My Clovis News Journal column for October 14, 2011. (I actually used the preferred spelling "protestors", but the paper changed it.)
The recent "Occupy Wall Street" events are entertaining political theater. It has been interesting to watch the Democrats derail the movement just as the Republicans derailed the Tea Party movement before. This may also partially explain why so many of the participants are missing the point. Many, if not most, of the protestors blame "capitalism" for the problems they are protesting. Some even are pushing socialism as the solution. They couldn't be more wrong. Of course, those misguided protestors have been raised to believe in the twisted ideals of socialism, so what would you expect them to cry out for?
Yes, Wall Street is corrupt. What do you expect when you have a government available to be influenced and bought? "Laws" to be manipulated and monopolies to be protected? Under such a system this exact type of corruption and cronyism is inevitable. However to confuse the current situation with capitalism is to show you have no clue what capitalism is.
Capitalism is an economic system where private individuals, rather than the government, own and control the means of production. This hasn't been the case in America in a very long time. While the ownership is still nominally private, the control- through thousands of pages of rules and regulations concerning every aspect of running a business- is by the State. Thus, no capitalism.
A more accurate term for the melding of government and "big business" (usually through the government's creation of corporations) is "fascism". Or, to use a less politically-charged word, "corporatism". Corporatism is not capitalism and is not equivalent to the free market. In fact, it is the mortal enemy of the free market and liberty of all sorts.
Some of the protestors are focusing on an even more deserving villain: The Federal Reserve. They are calling for an audit of the Federal Reserve and and end to its operation. My only disagreement with this point is that the Federal Reserve needs to be shut down regardless of whether it is ever audited or not. The US dollar has lost almost all of its value since the Federal Reserve began its counterfeiting operation back in 1913. Isn't that enough reason to abolish it? Return to sound money based upon things that can be voluntarily agreed upon to have lasting value. Gold and silver are good choices and have worked well as money for thousands of years.
I wish more of the protestors understood these simple facts rather than going with the feel-good soundbites they have been repeating endlessly.
Yes, Wall Street is corrupt. What do you expect when you have a government available to be influenced and bought? "Laws" to be manipulated and monopolies to be protected? Under such a system this exact type of corruption and cronyism is inevitable. However to confuse the current situation with capitalism is to show you have no clue what capitalism is.
Capitalism is an economic system where private individuals, rather than the government, own and control the means of production. This hasn't been the case in America in a very long time. While the ownership is still nominally private, the control- through thousands of pages of rules and regulations concerning every aspect of running a business- is by the State. Thus, no capitalism.
A more accurate term for the melding of government and "big business" (usually through the government's creation of corporations) is "fascism". Or, to use a less politically-charged word, "corporatism". Corporatism is not capitalism and is not equivalent to the free market. In fact, it is the mortal enemy of the free market and liberty of all sorts.
Some of the protestors are focusing on an even more deserving villain: The Federal Reserve. They are calling for an audit of the Federal Reserve and and end to its operation. My only disagreement with this point is that the Federal Reserve needs to be shut down regardless of whether it is ever audited or not. The US dollar has lost almost all of its value since the Federal Reserve began its counterfeiting operation back in 1913. Isn't that enough reason to abolish it? Return to sound money based upon things that can be voluntarily agreed upon to have lasting value. Gold and silver are good choices and have worked well as money for thousands of years.
I wish more of the protestors understood these simple facts rather than going with the feel-good soundbites they have been repeating endlessly.
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There's some good anti Federal Reserve stuff on my blog.
ReplyDeleteSummarizing:
The Federal Reserve is a price-fixing cartel. The Federal Reserve fixes interest rates. Interest rates are the price of money.
The Federal Reserve keeps interest rates far below the inflation rate. This gives banks and others an incentive to load up on as much debt as possible. Then, in a recession, the bankers get bailed out while individuals lose their jobs and homes.
Negative interest rates cause bubbles and busts.
This last one is complicated, but it'll blow your mind once you understand it. It's the Compound Interest Paradox.
Summarizing, the USA has a system of debt-based paper money. New money is put into circulation only when someone borrows it. Federal deficit spending is borrowed from banks and (indirectly) the Federal Reserve. New money is literally created when you go into a bank and take out a mortgage.
Money is only created when someone borrows it. However, only the principal is created and not the required interest payments. Society as a hole continually falls into a bigger and bigger debt hole. The debt grows exponential via compound interest. When money is created, you only create the principal, but the principal PLUS INTEREST must be paid back later. That means you need ever-increasing exponential inflation to keep the scam running.
The Compound Interest Paradox is very offensive. People who are "educated" as economists think it's nonsense. I'm convinced I'm right.
Added to "fractional reserve banking" and you have excellent reasons to avoid government "money" whenever possible.
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