Archive for the ‘Book Reviews’ Category

Our presentation at the UNIS-UN Conference, United Nations General Assembly Hall

Sunday, March 15th, 2009

On March 5th, 2009, we were given the opportunity to present at the United Nations International Schools conference, at the United Nations General Assembly Hall

The theme for this year’s conference was “The Food Crisis, A Global Challenge” and included a number of prominent speakers. The conference started off with a speech from UN Secretary General Ban Ki-moon, followed by Daniel Gustafson, director of the Liason office for North America Food and Agriculture Organization of the UN.

J.W. Smith was third to speak. The presentation was on eliminating poverty and hunger once and for all. It went quite well with a lot of positive feedback from both student advisers and the students.

You can also view the conference webcast. The presentation by J.W. Smith is third out and goes well beyond the summary below.

Here are the slides presented:

Below is a short summary of the lecture that went with those slides.

Reaching Doubting Contacts and Audiences in 20 Minutes

Picture a fertile valley 10,000 years ago with fruits nuts, and vegetables growing wild along with lush thatch for building shelters. All the wandering settlers who found it have to do is pick their food, build thatch homes, and relax most the day.

But a cunning cabal forms and each lay claim to a part of the land. They make a pact with toughies to share the spoils if they protected their “exclusive title to what nature offers to you, me, and everyone for free.

The primary cause of poverty among plenty

The primary cause of poverty among plenty is “Property rights law, as applied to nature’s resources and technologies, denying others their rightful share of what nature offers to all for free.” Others have to share the food they pick with those “owners” and those protecting their “property,” have to build their houses, and provide them with other services while those cunning go on to claim more unearned wealth throughout history.

Today that same protection of exclusive title to what nature offers for free is accomplished through law. Seventy to 130 years ago, this error in property rights law was being studied and taught right in the university (Professors John Stuart Mill, Alfred Marshall, Thorstein Veblen, & others).

We have never had a “true” democracy

A good place to start your thinking on how this happened is Greece which is claimed to be “the birthplace of our democracy.” There only “land owners” could vote. That monopolization of the voting privilege carried though to the American political structure. Eventually and slowly other “men” were allowed to vote.

Women did not get the right to vote until 1920 and for all practical purposes African Americans did not gain that right until the 1960s.

Due to the massive wealth appropriated from you and me funding lobbyists, which means funding the elections of most legislators, those “rights” are still illusions. It is still effectively “their” government just as it was when those “exclusive titles to nature’s wealth” were first established thousands of years ago and protected by power and legislators of every shade ever since.

The proof is capital claiming all the gains in wealth produced by the ever-increasing efficiencies of technology the past 35 years (30% per decade compounded) plus a part of what once went to labor.

Wages are lower today than they were in 1972 but we do not realize it because the wives went to work to make up for that theft of labor’s proper share and today each family does have a higher standard of living.

But this is the economic story, not the political story and it is enough to know this thesis has a solid foundation in the classics. Please imprint in your mind:

Property rights law, as applied to nature’s resources and technologies, denies you your rightful share of what nature offers to all for free.

Our property rights laws are aristocratic property rights law

Your property rights law, again as applied to nature’s resources and technologies, is nothing more than aristocratic property rights law, exclusive title to nature’s wealth.

We are not talking about personal property which was built by labor and properly exclusively owned. We are talking about the wealth of nature which she offers to us for free.

This is why the powerful are privatizing everything in sight and why costs rise rapidly (frequently doubling) each time they do so.

Efforts are underway to privatize highways, water systems, and other social services. In this “monopolization process,” the descendants of those claimers of the wealth of nature 10,000 years ago, hope to privatize Social Security.

When Bolivia’s water system was privatized (monopolized), costs tripled as services went down. Bolivian citizens revolted, took back their water, prices dropped, services rose, and the legal system legitimized the recovery of everyone’s right to water.

Regaining our full and equal rights through paying resource rents to ourselves

We can each regain our rights to our share of nature’s wealth by paying land rents, meaning all resource rents, to ourselves (meaning socially collected) and using those massive funds to build roads, railroads, water and sewer systems, and electric grids (all natural monopolies). Those funds will also run governments and provide education, health care, and retirement which is the community process.

This is not socialism. This is the rental value of nature’s wealth, which is your and my wealth, funding the community process. We have only reclaimed what nature offered to all for free and we have more wealth yet to reclaim even as we retain the principles of “honest capitalism.”

Money and banking are properly part of the community process

Money and banking are centuries-old technologies—just as much a part of nature’s wealth as land, water and air—and thus are an integral part of the community process. The only tangible (labor created) values within banks are brick, mortar and furniture.

Operating those banks and paying for the use of those few tangible values are covered by ½ of 1% interest on loans.
Base Money is created out of thin air by the socially-owned Federal Reserve. Circulation of that socially-created money is our money supply. Thus they are also forms of wealth produced by nature and a key part of the community process.

Those earnings of nature are also properly paid to ourselves and used to augment the funding of governments, infrastructure, education, healthcare and retirement.

Currently your earned money becomes monopolist’s unearned money which is then loaned back to you. That unearned money, essentially the other side of the ledger of everyone’s unnecessary debts, grows greater and greater.
The huge gains from correcting today’s unequal property rights laws is your share not being appropriated from you in the first place. That is done through paying rent values on nature’s wealth to yourself (the community fund).

Other examples of eliminating the monopolization process

Health care is an integral part of the community process. For example: Britain provides coverage to 100% of her citizenry at 43% the per capita cost of America whose citizenry without health care is approaching 50 million.
Case proven. The superstructure above the monopolized health care industry in America claims massive sums of unearned money.

Another example, insurance: Social Security is retirement insurance operating on ½ of 1% of premiums paid. For every $2,000 you pay in, you get back $1990.

All except life insurance is essential. Yet market insurance requires almost 50% of premiums paid to cover costs and profits. For every $2,000 you pay, you get back only $1000.

Establish a central insurance office where banks or individuals can apply by mail, phone, or computer for home, auto, and business insurance and the costs drop to 6% of premiums paid.

The entire superstructure of monopolized insurance (offices and labor) is replaced by one central office. Again we prove monopolizations of the community process exist.

A third example, patents monopolizing technology: Those profits are collected through the stock market (the monopoly superstructure within that sector of the economy). This is wasted effort extracting wealth from you and me and doubling consumer costs in the process.

Simply pay inventors well, place those patents in the public domain for all to use and 85% of the casinos called stock markets disappear. Monopolies short circuiting the community process do exist.

The efficiency gains of paying inventors a capitalized value for their inventions drop consumer prices 50% or more and those unnecessary stock brokers and staff are available for productive employment.

An honest capitalist structure

This is an honest capitalist structure paying resource rents and banking profits to ourselves and using that money to fund the community process.

Wages cover food, fiber, shelter and recreation which are primarily provided by private enterprise.

Savings within that circulation of money is the multiplier factor building and operating industries which is also private enterprise.

The ethereal word of high finance, the 60% of all finance capital which is unearned wealth amassed through the private collection of rental values to nature’s wealth, simply disappears under honest capitalism.

All taxes disappear as employed working hours drop by half

By paying resource rents and banking profits to ourselves, meaning socially collected, citizens are quintuply repaid through those massive funds building roads, railroads, water and sewer systems, and electric grids (any natural monopoly) as well as funding governments and providing education, health care and retirement which is all part of the community process.

Restructure to that honest capitalist structure and taxes disappear as employed working hours drop by half even as all enjoy a quality, secure, life. This requires sharing the remaining productive jobs and equal pay for equally-productive labor.

Addressing the producers of our wealth, private industry, completes this economic thesis. Each region of the world, each nation, each region of a nation, each state, each county, each community, and each entrepreneur (that includes you) must have equal rights to their share of both created and saved finance capital (created money and savings).
With those full and equal rights within the community process, entrepreneurs will fill every niche within the production-distribution process which entails most economic activity and is properly privately operated.

Visualizing this efficient economy

You can follow those flows of money and commerce in your head and we will verbally do so now: Socially collected resource rents and bank profits run governments, build infrastructure, and pay for education, health care, and retirement which is the community process.

Those wages—plus those of private industry—pay for food, fiber, shelter, and recreation.

Entrepreneurs, providing the greater share of those wages, fill every private industry niche within the economy and funding is available.

There is your fully operational economy. Both the community process and private industry are fully visible.

An economic-property rights law thesis for full and equal rights in 170 words

By paying land (resource) rents to ourselves, meaning socially collected, a citizenry is quintuply repaid though those massive funds building roads, railroads, water and sewer systems, and electric grids (any natural monopoly) as well as fund governments, provide education, health care and retirement.

  • Infrastructure and populations, not capitalists, establish the use-value of land and resources and their rental values fund those same required infrastructures as well as essential social services (the community, social credit, process).
  • Restructure to the just described honest capitalist structure and taxes disappear as your employed working hours drop by half and all enjoy a quality, secure, life.
  • This requires sharing the remaining “productive” jobs and equal pay for equally productive labor.
  • Each region of the world, each nation, each region of a nation, each state, each county, each community, and each entrepreneur must have equal rights to their share of both created and saved finance capital (created money and savings).
  • With those rights, entrepreneurs (private industry), will fill every niche within the production-distribution process.

Thousands of books can be written expanding from this foundation. But, to avoid waste, monopolization, hunger, poverty, and war—which consumes over half our resources, wealth, and labor—an honest social structure must be built upon the principles of this simple, 170 word, economic treatise.

Most social problems are alleviated or completely resolved under this economic structure. Funds are available for Universal Health care, retirement, infrastructure, education, and funding governments, all social needs currently starved for funds. Poverty and famines disappear and free time for family interactions are doubled.

All the stated goals of Capitalism, Socialism, and Comunitarianism are attained and those living standards can be set within the earth’s capacity to provide resources and absorb wastes.

The gains for you and I are many: Both taxes and poverty disappear even as our employed working hours drop by half and the pressures on our resources and the environment are alleviated roughly to the same degree.

How did such an inefficient social structure such as we have today evolve? Throughout the past 800 years and yet today only powerbrokers protecting their monopoly position created these monopolization laws.

In Mercantilism as a Rent-Seeking Society, Robert B. Eklund, R Tollison and about 70 authors they reference on the subject—including Adam Smith and many other classics—address mercantilism, monopolization, privatization and rent seeking (both in world trade and internal trade) as being the same thing. Thank you.

J.W. Smith

We have only opened the door; help us expand this

Most funding problems we face today are covered within those 168 words. This simplicity came together as we prepared the conference presentation.

We have only opened the door. Your comments will further expand our and others’ understanding of this school of thought. The short list of professors 70 to 130 years ago point you towards classics on this thesis.

After explaining this to a listener for roughly 20 minutes, we ask, “You have never heard any of this ever before, have you?” “No I haven’t.” “And you understand everything said, didn’t you?” “Yes I did.”

We have tested this over and over, including it being the primary focus of this presentation at that UNIS-UN conference, and we reach everybody. Please refine this to your views of the world and make your own tests as to how easy it is understood.

Then teach others. Hopefully this will spread exponentially and we will all have done our little bit to eliminate hunger, poverty, and war.

With the exception of insanity, we can’t think of any problem that will not be at least alleviated under this school of thought for full and equal rights for every citizen of this earth and the biggest problems—hunger, poverty, and massive waste of resources—are almost totally eliminated.

We encourage each to put clothes on this 168 word full economic-property rights law thesis and write articles and books. We would like to be cited but it has all been said before so it can be used without fear of plagiarism. Our only contribution is assembling those individual stories and bringing that economic-property rights thesis down to as few words as possible.

Please blog your thoughts on this site. We want to learn from you and surely others do also. If browsers doing so keeps increasing exponentially, this expanded school of thought will be on this site for all to read and this school of thought will become firmly established across the world.

For that purpose, this author keeps everything he writes on this site to be read worldwide. The Plunder by Trade story is now understood around the world and developing countries are refusing to sign those unequal trade contracts.

This unequal property rights thesis is closely tied into the Plunder by Trade thesis. Since it is even more unknown, we feel it is crucial that it too gets out there. Thank you

Related links

Please let others know

Please help us get this simple thesis on elimination of poverty, hunger, and war to the world (newspaper editors, listserves, links from webpages, your contacts, etc.).

With it we reach anybody and everybody in 20 minutes.

Put this thesis into your own arguments and develop your skills for quickly reaching people on subjects dear to your heart.

With the exception of insanity, all problems will be at least partially alleviated and the world’s gravest problems will be eliminated.

Thank you. Respectfully, J.W. Smith and the IED team

Stopping this Financial Crisis in its tracks, Eliminating Poverty, and Providing Full and Equal Rights for All.

Monday, January 19th, 2009

This financial crisis is deepening fast, J.W. Smth.

Cause of poverty within internal economies is rooted in exclusive title to nature’s wealth which she offers to all for free

Below are easily understood examples of the causes of poverty and equally understandable examples of how to restructure and provide a quality life for every citizen of a nation and even the world.

How did such an inefficient economy evolve? Visualize a fertile valley 10,000 years ago with fruits, nuts and vegetables growing wild along with lush thatch for building shelters. The new settlers have only to pick their food, build their thatch homes, and, once that home is built, relax most the day.

A cunning cabal form and each lay claim to a part of the land. They make a pact with toughies that they will share the spoils if they protect their unequal and unjust “property rights.’

The primary cause of poverty among plenty has just been established. The meek, mild, and law abiding now have to share the food they pick with those “owners” and have to build their houses. Those cunning go on to claim their unearned wealth on through history and that is the property rights laws, as applied to nature’s resources and technologies, denying others their rightful share of what nature offers to all for free, that is in place today.

Your property rights laws today, as applied to nature’s resources and technologies, is nothing more than aristocracy’s property rights law, exclusive title to nature’s wealth which she offers to all for free. We are not talking about personal property which was built by labor and is properly exclusively owned. We are talking about the wealth of nature which was not produced by labor. It is wealth that belongs to everybody.

Now it is obvious why the power structure is privatizing everything in sight and why costs rise rapidly (frequently doubling) each time a piece of nature or a part of the infrastructure of the economy, such as a highway or bridge, is privatized. This is happening all over the world and efforts are underway to privatize highways and other social services, even Social Security.

When Bolivia’s water system was privatized, costs tripled as services went down. The citizenry revolted, physically took back their water system, prices dropped, services rose rapidly, and the legal structure had to recognize and legitimize that recovery of society’s basic right to water.

Of course our legal structure did not begin 10,000 years ago, it developed in various stages between now (those unequal laws are still being enacted) and 800 years ago and aristocracy proper developed throughout the previous centuries.

In the above quote from our books, the origin of today’s unearned massive fortunes is laid out. Over the past several hundred years, every gain in wealth-producing technology was monopolized just as the wealth of nature upon and under land was monopolized.

Of course technology is also a part of nature

Wealth-producing technology developed faster and faster and its monopolization, along with the appropriation of ever more massive sums of unearned wealth, kept pace.

From 1972 until the current financial crash, the descendants of those original land monopolizers, today’s power brokers, claimed all the increased wealth of ever-more-efficient technologies plus a part of what once went to labor.

Those gains were 30% per decade compounded. Within those 35 years, unearned wealth increased roughly 130% while the daily income of individual labor declined. This theft was unrealized by labor because their wives went to work to make up the difference.

This theft was accomplished because while economies are going well governments due the bidding of capital and ignore the needs and rights of labor. Only during a crisis such as is currently emerging, when the threat of ballot box revolutions are high, are the rights of labor considered.

How society can restructure to full and equal rights

Below are some quick examples of how society can restructure to full and equal rights for each citizen during this crisis with the powerbrokers under threat of a ballot box revolution.

We will alert you that economies under these full and equal rights will reduce employed labor time and resource consumption by half.

That savings of resources and alleviation of pollution will go a long way towards providing every citizen of this earth a quality life even as the pressure on resources and the environment it reduced.

This is all evident in the above example of how labor was forced to work more hours to care for the non-producers who had laid claim to nature’s resources and technologies denying others their proper share of what nature offered to all for free.

Once those lost rights are regained, current non-producers have to work for their living and the labor and resources once wasted operating the superstructure of those monopolies are now free for truly productive work.

Of course we are told those monopolies do not exist but the above examples of how they formed and how they claim all efficiency gains of technology prove they are the primary factor in all economies today.

Our first example on the simplicity of elimination of monopolization

Whether buying real property or renting we are all paying rent on what nature offers to all for free.

Simply pay those rental values to ourselves instead of monopolists, use those socially-collected funds to run governments, build infrastructure (railroads; roads; water, sewer, gas, electric, and communication systems–all natural monopolies), and provide education, health care, and retirement.

As all taxes disappear, each citizen is quintuply repaid for paying those rental values to themselves.

Our Second Example, monopolization of social technologies

Just as resources and technologies are a part of nature, so are social technologies. Though a tiny tiny bit of mental labor was expended to figure them out and an equally tiny amount of physical labor expended putting social technologies in place, they are essentially there at all times offered for free by nature

Social technologies are not produced by labor thus they are not entitled to be owned or profits privately collected for their use.

Money and banking are social technologies that have been understood for centuries and are ideal examples. The only labor produced values in banking is a little brick and mortar and some furniture.

For a hundred years or more bankrupt private banks have been taken over by governments, nursed to health, and sold back to the private sector.

That alone is proof that socially-owned banks are far more efficient than privately-owned banks. Two hundred years ago, Scotland proved that one percent interest on loans covered the cost of banking.

With cheap computer accounting, the costs of banking are not over 1/2 of 1%. Thus all interest charges above that 1/2 of 1% properly are paid to the citizenry themselves, just as the rental values of nature’s resources, and those funds further support eduction, health care, retirement, etc.

There are a few other monopolies eliminated within our philosophical structure but they will quickly be eliminated once these two primary monopolies are understood and eliminated and the monopolization process thus exposed.

The simplicity of an honest economy that any bright high school student can understand can now be clearly seen

Labor is paid, they buy food, fiber, shelter, and recreation with those earnings and also pay rents on land (resources) and interest on loans.

As addressed above, those rental funds and interest paid cover costs of governments, all social services, even as all taxes disappear.

The ethereal world of high finance was not necessary back when this monopolization process started and it is not necessary today.

Under the simple, but profound, changes in property rights law, as it relates to nature’s resources and technologies, full and equal rights are attained and poverty disappears even as employed working our outside the home drop to two to three days per week.

More information

All that research is available in our primary books, recently updated:

They can be downloaded or read online for free.

You can also purchase hard copies, which will support our efforts and enable us to continue offering our research for free.

Those crucial 170 words describing an honest, efficient, capitalist economy. Does anyone have the ear of President Barack Obama’s Economic Recovery Team?

Please alert your contacts. Place a review on Amazon.com (Economic Democracy: A Grand Strategy for World Peace and Prosperity Money: A Mirror Image of the Economy).

Updated Books: Money; A Mirror Image of the Economy, and Economic Democracy; A Grand Strategy for World Peace and Prosperity

Monday, January 19th, 2009

The Institute for Economic Democracy and IED Press are pleased to announce 2009, newly updated, versions of our primary research:

These books were started five years ago and

  • Predicted the current financial crash
  • Demonstrate how to stop it in its tracks, and
  • Describe how to restructure to a robust economy without poverty

Visit the above pages for each book to learn more about them.

The books are available for downloading or reading online for free.

You can also purchase hard copies, which will support our efforts and enable us to continue offering our research for free.

Those crucial 170 words describing an honest, efficient, capitalist economy. Does anyone have the ear of President Barack Obama’s Economic Recovery Team?


An Open Letter to President Barack Obama’s Economic Recovery Team: Full and Equal Rights and a Quality life for All

Saturday, January 17th, 2009

By J.W. Smith

With the world economy still imploding the U.S. Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke pulled out all stops.

The Federal Funds rate was dropped essentially to zero and they declared their intention to recapitalize financial institutions through buying up their worthless debt, taking an ownership position through buying preferred shares, and giving them access to almost zero interest money. All that and more is promised for the ethereal world of high finance.

Pouring Trillions at the Very People Who Caused the Current Crisis

Thoroughly frightened, these managers of the crash originally part of the same ethereal world of high finance just mentioned, as they saw the economy still worsening, finally decided to also pour a few trillions at the real economy.

The collapsing auto industry is now to be bailed out, commercial paper funding daily operations will be purchased, loans will be made directly to industries that are unable to obtain financing, and—along with other governments—if unsaleable the paper guaranteeing every shipload of commodities or manufactures will be financed, and close to a trillion is planned to be passed out to all taxpayers.

Sound accounting and law put maximum leverage (debt to equity ratio) for banks and other stockholder industries at 12:1. The leverages of 30:1 or even 70:1 worldwide, attained by operating off book (Citibank’s rose to 280:1, before being bailed out), are unwinding. When values drop 50%, those leverage numbers double.

Thus trillions and trillions of both borrowed money (those zero interest treasuries as finance capital flees to safety) and created money are being poured at the world economy to try to inflate values so these now bankrupt banks, industries, homeowners, etc, will be solvent.

In 2008, financial institutions were to bring their off book business back on book and the 12:1 leverage rule was to be re-imposed. But, as most financial institutions and many others would be immediately bankrupt, the imposition of that law has been suspended.

If these efforts provide enough liquidity and confidence to turn those collapsing values back up, the unequal and unjust monopoly system can be saved for a while.

The Undeveloped World May be Gaining Their Freedom

But, except by war, they cannot avoid the reality that the rest of the world will be developing rapidly, they will be turning their resources and labors to producing for their own citizenry, and this will destroy the worldwide monopoly system. (See From Plunder by Raids to Plunder by Trade for the origin of plunder by trade which is only now being effectively challenged as the worldwide populist revolution rapidly gains speed.)

Towards that end, the value of the dollar started dropping fast the day those plans for the creation of trillions more dollars were announced.

The cheapest and quickest route to full and equal rights, elimination of poverty, and restructuring to a quality life for all is the current collapse being total.

Only then, with the former self-satisfied population cold and hungry, will the monopoly structure be rejected and hopefully replaced by an efficient, easily understood, social structure with the citizenry paying socially-owned bank profits and privately owned resource (land) rents to themselves and used to provide single-payer health care, retirement, building and maintaining infrastructure, running governments and all other essential social needs as addressed in the above hotlink.

More than half our economy is a waste of time, money, labor, and resources

Before we can understand the error of pouring those trillions of dollars at the ethereal world of high finance, we must first understand that it is totally non-productive and that social needs can be provided at less than half the costs of this monopoly system.

Labor created real values and monopoly created fictional values

Nature produced all the resources on and under the land and offered it to us all for free. Banking and money are only social technologies understood and used for centuries.

Land has tangible values but they were not created by labor and its wealth was offered to all for free. The only value in banking is a little brick and mortar, and banking and money are nothing more than social technologies in use for centuries, so most those profits too are unearned and thus properly belong to us all.

As each are nature’s wealth offered to all for free, those land (resource) rents and bank profits should be paid to ourselves (socially collected) and those funds providing all social services. This leaves only food, fiber, shelter and recreation, the basics of a quality life, to be paid for out of our earnings.

Quintuple gains by abandoning monopoly values and embracing real values

The shock of such a statement disappears when one realizes they are quintuply repaid by all taxes disappearing; the price of land dropping to zero even as use rights are retained, use values rise, and governments, infrastructure (roads, railroads, postal systems, water and sewer systems, electric and gas systems, and all other natural monopolies) education, health care, and retirements are funded.

Measured in required employed working hours to earn the money, the costs of providing all needs of society, including those basics (food, fiber, shelter, and recreation) drops to half of today’s monopoly costs.

These efficiency gains expose over half of our labors and resources being ground up within the superstructures of these monopolies we are told to not exist. A substantial share of those unnecessary costs go to the military protecting this monopoly structure.

Owning those bankrupt banks

Trillions of dollars have been wasted pouring money at the ethereal world of high finance. This created money should be poured at the productive real economy providing our goods and services, not at an ethereal world of high finance producing nothing and these are the very people who caused this crash.

Of course centuries of perception management (propaganda) have trained us to believe this ethereal world of high finance was crucial to running our economy.

It is not. By the rules of capitalism, by law, by custom, and by virtue of the trillions of dollars already poured at them, society should already own the banks and other financial institutions running our economy.

It is only necessary to declare that reality by Presidential decree or Congressional action. Governments have done this over and over again over the centuries, taken title to those banks, turned them back to the inefficient private sector after having nursed them back to health, where they return to their corrupt ways a generation later, and the boom and bust cycles goes on forever.

If governments can nurse bankrupt banks back to health and private banks crash economies, there is no logical reason for private banks

The very fact that society can nurse those bankrupt banks back to health where they go on to again crash the economy a few decades later once they are again privately owned proves the efficiency and power of a Socially-Owned Banking System and the inefficiency and powerlessness (during a crisis) of privately owned banks.

One monopoly, the banking system, has already been theoretically eliminated and this could be done quickly once we realize that monopoly is there. Those banks are bankrupt and it is only necessary for the government to declare that reality and take them over.

The elimination of the banking monopoly is the key to eliminating all other monopolies and doing that job while keeping the real economy running is where all those trillions of public funds should be going.

The process is not complicated. Already 38 of the 40 most developed counties have eliminated the 2nd of these monopolies we will be addressing through providing single-payer, privately provided, health care.

Other sectors of the economy are also doubly overcharging the consumer

Using Britain as an example, she provides better health care to her citizenry at 43% the cost per person as in America where 46 million essentially have no health care.

In this economic crisis there is an every-increasing cold and hungry citizenry. Simply pass the single-payer health care bill that over 5,000 physicians and thousand of others have petitioned President Barack Obama to do and those health care costs will immediately start dropping towards the 40% of today’s costs that it should be.

The funds to pay those health care costs come right out of the once bankrupt, but now healthy, socially-owned and operated banking system. That is two monopolies eliminated already, those two sectors of the real economy well financed, and all at zero cost to government or the citizenry beyond that already poured behind the once bankrupt banking system.

The unearned monies that once went to monopolist are now financing essential social services, governments, education, health care, retirement, and infrastructure. There are no personally paid health care costs and each one’s medical needs are privately provided by a single-payer health care system funded by the profits of the now socially-owned and operated banking system. See again the above two hotlinks.

At this point, it will be necessary to push aside the belief systems imposed upon us by centuries of perception management (propaganda [see also They Who Write History Control History and thus Control the World]).

Continuing with how President Barack Obama’s economic recovery team could establish an efficient economy

We will assume the alert Obama Presidency explains to the citizenry that Social Security, which is retirement insurance, costs only ½-of-1% of premiums paid (payroll deductions) to operate while the monopoly superstructure overseeing most other insurances cost 50% of premiums paid.

Once the citizenry realize that their insurance premiums would drop by half, they will insist on, and a frightened Congress afraid of a cold and hungry awakened citizenry would pass legislation establishing that efficient insurance structure.

Insurance costs, still privately paid except for that spent for health care addressed above which is paid for by socially-owned banking profits, immediately drop by half.

That is three monopolies eliminated and the replacement of insurance offices and their wasted labor visible in every town and city replaced by a central insurance office that nobody ever sees exposes the superstructure of current insurance monopolies.

With that exposure, the citizenry will now look for, spot, and understand the superstructures of all monopolies.

But they will also realize that, as these inefficient social structures are rationalized, more and more people will be unemployed.

Subsistence payments for the unemployed until they are reemployed

Knowing all this in advance, the alert Obama Presidency simultaneously asks Congress to pass subsistence payments for all unemployed heads of households who have no resources to draw on.

Once that law is passed, a decree is issued for every head of household—husbands, wives, or singles—without a job and without other income or resources to apply to their bank or credit union for a monthly subsistence based on single households receiving 75% that of married couples and an allowance for each dependent.

The loan institutions will put the applicant’s electronic transfer number on that application. That form will include testimony, under oath, that they have no income or resources.

Upon signing, and on the 1st of each month thereafter until receiving their first full paycheck, subsistence funds will be computer-deposited into those accounts.

Heads of family will walk out with funds in that secure bank to cover food, fiber, and shelter for that month and each month thereafter until employed.

Those who would be against a non-bankruptable bank and subsistence funds for those with no equity and no income would be so out of sync with events they will be few and irrelevant.

Though only modest amounts of cash can be withdrawn, all purchases or bills can can be quickly paid through checks, credit cards, or debit cards which are the real money in a modern economy.

With this latest break from unequal property rights laws as applied to nature’s resources and technologies over the past 700-plus years, denying others their rightful share of what nature offers to all for free, all Americans are now fed, clothed, and housed and the worst aspect of the crisis, a cold and hungry citizenry, is under control.

Spending of those subsistence funds will increase demand and quickly stabilize the economy.

Compare this financing of the real economy with created money halting the economic collapse in its tracks with the current failure of trillions poured at the ethereal world of high finance and the house of cards still crumbling.

With money flows across national borders controlled through countries and regions issuing new currencies spendable only within their borders, any shortage of circulating money for subsistence payments’ and continued funding or repairing of economic infrastructure can, up to the level of a balanced money supply, be created debt free and interest free.

Inflation threats due to too much circulating money are easily handled when a currency is spendable only within a nation’s borders.

Inflations are easily prevented

If required reserves of 3% are increased to 6% in step with money creation doubling reserve deposits (base money), the circulation of money will be reduced by half and the money available (to borrow or to spend) remains the same.

A 30% increase in reserve deposits, due to an increase in created money, will require a mandated reserve increase from 3% to possibly 4% to maintain the same money supply.

However, both money and investment confidence will have been destroyed in the economic collapse, creating inertia in velocity of money circulation which will give the appearance and effect of a further destruction of money, and increasing those required reserves (limiting surplus circulating money) will be only after an economy has returned to normal and threatens to inflate.

Meantime, as addressed above, the citizenry are quintuply repaid for paying those resource rents and bank profits to themselves.

The initial distribution of socially-created money and destruction of any surplus through increased mandated reserves, along with careful loaning choices, are tools to point money to the owners, operators, and workers within the real economy.

Bypassing the nonproductive ethereal world of high finance, avoids deflations and inflations and the only crisis would be from natural disasters.

Over half of current finance capital is wasted

Once monopolization is eliminated, only 40% the former level of finance capital will run the American economy efficiently. That unnecessary 60% had been operating the superstructure of those monopolies providing unearned monopoly profits.

Ownership of that capital will now be very broadly diffused, and it will be democratically and equally shared with all transactions visible, touchable, and understandable.

The ethereal world of high finance, which is nothing more than massive sums appropriated through unequal property rights law—denying others their rightful share of what nature offers to all for free—being loaned back to those from which it was appropriated and the still massive surplus with no place to be safely invested placed on the gambling tables of derivatives and hedge funds, will be history.

By this time monopolists will know their secret was out and they will not be investing in monopolies they know will soon no longer exist.

Rights to land is a human right

The citizenry worldwide and those locally will be watching closely the on-going drama and by now will understand the key concept of paying resource rents and bank profits to themselves:

“Human labor did not produce land (resources), nature offers it to all for free, and a rightful share for each can be had through socially-collected resource rents and bank profits returned to all citizens through essential services being fully funded by the wealth once consumed within monopoly superstructures and the unearned profits that once went to monopolists.

Taxes disappearing as those funds (bank profits, created money, and resource [land] rents) are returned to the citizenry through being expended on running governments, building and maintaining economic infrastructure (water and sewer systems, roads, railroads, electricity, communications superhighways, and all other natural monopolies), universal health care, retirement, and, in an emergency, any social need will quickly gain the respect and loyalty of the citizenry.

With the citizenry understanding these quintuple gains, society collecting all resource (land) rents and expending it on social needs will pass by law or referendum.

The mother of all monopolies (land [resources]) will have been eliminated along with its twin (banking monopolies), all would be receiving their share of the wealth produced by nature, and, for the first time in history, an honest capitalist society will have been established.

This funding of the real economy, stopping the financial collapse in its tracks, is many times cheaper than the current pouring of trillions of dollars at the ethereal world of high finance which caused this crisis in the first place.

Dual currency systems crucial for full and equal rights worldwide

In fact this plan costs nothing to society as a whole. Under a DualCurrency system, properly spent created money costs nothing, any surplus money can be drained out after an economy is rebalanced, and a restructured world economy that provides a quality life for all its citizens has to be a real value, owned relatively equally by everybody, many times greater than today’s monopoly values.

As proven by the savings possible under an economy fully restructured to full and equal rights, investment funds from socially-collected resource rents and bank profits replacing unearned appropriated values capitalized into huge blocs of capital are so enormous that money to fund this peaceful society will be in plentiful supply.

Shortage of investment capital is fiction. Currently only 40% of finance capital is operating the real economy. The rest is wasted within the superstructures of the monopoly system, wars, on high living and appropriating unearned wealth.

Revaluing values and debts

While all the above is taking place, accountants experienced in real estate will be assessing the value of all property before and after the financial collapse.

With reassessment ongoing, the alert Obama presidency proceeds to clear up titles to all property and, with the greatest good for the greatest number in mind, restore the financial health of the citizenry and the nation.

The land under all homes, all farms, all mines, and all industries will remain under the name of the current owners (previous owners if property has been foreclosed upon) but they now must pay monthly resource rents to society (which is themselves).

Considering rent payers are quintuply repaid as those funds come right back in the form of all taxes eliminated, operating governments, building infrastructure, education, universal health care, retirement, etc, socially collected resource rents and bank profits is the most efficient and profitable social structure.

As land has no sale value under these restructured property rights, it will incur no purchase costs.

Loans against land must be erased from the records and that against structures built upon it reappraised to current values. If 50% of loan values were backed by the land before the crisis, that 50% loan value is erased and the remaining 50% revalued.

If homes and structures, separate from the land, were half paid for before the collapse, the remaining loan would be discounted to 50% those structure’s current value.

Autos, boats, and other loans would be similarly restructured. Paid-for real-estate would not be affected except that landowners monthly rent paid to society would, when all efficiencies were factored in, be quintuply compensated as addressed above.

Erasing debts

A private bank can write off only a modest amount of loans before they are bankrupt while a socially-owned bank can erase all debt that is necessary.

The process is simple and the rights of all can be protected while stabilization of a severe crisis is not viable under private banking and restructuring an economy is equally impossible. Protecting borrowers would be in direct conflict with current property rights and private banks’ maximization of profits.

With the citizenry understanding the monopoly system they previously were unaware existed, and with property rights of all secure, this is the time to tackle the doubling of consumer costs due to patent monopolies.

Consumer costs, measured in employed labor time, drops by half

Explanations to the now alert citizenry on how consumer prices are at least twice that necessary will make those legal changes imperative. Whether by Congressional action or referendum, those patent laws will change to paying inventors well (a capitalized value and placing patents in the public domain.

When that law is fully in place, 85% of the activity of casinos known as stock markets, the superstructure of the patent monopoly system where those unearned profits are collected, will disappear. Again an unnecessary and wasteful monopoly superstructure stands out in bold relief.

The resources and talented labor previously battling within equity markets over who shall claim the enormous wealth produced by technology will be available for truly productive use.

Reduce employed working hours that 50%

Among the large numbers of unemployed will be people well qualified to calculate the number of productive jobs in a fully rationalized, efficient, economy.

We will assume their calculations will match ours, two to three days work per week for each employable citizen. From that calculation, Congress would pass and a President would sign, or a voter referendum would mandate, a reduction of the work week to that level. A productive job for each is now guaranteed.

Subsistence payments continuing as wages during the first one to two months, or more, of an employment-learning period will readjust the workforce smoothly. Highly skilled jobs, pilots, railroad engineers, etc, will take longer.

A few skills, such as scientists, may take years to rebalance the workforce but that and a stable money supply can be seamlessly accomplished. The workweek will be lowered and subsistence payments withdrawn as fast as labor is trained.

All this can be done much faster, much cheaper, and create a far more efficient economy than pouring those massive sums of created money at the same ethereal world of high finance that created this crisis and all others in history in the first place.

Some people are much more productive than others but not so productive as to justify the current wide disparity in pay. There will be exceptions—an Einstein, an Oprah Winfrey, a president, and a few others—but serious researchers have concluded that most should be paid equally with a differential in pay no greater than two to one is reasonable.

Through raising the wages of the lower paid, this badly needed social adjustment should be put into effect simultaneously with sharing those productive jobs. Both poverty and subsistence payments are now history and all at no net cost to society. Creating money incurs no costs if a society is properly structured.

Cost of products and services would drop roughly the same as hours worked, living standards will average higher than before the collapse, and the economy has no where to go but up.

All wealth is now earned

Within this restructured economy the massive unearned, appropriated, blocks of capital disappear and are replaced by a socially-owned and operated banking structure fully capable of handling the financing needs of regions, states, communities, companies, and entrepreneurial individuals.

Look at this closely: Each citizen pays land and resource rents and banking charges just as they do now. But those funds are paid to ourselves (society) and spent for health care, retirements, education, economic infrastructure, funding entrepreneurial industries, and running governments.

In this efficient economic structure, an equal sharing of now-productive jobs assures those honest earnings will be spent providing quality life styles.

That assured flow of money provides assured markets for the production of industries and business which, in turn, assures that the money will be there to fund them.

The ethereal world of high finance disappears

There is no need for the ethereal world of high finance which created this inefficient economy which loaned the very money taken from true producers back to them so they can pay for the monopolized products and services necessary to live.

This efficient economy operates on roughly 40% the flow of money even as it provides a higher quality of life for every citizen. The 60% of current flows of money that disappears measures the current wasted labor and resources of the monopoly system.

That there was ever a shortage of finance capital within a modern economy producing massive wealth is fiction. This unearned—privately collected—money was only being wasted on conspicuous consumption, war to protect the monopoly system, ground up within the superstructures managing each monopolized sector of the economy, and banked as unearned profits.

Back to the ethereal world of high finance which is currently crumbling:

The shadow banking system (commercial banks, hedge funds, etc.) have leveraged themselves 30:1, 70:1 and more (Citibank’s leverage had risen to 280:1 before being bailed out).

Leveraged buyouts for 40 years forced corporations operating the real economy to leverage below the legal limit of 12:1 However a drop in values of 50% immediately doubles leverage and even a conservative 7:1 leveraged company is now 14:1 and technically bankrupt.

Those high leverages had been made quasi legal by paying lobbyists massive millions of their unearned dollars to get Congress to change the laws.

Those changes permitted moving hedge funds and derivatives off book where a small amount of borrowed (leveraged) capital could earn massive profits.

A leverage of 50:1 on these bets (that is all they were, they were not productive investments in the real economy) would earn 100% on capital with only a 2% average move in the market up or down (those bets were placed both directions).

As these financial institutions knew almost everything that was going on within the financial community and they also had the ability to influence those markets, most of their bets were on the right side and massive unearned profits were made even as nothing was produced.

But when those financial markets collapsed control was lost. Bets were typically on the wrong side, and, most important, those high leverages on both sides of those bets meant that many debts could not be paid.

The ongoing massive collapses of the ethereal world of high finance from all those failures to pay is specifically where most the bailout money is going.

The ethereal world of high finance had, and still has, control of the Treasury-Federal Reserve-government, and they were/are pouring that money at themselves.

As we have shown, the best thing that could happen is the ethereal world collapsing of its own idiocy and silliness and be replaced by an honest monetary and economic structure.

With trillions of dollars thrown at the problem, this inefficient monopoly structured house of cards may be shored up for a while. But there is also the possibility that no amount of money poured at this ethereal world of high finance can stop the collapse.

Reason 1: The economies of nations are slowing across the world which destroys both buying power and wealth and the rate of slowing is increasing.

2: At least $30 trillion of wealth has already been destroyed worldwide and that is many times the dollars than have been created to replace those values.

3: Maximum profits are made by leveraging money, leverage means debt, and those leverages had risen to 30:1 70:1 and higher in the current collapse. Citibank’s leveraged rose to 280:1when they were finally taken over by the Paulson/Bernanke bailout team.

4: Each 50% drop in values doubles those leverage ratios which what caused those quickly rising numbers.

5: Accounting rules and the law stated that maximum leverage of American stock companies was to be 12:1. Those rules were both relaxed by law and by these stock companies moving the hedge fund-derivatives operations off book. Thus the high leverage ratios to begin with.

6: Realizing these evasions of common sense and law through off-book operations was the problem, companies were given until October 1st, 2008 to bring these operations back on the books. Because every corporation running off book companies would be immediately bankrupt, that order was put on a permanent hold.

7: Fifty years ago, corporations were sensible and sound. But again the high profits of leverage was the base of their undoing. Throughout those past 50 years the threat of leveraged buyouts forced virtually every stock company to maximize their debt. If they did not do so, buy out artists would buy up enough stock to gain control, immediately leverage with high debt, sell out, and—since the buyouts were done with borrowed money—increase their monies invested many times over.

8: Those companies are all rapidly losing value and their leverage ratios have doubled, tripled, quadrupled, or even far greater, again witness Citibank’s 280:1 leverage at the time of their bailout.

10: Leveraged profits being the route to massive individual fortunes for those engineering the leveraging and ever higher valued stocks for stockholders, the entire world is now highly leveraged and those ratios are doubling and then redoubling again, and again, as values drop.

11: In step with those collapsing values, shuttered businesses, lost jobs, declining wages, and both shoppers and businesses refusing to spend for fear they will soon need their money just to survive, the world economy is rapidly slowing and losing value faster than money is being created

12: As each created dollar’s (base money’s) normal circulation adds 9-to-10 dollars to the money supply, it appears the several trillion dollars created so far should have replaced the money destroyed.

But the real money supply is the circulation of base (created) money. The money supply is not base money itself, it is the velocity of that money as it circulates.

The speed of that circulation has slowed down as individuals, highly leveraged companies, and extremely highly-leveraged financial institutions save their money for what appears to be even tougher times ahead.

13: Those highly-leveraged financial institutions and now equally highly leveraged, low-stock- value corporations have to hang onto every dollar thrown at them during the current bailout frenzy.

This is what is meant when the evening news tells us that banks are not loaning the bailout money being poured at them. They do not dare loan it out. They need to keep it on their books in a so-far-failing effort to comply with the 12:1 accounting and legal leverage rule when it is enforced.

14: Once a population has lost trust in an economy and its banking system, no amount of created money can make them spend beyond their base survival needs.

The Ascent of Money story is the 600 year history of collapses of bubbles. After watching that, we felt that the money being thrown at the ethereal world of high finance is like throwing a bucket of waste water directly into the wind of a hurricane.

There we learn that the massive leveraging of the entire financial structure through off books accounting was copied directly from Enron’s Kenneth Lay. There was never ever any intention of producing anything. The intention was to totally privatize, monopolize, move the high leverage off books, and pull in massive profits.

To keep this short, I had to gloss over many aspects of this restructuring to an efficient economy. But we have continually hotlinked to that bigger story.

The even more complete story is in the just released 2009 editions of Economic Democracy: A Grand Strategy for World Peace and Prosperity and Money: A Mirror Image of the Economy.

These books were started over five years ago on the assumption that this crash was coming.

More important, as we have addressed herein, they show how to stop this financial and economic crash in its tracks and quickly restructure the world economy to full and equal rights for every world citizen.

The elimination of the 50% of the economy (perhaps half is preparation for, and loss from, those wars) that is wasted labor and resources permits each that quality life while reducing paid employment by half.

The simple cause of this crash, massive increase in leverage as economies and corporations collapse in unison leading to a massive drop in the money supply as circulation of money slows seems not to be addressed because it seems few really understand what money is. So we threw in our understanding of the problem.

Thank you.

J.W. Smith

Those crucial 170 words describing an honest, efficient, capitalist economy. Does anyone have the ear of President Barack Obama’s Economic Recovery Team?

Alanna Hartzok, Receives Book Award for The Earth Belongs to Everyone

Monday, January 12th, 2009

Earth Rights Institute’s Co-Director, Alanna Hartzok, Receives Book Award for
The Earth Belongs to Everyone.

Radical Middle Newsletter, founded by the Center for Visionary Law and edited by Mark Satin, has awarded its 2008 Radical Middle Political Book Award to Alanna Hartzok for The Earth Belongs to Everyone (Institute for Economic Democracy Press).

The award is given to the book that best exemplifies a politics that’s grounded in practical reality, but at the same time is deeply creative and imaginative.

For more information about the book, please see The Earth Belongs to Everyone


Credit Default Swaps, Derivatives, The Federal Reserve, Henry Paulson, Ben Bernanke, and How the Financial Crash Could Have Been Avoided

Sunday, October 12th, 2008

By J.W. Smith

Steve Kroft in Sixty Minutes did a great job describing what credit default swaps were and how they were bringing down the biggest banking houses in the nation.

As explained in the above video, credit default swaps are nothing but insurance policies given a different name so as to avoid retaining the reserves required by regulations of the insurance industry.

Instead of retaining reserves, these gamblers expected cash flows from premiums to cover losses and paid out their massive earnings in the form of multi-million dollar salaries, bonuses, stock options, and profits.

With the insurer, now called a credit default swap derivatives holder, having nothing set aside to cover major defaults when the housing bubble collapsed, they simply did not have the money to pay those losses.

These derivative companies were held “off the books” so the parent companies (Bear Stearns, Merrill Lynch, Lehman Brothers, Washington Mutual, AIG, etc.) could avoid the accounting rules of marking those credit default swaps to market.

All went well and massive profits were made as the bubble economy inflated. But when the bubble collapsed the losses were so massive that, though at first they tried, the parent companies could not rescue their off-the-books creations.

Though, as explained by Steve Kroft in the above video, they are what triggered the current, 2008-09, financial crash, credit default swaps are only about six percent of all derivatives. There are still over $600 trillion more derivatives out there and it is agreed by all that they are nothing more than bets on which way a company or some aspect of the economy will go.

When this financial collapse first started a year ago (October 2007), there were $530 trillion worth of derivatives, almost 10 times the GDP of the world economy. As the world economy lost $30 trillion in value during this financial crash, total derivatives rose to $700 trillion.

The Federal Reserve/Treasury is now speaking of trading an investment stake in financial institutions in for the money it takes to recapitalize these financial institutions to solvency.

The citizenry is becoming aware of the give-a-way of created money to the very people whose greed created this crisis. September through November money was created at the rate of 300% a year, from $836 billion to $1.479 trillion. Much more money will to be thrown at bankrupt banks and corporations.

If those who have to pay off those bets have no more money behind them then the credit default swaps people and the Fed/Treasury bailout effort fails to crank this house of cards back up, the people will own the entire banking system.

That analysis is based on the Fed/Treasury taking a creditor ownership stake in these companies which supersedes stockholder rights. But with the foxes guarding the henhouse the money thrown at bankrupt corporations could be a cover story to satisfy the masses as the foxes move as much of the taxpayer bailout money to overseas safe havens as they can.

But once ownership of a large percent of the world’s wealth is traceable to those supposed safe havens (currently $23 trillion worth), they are no longer safe. There is no way those $23 trillion, and rising fast, could be earned money and their property rights would simply be extinguished by law.

I am sure these thieves, currently called investors and unaware they are trading under property rights laws which are a system of theft, will prefer that to the normal angry citizenry response, the guillotine or the hangman’s noose.

To understand our failure to realize our property rights laws are a system of theft, we need only analyze how those rights evolved.

We are taught that Western culture evolved out of aristocracy but that is not true. Current Western property rights law, as applied to nature’s resources and technologies, denying others their rightful share of what nature offers to all for free, is only slightly adjusted aristocratic property rights law.

Aristocracy held exclusive title and all others had to pay them for the use of the land which nature had offered to all for free. Thus the extinguishing of the rights of all others was done through the principles of exclusive title as opposed to conditional title.

Society is Quintuply Repaid for Paying Land (Resource) Rents to themselves. Those socially collected funds pay for operating governments (local, regional, and national), builds infrastructure (water and sewer systems, roads, railroads, electric systems, and all other natural monopolies), and, when adding in the current unearned profits of banking which too should properly go to all, there are enough funds to cover health care and retirement.

Recapitalizing banks with public funds will, by those same property rights laws which created this crisis, transfer those bank titles to society.

That is not the disaster we are being told. That is an opportunity to have the costs of government, infrastructure, health care, and retirements paid by the rental value of the fruits of nature and the profits of banks.

For an understanding of the fraud of current property rights law and how those inequalities are responsible for both poverty and war, we need only analyze each monopolized sector of the economy and the massive efficiency gains from the elimination of those monopolies.

Just above we have already addressed exclusive title to land (resources) with society being quintuply repaid by by restructuring to conditional title (society paying rental values of nature’s resources and technologies to themselves).

Land’s tangible values were created by society itself simply by forming, they were not produced by human labor, society should collect those rental values, and return those funds right back to the citizenry by providing essential social services.

As opposed to land, Banking has no tangible values beyond a little brick and mortar, furniture, and computers. Fair return on tangible bank values plus the cost of labor has been proven to be covered by 1% interest on loans a century ago with expensive hand labor. The costs of computerized banking is not over 1/2 of 1% interest on loans.

Thus most the profits of banks are misnamed, they are unearned. Those massive unearned sums of money are properly termed “thefts of social wealth.” We have already pointed out that, just like the rental value of land (resources), those unearned funds should be collected by a socially owned banking system and used to provide essential social services (health care and retirement).

Britain providing better health care to all their citizens at 40% the cost per person as in America which has over 60 million essentially uninsured citizens and inadequate insurance on others exposes 60% of America’s health care as wasted. In that one sentence the monopoly of the our health care system stands exposed and the waste quantified.

The Monopoly within the insurance industry is exposed with equal simplicity. Social Security is only retirement insurance and its operating costs are 1/2 of 1% per year. Except for life insurance, all other insurances (automobile, home, health, business, etc.) are a necessity and thus a social right.

Simply replace marketing rights for essential insurance to a social right, establish the framework where that insurance is available simply by signing up, and costs drop roughly 50%. Those insurance offices every few blocks apart are replaced by one central office such as Social Security utilizes today.

Virtually every technology (industrial, chemical, or electrical) is an aspect of nature waiting to be discovered. Those technologies are monopolized through exclusive patent rights.

The unearned profits of monopolized technology are collected through the stock market. Currently inventors receive very little for their inventions. Most the profits go to monopolists.

Simply pay inventors well, place those technologies in the pubic domain, and 85% of the stock markets as well as the wasted labor and capital those savings represent disappear. Those savings permit the price of consumer products to drop fully 50% and we really think it would be 75%.

Those massive cost savings represent the equally massive savings of labor, capital, and resources as the monopoly superstructures operating those monopolies disappear as well as the massive unearned profits no longer collected.

In the case of land (resources) and banking, those unearned rental values and bank profits collected are returned right back to the citizenry. In the case of all other monopolies, the funds to operate the superstructures of those monopolies (labor, capital, and unearned profits) simply are not appropriated from the citizenry in the first place.

Unearned profits are the least of the waste incurred. By far the greater waste of our monopoly system is the unnecessary labor, capital, and resources necessary to operate the superstructure of those monopolies.

We calculate the total waste to be fully 50% of the current cost of operating the economy and this does not consider the cost of the military which is no longer needed. These past 60 years military might has only been protecting this monopoly system and the wars of the previous 800 years have primarily been over who will control those resources and the wealth producing process which is exactly what those earlier battles were about.

We needed to establish the above foundation before we could explain the real cause of the current worldwide financial crash. The above has already explained how to avoid them.

The rents privately collected on all the land and resources in America, including that which is savings due to property being paid for, is a truly massive sum. That and the fifty percent of the current costs of the health care and insurance industries currently wasted is a lot of money.

As the ethereal world of high finance is currently many times larger than the finance capital necessary to run an efficient economy and operating that superstructure costs huge sums of money, the funds that should never have been appropriated from the citizenry in the first place, and the honest profits available for distribution to them by an efficient socially-owned banking system, is also a huge sum.

The disappearance of the superstructure operating technologies, 85% of the stock markets, also saves massive sums.

Most of those savings are in the form of labor and resources no longer wasted. This permits a reduction in employed labor time of roughly 60%. labor time spent caring for the home and children will see a moderate increase. Self employed labor time will see a large increase and that productive employment will further decrease those in the labor force employed by others.

On top of those labor and resource savings are the finance capital savings. As just stated, this ethereal world of high finance is many times larger than that necessary to run the real economy. That is the real story that the finance industry does not want you to ever know.

Massive unearned wealth was spent lavishly in conspicuous consumption (mansions, wedding costing millions, private airplanes for pleasure, underwater submarines to cruise the oceans, etc,) investments, and still they could not spend all their unearned wealth.

More money than places to invest led to export of capital. This is the foundation for the massive export of capital and enforced privatizations (by the IMF, World Bank, and other infrastructures of world control) all over the world and also within the imperial centers. There simply was not enough safe place to invest these massive sums so safe places to invest were created.

But they still had too money left over that they could neither consume nor invest. And that massive amount of appropriated wealth with not enough places to invest is where the ethereal world of high finance came from.

As capitalist societies came out of their periodic crashes or wars, at first places could be found to invest all their money. But once those safe places to invest were all filled, money with no place to safely invest would start building.

The stock markets can absorb massive sums of unearned money and their values would rise in step with the absorption of that surplus finance capital. All stock values above monopoly values is gambling and all those unnecessary charges are a tax on society by monopolists who are not even aware this is a monopoly structure.

Too much money into stock markets would lead to bubbles and eventual collapse. So little by little other gambling games were inserted into capitalism’s financial structure.

This is where the $700 trillion derivatives market came from. Some point out that possibly 8% to 10% of the derivatives market has a legitimate purpose, primarily insurance. I could accept that except that those credit default swaps were the fake insurances that are bankrupting our financial structure as this massive gambling casino collapses.

The entire $700 trillion derivatives structure, fully 85% of the stock market (as addressed above), a good share of merchant bank business (the shadow banking system), and the monopoly aspect of all banking is nothing less than the ethereal world of high finance. Only a part of it is tied to the real economy. The rest is essentially producing nothing as it sucks massive sums of money out of the economy that belongs to us all in roughly equal shares.

This is what is missing in all financial and economic analysis, these massive sums of unearned finance capital should never have been appropriated in the first place. As laid out above, eliminate these monopoly structures and economic efficiency more than doubles.

If the serfs had won those early struggles and established a sharing society as laid out early in this posting, production would have doubled. That would have produced industrial capital for more people both within that society and other societies.

That sharing culture would have shared as it crossed the oceans instead of enslaving. As they met other people, they would have said, “We will teach you how to read, write, smelt ore, build ships, etc.” Soon the production of those newly literate people would have doubled. In a few years doubled again, and then again.

In short, if Western culture had established a cooperative capitalist society instead of a monopolized economy, there would have been little poverty, few wars, and we would have had a peaceful prosperous fully developed world decades ago.

The simplicity of eliminating poverty and war will stun you. That page is the conclusion of this author’s two primary books (Economic Democracy: A Grand Strategy for World Peace and Prosperity and Money: A Mirror Image of the Economy).

That conclusion alerts us that a financial collapse such as we are currently experience can be stopped in its tracks, all citizens can be quickly provided the income for food, fiber, and shelter, and the world economy quickly rebuilt with no poverty and no wars by simply following the rules of full and equal rights for all through a restructuring of property rights law and eliminating Plunder by Trade (addressed in that hotlink).

We should alert Henry Paulson and Ben Bernannke that their task is really simple if they, and all others, were willing to give up their massive unearned wealth as we restructured to an honest economy. Thank you. J.W. Smith

Those crucial 170 words describing an honest, efficient, capitalist economy. Does anyone have the ear of President Barack Obama’s Economic Recovery Team?

Georgia’s South Ossetia war Has a Connection to American Airmen Finishing Out Their Lives in Soviet Prisons

Tuesday, August 12th, 2008

By J.W. Smith

Russia’s defense of Slavic people of South Ossetia when Georgia, under America’s tutelage, attacked that break-a-way province is being portrayed by many as Russian aggression.

But America and Western Europe are not satisfied with having finally destabilized the Soviet Union after the slaughter of tens of millions around the world and spending trillions of dollars over the 70 years of the Soviet Union’s existence to destabilize them.

With their perception of world events carfully managed, citizens of America and Europe were unaware that the threats were coming from the West, not the Soviet Union. Nor, as M.K Bhadrakumar clearly lays out, http://www.atimes.com/atimes/Central_Asia/JH13Ag02.html, are they responsible for this one.

But with 80% of Germany’s firepower expended against the Soviets during WWII, they knew well that the purpose of that war was to destroy them, not destroy Germany. They also know that the attack on South Ossettia by Georgia was a continuation of this plan to destabilize Russia and many others recognize this. Read Patrick J. Buchanan,
Rodrigue Tremblay,
Eric Margolis,
Antony Black, and
Spengler in the Asian Times
Spengler alerts us that the shattering of the Soviet Union was so devastating that by the end of the century there will be only 20 million ethnic Russions within the formal borders of Russia by the end of this century. It is his story and we will let him tell it.

After reading that history and forecast for Russia’s future, one will realize the desperate position the Russians have been forced into. From that precarious position, a nation is forced to take high risks.

The intent to totally fragment Russia is obvious, lets analyze what you or I might do if we were so threatened. As we speak, several fleets (American and European with a few ships from Japan) from all over the world are on their way to the Persian Gulf to blockade Iran and bring that nation to its knees.

Russia has already armed Iran with unstoppable Sunburn missiles designed to sink the largest of warships and more can be put in place faster than those war fleets can get to the Persian Gulf.

Since the shattering of S. Ossettia and the signing of Poland, Czechoslovakia, and the U.S. to emplace missiles within 10 minutes striking distance to Russia, the Russians have said they will arm Iran and Syria with the latest air defenses. Almost certainly that will include more Sunburn missiles as well as the S-300 defense system capable of tracking and firing on 100 incoming planes at a time. Both of those defense systems are deadly.

But lets add another advantage Russia has, nuclear weapons. Remembering that America has already broken the agreement to reduce nuclear armaments and have openly stated they would use them as first strike weapons, this leaves other nations open to the same options.

Once we understand how Israel orchestrated the 9/11 attack on America, which justified current U.S. assaults around the world, would not you or I arm Iran with a few nuclear weapons that could only be activated electronically by Russian personnel?

Unless Israel and America wanted to commit suicide, suddenly enormous power has moved to the side of Russia. Quietly Russia would inform the aggressors that if they attack Iran (a blockade is an act of war) Israel disappears as a nation, all their fleets go to the bottom of the Persian Gulf along with a fair share of their airforce.

As doing Israel’s dirty work under that flag of protecting her, even if many are unaware of that reality, is what the threat of war with Iran is all about, both Israel, America, and NATO will call an immediate halt to their planned assault.

From their position of strength, Russia could demand the removal of the blockade Armada, respect for the rights of the Iranians, removal of the missiles being put in place in Poland which are only 10 minutes flight time from Russia, and for America to abandon her multi-colored revolutions within Georgia, the Ukraine, and Belarus designed to expand NATO all the way to Russia’s border and essentially strangle her.

Once the aggressions of the West were checkmated, their warships withdrawn, their missile installations in Europe canceled, and an agreement that Iran would not be embargoed or attacked, Russia could withdraw her yet inactive nuclear missiles and hopefully the world could enjoy the peace it is entitled to.

This assault on Eastern Orthodox Christians has a long history. After WW II, from the Soviet side, it certainly looked like the West intended to finish the job that war was designed to do. From 1945, and up to at least 1956 when the U-2 spy flights started, thousands of U.S. “ferret” spy flights photographed Soviet territory and raced back before they could be identified and attacked.

In 1946 and 1947 alone, this was before the Cold War officially started, 30 such planes were shot down and at least 20 U.S. airmen were captured alive, never acknowledged by their government, those airmen finished out their lives in Soviet prisons while their families were told they died in various accidents.

As acknowledged by the highly respected U.S. News and World Report, between 1950 and 1970, after the Cold War officially started but those overflights had been going on since the end of WW II, there were over 10,000 and possibly over 20,000 such overflights deep into Soviet and Chinese territory by military aircraft.

There was much more going on than the photographing of Soviet territory. Sabotage and assassination teams were being dropped in to hide among their relatives and ethnic brothers. Almost universally these acts of war failed, with large losses among the agents and their relatives who were to hide them.

In June 1992, when Russian President Boris Yeltsin met with President HW Bush and said, “We may have American prisoners yet,” quite a stir was created. News anchor Tom Brocaw reported this disturbing news and the congressional uproar over these possible prisoners.

The next night Brocaw said, “These were American airmen shot down during the Cold War. This is the first time Americans have been apprised of this.”

Then for weeks, except for an occasional highly sanitized statement, all went silent on that explosive subject.

A few months later, the headlines read, “Yeltsin: POWs ‘Summarily Executed.’” But the last line of that front-page article depicting these execution horrors told the real story.

“The largest group of Americans imprisoned or who died in the Soviet Union were more than 730 pilots and other airmen who either made forced landings on Soviet territory or were shot down on Cold War spy and sabotage flights.”

As they finished out their lives in prison, their families were told they had died in accidents.
The intelligence agencies of Britain, France, and Germany were running similar, but smaller, covert operations against the Soviet Union and other nations of the Eastern bloc.

This was a massive assault on Soviet sovereignty, actually outright acts of war, by essentially the same powers that had invaded Russia 25 years earlier when they broke free and also the same powers who owed an enormous debt to the Soviets for saving them from fascism in WW II.

The fact that there were no Soviet spy planes carrying assassination and sabotage teams overflying Western territory during this period is something scholars should note.

Nor should the internment of U.S. pilots in the Soviet Union have been news to U.S. newscasters. With the Soviets complaining to Washington, DC, to the United Nations, and holding many trials, for the American people not to be informed of these assaults on Soviet territory can only be due to cooperation by the major media of record in misinforming America.

These illegal flights remaining a secret only to Western citizens testifies to how locking society within a belief system requires suppression of information about acts of war by their managers of state simultaneously with depictions of imminent attack from the targeted society. That is, of course, the creation of enemies to protect a power structure.

As in any society after any revolution, there were those within the Soviet Union who were sympathetic to, and subject to manipulation by, their religious and cultural cousins in the West.

The same process ongoing in Georgia/South Ossetia today. Western Christians want to join their religious cousins in the West and Eastern Christians wish to retain their ties with their religious cousins to the East.

Thus, when Germany invaded, whole communities of ethnic Germans and other communities still having religious ties and loyalties to the West joined the invading army.

When that war was over, entire communities were resettled in Siberia where they could not link up with outside powers still threatening to overthrow the Soviet government.

Millions of innocent people, even many dedicated and loyal communists, were rounded up for resettlement and many were executed. But a large share of those executed had been harboring trained saboteurs who had been parachuted into the Eastern European countries all the way to Byelorussia.

Struggles for power became mixed with the legitimate battle to defend the revolution, and many were swallowed up in the holocaust. America today, facing the much weaker threat of individual terrorists, is reacting far more violently, primarily outside its borders but also within them.

It was protecting their country from being overthrown by external powers manipulating internal ethnic groups that created these suppressions. Where America faced no such threat after its revolution or even since, the cooperative efforts of many nations to overthrow the Soviets had been ongoing for 70 years.

These included direct intervention in their revolution, the WW II effort to exterminate them, years of covert actions such as training and flying in assassins and saboteurs, being embargoed from world trade, and their post-WW II military encirclement.

Ignoring the background behind the forced migrations to Siberia, and in its constant search for drama, the Western press openly pushed the governing belief system that the death toll within the Soviet Union was 60 million.

But then it became 40 million, then 20 million, then 10 million, and the figures are still coming down towards the true number killed under “Stalinism,” certainly under 100,000 and most likely fewer than 50,000, primarily those harboring their cousins from the West intent on overthrowing that government.

These are the same principles peddlers of crisis have been using for thousands of years. The greater the lie, the more surely it will be believed by their followers.

Even if it is done only verbally and the accuser is in no personal physical danger, the surest way to be recognized as a leader is to lead an attack against an enemy.

There has been so much fabrication it is impossible to know what is true. We are satisfied the citizens of those Soviet communities who welcomed the German armies, who were contacts for the saboteurs the West was infiltrating into those countries, and thus who were a threat to the security of this new federation, were relocated to Siberia.

This was a full-fledged war, the Soviets knew it, and many innocent people died from the 70 years of intense destabilization efforts and outright wars.

The names of the now declassified plans for war against the Soviet federation, Bush-whacker, Broiler, Sizzle, Shakedown, Dropshot, Trojan, Pincher, and Frolic graphically portray their offensive purpose.

Some of those plans included the actual occupation of the Soviet Union. Papers in President Johnson’s library testify to a planned nuclear strike to destroy the rising economic and philosophical threat.

Make no mistake about it, the intention was to both destroy the Soviet federation and suppress any other breaks for freedom around the world and both goals were reached.

However only temporarily, periphery nations are allying, again making a break for freedom, and, as they are now aware that it was the historic imperial nations–Europe and America–who were destabilizing them for 50 years, they may finally break free.

Those destabilizations cost trillions of dollars and 16 to 20 million lives. Slaughters in Iraq (over 1.2 million and counting) and the Congo (over 4 million and counting) alone added over five million and both struggles are still ongoing even though the struggle in the Congo is basically unreported in the West.

That seventy year struggle to keep the world from breaking out from under capitalism cost those 16 to 20 million lives just mentioned plus hundreds of millions from disease and hunger as those nations’ economies were destroyed.

Analysts are right when they say the West would not have attacked the Soviet Union. But that is only because the Soviets developed the atomic bomb too quick. One hydrogen bomb getting through to America would be one too many.

But the steady encroachment to the East with the goal of fracturing Russia is intended to finish the job that started with fragmenting the Soviet Union.

After destroying Yugoslavia, probably the most productive and peaceful nation on earth who had forgiven Western Christians for their three thirds policy (1/3 the men to be killed, 1/3 to become Western Christians, and 1/3 to be pushed out into Siberia) in Croatia in WW II and their 26 ethnic groups were 30% intermarried, parts of that former nation and Romania were brought into NATO.

Belarus, the Ukraine, and Georgia were then targeted. Belarus rejected their offer, the struggle goes on in the Ukraine, and the ongoing conflict in Georgia that the world is now watching closely is a part of that struggle.

Study the history of suppressions worldwide, study why tiny impoverished Vietnam faced such an assault. Study why Cuba is under such an assault even though their revolutionary government provided Cubans with universal health care, education equal to America, and eliminated hunger. And study why every offer of the Soviets for mutual disarmament and peace was ignored and not even reported in the American press.

A key part of Western perception management was the lack of rights in the Soviet Union and secret police everywhere.

Not only was this fundamentally true only for Western visitors of which many were spies, America and most of Western Europe could give more freedom and rights to their citizens because they were not subject to bombings, assassinations, and threats of invasion, the CIA’s Mighty Wurlitzer saying otherwise notwithstanding.

Take note how, under a far lower threat level, group terrorism as opposed to state sponsored terrorism, America is reacting at a far higher level of repression and suppression of rights.

Professor Michael Chossudovsky and Russian intelligence think the 2008 terrorist attack on Mumbai India “has the fingerprints of a paramilitary-intelligence operation” controlling the perception of the world just as has always been done (http://www.godlikeproductions.com/forum1/message675861/pg1).

Imperial Democracies, Representative Democracies, Participatory Democracies, Direct Democracies

An internet search using the keywords “republic, not a democracy” is an education. America describes itself as a democracy, conservatives openly state this is a republic and that it was never intended to be, and it is not today, a democracy.

Of course word meanings change over time. If a majority of the people perceive a word as meaning something that becomes its new meaning.

Western nations have described themselves as democracies for so long their citizens, and the world, generally take this claim for granted.

However, because early settlers and frontiersman only came to town once or twice a year, only a “representative democracy could function and, even though they now have rapid communication and could practice direct democracy, a republic, not a democracy, is what America is yet today.

Democracy, as understood by their citizenry, does not conform to reality. In fact, it never did. Most voters think the winners of elections are representing them. But that is seldom true.

Winners of elections at the state and national levels, where those crucial laws are enacted, are normally determined by who spends the most money and who controls the various media. Thus the winners of elections represent wealth and power far more so than the citizenry at large.

On the other hand, the Soviet Union, even under hostile conditions of foreign imperial powers bent on their destruction, had a participatory democracy.

That they were true democracies with the citizenry sending “representatives” to their legislatures with instructions on how to vote has been kept out of Western media and history books.

Under those participatory democracies, suggested laws were discussed within the communities, voted on, and a representative was sent to the legislatures with specific instructions to vote yes or no on each aspect of each law, not for he or she to decide on their own how to vote.

At the North American-Cuban Philosophy conference in June 2002, Western scholars watched mesmerized as the nation shut down for three days and Cuban citizens of all ages gave impassioned televised speeches on the pros and cons of changes in their constitution.

Modern communications permitted them to practice direct democracy. True democracy, in its fullest meaning, participatory and direct democracies of the Soviet Union and Cuba, has been censored from Western media and history books.

Though the words are never used within an empire’s mainstream media or educational system, the world has many imperial democracies. These puppets on the periphery of empire are supposedly elected by the citizenry but the leaders being picked by powerbrokers within the imperial centers disenfranchise the electorate.

The media and historians of the imperial centers again reverse reality and call these puppets kept in power by Western intrigue and military might as democracies and those who temporarily break free as dictators and killers.

As the citizenry believe they have democratic rights, both representative and imperial democracies have the potential to become truly democratic. That, of course, would be through ballot box revolutions restructuring authoritarian nations into true democracies.

While the entire world understands how the citizenry within imperial democracies are disenfranchised, few in the imperial centers realize they too are similarly denied true representation. To maintain such democratic fictions, through corporate funded think tanks funded to the tune of hundreds of millions per year, massive numbers of perception management articles and books are inserted into the media and educational systems.

The Essence of the Cold War was perception management (propaganda) encasing society within a belief system.Former attaché to the Soviet Embassy George Kennan, undoubtedly the U.S. citizen most knowledgeable about the Soviet Union, one of the prime promoters of the Cold War, and one who eventually had a change of heart about the morality of that deception, is quoted as saying those executed in the Soviets were in the tens of thousands.

Tens of thousands is still a large number to be sure, but, even though many, even possibly most, were innocent, a large number were attempting to overthrow that new gov-ernment which is a capital offense in any country.

For a balanced perspective, compare the under 100,000 killed within the former Soviet Union as they searched for those be-ing supported by the West to overthrow the government with the 16 to 30 million killed, and still rising, on the periphery of empire by the West (2008) as addressed above.

Many innocent people within the Soviet Union were swallowed up in this mass hysteria. The Soviets opened their records and restored the good names of these people. Historians are tracing what happened to each individual so their families can know their fates. Perhaps the world may someday know the true numbers of those unjustly persecuted souls.

We caution the reader on the statistics that will be published. The slaughters within defeated centers of capital and others threatening to break free are exaggerated, while the suppressions and oppressions by the dominant centers of capital are camouflaged as defensive actions and their slaughter of innocents are recorded in history as a response to others’ aggressions. Both are happening today in the Georgia, South Assetia, Russian conflict,

When Hitler was planning WW II, Reinhard Heydrich, deputy chief of Hitler’s SS, operated a covert operation counterfeiting letters from top Soviet military officers to indicate a counter-revolution by these officers.

Possibly 35,000 highly loyal officers were executed. We say possibly because we must remember how intelligence services create and exaggerate facts to demonize enemies; these exaggerated figures then become recorded history.

After WW II, copying Heydrich’s successful destabilization efforts, Western secret services counterfeited papers and letters that caused massive arrests of innocent people in Eastern Europe and the Soviet Union.

Citizens of the West heard all about the repressions but nothing about the causes or that, when the Soviets caught on to the scam, they released those imprisoned and even paid compensation to an innocent American couple who were caught up in that intrigue and imprisoned for several years.

Even as the Russian revolution with its participatory democracy with full and equal rights for all was succeeding, the British were attempting to destroy Lenin’s reputation to the world.

By the same methods that placed Napoleon in history books as a megalomaniac, the leaders of the Bolshevik Revolution and Soviet Union will be in future history books as mass terrorists.

This, of course, may change if the world breaks free and writes their own history which will include the slaughter of their people as we describe here.

That falsification of history will be accomplished through financing already highly biased (or unwitting) historians to research executions and point out the total innocence of those executed, and will simultaneously totally ignore the counterfeit papers fingering innocent people, the destabilization-assassination teams inserted, the many who were guilty, or the massive amounts of money spent placing a ring of steel around the Soviet federation.

A participatory democracy with full and equal rights for all was a threat to representative democracies with their excessive rights for a few and limited rights for the many and the intentions were to take the Soviet Union out.

Limited rights for the many are not immediately apparent due to broad sharing of the wealth stolen from the periphery through plunder by trade. When they need allies, monopoly capital pays their labor and necessary allies well.

Conceptually Reversing the Process

Remembering how close the Soviets came to winning the arms race and thus winning the Cold War, does anyone doubt what would have happened if the Soviet Union was untouched and America was the one that had been invaded, the nation which lost 30% of its prime labor, and the nation in which everything above the Mason-Dixon line and east of the Mississippi River had been blown up or burned to the ground?

The conclusions are obvious. WWII and the arms race imposed upon it is all that prevented the Soviet Federation from outperforming monopoly capitalism. Their cooperative ways explain why the Soviets developed so fast under such adverse conditions and development could even be much faster yet under Henry George’s inclusive philosophies as we address throughout our website (click on “Home” at top of screen, www.ied.info).

If the Soviets had been incompetent, as we hear so often, they would have been no threat and there would have been no Cold War. They would have simply been quietly overwhelmed by capitalism. It was their competency that was the problem. To have advanced as far as they did under such adverse conditions before finally being overwhelmed by assaults from the Western world testifies to a fiercely loyal population working hard for their country. They were not a terrorized and sullen population.

Keeping the World in Chains

Patriotic forces in the former Soviet Union have taken back their country and are rapidly rebuilding. Some of the property titles of those who bought Russia’s wealth for pennies on the dollar have been reclaimed.

But for a quick lesson on what Marx meant by “monopoly capital,” and what “debt traps” mean, look at what those shattered economies face. If they repudiate or default on any external debts, any assets outside their borders can be, and will be, attached.

This means businesses, property titles, bank accounts, goods-in-transit, ships, or planes. Those beleaguered societies would be in one of the tightest containment traps any imperial center of capital ever devised.

Every ship or plane leaving their ports would be subject to seizure to repay those debts. Without unimpeded access to the world, no economy of any country can function efficiently.

The traps structured within unequal property rights laws designed to keep the world in chains becomes fully visible and it is obvious that, so long as one group has title to an excessive share of wealth, and especially considering it is appropriated wealth, neither “rule of law” nor “property rights law” means equality under the law.

Those chains kept upon weak nations and the suppression of their breaks for freedom proves colonialism has never been abandoned. The colonial masters only put on a cloak called Adam Smith free trade and spoke fine words of peace, freedom, democracy, justice, equality, and rights while all the time covertly suppressing those breaks for freedom and rights. Thank you.

J.W. Smith

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Corporate Control of Food, Facing Famine & Starvation, Solving the Current Food Crisis

Sunday, August 10th, 2008

by J.W. Smith

We would like to hear from those who can expand upon these perceptions.

Early corporations burned all the spice trees they could not control so as to maintain the high price of spices.

Modern corporations controlled America’s foreign policy, Destroying the farming industry of poor countries through selling highly-subsidized, thus low-priced, grains to both developed and undeveloped nations.

Under their self-designed monopolization of the world’s food supply, those corporations doubled, tripled, and even quadrupled their grain prices as food supplies grew scarcer.

Under this monopoly structure, specifically designed to suck the wealth out of nations, hundreds of millions now face starvation.

As these people–helpless within the corporate controlled world structure–die, the capitalized value of the appropriated wealth (profits) of the designers and operators of this death trap multiply, in the stock markets, by 10 to 30 times or more.

Their hundreds of millions of appropriated wealth becomes hundreds of billions, those entitled to a secure food supply die, and both catastrophes are due to the Plunder by Trade System and the property rights structure put in place the past 700 plus years, both denying others their proper share.

This was all done under the cover word “privatization” which the power brokers’ perception managers have taught us is is a good thing.

They get away with these outright frauds because advancing technology is so efficient those same powerbrokers and perception managers are able to distribute half the potential gains of technology, bank obscene profits, and the even greater remaining potential gains are not even thought of because the half or so of the potential gains realized is itself very large.

Immense as those unearned profits are, they are only a fraction of the gains in living standards denied the world through the 50% of full potential never realized because technology is monopolized.

How can a nation or region attain security so as to avoid starvation and poverty as faced by 100s of millions today due to intentional destruction of the viability of local farmers and corporate control of world food supplies?

First they must establish local permaculture and avoid corporate control of food supplies. If a nation or a region were serious and organized (for smaller nations this means alliances or federation), they could be self sufficient in food within 20 years even as their soil fertility steadily increases.

Plants providing thread for cloth, such as flax or six foot high hemp, are among the most prolific in the world. So permaculture can be expanded to produce fiber for clothes and exotic threads made from oil or coal will not threaten the environment.

Houses built from rammed earth, brick, or rock with ceramic interiors that will last for centuries is also primarily a local industry.

Within those two local industries, permaculture and housing, are the essentials of a secure society, food, fiber, and shelter. When regional soils are used with attention to protection of nature’s wealth, these necessities of life are not intense consumers of resources.

With no one claiming or receiving unearned wealth, money within this secure social structure represents use values (real values) which are labor values plus rental values of nature’s resources and technologies distributed to all through those rental values funding essential social needs. Taxes disappear and health care, retirement, governments, and more are all funded from those natural flows of money.

We document thoroughly that over half our wealth is ground up within the superstructures of our monopoly system. We then document that an equal amount is wasted in plunders by trade and war. We are now demonstrating that another large share is wasted through the massive sums of unearned wealth being spent on resource intensive endeavors which primarily only structure our time and supports our egos.

All this is built on, and made possible, by our vaunted freedom to travel. As shown above, caring for basic needs is quite easily managed in social restructures that avoids the theft of others’ wealth, the resultant disappearance of the ethereal world of high finance, and the further result of elimination of war

The further waste within the wealthy world which is consuming another large share of the world’s wealth is running uptown for hamburgers, shopping till they drop, having houses full of clothes and shoes that are seldom–or never–worn, kids with closets stuffed with toys they never play with, there are trips overseas, cruises, annual vacations, and on and on. The list of what a modern society is titillated with as they exercise their freedom to travel (conspicuous consumption) is endless and very resource and energy intensive.

At Aptera Electric Typ-1 e – Video Test Drive, you can watch a video of a 300 mile per gallon, three wheeled, two seat, 90mph, Aptera gas-electric hybrid run-a-round, that requires less than 10% the labor and resources to build as today’s average car. Beyond the computer, which is not a necessity, everything in that car was on the shelf, available for purchase, 40 years ago.

On short drives this little run-a-round runs on electricity alone up to 120 miles, is charged each night, and uses no gas. Battery capacity has already been proven (120 miles on one charge), somewhere up to 20 such batteries is surely adequate (golf carts use only six), far more efficient batteries are coming on stream, and the market has priced that electric storage capacity at roughly $2000. So batteries being too expensive is fiction. Simply crank up the newer, highly efficient, batteries, specifically designed for cars, to mass production and the price will be reasonable.

With a lifespan, double that of today’s cars (There is no drive train, the small engine runs only on long trips, and fiberglass bodies are easily repaired) means people throughout the world could have been driving this very cheap, almost pollution free, car the past 40 years.

The efficiencies of a market economy within today’s property rights law, as applied to nature’s resources and technologies, denying others their proper share, are fiction.

The world was sold BMWs, expensive SUVs, pickups and other big cars because companies earned $8,000 apiece on them, only $1,000 on small cars (these statistics on the evening news demonstrating and discussing the Aptera car), and could not have earned over $500 on this little gas electric run-a-round.

Ditto for much of what is sold within the so-called developed world. You can pay $700 for a pair of shoes that cost $3 to produce and ship. Even the cheapest priced shoes, which to me looked much better than that $700 pair, will cost $40 while an efficient economy could distribute them for $15.

Those high prices are due to the monopolization process compounded by promotional, persuasive, titillating advertising and further compounded be a society trained to conspicuous consumption. Not only did our property rights laws as applied to nature’s resources and technologies, denying others their rightful share, evolve out of aristocratic law, so did our system of individual identity.

This exposes the true costs of modern societies, freedom to go anywhere and do anything one wants. Most industries beyond food, fiber, and shelter are built to sustain those freedoms even though the most important needs for a fulfilling life, food, fiber, shelter, family and friends, are near that home.

If all are to share in freedom as understood within the wealthy world, pleasure travels must be rationally spaced. Through equal pay for equally productive labor, a sharing of truly productive jobs (two days per week once the current waste and inefficiencies within the economy are eliminated), and a culture of family, friends, and cheap transportation accomplishes that spacing.

A thirty mile local commute would plug in at night and charge for 30 cents. With about 10% the resources and labor to build and a lifespan of twice today’s cars, both local and regional travel could have been affordable, relatively non polluting, and in place the past 40 years.

Equal pay for equally productive labor and a sharing of productive jobs will have eliminated conspicuous consumption, retained rational consumption, and each person or family would automatically restrict their expenditures to rational travel and pleasures.

Study current freedoms closely. Titillating and extravagant life styles are a major cause of pollution, resource depletion, poverty, and, in a final analysis, to protect that life style, even wars.

This is being carried forward as we speak. Companies consisting of nothing but advertising (they have no factories) are all over the place. Their only purpose is to sell you something at a very high price that has nothing to do with your basic living needs or rational pleasures.

If you had never heard of them, you would never have felt a need for what they had to sell. Those products have common features, you do not need them, they titillate your interest, they feed the ego of you and your peers, and they are enormously expensive.

A friend’s friend bought in-style, wore-out, ragged western jeans for $100. When telling this friend about paying $5 for a nice suit at the goodwill store, the raggedly dressed friend said, “And what do you think of yourself.”

In short, life styles of the middle classes within the wealthy world today is only conspicuous consumption as practiced by aristocracy and the wealthy for centuries. Our conditioning to be aristocrats will be trumped by reality once all are paid equally for equally-productive labor and employed labor time is reduced to the two days per week necessary to provide a quality life.

A Practical Approach for Developing Poor Nations & Regions

Trying to provide an answer to capitalism, socialism, and communism the past 50 years, the Progressive Utilization Theory, Prout, www.prout.org, “integrating economic democracy and spiritual values,” is speaking to full and equal rights for each and every person, very similar to our approach.

Those reading both philosophies may want to add a spiritual approach to this strictly economic approach and perhaps add a full understanding of Henry George philosophy appled across the full economic spectrum and A Socially-Owned Banking System to Prout’s cooperative philosophy.

While waiting for the world to throw off the current beliefs which maintain their poverty, let’s design an emerging-nation development plan utilizing cheap, broadly-available resources that can be accomplished within the current monopoly structure.

Almost all countries have traditional, fireproof, earthen homes hundreds of years old. Most developing nations have large numbers of unemployed labor quite capable of building in the traditional ways and who can build high-quality earthen homes cheaply.

Firing the inside of earth homes creating ceramic walls and floors opens an unlimited potential of beautiful, clean, easily maintained, yet cheap, housing. Some regions traditionally use other building materials such as stone, straw-bale, timber, bamboo, etc.

Local master-craftsmen can train the apprentice home builders, and these newly-trained practitioners can teach others on the job. The teachers would be paid but the workers’ pay would be their training as master home builders.

For example, assuming five workers to a crew on an adobe or rammed earth home, every three or four houses built will result in five more master builders who can return to their home regions, sign up apprentice home builders, and that would continue exponentially and rapidly build quality housing for all that will last for centuries

Other building materials will require differing periods of training to produce master craftsmen, but the principle is the same. (See Hassan Fathy’s book, “Architecture for the Poor,” for an inspiring account of the method that was used to create a total-process system of adobe construction in Egypt.

Having designed and built sustainable housing and major architectural projects in many countries, Phil Hawes philhawes@amaonline.com is an internationally known expert as is Richard Register, ecocitybuilders.org.

Additional industries are necessary to produce doors, windows, plumbing and electrical systems, flooring, roofs, and furniture. These industries will expand in step with the expansion of home building.

Though these homes will be built cheaply, they have full, actually superior, use value. As some projects mature, labor will be paid, while in others the master-builder will train volunteer workers to build more homes for themselves, family, and friends, and are thus paid indirectly, but paid well.

Since real value is being produced utilizing local and regional resources, base money can be created by any nation, or region, up to the value of those homes, businesses and inventory.

That created money and the circulation of that base money is the proper financial source to utilize a nation’s own resources to build infrastructure, industries, businesses, and inventory necessary to service a developing community.

The circulation of that base money will build and operate distribution systems and repair systems and provide wages which becomes the buying power (circulating money, money supply) to purchase the production of those industries.

Simultaneous with building homes, a country or region must develop a prosperous agriculture. Permaculture fruits, nuts, berries, tubers, and vegetables work will with eco-village housing.

Master permaculturists can be trained and returned to their regions to train more just as described above with master builders. Farms, equipment, and the food produced have value and, as it is locally produced and, if circulating money (the money supply) is insufficient, more money (known as base money) can be socially created for that development as well.

All resources should be processed locally into high value-added products both for regional consumption and export. As economic activity and production increases, buying power increases to purchase the new production, and community values rise.

So long as countries or regions are utilizing local resources, money can be created to build industries and infrastructure. Correctly guided, this can even include high tech industries for manufacturing such energy producing equipment as wind generators, small hydro generation units, and photovoltaic cells.

These can convert the naturally occurring, non-fossil fuel forces of wind, waterpower, and sunlight into electrical energy. It is possible to train ambitious local inhabitants to assemble electronic equipment, such as TVs and computers, which can provide a free education via satellite and solar powered WiFi.

However, a developing country or region will soon need technology and industries that, unless the revolution we addressed throughout our books has taken place, are firmly under the control of the imperial centers. It is at this point that regions must federate (ally together) to negotiate with the imperial centers to trade access to resources for access to technology.

To not ally together would result in the locally created wealth being transferred to those imperial centers via unequal pay for equally-productive labor and the many other methods of theft of others wealth.

Local resources will be purchased far below their full value, resulting in the familiar inevitable debt traps for the developing regions sucking up any money that has been created and even taking title to constructed wealth.

The key is cheap, quality, local production of social infrastructure. But the money created must be regionally created and protected against claims by international creditors through an international trading currency (a dual currency trade structure).

Collecting the rental values of nature’s wealth as per Henry George’s property rights (chapters one through five of Money: A Mirror Image of the E economy) prevents capitalized monopoly values, provides development funds, and protects the entire nation from having those values attached to repay debts.

Henry George’s principles of society collecting socially created rental values (You are Quintuply Repaid for Paying Resource Rents (Land Rents) to Yourself (Society)) are essential both for economic efficiency and protection against creditor nations laying claim to a weak nation’s wealth.

The use value is still there but society collecting resource rents and interest on loans prevents those nature-produced values from being capitalized, keeps them out of the hands of creditors, and thus nature’s wealth and socially-produced profits are spent for a nation’s citizens (infrastructure, eduction, health care, retirement, and more).

By all classes being available via satellite or WiFi and studied on home TV, it is possible for the developing world to educate their citizens for 5-15% the cost of conventional brick and mortar schools (Communication Super Highways Educating the World for 5-15% the Cost of Brick and Mortar Schools).

Not only would the youth become well educated, so would many older citizens. wiring those emerging nation’s communication superhighways would give the talented access to jobs and markets in the highly developed world. Apprentice labor working side by side with skilled labor will soon build a skilled labor force as described above on building homes and training permaculturists.

Currency values can only remain stable if a country’s productive capacity is efficient and stable. So a country needs to develop infrastructure cheaply and efficiently and the above building of quality homes, support industries, and communication superhighways cheaply are examples but only a start.

With technology and markets historically monopolized, high technology industrializing is more problematic (this may be changing fast, study our pages and books). The key is maximum production of high-value-added products rather than selling raw resources.

Example: an oil producing nation has the option of refining its oil, producing plastics, etc. The monopolies of wealthy nations are so powerful that such industries will require trading alliances or full federations between weak nations, a step toward the full federation of all nations.

Stevia is 30 times sweeter than sugar, is cheap to produce, cheap to process, and it does not have the health damaging effects of sugar.

William Hayward (haywardwj@execs.com) has containers filled with Stevia plants, processing equipment, and instructions ready to ship anywhere in the world. Africa also has a couple indigenous sweet plants that may replace sugar. The gains to a society both financially and in health care substituting any one of these sweeteners for sugar is huge.

Most important is sharing with other developing nations the various ways to protect their wealth from being claimed by speculators of wealthy nations.

Hopefully these nations can ally together (federate) to build their infrastructures and protect themselves from monopoly capital. As this simple development plan is put together, other areas of utilization of local labor and resources will become visible.

We are a cooperative publishing house dedicated to the elimination of poverty and war that pays ourselves double the normal royalty and will pay higher yet as soon as we can.

We need more cutting edge researchers. If you can broaden our understanding and that of our readers, have a high-quality book within you that you wish to use in class, or just wish to reach the world, please Contact Us. Thank you

J.W. Smith

Economic Democracy: A Grand Plan…

Wednesday, August 6th, 2008

Books News, Inc. has posted several reviews for this book in their web site. Here is a copy of the reviews:

Economic democracy; a grand strategy for world peace and prosperity; green economics for sustainable development, 2d ed.

Smith, J. W.
Institute for Economic Democracy, ©2008 476 p. $35.00 HC79
978-1-933567-10-5

In Money: A Mirror Image of the Economy, published simultaneously with this work, Smith (PhD, political economics, Union Institute and U.) discussed the monetary implications of his theory that application of 19th century political economist Henry George’s land tax ideas would allow for the social appropriation of natural resources and help eliminate inequality and economic inefficiency. In this volume he addresses some of the historical implications of this view of property rights, describing how classical economic property rights has allowed plunder by trade. He also reiterates his monetary theory and argues for its adoption. (Annotation ©2008 Book News Inc. Portland, OR)

Money; a mirror image of the economy; green monetary theory for sustainable development, 2d ed.

Smith, J.W.
Institute for Economic Democracy, ©2008 202 p. $35.00 HG220
978-1-933567-12-9

Smith (PhD, political economics, Union Institute and U.) argues that current property rights law is both inequitable and inefficient. He proposes restructuring property rights law in line with the ideas of 19th century political economist Henry George, who proposed the establishment of a social tax on land, to which people would not have exclusive title but only conditional title. He contends that this proposal would allow for the true social appropriation of natural resources and would allow for a doubling of economic efficiency and massive savings by all. He spends much of this volume analyzing the monetary implications of such a theory. This theory also lies at the heart of the author’s Economic Democracy: A Grand Strategy for World Peace and Prosperity, published simultaneously. (Annotation ©2008 Book News Inc. Portland, OR)

Ascent to freedom; the practical and philosophical foundations of democratic world law.

Martin, Glen T.
Institute for Economic Democracy, ©2008    500 p.    $35.00    K230
978-1-933567-06-8

Martin (philosophy and religious studies, Radford U.) presents a legal-philosophical argument for the establishment of democratic world law. He provides a historical overview of the philosophy of law in Western thought, from pre-Socratic beginnings to Jürgen Habermas in order to provide a foundation for his thoughts on law, human rights, and community and also addresses practical issues concerning the implementation of democratic world law within the framework of the Constitution for the Federation of Earth (which is included in an appendix). (Annotation ©2008 Book News Inc. Portland, OR)

You can also see them in their original site: Books News, Inc.

Fannie Mae and Freddie Mac, a $5.2 Trillion Bankruptcy

Sunday, August 3rd, 2008

By J.W. Smith

When established in the 1930s, Fannie Mae was a government sponsored, non-profit financial institution, designed to provide low-cost home loans to a nation traumatized by the Great Depression.

In 1970, FMae was privatized so as to remove it from the federal budget and Freddie Mac was established the same year. As government sponsored organizations (GSEs), neither paid local or state taxes, they were exempt from Securities and Exchange registration and fees, they were permitted to operate with lower reserves than banks, and they could each borrow up to $2.5 billion directly from the U.S. Treasury at low interest. The faith that they were backed by the government and operated so cheaply gave them access to massive sums of low-interest money looking for both profits and security.

With those advantages mortgages bought directly from lenders provided a large and steady profit stream which was reflected in high and secure stock prices. Even larger immediate profits were made when those loans were packaged into bonds (Mortgage Backed Securities) and sold to investors at a high capitalized value justified by the expected profits on these packaged mortgages and the normal low interest on bonds.

This proved so profitable that banks and other lenders packaged their loans into bonds, sold them on the market for that quick profit (especially the agent rake offs), loaned out those replenished funds, and did this over and over again with riskier and riskier loans as housing prices climbed higher and higher and security requirements were lowered to essentially nonexistence.

When bankruptcies jumped above normal, the value of those Collateralized Debt Obligations (CDOs) collapsed. The market now knew home prices were going to drop, the losses were going to be very large, and those CDOs, SIVs, (Structured Investment Vehicle) or any other name they went by were unsaleable.

Starting with the Bear Stearns collapse in March 2008, The Federal Reserve has pledged to pour several trillion dollars into banks and other financial institutions (including other central banks) to stem their collapse and the financial markets have still not liquified.

Each knows the various ways of being leveraged beyond the rules of prudent banking, know both they and all others were way over leveraged, so they must keep the money handed to them by the government to bring their debt ratios down from 30:1 to 70:1 (Citibank was 280:1 when bailed out) and do not loan to each other. Realizing the new rules will force them to reduce their leverage (meaning reduce those debt to equity ratiios), those trillions are being kept in reserve to pay down their debts and keep them within the parameters of prudent banking as demanded by those new rules. Both accounting rules and the law says a maximum of 12:1.

As homes and other equities continue to lose value (11 million homeowners with negative equity and prices expected to fall at least another 30%), the financial institution’s debt to equity ratios  look worse faster than money can be poured at them. Bankruptcies and walk-aways are rapidly increasing and prime loan walkaways and Alt A bankruptcies, expected to start in 2009, are anticipated to create greater losses than subprime loans.

The soothing words of $25 billion being available to shore up the two FMs and even that may not be needed fooled few people. Two hundred billion has been spent and another $800 billion is budgeted to buy up their toxic debt. And it is still far from sure the two FMs can survive.

Lets do the math. The housing rescue bill just passed, December, 2008, is intended to protect the $5.2 trillion in mortgages of the two FMs which are now guaranteed by the government. The value collapse of the remaining $7 trillion in mortgages is supposedly protected by the trillions poured at the rest of the financial structure, including the shadow banking industry. Thus GMAC and may other shadow banking corporations have officially became banks and eligible for bailout money.

Since most those trillions authorized by Congress is to replenish the coffers of financial institutions and only possibly $800 billion will go to homeowners to stave off their bankruptcies, it would appear two or three million will still lose their homes. And this is before the much larger 2nd wave of foreclosures and bank crises–the keep up with the Jone’s Alt A loans, prime mortgage holders whose income has collapsed, home mortgages up to 50% under water walk-a-ways, and credit card defaults–hits.

This financial crisis was never necessary. On GRIT TV, 7/18/08, Headrick Hertzberg pointed out that Fannie Mae did not have that high overhead when originally established. He said, “What is the purpose of all that overhead, those high profits, the huge salaries, and the annual payoffs to presidents and others?” It is obvious that providing low cost home loans was the proper function of the two FMs and neither should have ever been privatized.

One of the key aspects of our research is that so much unearned wealth is appropriated through Plunder by Raids and property rights law as applied to nature’s resources and technologies that denies others their fair share. Those huge blocs of unearned finance capital within the ethereal world of high finance get larger and larger, they cannot find enough places to safely invest it, and this is why they insist on privatizing, privatizing, privatizing.

Not even massive conspicuous consumption and investment in new privatizations can consume all the massive funds being appropriated from its proper owners. So investors turn to hedge funds and derivatives which produce absolutely nothing. They are only bets which decide who will end up with most of the stolen wealth.

They reach down into the real economy to appropriate more wealth and they grind up (waste) ever more wealth as they gamble between themselves (hedge funds and derivatives, $526 trillion worth, are only bets between each other).

Instead of pouring money at the ethereal world of high finance, it should have been pointed towards those millions threatened with loss of their homes, in short, towards the real economy.

In The simplicity of eliminating poverty and war will stun you we demonstrate a society can stop a financial collapse in its tracks if they point newly created support money at the real economy (those troubled home owners, the unemployed, and the underemployed). In the process it is possible to restructure the economy to double its current efficiency, the ethereal world of high finance disappears, a quality life for each citizen of this world is provided at less than half the current resource consumption, and future financial collapses are eliminated.

Instead of running such a society with full and equal rights for all, the corrupt financiers now controlling the money creation process are pointing most this money at themselves, the ethereal world of high finance which we prove are negative producers reducing economic efficiency by fully 50%.. Thank you

J.W. Smith

We are a cooperative publishing house dedicated to the elimination of poverty and war that pays ourselves double the normal royalty and will pay higher yet as soon as we can.

We need more cutting edge researchers. If you can broaden our understanding and that of our readers, have a high-quality book within you that you wish to use in class, or just wish to reach the world, please Contact Us.