  Many of the citizens of the world — those under about 35 (as your first few years of life have little direct connection in a cerebral sense to economics) have never known a world where overspending and ponzi economics was not practiced.

You can’t exactly flaw people for not understanding that a thing is broken when they’ve never experienced life in any other way.  And for those who are somewhat older, those of us who remember the 1970s, the oil shocks, gas lines and 5 gallon purchase limits along with grocery store prices that seemed to double every six months (it wasn’t quite that bad — but it was bad!) it is easy to get the mistaken impression that what we’ve had for the last 30 years “fixed” what was broken in the 1970s.

It didn’t, of course.

The world had run on it a simple fraud covered in various layers of complexity to hide it from the common man, just as has been done many times before.  The 1920s were the same thing, basically, minus the computers but also minus fast information sharing.  The land swindles of the day in Florida were almost identical to the condo-flipping schemes here in the Panhandle when you boiled them all down; tiny down payments on construction not yet initiated, the promise of ever-higher valuations, carnival-style barkers spinning rags-to-riches stories and you only needed $10,000 to get in “on the ground floor” of an elevator that would take you to the sky.  Sign right here mister, and your life of luxury and privilege will begin.

Uh huh.

Last night the yarn-spinning continued on Greece.  Bloomberg said:

Greece and its private creditors said early today they had made progress during talks in Athens on a debt-swap accord needed to lower the country’s borrowings and clear the way for a second round of international aid.

“The elements of an unprecedented voluntary private-sector involvement are coming into place,” according to an e-mailed statement from Charles Dallara, managing director of the Institute of International Finance, a Washington-based lobby group representing creditors negotiating with the government.

Sure they did.  Sure Greece is going to pay debts of more than 100% of its GDP — even after the “restructuring.”  And sure this is “voluntary” — in more-or-less the same way that it’s “voluntary” that you hand over your wallet when there’s a gun up your nose.

The real problem is that people — and governments — borrowed money they couldn’t pay back off their economic surplus.  For a private-sector entity (a person or company) economic surplus is easy to define — it’s what you have left after you spend on the bare necessities of life.  When those necessities (such as your house) become part of the overborrowing then the situation appears more complex but it really isn’t — you just “upscaled” your view of what was a “necessity.”

But let’s face facts — a trashy trailer on a 100×50′ piece of rented land with utility connections is more than the “bare necessities” when it comes to housing — by a lot!  I lived in a little 400sq/ft one-bedroom apartment for a good while when I was just getting started and that was more than “bare necessities” (by a lot) for even modern comforts.  A studio would have been sufficient, since I had no dependents and was single.

The same applies to transportation.  Most people today in the United States are driving around in vehicles that have values that are two, three, five or even ten times the cost of “basic necessities” for the required task (getting to work, the grocery store, etc.)  It was in fact in the recent-enough past that I owned said vehicles that the “basic car” had an AM radio with one speaker, a manual transmission, no air conditioning, no power door locks, no power windows, no power steering, no power seats and the seat coverings were vinyl.  You could also see (and work on) all sides of the engine and the road under it when you popped the hood.

In fact, one of the pieces of said “basic transportation” that I owned in my earlier years (and drove to work every day) was one of these:

Before that I had one of these in considerably worse condition than pictured (it was gray and had a smashed-in passenger side door from a collision prior to my acquiring it for a literal cost of $100.)

THOSE were “basic transportation” and not only where they cheap to buy they cost almost-nothing to insure because there was no reason to have collision or comprehensive coverage on them!  The Vega, incidentally, consumed a quart of oil per tank of gas on good days (and worse on bad ones) along with having a habit of slowly eating coolant.  Yeah.

I’m not saying you shouldn’t own this, incidentally:

IF you can afford it without debt, and without spending more than you make.  That is, if you can pay for it using your personal economic surplus.

But recognition of these facts is rather jarring for most people.  Some of us grew up understanding it; our parents owned one car that was much nicer than the other (and was used to get to work) while the other was, literally, “basic transportation” (with no power anything and no air conditioning) if we had a second car at all.  We rode bicycles to our friend’s home rather than being carted around by “soccer moms” in no small part because driving the car cost money; the bike cost only human power.  Nice bicycles (which most of us could not afford) had 10 speeds; the more-ordinary ones that nearly all of us actually owned had coaster brakes and one speed.

Let’s put this in a slightly-different perspective.  The poverty level income for a single person in the United States today (as of 2011) is $10,890.  Many people reading this, perhaps most, spend more than 1/10th of that on their cellphone bills.  A further significant proportion of the population spends more than 1/10th of this on their cable or satellite TV bill and the overlap between the two is significant.

That is, a very significant percentage of the population spends more than a quarter of poverty level income on two luxury and entertainment items which are utterly unnecessary.

Again, none of this is a problem if you can afford it.

But what should you have paid for first?

Well, for one, a very significant financial reserve.  Your retirement, for example, never mind a cushion in case something goes wrong (like losing your job.)

With governments its equally-simple: Government gets all of its money by taxing it.

Yes, all of it.

I know, some people will say “they can print it!” or “they can borrow it!” but in fact on a long enough timeline all of that is taxed.

If the currency is debased the taxation happens immediately and hits everyone at once.  If it’s borrowed then the taxes fall on you tomorrow, assuming it’s ever paid back.  There’s no real difference, when you boil it all down, other than the immediacy of payment.

All of it, in the end, comes down to taxing you — taking your money and giving it to someone else.

That’s all government does.

This weekend dawned with the news that Greece’s creditors have walked out of their meeting.  That in and of itself is probably not all that important.  What is important, however, is the rising tide of speeches coming from various government officers in Europe recognizing that deficit spending has to end.

It’s not just there — Fed President Dennis Lockhart has said the same thing about the United States.  What was just a few lone bloggers in the wilderness a few years ago, myself included, has now turned to policy-makers inside and outside of the government itself.

At the core of this problem is the buying of votes with money that doesn’t exist.  It’s very popular to do things like that, as having the necessary adult conversation regarding the sustainable level of spending by government — and the adjustment that comes to GDP and thus overall consumption when overspending stops — tends to bring revolt at the ballot box.

But there comes a time when the political expedience of vote-buying and other chicanery simply cannot be sustained any more.  We’re within sight of that cliff, and if we do not act we will go over it.

If you remember the speeches from Bernanke in the 2008/09 time frame he counseled that we must get our budget deficit under control in the “intermediate term.”  But exactly what is “the intermediate term?”  This again leads back to the fundamental nature of exponential growth and how badly you’re screwed if you ignore it.

In 1980 the Federal Government spent $53 billion on health care all-in. Last year it was about $820 billion.  That’s a roughly 9% compounded rate of increase.

The rule of 72 says that this means the spending will double again in roughly 8 more years (2019) to $1.64 trillion, then in 8 more (2027) to $3.28 trillion, which is approximately the size of the entire federal budget today.

Obviously that won’t happen as you can’t raise that much money, but that’s exactly what our politicians are promising people over the age of 50 when they say “Medicare will not change for those over 50” as that rate of expansion simply gets you to where you qualify at age 65!  There will be two more doublings required to get you to 80 years of age, which (if it was possible) would rack that number to over $13 trillion dollars — close to the size of the entire economy today.

Bluntly: Such claims are a lie.

What’s worse is the curve when you look at government debt.  Let’s chart it:

Pick a point on that graph.  Even at the most-optimistic number — 2006 or 2007, when we were creating massive amounts of private credit to prop up an about-to-explode housing bubble — federal debt was still growing at over 6% a year.  That means it was doubling every 12 years!

In 2008 and 2009 we grew it at 15% or more a year.  That means it was doubling every 4.8 years.

Does anyone really think we’ll get away with either of those statistics given what we now know is happening in Greece and elsewhere in Europe?  Remember, Japan, which is the common poster child for this, came into their government debt binge with massive private savings — savings that have been essentially all consumed by that binge.  We never had the private savings in the first place, which means we have nothing to consume in previously-earned economic surplus!

Folks, there is not one year in the last decade during which we can point to a sustainable level of debt.  If you go back into the 1990s there were a few years during which federal debt expanded at a much-more-modest rate, but those were years during which private credit creation was expanding exponentially in place of the government (through the Internet bubble.)

There isn’t any way out of this through more government debt.  It has to stop, and stop now, because the nature of exponential growth is that the rate of damage accelerates.

If you read (again) my Ticker from 10-18 of last year, you should understand what’s going on — and what we face.  This is simply not about what I want, what I’d like, what pundits would like to do or anything of the sort.

It is about mathematical reality.

Think about exactly how much further we can expand government spending in this regard and not have the entire economy collapse around us.  Then reduce that percentage of increase to “doubling times” and you know where the wall is, in your best estimate.  Nobody who does this exercise can come up with a number that is larger than the number of fingers you have on one hand.

Look, I don’t like what taking our medicine means, and the reason I wrote Leverage was because I had gotten very tired of people saying “nobody could have seen this coming.“  In addition, there are a whole host of people who have sounded the warning horns for a while, yet they have no cogent plan to resolve the problem or help buffer the inevitable (and severe) pain that must be endured.  Some of them, including some political candidates for President this time around, understand the problem and even propose massive budget changes (e.g. $1 trillion a year in spending cuts) yet have no plan to buffer the economy and the people from what will, left alone, be a contraction in overall GDP of up to 25% and the Depression that will inevitably come with it — a Depression worse than the 1930s!  That is outrageously irresponsible and worse it will never get passed because without those buffers it is not only unnecessarily harsh but could lead to the collapse of both civil order and our government.

But irrespective of what I would like to see, or what politicians promise, this adjustment — the necessary adjustment — is coming.  It cannot be stopped.  It is mathematically certain, whether people like Bernanke, Obama, Romney and others wish to face it or not.

Your choice is whether to face these facts in your personal and economic life, preparing to the extent you’re able, or whether you will be one of those who claim that you were “blindsided” by the inevitable that you were simply unwilling to face.

The Market-Ticker

Discussion (registration required to post)

It’s Dying.

The two-party system, that is. And it has to, if our Republic is to survive.

It’s dying for good reason. Citizens across our great nation are realizing that the Republicans and Democrats in Washington no longer represent their interests, and they’re ready for a severe change to the political status quo. No longer is the concept of “throwing your vote away” relevant. What does it really matter, if the alternatives – the Republicans and Democrats – have become two wings of the same party, the Big Government party?

The U.S. government borrows more than $40,000 per second. So if you’re an average American, the U.S. government added to your tab more than you make in a year in the time it took to read this sentence. What they don’t borrow, they print. And what they don’t print, they take from you, in the form of taxation.

As if that weren’t enough, Congress seems intent on making life hard on the American people. From the drug war, to the Patriot Act, to the TSA, to the NDAA, their assaults on the civil liberties of nonviolent, innocent American citizens seem to be intensifying at an exponential rate.

The rule of law in America is deteriorating, as white collar banksters are rewarded for defrauding billions of dollars out of blue collar America while blue collar America is harassed and imprisoned for nonviolent crimes that affect no one else. All this has been enabled by both Republican and Democrat politicians alike for decades. At best, they give lip service to the Constitution, while trampling all over it and the principles it stands for.

But there’s a new party in town.

The Libertarian Party has only been around for about 40 years, but the principles it stands for go back centuries. America’s Founding Fathers were the first modern Libertarians. They sought a life free of the King’s dictates. So they wrote the Declaration of Independence, testifying that all men are created equal, and that rights come from the Creator – not from kings, governments, or anyone else.

But men like George Washington and Thomas Jefferson would be shocked at our modern government. They grew hemp and made moonshine, both of which are illegal today. They did not ask for permission to own and carry a firearm. They certainly did not obtain a permit to wager a bet on a friendly game of cards. By all accounts, Washington and Jefferson, those symbols of American liberty, would be common criminals in modern America. Our Congress has stacked the deck in this way, because it enables them to play out the game in their favor.

The message of Liberty was, and is, about individual empowerment. The ability to live free of force from others. To live in a nation of laws, not of men. To enjoy the comfort of one’s own castle, where every man is his own king. The government’s role is not to give us rights (which it cannot do), nor to infringe upon them; but rather, simply to protect our natural rights.

That’s why people of all races, creeds, and colors are leaving the two-party system and joining the Libertarian Party in droves. It is the only party whose registrations are growing. It is the only party that knows that all citizens, and especially minorities, are not served by special rules or government favors, but by the law being equally applied to all. It is truly liberating to finally release oneself from the confines of the two-party box; to no longer be required to make excuses for one politician or another’s repeated shortfalls; to have real choice. The Libertarian Party is the real populist party, the party of We the People.

Perhaps our cry can best be summed up by five words of the Rev. Dr. Martin Luther King, Jr.: “We want to be free.”

We just want the opportunity to live the American dream.

Calen Fretts is a resident of Valparaiso, Candidate for the U.S. House of Representatives in the 1st District of Florida, and Vice Chair of the Libertarian Party of Okaloosa County.

http://frettsforcongress.com

If most high profile Republican leaders and officials, salaried or not, do not shed their political arrogance and narcissism soon, 2012 November elections may be a repeat of why a high percentage of California Republican middle class voters refused to vote for many Republican candidates last two major election seasons. If any candidate’s only relevance to our lives is their Republican registration – not good enough, not any more.  But the message remains elusive to local, state and national Republican Party officers and leaders suffering a severe handicap of arrogance, narcissism, and many lacking in social and people skills outside of impersonal blogs, websites and podium speeches.  Federal prisons are full of dishonest lawyers and corporate executives which justify us more streetwise middle class voters to remain cynical and distrustful even of our own GOP leaderships.

Every time the majority of elected Republican leaders, local, state or national display condescending attitudes, arrogance, greedy self-serving agendas, and elitist demeanor toward whom they consider economic and intellectually inferior on the basis of modest incomes, they are further alienating an inevitable diversity of voters with potential common shared issues.  Many of us, with the ability and the backbone to confront internal Party deficiencies and push for leadership reforms, are frequent targets of verbal assaults by titular Republicans with delusions of being earthly deity.  God forbid if virtues of speaking truth and accountability are not just confined at Democrats.  It remains the GOP (as in Going Old Party) tradition to discourage us plebiscites from openly (instead of some “quiet room”) exposing ineffective leaders; or to probe into some Republican candidate’s credibility by connecting the dots between current campaign rhetoric to his/her past performance.  Embellishing resumes to expediently fit a believable profile of public leadership has not escaped intelligent voters’ observations. A demon is a demon regardless of partisan labels or religious claims which are no assurance of their personal integrity and humanity.

It takes profound intellect and expansive sociological sophistication, seemingly lacking in sufficient numbers within current traditional Republican ranks, to develop solutions of realistic substance.  The Democratic Party is not alone in being inundated with intellectually hollow whiners.  Attending state GOP conventions are bastions of mind numbing sound bites – stale, archaic, simplistic and lacking in public relations hospitality and other social skills to which the organizers seem totally and repeatedly oblivious, but then consider the sources.

Every political leader should be judged for re-election on the basis of how much legislation and policies have given benefit to the mass numbers of their constituents, not to a small percent of their deep pocket donors.  Not all corporate titans give a damn about helping to preserve and improve the integrity of U.S. patriotism, as most have legally sanctioned privileges to protecting their profits by stashing their monies offshore; low wage overseas job outsourcing; and our U.S. military protecting corporate overseas assets. Legislative offices, supported by middle class taxpayers as well, are visited most frequently by corporate lobbyists, whose fees are a business tax deduction unavailable to us middle class.  In fact, economic treason is a legitimate allegation to launch against many Republican and Democratic congressmen,  U.S. Senators and their corporate donors.  Isolating the ills of this nation just on Democrats alone is wearing thin, given the facts of bi-partisan complicity in playing us middle class voters and taxpayers like human yo-yo’s.

The problem why our GOP presidential candidates are not believable is that Newt Gingrich comes across a capricious and ego driven moral and ethical hypocrite whose criticism against Mitt Romney seems  self-serving.  On the other hand, Mitt Romney believes himself to be an American aristocrat whose rhetoric alone should be sufficient to justify voters’  support.  Romney’s offensive references to “envy” and that tax policy disagreements be confined to “quiet rooms” among other verbal Freudian slips were not just poor choice of words, but reflective of how he defines us not of the elite.  In his mindset, failing to achieve super rich status is the only value which passes his litmus test of intelligence.  Rick Santorum is too culturally and socially unsophisticated to lead a nation where many admitted Christians, including Catholics, prefer government and legislative agendas be confined within secular boundaries. Ron Paul is just a magnet for Libertarian type advocating a anarchy.

News media have no idea the number of scams, deceit, lies and exploitation passing for GOP’s version of gratitude, respect and morale reinforcement to many of us grassroots active uncompensated Republican volunteers in California and beyond.  Our first Bay Area regional Korean American Republican elected as GOP state senate nominee, Doo Sup Park, had to file a police report for a seemingly deliberate act of larceny committed on him last year by Luis Buhler sanctioned by his CAGOP allies, as the case remains ignored by the California Republican Party officers (all white Caucasian and most are social rednecks).  However, such breaches of integrity and respect are prolific, mostly the rule, not the exception. We are no longer electing from high standards of public leadership qualifications, but out of desperation to lure candidates with disposable campaign cash, insatiable egos and under the delusions that simply attacking  Democrats  is synonymous with actual leadership performance.  Unless we grassroots Republicans assert our mandates for higher standards, we will be stuck with the whims of some Tea Party movement; and politically ambitious individuals mistaking narcissism, aloofness and arrogance as social class. Maybe an acting course can help many of them effectively pretend to have charisma. Too many overpriced Republican campaign consultants and spin doctors seem to do a lousy job.

The problem is that many Republican official representatives and leaders, even at county levels, believe their role to just pontificate rules of behavior for others. They believe to be divinely or aristocratically immune from the need to exemplify role model behavior or be held accountable. Talking at us, not with us is a typical Republican tradition which is sowing Republican middle class warfare conflicts.  It is the arrogance of many Republican officials, salaried or not, to presume that blind allegiance to the Republican Party ideals must transfer even to defective Party leaders. We have a moral and ethical right to support the ideological merits of being Republican without being crucified for refusing to pay homage to a growing number of politically ambitious Republicans whose only public leadership qualification lies in their embellished or fictional resumes.

Gail E. Neira
Lifelong conservative Hispanic American active Republican
San Francisco native, past publisher, managing editor, diplomatic embassy aide

Grassroots Republican Pantry

The Pampas of Argentina or the backwaters of Paraguay were the preferred location for those who openly professed their reprehensible loyalty to the Führer principle. However, do not blame all those ex-Nazis for selecting the shores of the Americas for their new domicile, their seeds were planted long ago in the offices of Wall and Broad Streets. Leni Riefenstahl’s Triumph of the Will saga shares more, than what one wants to admit, about the dark side of American History.

From the beginning of the Republic, the Federalists conspired for the illegal passage of their central government constitution in order to form a competing world empire with their British cousins. Their leader was Alexander Hamilton, who championed making individual states subservient to the original crony capitalists. When the Father of our Country, George Washington admonished about the dangers on entangling alliances, the world was warned that the drive towards independent liberty was compromised under this new Federal system.

When Andrew Jackson rallied frontier populism against the establishment elites of his era, you had an opportunity to restore some of the former glory of the Revolution of 1776. The conflict over the abolishment of the National Bank symbolizes the eternal struggle that continues to this very day.

The Manifest Destiny of the U.S.-Mexican War demonstrated just how far the country strayed from the fundamental concept of independence from England. The expansionistic campaign had more in common with the Crown than the Boston Tea Party.

The early 19th century fascists looked to their next defender Abraham Lincoln, the lawyer for the railroad corporatist cabal and the worst of all despotic presidents, to complete the task.

Myth #1: Lincoln invaded the South to free the slaves.

Myth #2: Lincoln’s war “saved the Union.”

Myth #3: Lincoln championed equality and natural rights.

Myth #4: Lincoln was a defender of the Constitution.

Myth #5: Lincoln was a “great humanitarian” who had “malice toward none.”

Myth #6: War was necessary to end slavery.

The significance of the War of Northern Aggression is that the principle of independent sovereign states under the precepts of constitutional law died. With the prevention of secession, the liberty of a voluntary union was betrayed for the rule, under a loyalty oath, to an Amerikan Reich.

The next False Flag excuse was the Spanish-American War and the “Remember the Maine!” slogan that pushed the country into a “Pacific Imperium“. Those NeoCons, like Senator John McCain, who revere Theodore Roosevelt as a model for imperialist jingoism, draw their psychopathic lusts from the same bloodline as Reinhard Heydrich and Heinrich Himmler.

World War I produced the infamous Woodrow Wilson internationalist treason. No longer will America be a society governed by elected representatives. The only coup to come out of his administration was won by the banksters. The fate of a proud people, sealed with the creation of the Federal Reserve, the establishment of the income tax and the permanent foreign military intervention abroad is the basis for the final destruction of the country and the horrors that befell our nation in the last century.

World War II inflicted the Franklin D. Roosevelt curse that guaranteed the imposition of socialism on the American people. How ironic that the Hitler bogyman’s regime, the scourge of Western Civilization and the reason for defending democracy, ultimately lead to similar collectivist policies, now adopted in the United States.

Just look to the ignominious involvement of Prescott Bush’s involvement with the funding of Adolph Hitler. Even FAUX news cannot hide the relationship in Bush’s Grandfather Directed Bank Tied to Man Who Funded Hitler.

“Prescott Bush was one of seven directors of Union Banking Corp., a New York investment bank owned by a bank controlled by the Thyssen family, according to recently declassified National Archives documents reviewed by The Associated Press.”

So what can and should a “reasonable man” conclude from these examples from history? The essential lesson is that the pristine fairy tale of the federal government’s noble role as defender of righteousness, that politicians want to accept and often die for, is a fictional myth.

Power politics always serves the interests of the banking elites, who control the political process, own the financial capital and manipulate the media viewpoint of events. This reality is pure fascism. You live under this system, so grow up, and admit it . . . it is the lamentable truth.

http://www.youtube.com/watch?v=tsH8xvjTAlo

The Fourth Reich did not originate with Operation Overcast, the initiate name for Operation Paperclip. The classic book Fourth Reich of the Rich, by Des Griffin deserves another read.

“Some 150 years ago, in a speech at Springfield, Illinois, Abraham Lincoln acknowledged the fact that “no foreign power or combination of foreign powers could by force take a drink from the Ohio or make a track on the Blue Ridge in a trial of a thousand years.”At what point then is the approach of danger to be expected? I answer, if it ever reach us it must spring up from among us, it cannot come from abroad. If destruction be our lot, we must ourselves be its author and finisher. As a nation of freemen we must live through all time or die of suicide.”

Are we committing national suicide? Webster’s Dictionary (1828) defines suicide as: “Self murder; the act of designedly destroying one’s own life.” For that to be true on a national scale, the decisions leading up to our national self-destruction would, of necessity, have to be made by those who govern the country Congress, or “the government.”

Much of the German population was captivated by Hitler. The “presstitute” Goebbels’ media holds out Obama as a shining example. His manners are a composition of every tyranny to grace the scorched earth of despotic government. Will the America public come to their senses and make war against this Amerikana version of the Fourth Reich? You need not look for the Boys from Brazil to find today’s Nazi’s. They do their business in New York City, run their international institutes from London and order their bombing from Washington, DC.

Sieg heil! to the New World Order is the modern definition of national suicide.

SARTRE

“Sometimes the ‘people’ are right.”

Anonymous leader

******

“There are two kinds of outrage:

The anger of the disappointed spoiled;

The authentic moral wrath of the common people betrayed.”

Anonymous sage

Permit me to sketch some real-world political context.

America has evolved two cooperating political elites, each of which runs one of the two parties and shares three common traits: (1) high education levels, (2) important wealth (3) a distrust of the populist vote bordering on fear.  Winning elections for each requires a periodic courting ritual during which the populist vote (on which success depends) is earnestly sought, followed by a measure of post-election betrayal. Well before the 2008 credit-bubble crash and the advent of the Tea Party movement, I noticed the growing populist pressure.

“Populism in this usage represents the politically relevant precepts, attitudes and core positions that distinguish an enduring majority of adults from the political elites that depend on their approval.”

For decades, the corporate country club conservatives and the Lexus limousine liberals succeeded in achieving a rough division of the populist center: social populists on one side, economic populists on the other.

That situation was mutating well before the 2008 real estate credit bubble burst.  Just before that calamity, I wrote the following (in an analysis of developments in American populism):

“While I still believe that a legitimate populist movement can accommodate local custom (when popular sentiment clearly differs from the mainstream, thinking of the accommodations for gay marriage in Vermont for example), I also believe that there can be no accommodation for the anti-democratic reversal of the popular will in the rest of the country in this important area of life, especially by judicial fiat.  When judges, for example, abuse their trust by overriding the popular will, especially on essential ‘family values’ issues, a populist rebellion is virtually inevitable.

Politics is a game played among four players, each representing one mindset.

The game is about power, challenges to boundaries, and the reallocation of other people’s money & property.

1. For typical liberal minds, boundaries are obstacles to be eliminated, including the boundary between “mine” and “yours”.
2. For typical conservative minds, boundaries are bulwarks to be defended, including the boundary between “my kind of people” and the “unwashed”.

[Liberals and conservatives share a great deal more than they are willing to admit.]

1. For centrist minds, boundaries are threats to a delicate balance and boundary relaxations are always preferable to conflict.
2. The reasonable minds, the rarest of all, are equally wary of the toxicity of the ideologues and the weakness of many centrists whose tendency to conflict avoidance undercuts courage and principle when both are most needed.

People endowed with common sense agree that “extreme” ideologies[5] are harmful, yet many of them tend to ignore the extremism of the ideologues who claim to share the same general socio-political vision. But the difference is not just one of degree, as in intensity or passion. When actually adopted, all ideologies operate as powerful reality filters, screening out or distorting every inconvenient data set or challenging point of view that cannot be accommodated to the “correct” view. In a sinister operational sense, the extreme ideologies work like mind-worms, feeding on the vulnerable, substituting a secular catechism for critical thinking. The vulnerable groups include those closest to a particular ideology in the spectrum of belief, the rootless ones searching for “meaning and purpose” and all the post-modern thinkers who have abandoned their allegiance to the core moral order. They were Lenin’s “useful idiots”.  I like the term “unwitting prey” or even “pets”.

At this juncture in history, the most toxic ideologically saturated minds are still found among the progeny of the two malign ideologies of the last century:  Marxism and National Socialism. The beliefs of Lenin survive in the guise of bureaucratic egalitarianism and those of Hitler survive as population eugenics. The true believer ideologues[6] dance on a scary precipice, unaware of the yawning abyss, one foot-slip away.[7]  History taught in the classic manner, with fidelity to the past, sans ideological filters, is a powerful vaccine against the toxic infectious ideologies. We can hope that such classic history will once again be widely taught.

Each of the four archetypal mindsets (liberal, conservative, centrist and reasonable) is “onto something”. They are not ideologues – these mindsets are traditional styles of rational thought and communication. Each is a gift to us conveying some essential part of the big picture. Each has had its day and will again. No culture can afford to ignore or marginalize a single one of them, except at a steep cost, because each mindset is part of the civilized historical tradition.

No society without liberal, conservative and centrist minds – all of whom are in a mutual dialogue mediated by the reasonable minds – can avoid the “bubble trap”. The real world abhors a bubble.  Those who insist in living in one will eventually find themselves in an unchecked downward slide. The slope is steep and the momentum of the fall is constantly accelerating. The reasonable minds among us are the first to notice the pending disaster, but only an aroused population can stop it.

“Not my problem”, you say? No part of a human society falls over the precipice without taking others down with it. I believe that during times of great imbalance – like our present situation – we are in acute danger because the consequences of a major misstep will be unforgiving: We are permitted to briefly lose our balance, but we must quickly regain our footing or we will fall.  The precipice is always near, and it’s a very long way down.

Dialogue pierces bubbles and augments balance. At times like this, when political posturing and maneuvering trump dialogue, the abyss is much closer that we think.

About that Giant

Now, here is a secret. All this time a huge giant has been sleeping under our floor.

Go with the metaphor for a moment, and ask yourself: What would a dreaming giant dream?

HINT: The giant is us, the people, not the population, but that ancient virtual collective memory that holds the precious life lessons of our ancestors.  This is our giant, the keeper of our pains, joys, successes and failures – especially of our failures. The Sleeping Giant embodies our common wisdom, our common sense and our common morality.

When the players in the political game become too corrupt, too careless, too unbalanced and too arrogant, the center does not hold and things fall apart[8]. Eventually the noise from all those gnashing teeth awakens the Giant under the floor.  Meantime the Giant dreams of wisdom ignored.

Elites are typically out of touch. It is their nature, whether conservative, liberal or centrist.  They are disconnected by circumstance, out of touch almost by definition, and always distanced by the habits of comfortable neglect. In the Giant’s world, loyalty and trust trump ideology and one’s station in life – especially the ideological fads of the elites.  In the Giant’s world, loyalty and trust start with family and friends then radiate to neighborhoods, then to communities, and so on, ending at the borders of the country. Loyalty and trust are at the heart of the ancient moral code, the “Deep Torah[9] of humanity” if you will, the main precepts of which cannot forever be ignored by any people, including, especially, by the elites.

Our daily lives, the reality “on the ground”, shapes the alpha and omega of real life.  When we say that the elites are disconnected, this is what we mean they are disconnected from – and this is why they need to be watched at all times. But the common people are too busy living and struggling with daily life to keep up surveillance of the miscreant elites.

Among all the precepts and aphorisms of the ancient moral code, five themes sound in the Sleeping Giant’s dreams like thundering heartbeats:

1. Earning entitles one to keep its fruits – the harder the earning, the fiercer the keeping. This precept applies to all people regardless of their station. One does not initiate a general program of taking property from any group (i.e., without a fair individuated adjudication, such as reparations for theft) without threatening all groups. In the Giant’s world, the earnings of the common people the fruits of which are more precarious and therefore more precious, are to be carefully respected by the elites. Significant price inflation is a thinly disguised, elite-engendered theft of earnings.
2.  The common people and their children entitled to the same human dignity as the elites enjoy. In the Giant’s world, the common people must be every bit as well protected from predators (human, animal, institutional and inhuman) as are the elites and their children. For example, the specter of private security guards for the elites and underfunded, under-deployed police for the poor people is a violation of human dignity.  In the Giant’s world, the elites (who are functionally necessary, but not individually indispensable) will be “kept on” only so long as they honor the basic human dignity of the common people.
3.  Theft by a common person is stealing and should be punished. In the Giant’s world, there is no theft exemption for the elites. The “Deep Torah applies to all – ruler and ruled, powerful and powerless.  Yet theft by an elite person is sometimes a mere “resource reallocation”, until the crime is discovered, when it may be called “misappropriation.” In the Giant’s world, elites do not steal from the common people…even elected elites acting under color of law.
4.  Trust is the baseline commitment of the social order and individual relationships.  When elites disparage the family ties, the loyalty and trust relationships and arrangements of the common people, the foundation of general trust is damaged. Elites do not break trust with the common people nor publically undermine its value by disregarding it among themselves, except at their great peril. They do not debase the Deep Torah by adopting a separate moral standard for themselves.  Not without deeply angering the awakened Giant.
5.  Beware when the trust with the common people is finally broken: Then, even the most benevolent gestures of the elites become traps – hungry tigers are then considered safer company. In the Giant’s world, the elites do not trick the common people.

Our current elites include some very clever types who value their personal status over anything else.  Some of these clever ones actually fear the Giant, but they have a plan to lull it into sleep.  These elites have kept a subset of “the population” as pets.  These human pets enjoy a very limited capacity for independent thought and action, because they have been conditioned to dependency, and they live on highly filtered information[10].  These pets can be easily manipulated and even teased into a state of faux rebellion.  Occasional pet outbreaks are arranged or exploited[11] to create conditions that will allow the elites to reestablish themselves by changing costumes.

This is why mobs of noisome pets should not be confused with a Sleeping Giant Awakening.  Two distinct things must not be confused: The anger of the disappointed spoiled and the authentic moral wrath of the common people betrayed. Those unruly pets sleeping in tents in the public square are an intended distraction.  Moral outrage grounded in the Deep Torah will always trump ordinary discontent.

The awakened Giant is the real deal. But how can we tell the difference? How will we know when the Sleeping Giant has awakened?  Listen closely for a critical the voices cohering around five themes: (a) keeping earnings; (b) being kept safe from predators; (c) holding thieves accountable, no matter their status; (c) honoring trust relationships; (d) rejecting the falsely benevolent gestures. This is the growl of the “Deep Torah”. It is the authentic voice of the people that, when aroused, exhibits a sudden moral coherence and unmistakable power.

You may have noticed that the Giant is stirring. It may soon be fully awake. I leave it to the reader to decode the signs, both false and true.

Timing is everything.

A fully awakened, angry giant is a very blunt instrument indeed.  This is why populist rebellions tend not to end well, even for the common people who first cheered the “protesters”, only to discover, too late, that a new set of elites had been using them as unwitting foot soldiers all along.

There is a strategy for the survival of the good people and good institutions, the constitution of this Republic and the prospect of an American renewal during an Awakened Giant Event.

The strategy is grounded in five simple rules, easy to outline, but difficult to implement….

Rule One: The ideologues cannot be trusted.

Rule Two: Listen closely for the ancient moral message (see above).  The more quickly that message is heeded, the sooner the Giant will go back to sleep

Rule Three: When things go seriously awry, the voices of practical and moral authenticity will not diverge.  So beware those who are still trying to trick the people – even – or especially- in a “good cause.” Beware those who want to “break some eggs” to make an omelet when they really mean break some heads to make a revolution. And shun those who want to destroy human dignity and freedom to make “a better world”, because the really mean “a bigger kennel.”

Rule Four: The Sleeping Giant is us.

Rule Five:  Victory goes to the most self-disciplined, morally rooted (think deep Torah here) and determined candidates, parties and movements.

How awake are you?

Copyright © 2011 by Jay B Gaskill, Attorney at Law, All rights Reserved

Forwards and links are welcome.  For other permissions, contact the author via e-mail law@jaygaskill.com

The author is a California Attorney and the creator and administrator of The Policy Think Site www.jaygaskill.com and the linked blogs.

Countries around the world, particularly in the West, are hopelessly in the red, with debt rising every day. Even worse, politicians seem paralyzed, unable — or unwilling — to do anything about it. It is a global disaster that threatens the immediate future. But there might be a way out.

When Carlo Ponzi, a dishwasher from Parma, Italy, immigrated to the United States in 1903, he had $2.50 in his pocket and a million-dollar dream in his head. He was able to fulfill that dream, at least temporarily.

The scheme continued. Ten investors turned into 100, and 100 investors turned into 1,000, until the scam was discovered. Ponzi spent many years in prison, and he died a pauper in 1949. But his name remains important to every criminologist today — and every economist.

Economists use the term “Ponzi scheme” to describe a disastrous mechanism in which someone pays off old debt by constantly taking on new debt. The repayment of the debt — the most recent loans, plus interest — is deferred into the distant future, fueling an eternal process of debt refinancing.

It’s the classic pyramid, or snowball scheme, practiced by thousands of con artists after Ponzi. The most spectacular case was that of New York financier Bernard Madoff, who was responsible for losses of about $20 billion by 2008. Snowballs are set into motion, becoming bigger and bigger as they roll along. In the worst case, they end in an avalanche that takes everything else with it.

Western economies have not acted much differently than the fraudster Madoff. In 2011, they were virtually inundated with bad news and old sins. Almost everyone — in Europe and in the United States — has been living beyond their means, from consumers to politicians to entire countries. Governments have become servants to the markets upon which they have become dependent.

Bigger Snowballs

On an almost weekly basis, the reports have become more worrisome and the sums of money involved more staggering. Many are now concerned that, as 2012 begins, the snowballs will only get bigger — and roll faster:

• There are the banks in Europe, which will have to repay about €725 billion in combined debt in 2012, including €280 billion in the first quarter alone. With the private market largely off-limits to them, the banks have had to rely on the European Central Bank (ECB) to bail them out. The ECB is now lending them fresh money — as much as they want — at minimal interest rates.
• There is a country like Italy, which has an exorbitant amount of debt to service at the beginning of the year. About €160 billion in debt will mature between January and April; the total for the entire year is about €300 billion. The government in Rome is already having trouble finding buyers for its bonds.
• There is the ECB, which is creating billions essentially out of nothing. On an almost weekly basis, it is acquiring bonds that no one else would buy from Portugal, Spain and Italy and, in the process, it is turning into a reluctant financier of nations. This financial aid already amounts to €211 billion.
• There is the European Commission, whose president, José Manuel Barroso, supports the use of so-called euro bonds. These bonds, which would be issued jointly by the countries in the monetary union, would amount to an accumulation of collective debt on top of national debts.
• There is the €440-billion euro bailout fund, of which €150 billion are already promised to Greece, Ireland and Portugal. But because this amount is still not enough, the finance ministers have decided to “leverage” the fund, a seemingly harmless term for bringing in additional lenders, thereby multiplying the volume of credit.
• And then there is the United States, which only remains solvent because the Congress in Washington keeps raising the debt ceiling. The American government already owes its creditors about $15 trillion. Stay tuned for the next installment.

In other words, there are plenty of snowballs that have started rolling and getting larger with each rotation. Some aspects of the economic system in the industrialized countries resemble a gigantic Ponzi scheme. The difference is that this version is completely legal.

Living on Credit

Old debts are paid with new ones, with borrowers giving not the slightest thought to repayment. This has been going on for a long time, far too long, in fact. It was only with the eruption of the financial crisis in 2007 and the outrageously expensive bailouts of banks and economies that many people realized that the entire world is living on credit.

“Debt is rising to points that are above anything we have seen, except during major wars,” economists at the Bank for International Settlements (BIS) concluded in a recent study. “The debt problems facing advanced economies are even worse than we thought.”

This is even true of seemingly rock-solid Germany. In the third quarter of 2011, German public debt amounted to €2.028 trillion, an increase of €10.8 billion over the debt level just three months earlier. Germany’s public debt grew by about €120 million a day — or more than €80,000 a minute — between July and September.

To make matters worse, this increase occurred in a quarter marked by plentiful tax revenues and a significant decline in unemployment. But debts increase independently of whether times happen to be good or bad.

The End of the System

The same thing is happening almost everywhere. In the first decade of this century, which was by no means a weak period economically, countries more than doubled the level of debt — to an estimated grand total of $55 trillion by the end of 2011.

The United States leads the pack with its national debt of $15 trillion, followed by Japan with about $13 trillion. Germany’s €2 trillion looks almost paltry by comparison. Today, the three major rating agencies award their highest credit rating to only 14 countries in the world.

The fact that nations are continually spending more than they take in cannot turn out well in the long run. The word “credit” comes from the Latin “credere,” which means “to believe.” The system will only function as long as lenders believe in borrowers. Once the belief in the creditworthiness of borrowers is destroyed, hardly anyone will be willing to buy their securities.

When that happens, the system is finished.

This is precisely what happened with Carlo Ponzi’s scheme. And now entire countries are suffering suspiciously similar fates. They are no longer being taken seriously.

Meanwhile, it is also flaring up in the United States once again, with Democrats and Republicans blaming each other for the nation’s debts. Instead of taking responsibility and consolidating the budget, President Barack Obama prefers to rail against the Europeans’ approach to crisis management. They, in turn, refuse to tolerate any interference, especially from the United States, which they blame for being the source of the financial crisis in the first place.

In this fashion, the Old World and the New World are tossing the blame back and forth, while confidence in politics and its ability to avert collapse is dwindling on both sides of the Atlantic. Is there still a way to stop the avalanche, or at least to diminish is destructive force? Why do countries that collect taxes have to borrow money in the first place?

Part 2: Of Good Debt and Bad Debt

Alexander Jung – Spiegel

This is getting old…

It took a relatively obscure former British academic to propagate a theory of the financial crisis that would confirm what many people suspected all along: The “corporate psychopaths” at the helm of our financial institutions are to blame.

Clive R. Boddy, most recently a professor at the Nottingham Business School at Nottingham Trent University, says psychopaths are the 1 percent of “people who, perhaps due to physical factors to do with abnormal brain connectivity and chemistry” lack a “conscience, have few emotions and display an inability to have any feelings, sympathy or empathy for other people.”

Bah.

Such people do exist, of course.  But that’s not the point.  This sort of behavior is self-defeating in any operable society because those who operate in that world quickly find themselves with few friends and fewer opportunities.  Word gets around.

Soon nobody will do business with you without donning a titanium butt-plate first, as they get tired of being violated.  That in turn drives up your cost of doing business and suddenly your competitors have an edge.  They exploit it, and now you’ve got trouble — if you don’t reform you’re soon out of business.

This is the usual dynamic.  It led those who were psychopaths to practice “quick hit” economic acts.  In the old West the huckster ripped off someone or robbed a stagecoach, but never showed up in town and plied a trade for any length of time, because they’d never get away with it — soon the lynch mob would appear and give you a permanent necktie.  In the more-modern era you were simply run out of business and then run out of town.

But something happened in the 1990s and into the 2000s.  The Government became infested with the same sort of game, and started to embrace and even sleep with some of these monsters — sometimes literally!  Government found that it could run the same game that was plied in the old days of “snake oil” and use it to buy votes, and so long as they made more and more outrageous claims the voters would suspend their disbelief and continue to buy into their games at the ballot box.

Now the psychopaths in the business world had a partner who would shield them — literally — from the consequences of their actions.  Money laundering, bogus securities that the sellers knew were worthless, even actual bribery became part of the business model and the justice system was blinded by those handlers in the government, who relied on the very same hucksters to finance their political promises!

So yeah, sure, we have psychopaths on Wall Street.  But the real problem doesn’t lie there.

The root of this problem lies in Washington DC, because without their active cooperation there would have been thousands of indictments, trials and prison sentences handed out by now.

But in point of fact there have been none.