Tag Archives: plutocracy

Certainly a Small Country as Switzerland Has No Lesson for the Most Powerful Nation on Earth

Switzerland is small and the United States is relatively big, India much larger. Switzerland is about the size of Vermont and New Hampshire combined with the population of Virginia, 8 million people. Comparing that country with countries the size of the United States at 310 million or India at 1.1 billion people, one might conclude that some means of governance would have to be different simply due to size.

Yet all three countries send their young people to possibly die in their militaries. All three have healthcare and trade issues. All three tax their citizens. All three have currencies to maintain. Why is it that only one of the three allows all its citizens to decide if their government has made the proper choice for their country?

The issue is whether India, the United States and Switzerland provide fair representation of their citizens’ views in their political choices. If the citizens of the United States chose to indebt their grandchildren so that they could live a better life, then so be it. If they chose to place 25 percent of their population in either low paying jobs or on unemployment so that the rest could enjoy low priced goods from China, then so be it. If they chose to force millions of home owners to give up their homes so that a few bankers could gamble with their value to make trillions in credit default swaps, then so be it.

However, given the choice to vote on the wisdom of a few politicians’ choices regarding what in hind sight were self evidently selfish choices that ignored the best interests of the majority of Americans, the likelihood that the United States would be in the predicament we are in if we had Switzerland’s political protections is pretty small.

The question I have raised is one of fair representation. The United States Congress has bowed to political pressure and has opted to support one tiny faction of wealthy people over the interests of the vast majority and over our country’s very future. A review of which bills get introduced, which bills are put to vote, and which bills get passed makes if painfully clear to any who study the evidence that our representation is flawed. U.S. representative corruption is not unique in history or in contemporary governance. It certainly is evident in India as well. It is, however, unacceptable to any free nation and opposes the will of the U.S. Constitution.

America’s system of choosing 535 people to represent the wishes of 310 million is broken. Congress’s voting record resembles the wishes of perhaps the wealthiest 60 million and disregards the welfare of the remaining 250 million. No country’s governance can last the test of time that chooses this path. It leads to plutocracy and eventually military dictatorship as the only means to hold back the fairness that democracy promises, and neither of these types of governments has proven stable in history.

The intent of our founders was that a balance of power between the wealthy and the commoner be shared so that neither could take from the other without permission. It was their intent that all could choose together to grow the nation in fairness and peace and that all would share the burden of that responsibility. Yet America is ignoring their wisdom and a rift is growing.

I am not advocating the rift that is building in America, merely observing it and voicing the crisis that is approaching from a distance. If we choose to ignore the winds of discontent and continue our selfish governance, this discontent will generationally grow into civic unrest and will eventually force a contest of state power over its people. I expect that before this occurs, the safety valve of our Bill of Rights will allow the freedom of assembly, the freedom of speech, the freedom of the press and right to vote to overthrow the will of 535 who are not listening to the will of the people.


Filed under American Governance, American Media, American Politics, Bureaucracy

As America’s Political Process is Upheaved, Our Institutions and World Governments will Share the Responsibility for Our Debt Restructuring

Certainly at any moment in time, if we examine a bell curve of society, we find a percentage of people who are unable to manage a budget or that have impulsive natures regarding credit and materialism, and together as a group, they find themselves over their heads regarding debt and consumption.

Ultimately, everyone is responsible for their own spending habits. No-one forces us to indebt ourselves or to reach beyond our means to purchase life’s comforts. However, just as a family bathing at the seashore can find them swept out to sea by a breaking riptide in which they are defenselessly broken by one of the world’s destructive forces, a family can also be swept away by the world’s financial forces when its monetary system rises in a feeding frenzy or violently contracts.

When these systemic accelerations and decelerations impact the world, the bell curve of personal budgets violently shifts, trapping not only this lagging tail of incapable and impulsive budget breakers but also a much larger swath of responsible citizens as well. In the most recent financial collapse, this budgetary bell curve was shifted and skewed dramatically by America’s generational monetary flaws, by America’s post-war demographics, by a shift in America’s fortunes, by our lack of institutional oversight, and by institutional entrapment of larger forces that self-servingly swept up Middle America. Together these forces led to a pervasive over consumption and overwhelming debt.

Generational Monetary Flaws – Our capitalistic monetary system, although arguably the best system for advancing societies, still has great flaws, the greatest being its reliance on capital providers and money lenders to create money that over time concentrates wealth back into their hands. This concentration builds to a breaking point about every third generation. Each generation shifts its philosophy from those of its parents, allowing the generational capitalism pattern to play out one generation after the next. After a financial collapse, the first generation is traumatized, the next generation legalistically rebuilds, and the third happens to branch out to become risk takers setting the stage for Ponzi excesses and collapse. Our recent collapse unfortunately happened as usual during our country’s latest risk taking generation.

Demographics – After WWII, our grandparents and parents set about to make up for the war and created a bulge in population, the baby boomers. This generation’s spending patterns were well known as they progressed from childhood into marriage, spending years, and into preparation for retirement. The entire world connected to this generation’s spending patterns and fed into its cycle which could be considered instinctual by nature. The build up to this monetary collapse came as the boomers were in their biggest spending and investing for retirement income period when they met with faced a world that was willing to help them foolishly part with their capital during their largest debt capacity years.

Shift in America’s Fortunes – America had been given the gift of excess wealth during the run-up to the Depression of 1871 from Europe’s banking system that manipulated a Ponzi housing scandal to extract Europe’s population’s wealth out of Europe for America’s rail expansion. Our capitalists came out of that depression with enough of Europe’s capital to “win” the world’s second great round of industrialization and to feed Europe with armaments during two great wars. America exited the two wars with most of the world’s gold and much of her industrial capacity.

We were now the world’s hegemonic power with an immense concentration of power. Our baby boomer leadership chose to spend our power and financial position on two competing motives that together squandered our fortunes. America chose to become the world’s first truly worldwide military superpower to defend ourselves against the next great war, spending more than double the rest of the entire world’s military budget. In addition, our boomer generation found that this war chest could be used to cure some of our societal issues that led to our being the world’s superpower.

America began its war on poverty and bigotry that together with our military expenditures sapped us of our newfound wealth and started us down a path of borrowing against our world reserve currency status to meet our lofty goals. The result of this two pronged philosophy was a national debt that as of this year surpassed our GDP.

Lack of Institutional oversight – America’s constitution was a work of genius in protecting our new nation from tyranny in its infancy. Our founders designed a grand web to catch tyranny from rising from any faction to thwart the progress of America. Yet we did not protect ourselves from our own debt.
So when America’s government began its war on communism, bigotry and poverty, it did so without a built-in constitutional predator to stop the spread of our governmental spending or to suppress the self serving monetary support for our spending folly from the international banking cartel that comprised our Federal Reserve.

For two centuries, our constitutional republic form of government had worked well in slowly advancing our society through dramatic societal shifts resulting in only one civil war, and had supported our laissez faire business growth during the nineteenth and twentieth centuries to make America the dominant economy of the world. Yet, our economy and position as the world’s reserve currency hid the dangers of a reckless Congress until its out of control spending surpassed our ability to enable it. Too late we have found that the Constitution has no protections against entitlement building and imperialistic spending.

The saying, “One’s greatest strength taken to extremes becomes one’s greatest weakness”, applies to our purposely weak federal government in the case of a rapidly advancing government directed capitalistic economy from the East. While our form of government has protected us fairly well from tyranny, it also has provided us with a fairly constrained federal government and 50 competing state governments to fend off the economic advances of China that has risen from two centuries of infighting to once again challenge the West’s hegemony.

Our constitution protected us only “fairly well” because it too came under attack when in 1913, America’s decision to hold the House of Representatives at 435 representatives led to the ability of our financial elites to wrest financial control over both chambers of Congress and move our nation dangerously close to plutocracy. The result of this shift in power was to remove the government’s oversight of those that would harm America’s financial security and to instead refocus Congress’s attention on guarding our elite’s financial opportunities. This shift set the stage for institutional entrapment.

Institutional Entrapment – While visiting a maple syrup farm, I found myself hiding behind a big maple tree in the midst of a full on cattle stampede as bulls and cows stormed out of the maple forest toward a waiting wagon full of sweet sorghum laced feed provided by their manipulative farmers. These cattle had been programmed to rush headlong in a daily feeding frenzy toward these sugary delights that were fattening them for market.

Like cattle, people are also able to be programmed and manipulated into instinctively acting en masse to meet the needs and desires of manipulative institutions. America’s masses were caught in a rip tide of institutional forces that individually and together overwhelmed our budgetary bell curve and sent us into a frenzy of debt much as Europe was swept into the Long Depression of 1871.

In 1979, China determined to come out of 150 year slump that had been precipitated by the West’s gun boat diplomacy and to implement her strategy to rise to the position of 21st century hegemony. At only 1/8 of America’s GDP, China was determined to implement a decade’s long strategy to build her infrastructure and education to support a gold rush of investment by foreign powers. In 1979, China opened her doors to any companies that would bring intellectual capital with them to educate China to the world’s newest innovations.

40,000 U.S. corporations set up shop in China bringing with them their trade secrets that would have enhanced America’s economic future and bringing millions of jobs that would have employed America’s now 30 million underemployed. Together with international bankers, they lobbied our Congress to establish favorable trade policies so that China could flood America with low cost goods that put many domestic companies out of business, that thrust America’s wages downward, that removed both blue and white collar jobs from our shores, that reduced our GDP and GDP growth, that increased our trade deficits, that reduced our tax base, increased our federal debt, that gutted our shores of thousands of factories, that devastated our world commodity relationships, that harmed our reserve currency status, and that by virtue of these financial insecurities harmed our national security.

Faced with wage pressures, baby boomer expectations of a better life than their parents, and a mounting disparity between the upper quintile that benefited from globalization versus the bottom 80 percent of Americans who found their purchasing power diminished, America rushed to the mega-distribution and retail outlets like Walmart whose shelves were filled 90 percent with low priced, sweet sorghum laced, Chinese goods.

International bankers, intent on providing the capital to meet the needs of the modern gold rush, devised methods to extract capital from America. Beginning in 1980 immediately after China opened her doors, our retirement accounts were designed as 401ks to feed the stock exchanges with funds to funnel to China. Then three subsequent booms were orchestrated to extract more capital from our baby boomers. The last boom was our great housing debacle in which 100 % non-recourse, non income verification loans were offered to Americans during the greatest housing Ponzi ever known, and on top of this Ponzi, international bankers laid a credit default swap scandal that fed a speculative gambling four times the underlying assets that had already been speculatively pushed to 200 percent their underlying real asset values.

Americans, fell subject to a rising swell of asset values and loose credit that was instigated by our political forces, multinational corporations, and international bankers to feed the China gold rush. Our instinctual need to meet consumption desires in the midst of America’s masses’ falling purchasing parity was entrapped by globalization’s desire to feed China’s burgeoning industrial infrastructure through maximum extraction of America’s and the West’s capital by increasing our indebtedness to its utter limits.

So while America’s middle class is not without blame for taking on debt beyond its ability to pay, it must be remembered that its ability to pay was swept out to see with a collapsing economy, caused by multiple factions inside and out of America that were intent on bulging American family debts to meet the hegemonic aspirations of the East and the western institutions that self servingly supported their efforts. Now without isolating and limiting the impact of this massive American private and public debt, our economy will not recover from this financial riptide for twenty years. As we stagnate, China will triple her economy and dwarf ours. Our financial and national security will be threatened.

We cannot afford to allow this mountain of debt to hold America back from restructuring its economy to meet this national threat. We must now transition from a nation of consumers to one of producers. We must reverse our economy to meet the obligations and expectations of our society. We must also revert to a society that can meet its obligations and the expectations of the world’s creditors.

America’s people cannot be held fully responsible by our institutions and those of the world for the frenzied financial wave that overtook us. We cannot be held in servitude to pay for our banker’s and multinational corporations’ follies and for the foreign investment infrastructure that will raise China’s economy. Those that had the elite power to manipulate and entrap America must now join us in getting our house in order, in isolating and restructuring this debt to share in the pain of its disposal. This is a first and high priority for America.

Those culpable will need to share in the process. Our people will share some responsibility. In the end, after this political process is upheaved, the responsibility will be shared by all that participated in the rip tide of events that shaped our modern crisis.

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Filed under American Governance, American Politics, U.S. Monetary Policy, U.S. Tax Policy