Archive for the ‘General’ Category

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 possibly $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.

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, assuming those equity positions are taken, end up owning 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 this 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.

You are Quintuply Repaid for Paying Land (Resource) Rents to Society. Those funds pay for operatiing 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, social 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 collecting those unearned rental values).

Land’s tangible values were created by society itself simply by forming, they were not produced by human laobr, 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 because they are unearned. Those massive unearned sums of money are properly termed “thefts of social weath.” We have already pointed out that, just like the rental value of land (resources), those uneaned 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 monpoly 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 waitiing to be discovered. Those technologies are monopolized through exclusive patent rights.

The unearned profits of monopolized technology are collected through the stock market. Curretly inventors recieve 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 superstructues of those monoplies (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 never paid out due to their property being paid for, is a trully massive sum. 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 appropritated from the citizenry in the first place, and the honest profits available for distribution to them, is a vey huge sum.

The disappearance of the superstructure operating technologies, 85% of the stock markets, saves massive sums. The cost of operating a socially-owned bank, for example, is only 1/3 that of a monopolized banking system. This is what frees up those profits for caring for essential social needs.

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 finace 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 always absorb 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 both those unnecessary values are a tax on society.

But any more money into the stock market would lead to its eventual collapse. So litle 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 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, and the monopoly aspect of all banking is nothing less than the ethereal world of high finance, only a part of it tied to the real economy, essentially producing nothing, but sucking massive sums of money that belongs to us all in roughly equal shares.

This is what is missing in all financial and economic analysis, these massive sums of 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 one 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. Each people they met 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 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 resturcturing of property rights law and eliminating Plunder by Trade (which we have not addressed here).

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

By Nick Polimeni

The NY Times article Lesson From a Crisis: When Trust Vanishes, Worry, by David LEONHARDT, Sept 30, 2008 brings us some rationale in support of the financial markets and financial community, in the persona of Frederic Mishkin, (Meyer’s grandson) a recent member of the Federal Reserve Board.

Dave presents us with an object lesson on why we need to save Wall Street and the financial community, and gives the Great Depression as the example when government didn’t do anything, and things got worse, and Mr. Meyer Mishkin lost is business, and never held a steady job after that. Although he concedes we would never have a repeat of the Great Depression, we are assured by economic leaders and journalists who admire and believe them, that it won’t be long before Main Street falls victim to the an eventual depression. At the same time, we’re gratified to hear that we will not see shanty towns, because with our country’s wealth, a much smaller portion of the population is living in the edge if despair. However, we must know that at the heart of the problem is the credit crisis.

The heart of the financial crisis is the credit crisis. A credit crisis is a condition where there’s not enough liquidity/money to lend. That’s what the experts say. That’s what they want us to understand and believe. This has come to be understood as the absence of liquidity that is available to lend, but it can also include as the ‘unwillingness to lend” because of no faith in the borrower, and yet another nuance, potential borrower-banks, who may need the liquidity from other banks that have it, don’t want to borrow as the risk of being acquire for very low price is imminent.

It is difficult to establish the extent of the losses in the financial markets by the financial community. But even if we had real numbers, who knows what 50 Trillion dollars is like?

But there is one thing we can easily understand, and that is, when you consider the wealth distribution in the US (which is not too different in most of the world), the lion’s share of losses has been suffered by the super wealthy. One can find various statistics, by searching, “wealth distribution” on any search engine. We are told that about 80% of the wealth is owned by about 5%, i.e., the super-rich.

The Treasury estimates some 1.7 trillion in foreclosures, and Mortgage securities swap 40 times as much. The mortgages, of course, will be re-written or the homes resold, so the financial backers of those mortgages will probably recover 1986 prices. I chose 1986 because that when the financial markets began to grow significantly out of proportion with the real economy (the consumer and production economy), and as The Economist puts it in their “Wall Street Crisis Briefing of March 22, 2008, What Went Wrong,” the financial community services “raced ahead of the real economy, even as the ground beneath it fell away.” The financial community, in it’s new and creative ways of creating liquidity, enhanced by the “generally accepted accounting principles” (GAAP) which compound the problem especially after a bubble bursts, was simple experiencing heavy inflation, which was viewed by most investors, as real profits and gains.

This easily shows that the recovery of the financial community and financial markets is unpredictable, and could be many years to recover, depending on how intelligently the Economic Stabilization Act is applied.

Therefore, there is nothing that can predictably save Main Street real economy if it has to wait until the financial markets are back to normal. We are told that the real economy can’t function without the financial community and financial markets. This is so only because that’s how the structure is set up. But it need not be so.

There are several underlying principles that once understood the idea of severing the dependence of the real economy from the financial markets and the financial community will makes perfect sense.

The underlying values in the financial markets are completely and totally dependent on the existence of real values in the real economy. The financial markets may show extraordinarily high prices, but when the securities are redeemed, the resulting cash can ONLY get what is in the real economy.

The value of the currency is founded on the productive capacity of the society. No more wealth than that can be generated during each production cycle.

The financial community generates liquidity by creating layers upon layers of recomposed assets, backed by various type of things that are considered assets (and this is subject to the intricate and obscure way the GAAP, and not always follow real economy rationale), all of which are dependent on assets in the real economy.

In that same manner can the “productive capacity of the people of the nation” be a more rational assets based on which liquidity can be generated by government through its exercise of the constitutional mandate to manage the currency; without the need to “borrow” from the financial community, and continue to build up a government debt which mathematically will never be able to be repaid, except through series of accelerated inflationary cycles, or if the government goes into various business activities which will provide it enough income.

Ultimately we can’t wait until the Economic Stabilization Act trickles down to the real economy. We must directly assist the real economy through direct loans, and a community banking system that is not dependent on the financial community, is owned by the people in the community, and regulated and funded by the Treasury of the nation. This will bring confidence to the real economy because the results are real, and people can eat, and don’t have to sleep under the stars against their will.

Nothing will stabilize the financial markets faster than a stable real economy where there’s nearly full employment and people are engaged in productive activity regardless of the fiasco in the financial communities. Sure, Wall Street will continue to suffer but ONLY until the prices traded are closer to the real economy underlying values, at which point, confidence will begin to return to Wall Street and the financial community.

Saving Wall Street is not really Meyer Mishkin’s lesson; because it took some 30 years, for example, for home values to get to the level they were right before the Great Depression; the lesson is saving the real economy.

By Nick Polimeni

One of the reasons the Paulson bailout was touted necessary, was that Main Street economy (consumer-production, employment) couldn’t work without it. Nevertheless, a wide base of economists have maintained the bailout was not necessary; that even with the bailout there would be problems, as James K. Galbraith puts in his Washington Post article, “A Bailout We Don’t Need: “First, the underlying housing crisis: There are too many houses out there, too many vacant or unsold, too many homeowners underwater. Credit will not start to flow, as some suggest, simply because the crisis is contained. There have to be borrowers, and there has to be collateral. There won’t be enough.” Others worry about the huge increase of the national debt, and yet others fear deficit spending and candidates whether they’ll be able to keep their promises.

As you can see, the lowest common denominator is: There isn’t enough money. What’s wrong with this idea?

What’s wrong with it is the underlying fallacy, wherein we take for granted that

a) The only way to create liquidity is to capitalize things through collateralization of assets in our nation’s real economy, and

b) Only the financial community can generate this liquidity.

Further, it appears that no conventional economist ever bother to go beyond the current system to examine the underlying relationship between the financial community and the consumer-production (real) economy. It’s a marriage made in hell, ready for divorce. When one pours over the thousands and thousands of public postings on the subject they are all based on the same underlying assumption: liquidity can ONLY be generated by the financial community. Even the government has to borrow from them, building an unsustainable national and international debt.

When currency was backed only by gold and silver, or other commodities, the quantity of currency was significantly restricted or subject to the ebbs and flows of the availability of that commodity. Today, however, there is no commodity upon which the value of the currency depends. The currency is backed by the productive capability of the population, and the process of monetizing (creating liquidity based on that productive ability) is not the exclusive right of the financial community, nor if we want to engage their participation, do we need to do it by surrendering all power to determine the use of that liquidity.

While there is no explicit details on how to create liquidity, the US constitution, Article I, Section 8, provides the basis for authority over the economy, with the right to: “To regulate commerce with foreign nations, and among the several states, and with the Indian tribes;” and “to coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures.” Under that authority, the government can and should, for each economic period (a year, six months, or as reasonable):

1. Assess the available human resources (people who need and want employment).

2. Determine the productive capacity of the nation.

3. Determine if the natural resources or raw material is adequate to support that capacity.

4. Determine the consumption needs of the population.

5. Monetize whatever new amounts are required to fuel this new additional production above the previous year.

These steps can be done to any degree of detail necessary or desirable to ensure adequate monetization. The congress will pass as part of its budget a provision for new liquidity, by ordering the Treasury secretary to enter in its accounting records, under the asset heading of “New Liquidity,” and the equivalent cash increase to the Treasury.

Of course, this is sacrilege by traditional economic theory, and these schools, and their wealthy sponsors will publish hundreds of thousands of pages calling it fiscal irresponsibility, and voodoo accounting, and decree money, and they will produce historical precedents to show this is the beginning of mad hyperinflation.

In the end, this is just a method of monetizing which bypasses borrowing from the super-wealthy, and borrowing from next year’s productive capability of the population. The promissory note or security is given to the population instead. Why? It is obvious that since the currency is backed by the productive capacity of the population, then, the population has to be the primary beneficiary of that production.

The Treasury then will distribute the funds through community banks, which have explicit instruction on the distribution of the new liquidity, based on the five point assessment above. Community banks stocks are owned by its depositors (not unlike ‘credit unions”), and there is a cash ceiling to the amount of stock an individual could own, to eliminate concentrated ownership in the hands of a small group.

This process would totally alter the concept of loans, credit, and taxes. Taxes would be used to equalize wealth, or miscalculations or misestimating on the original assessment; they would withdraw directly for the bank’s liquidity any excess that could become inflationary.

In the article, “An Alternate Economic Paradigm there is a more detail description of managing the system as if it was a “complex navigational system, with locks, gates, and reservoirs,” and the management provide and monitor liquidity to float all boats. With this process, we can rebuild our industrial base, employ everyone who wants to be employed, and have the necessary liquidity to maintain a rational growth rate, with a stable currency.

It is absurd that that the only way to add liquidity to the economic system can only be done through borrowing from the financial community, or failing that, through government borrowing, and astronomically increasing its debt to the super-rich. We run our lives and our country’s economy based on available credit (ability of desire of the financial community to lend); and not on what we need and on supporting our human resources with the necessary liquidity to employ everyone who wants to be employed. We buy oil and coal because it’s “cheaper” than solar and other alternative energies, instead of supporting the alternative sources with sufficient liquidity to make it viable. Where’s the money? Is the financial community the God appointed source of it?

The real reason this method of monetization and liquidity generation is not even brought up or the status quo challenged with this, as an alternative is because it would radically alter the balance of power between the population and the super-wealthy, and this is something they powerful have not allowed for hundreds (maybe thousands) of years, and they will vigorously oppose it today. Two possible reasons conventional economists don’t bring it up is either because they’ve not thought outside the economic box they are trained into in college and MBA programs, or they have a vested interest in the status quo

By Nick Polimeni

James K. Galbraith’s in his “A Bailout we Don’t need” in the NY Times, makes suggestions that are rational, and would be viable to eliminate the need for the bail out bill. He admits, however, that his solutions are not going to help the economy recover quickly:

“Two vast economic problems will confront the next president immediately. First, the underlying housing crisis: There are too many houses out there, too many vacant or unsold, too many homeowners underwater. Credit will not start to flow, as some suggest, simply because the crisis is contained. There have to be borrowers, and there has to be collateral. There won’t be enough.”

The fact is that we take for granted that the only way to create liquidity is to capitalize things through collateralization of assets in our nation’s real economy, and only the financial community can generate this liquidity. Further, no conventional economist ever got past the current system basic, to examine the underlying relationship between the financial community and the consumer-production (real) economy. It’s a marriage made in hell, and there has to be a divorce. And when you pour over the thousands and thousands of public postings on the subject, you can see the same underlying assumption: liquidity can ONLY be generated by the financial community. Even the government has to borrow from them, building an unsustainable national and international debt.

Considering that the currency is backed by the productive capability of the population, there are many type of organization which would be superior to our financial community to take charge of monetization, including expanding the credit unions (depositors’ owned banking), or cooperatives of people in communities.

It is absurd that that the only way to add liquidity to the economic system can only be done through borrowing from the financial community, and when all the existing assets are already monetized, and “there is no more new money,” further monetization (additional liquidity) can only be done through government borrowing. In fact, the most logical method would be to monetize (create liquidity) that is necessary to supportable the productive capacity increase from year to year.

We run our lives and our economy based on available credit (ability of desire of the financial community to lend); and not on what we need and on supporting our human resources with the necessary liquidity to employ everyone who wants to be employed. We buy oil and coal because it’s “cheaper” than solar and other alternative energies, instead of supporting the alternative sources with sufficient liquidity to make it viable. Where’s the money? Is the financial community the God appointed source of it?

The real reason this is not even brought up or challenged as an alternative is because it would radically alter the balance of power between the population and the super-wealthy, and this is something they powerful have not allowed for hundreds (maybe thousands) of years, and they will vigorously oppose it today.

Two possible reasons conventional economists don’t bring it up is either because they’ve not thought outside the economic box they are trained into in college and MBA programs, or they have a vested interest in the status quo.

This idea has been discussed before, but taken off the table on specious basis, while the underlying reason is the protection of the power wielded by the financial community, servants of the super-wealthy.

Professor Michael Rivage-Seul

Funny how gambling terms routinely pop us in discussions of globalized economics. Here I’m not just talking about desperate absurdities like state-sponsored lotteries to finance public education of all things.

It’s about the “casino economy” itself, where international “players,” “stakeholders,” and “high rollers” “win” and “lose” fortunes by betting on the market’s ups and downs.

And then there are periodic reshufflings and “new deals” like the famous one following the Great Crash of the 1930s. All of those are gambling terms.

Presently (following the Great Crash of 2008), we’re in the midst of yet another reshuffling and redistribution of cards – another New Deal. But whereas 30s version shifted money from the haves to the have-nots, the re-run promises an income redistribution from the disappearing middle class to the super-rich.

They’re the gambling addicts who got us here in the first place. And what will we get in return? Nothing, nada, zip.

The gamblers’ codependent enablers are making sure of that. Paulson and Bernanke, along with corporation heads, their lawyers, professional economists, and the government representatives who share their beds are intent on pushing through a one-sided deal.

They think we’re all too stupid to understand what they’re doing. So with a wink and a nod, they slip aces from the bottom of the deck into the hands of the card sharks that have been cheating all along.

Watch closely. Paulson and Co. want to cancel their cronies’ losses, reshuffle the cards, and allow their pals some kind of do-over. All of this flies in the face of what we’ve been told are the rules of the game.

Adam Smith’s version of Hoyle says losers should pay their gambling debts and suffer the consequences.

Of course they tell us that the consequences would be too much for the rest of us to bear. It would be the end of civilization as we know it, they warn. I’m still not sure about that.

That rationale sounds a lot like the trickle-down thinking everyone’s running away from as fast as they can. It pretends that we’ve all been somehow benefitting from the market’s unreasonable exuberance over the last few years. I don’t think so.

The ones cashing out at the casino bank are drawing those seven figure salaries we read about. Even Bear Stearns and Lehman execs are not suffering. Feeling no pain at all, they’re comfortably drifting to earth under golden parachutes.

I’m not an economist. But I do know is that Paulson and the gang are not only doing all of this with our money. They’re doing it in secret and fast. And they’re working behind closed doors, behind our backs. They say we may not know the results of their confab perhaps for weeks.

But if we don’t act now, we who are footing the bill will be left holding the bag. We’ve got to prevent that pronto. Robert Reich has recently shown us how.

In a mailing from Kate Stayman-London, CREDO Action [act@credoaction.com] he lays out 5 guidelines and an ultimatum for Pelosi and Reid to demand. First the guidelines:
1. If the taxpayers are shouldering the risk, the taxpayers should reap any eventual benefits. We accomplish this by giving the government an equity stake in every company we bail out proportionate to the amount we give them.
2. If we’re paying (more than) our fair share, the CEOs and executives should have to, too. All of the fat cats who got us into this mess should relinquish their stock options and salaries until they start showing us, their investors, that they can once again be profitable. Future salaries should be linked to profitability.
3. No more campaign contributions from Wall Street executives and PACs. Taxpayer dollars should be used to get our nation out of a crisis. They cannot be used to fund giant, powerful lobby operations that will be used to strong arm Congress into making bad policy.
4. Better regulations start right now. Wall Street can’t expect to take thousands of dollars out of your paycheck without agreeing to increased transparency and more stringent oversight — the kind that might have helped avoid this mess to begin with.
5. Bankruptcy judges get broader leeway to help homeowners. Why should we lose our homes so the CEOs can keep theirs?

And then the ultimatum
If Wall Street doesn’t like these conditions, then it is welcome to find private investors to help it out of this debacle. But if the American people are going to take this hit, then we must have a say in the terms of the deal — even if we don’t have an army of high-paid lobbyists at our disposal like they do.

Reich is correct, of course. But even his recommendations, as sound as they are, don’t go nearly far enough. In effect they recommend that the monitors watching each gambling table from up there in the ceiling booths wake up and start doing their job. What ever happened to the Sherman Anti-Trust Act?

But even in Reich’s vision, the economy still remains a casino, though better monitored and regulated. He overlooks the fact that the globalized economy based on competition and risk-taking is a relic of the past — fundamentally unviable.

Peak oil and global warming are seeing to that. Goodbye corporate globalization. There is no alternative to consuming closer to home. And for that the economy must be fundamentally rethought and restructured. Untargeted economic growth (in Bush I’s terms: “Computer chips or potato chips; what’s the difference?”) is no longer acceptable. But that’s another story.

Phone Pelosi and Reid today. Tell them to make the Wallstreet losers play by the rules.

Mike Rivage-Seul teaches at Berea College where he has taught for more than 30 years. He is the director of Berea’s Peace and Social Justice Program. He may be reached by phone at (859) 986-1361 (H) or at (859) 985-3741 (W). His e-mail address is mike_rivage-seul@berea.edu

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

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.

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 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 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), and the market has priced that electric storage capacity at $2000. So batteries being too expensive is fiction. Simply crank up to mass production specifically designed for cars and the price is 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 it 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 and operated 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 ap-prentice home builders, and rapidly expand the home building project.

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, the 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 distri-bution systems and repair systems and provide wages which becomes the buying power 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. Commercial farms, equipment, and the food produced have value and, as it is locally produced, 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 indus-tries 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 this book 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 trans-ferred to those imperial centers via unequal pay for equally-productive labor. 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 protected against claims by international creditors.

Collecting the rental values of nature’s wealth as per Henry George’s property rights (chapters one through five) prevents capitalized monopoly values, provides development funds, and protects the en-tire nation from having those values attached to repay debts.

Henry George’s principles of society collecting socially created rental values 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 values are forever kept in trust for a nation’s citizens.

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.

Not only would the youth become well educated, so would many older citizens. WiFi wiring those emerging nations 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.

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 and support industries cheaply is an example but only a start.

With technology and markets historically monopolized (this may be changing fast, study our pages), high technology industrializing is more problematic. 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 in-dustries will require trading alliances or full federations between weak nations, a step to-ward 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 to-gether, 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

COMMON SENSE AND SURVIVAL

The graph line of the global population explosion now goes upward almost vertically. The graph line of reserves of resources that fund that explosion falls precipitously. The point at which population crosses the food production line is the point of the beginning of the coming mass die-off of human population.
Since Babylon, the type of human culture that we live in has featured an emperor or surrogate who is surrounded by a handful of wealthy militarist/financiers. These people own and rule the realm. This class has historically gained their power and wealth by feeding off the people and by growth/conquest. This class has always urged growth as the means to increase their power and wealth. There were always new fertile lands to conquer and peoples to enslave. The configuration of the culture of empire which we call civilization, has not changed in six thousand years. Today in the U.S.A. less than one per cent of the population has more than three quarters of the wealth. Certainly they have enough wealth to buy and run the government and have a land ownership pattern that rivals the land barons of Guatamala.
This culture has increased its population by running a net deficit of the fertility of the earth. The soils, forests, fish stocks, pure water and over-grazed and desertified landscapes have been sacrificed to the god of growth. Now there are no more fertile lands to conquer and exploit, but the population continues to grow and the fossil fuel production reaches peak and begins to decline. The culture that has no vision of the future and no purpose other than material consumption hits the wall.
In the past few centuries the elites have gained a new method of growth/conquest. The lever of Science/technology has been used to further their power. Through the creation of industrialism, we now live in a manufactured environment. We civilized people have created machines and been conditioned by the machine world until we begin to act in a machine-like manner. Powerless, we are thoroughly dependent upon the machine for our food and shelter survival. Alienated and atomized, we move around trying to fit into a niche in order to obtain survival. The pressure to move to a job breaks nuclear families apart and certainly precludes the existence of extended families. We have become interchangeable ciphers in the industrial machine. We have been culturally conditioned from birth to have great regard for non-living manufactured items and have been alienated from living things. We have more regard for the dead wood of a church than for a living forest.
Today, when we look at the numbers and look back at those millions of acres of exhausted and eroded soils, common sense tells us that this is the end. The Patriarchs of empire have committed us to a fundamental biological error. Any organism that wantonly kills that which feeds it will not endure very long. The culture of empire does not have a political problem; it has a biological problem. It lives in a bubble of self-created definitions and has a dysfunctional relationship with the life of the earth. One might say that if the humans can’t keep the planet alive, they certainly can’t live here.
For several million years our successful ancestors maintained adaptation to the ecological energy flows of the earth. Now, humans have become so biologically maladapted that we are in the third mass species die-off, the last one being the dinosaurs.
It’s just common sense that we throw out the whole of the culture of civilization. If even a small part of the human species is to endure, we must return to foundational principles.
The millenniums-old project of the imperial elites to control every thing in front of them and indeed, wishfully, the universe, has failed.

THE SHIFT

The human species is seriously out of balance with the natural world. The obvious answer to this is for the species to regain balance with the natural world. Simple common sense morality would say that first we need a society that agrees that each of us is alive and not a bio-robot and that each of our lives have intrinsic value. We shift from a war/competition – death focus to a principle that all life has value. Life is the growth system. Consuming living ecologies in order to amass piles of baubles is ultimately not a growth system.
Common sense morality would say that we humans should aid the living earth and that the simple morality would be that we humans aid in the complete ecological restoration of the earth back to its climax condition. This is the least that we could do given the grievous damage that has occurred. Of course this is also the pathway toward our survival.
A modern human normally enters the world in an austere hospital, possibly experiencing birth trauma. The child is baby-sat by a TV and then later turned over to a mass education institution for further conditioning. After graduating they get to work in a cubicle until they retire and die.
In a culture in which the growth of life is the paramount focus, the pregnant mother would become a center of community energy. Recent scholarship has shown us how important it is for both mother and baby to receive soothing and comforting energies. Great community energy would also be focused on the children. Just like all the other species around us, the “growing” of children would be a central activity. In a Life culture we would assume that the society would be formed in such a way as to encourage every possible talent of each individual. As we symbolically move out of the patriarchal/intellectual to the feminine/feeling mode the social dialog changes. The successful growing of life of all kinds requires a feeling for it and some application of the intellect. We would begin to follow perceptions and conclusions brought to us by our feelings rather than conclusions derived solely from intellection.

HUMANS ON THE CUTTING EDGE

It’s just common sense. If humans want to live on this planet they will have to restore the life of the earth. This seems like a tall order but the imminent death of billions is also a large event.
Answers have come bubbling up out of our mass intuition. For decades skills have been building in the practice of Permaculture so that seed communities can restore ecosystems, build soil fertility and produce more food per acre than the industrial system. Hand-made houses with solar advantages built from local materials are scattered around the planet. There are examples of hand-made houses with solar advantages that can heat and cool themselves without outside energy. The world-wide move to ecovillages is well under way with Russia alone having now over eight hundred.
Bill Mollison, one of the co-originators of Permaculture says that, “Without permanent agriculture there is no possibility of a stable social order.” The intuitively forming ideal is extended families occupying their own private permaculture design with a number of these families occupying a watershed. A number of watersheds constitute a bioregion. This is a natural social/political framework in which the needs of the earth are re-presented in human society because the humans are advocating for the life and gaining survival from that life. We might call this biological democracy.
Human/earth centered, rather than object centered, this new movement promises to become the next human culture. Human social institutions tend to form around food survival systems and be resonant with the morals and purpose of those different activities to gain food; we would expect the new culture to do the same. When some or all of the seed communities make it through the apocalypse, they will be the ancestors.
Many flail about trying to save the dying beast of empire by recycling their tin cans or inventing free energy machines but it is just common sense that if we want to aid the life of our great, great grandchildren we will ignore the dying beast and put our living energies into the new way of life.

By Wm. H. Kőtke, author of the underground classic book: THE FINAL EMPIRE: The Collapse of Civilization and the Seed of the Future which can be viewed at: http://www.thefinalempirebook.com. and Garden Planet: The Present Phase Change of the Human Species. seen at: www.gardenplanetbook.com . Telephone orders at 1-888-280-7715 or at bookstores everywhere.

.

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 gave them access to massive sums of low-interest money looking for 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 so far has poured $1.2 trillion into banks and other financial institutions (including other central banks) to stem their collapse and the financial markets are still not fully liquid.

Each knows the various ways of being leveraged beyond the rules of prudent banking so they will not loan to each other. Realizing the new rules will force them to reduce their leverage (meaning reduce their debt to equity ratiios), that $1.2 trillion is being kept in reserve to pay down their debts and keep them within the parameters of prudent banking as demanded by those new rules.

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 books look worse faster than money can be poured at them. At this point, the two FMs were in crisis (over $540 billion in subprime and Alt A loans or guarantees and prime loan walkaways have not started yet) and an emergency appropriation by Congress expanded the money creation authority of the Federal Reserve another $800 billion, primarily to protect those two home mortgage lenders for whom they now accepted full responsibilty.

The soothing words of $25 billion being available to shore up the two FMs and even that may not be needed fooled few people. Much, if not most, of that $800 billion is available to fully fund or nationalize those two institutions which fund or guarantee half the nation’s mortgages.

There are those who think the Fed is whistling in the dark. Lets do the math. The housing rescue bill just passed, July 30, 2008, is intended to protect the $5.2 trillion in mortgages of the two FMs and which are now guaranteed by the government. The value collapse of the remaining $7 trillion in mortgages is supposedly protected by the $1.2 trillion poured at the banking system we addressed first.

Since most that $2 trillion authorized by Congress is to replenish the coffers of financial institutions and only 400,000 of an expected 3 to 4 million facing foreclosure expected to have their loans lowered to reflect current values, it would appear 3.5 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 and they grind up (waste) ever more wealth in the process.

Instead of pouring money at the ethereal world of high finance, it should have been pointed towards those 2 million 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 pointed 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.

Welcome! We have decided to try and give blogging a go, so that we can better communicate ideas in a two-way fashion.

We hope that over time, we will have posts from numerous members and partners of the Institute.

At the same time as introducing the blog, we have redesigned the entire web site, so have a look at the home page and let us know what you think!

(If you have linked to us, we have tried our best to make old links forward correctly to their corresponding new location in our new system. If you find any links that are broken, please do let us know.)