Austerity or Communism

by Glen Wallace

If we don't transform into more of a resource based economy in the form of a libertarian communist, socialist system, we will inevitably, gradually, slump into a global recession of austerity where the masses will be spending the bulk of their monetary funds in paying off debts to the rentier class. 

People are constantly working for free.  In fact, it could be argued that the new internet economy is largely built on the backs of individuals gladly toiling without remuneration.  It is through the efforts of the so-called users of Facebook with their millions of updates from millions of unremunerated man-hours of labor writing status update posts and uploading photos and videos that has drawn visitors to view the ads that generate the ad revenue that has made Zuckerberg one of the wealthiest individuals on the planet.  It is also difficult to calculate the massive amount of value added to Amazon through all the in depth product reviews provided by the site visitors -- also without remuneration.  Many of the top rated product reviews on Amazon read like something a professional writer might post as a magazine article.  But I don't think those reviewers are secretly professional reviewers, rather, I think they really enjoy the ideal of sharing their insights and helping their fellow humans.  I have written a couple of in depth product reviews myself without any remuneration just because I wanted to help other consumers. 

We need  to look into how we can build an economy that harnesses that innate desire to create and help the world.  The collectivism could be used to pool the resources necessary for the makers of stuff to make and invent. 

Hoarding for the purposes of financial gain and hedging could become a thing of the past.  There are whole warehouses around the world used for the sole purpose of storing copper in pallet sized sheets that are stacked on pallets.  The copper is stored as financial investment in the form of physical copper -- it is treated as investment just like many people invest in gold or silver by owning physical gold or silver.  I'm not necessarily disparaging the practice of hoarding metals, precious or otherwise, on the contrary, doing so is very understandable.  In the current world of economics there is all sorts of volatility that could threaten the value of traditional national currencies.  Ownership of metals can provide a hedge against such volatility.  The problem is that our current global economic model creates a demand for the hoarding of natural resources.  In a resource based economy, those resources, like copper, could be put to good uses instead of sitting in some remote warehouse.  We need an economy where there is no demand to hoard the supply.

Societal economic planning decision making protocol

by Glen Wallace

I would categorize a decision making tree, regarding economic systems, into three main parts.  Each part should be addressed in order, however, there may be some overlap between each adjoining category.

The three categories or phases to be addressed in order are:

1.) The Ethical Question -- Is the plan ethical?
2.) The Utilitarian Question -- Will the plan work if implemented?
3.) Political Feasibility -- Can the public & politicians be convinced to go along with  the plan?

The first category that needs to be addressed is the ethical question -- this is where we ask if enacting a specific plan is ethically acceptable for everyone impacted by the plan.  As an example of an ethically unacceptable plan or protocol, I would refer to the instance I remember reading about some 20 years or so ago about the Chinese government executing a number of business managers due to poor performance (I'm hoping they don't perform those kind of executions anymore but I don't know).
 
This brings us to the second category, the utility or utilitarian question.  The utilitarian question asks whether the plan to be implemented will be effective in terms of improving the prosperity of the citizens of the nation or state that they will reside in.  But it is important that we don't skip the first category before addressing the second.  It doesn't matter how much executing or threatening to execute the business managers due to poor business performance may or may not improve the overall prosperity of the rest of the nation (I highly doubt it would help, more likely to hurt the economy) the executions are ethically unacceptable and therefore should never have gotten past the ethical consideration phase and entered into the utilitarian consideration phase. 

If the ethical category had been addressed in the first place, as it should have been, then the planning stage for the Chinese execution plan wouldn't even have gotten to the second, utilitarian addressing stage and would have instead been tossed into the planning waste bin where it belongs early on.  But if a plan does pass the ethical test, then we go on to ask if the plan will work -- the utilitarian question stage.

The third stage to address is the political feasibility addressing stage.  In this stage we look at how or if we can go about convincing the electorate and their representatives to ascend to a given plan.

But once again it is important that we don't just jump to this stage before addressing the first two stages.  That is because once the first two questions have been answered to a satisfactory extent that they pass muster, then it will be that much easier to convince the constituents and politicians of the benevolence of the plan.  For it is the answers to the first two categories of questions where the arguments can be found that will convince the populace and politicians to accept the plan.

I was watching on the local public television channel a presentation by Sheila Bair, former Chair of the FDIC.  And following her presentation was a Q&A session.  One of the questions she was asked was whether or not the Glass-Steagall act should be reinstated.  Now I'm going by memory, but I believe her answer was something to the extent that she didn't know if it was politically feasible given the current political environment.  I would argue that her answer then skipped the first two categorical questions that should have been answered first regarding Glass-Steagall before addressing the political feasibility question. 

There is nothing overtly unethical about the reinstating the Glass-Steagall act -- first categorical test passed.  I don't think a whole lot of attention needs to be paid here towards arguing for the ethical acceptability of reenacting Glass-Steagall.  I don't believe, for instance, that many people would contend that bankers have some inalienable right to engage in both traditional banking and speculative investing within the same company.  I believe the strongest case is for a moral imperative that those two areas be handled by separate financial institutions as was required by Glass-Steagall.  Without such separation, the systemic risk to the economic infrastructure of the nation is put at risk by the speculative bets of traders.  We have come to a point where the traditional banking system of savings and lending is regarded as a necessary utility.  When the ability of a bank to lend to businesses or meet the withdrawal requests of savers is undermined by the speculative division of the bank that made some bad bets, the entire economic infrastructure as a necessary utility can be put at risk.  Thus, the so-called 'too big to fail' that really mean 'too important to be allowed to fail' protections may be required that call on public resources to bail out the failing bank. 

For the second category, in addressing the utility question we need to look at the possibility that repealing Glass-Steagall created a financial environment that either directly led to the great recession or helped bring it about or made it that much worse.  If a case can be made linking the repeal causally to the economic meltdown and great recession and that causal link were presented to the public then the third step of passing the political feasibility phase, regarding the reenacting of Glass-Steagall, would be greatly enhanced.  Nobody is going to want another financial crisis; especially since we haven't even recovered fully from this most recent great recession. If the public can be convinced that reenacting Glass-Steagall will have the utilitarian value of preventing another financial crisis like we saw in 2008, then passing political feasibility will be that much easier. 

The Group Ownership of America

The Group Ownership of America

by Glen Wallace

by Glen Wallace

After the resignation of US Health and Human Services secretary Tom Price, once again I’m hearing people on the television tell how he misused ‘taxpayer dollars’.  I’ve written about this before, but apparently the message didn’t get around that well.  So once again I repeat, once the government has received the dollars paid by a taxpayer, those dollars no longer belong to the taxpayer.  It seems like a simple and clear enough concept, but the widespread misuse of the term ‘taxpayer’ continues.  So, if the money spent by the government does not belong to the taxpayer at the point of transaction between someone in the government spending some of that money, why do so many politicians, writers and news reporters insist on continuing to imply that the taxpayer’s have ownership of those dollars spent?  Some better terms to use would be ‘public dollars’ or the ‘people’s funds’ or the ‘citizen’s dollars’.

The payment of income taxes is just one form of revenue that the federal government relies upon to pay its expenses.  To my knowledge, however, there is no quid pro quo legal relationship between paying of those taxes and having that revenue be spent either in the interests of the taxpayer or at the direction of the taxpayer.  The taxpayer has no special standing compared with a citizen who, whether due to a tax loophole or deduction or low income, pays no income taxes.

I sometimes wonder if the misuse of the term ‘taxpayer’ is a deliberate attempt to maintain the illusion of a contractual understanding between paying taxes and how those revenue dollars are spent.  Maintaining the illusion could benefit those in power who are able to avoid contributing more to the government’s revenue than they currently are.  Once the common citizen realizes that income tax is merely one of many potential sources of revenue and not a payment for services for themselves or for the country, they may start to creatively look for those other potential sources of revenue — especially revenue derived from taxing wealthy individuals, corporations and institutions.  After all, if the ordinary workaday citizen starts thinking that maybe this country could be run with little or no money coming from the hourly and salaried worker, then they might start searching in earnest for those other revenue sources.

And those other potential sources of revenue are many:  tariffs are one — we could really leverage our trade deficit by increasing tariffs.  There would be a double benefit since not only would we be getting all that new revenue, but an incentive would also be created to bring back more manufacturing and the associated jobs to America — since a company that makes stuff here wouldn’t have to pay the tariff.  A high frequency trading machine tax could also be implemented that would directly tax Wall Street while leaving Main Street largely alone.

Additionally, a federal asset tax on billionaire individuals and corporations could be implemented that would act much like local property taxes, only this new property tax on billionaires would apply to all their assets, not just real estate.

And I think there are many more potential revenue sources outside of ordinary income tax, but for now I’ll list just one more:  While I’m a strong proponent of conserving our nation’s natural lands in as close to a natural state as possible and protect those lands from exploitation for natural resources, but if all those efforts at conservation on federally owned lands fails and the decision to exploit a parcel of land has been made, then I think we should at least act to maximize the fiduciary benefit to the country of that resource extraction on those lands.  But I think there has been and continues to be a long history of acting in a fiscally irresponsible manner when it comes to deriving revenue from natural resource extraction by privately owned companies on federally owned lands.  That needs to stop.

We, the citizens of this country should look at ourselves as an ownership group of a vast real estate empire.  As owners we have to decide on three main categories of use for that land: recreation, conservation, and income revenue.  Of course there can be a lot of overlap between those three categories, but we should always strive to do the best job we can in whatever direction for land use we decide on.

Given that we have representatives in Congress that are supposed to be managing the affairs of our ownership group, we should hold them responsible when they mishandle our real estate portfolio.  While those representatives will maybe get a passing grade when it comes to the first two; conservation and recreation, I think I’ll have to give a failing grade when it comes to income revenue when the land we own is primarily used for that purpose.  From my understanding, when a lumber company or a mining company wants to extract a natural resource from federal lands all they have to do is bid on the mineral rights or timber rights for that land in a no reserve auction, and the winning bidder gets to extract all they want and keep the entire bounty from that extraction, no matter how low the bid is.  There is a reason private landowners do not use a similar process when they decide to open their lands for resource extraction: it is a fiscally irresponsible way to do things.  We the people should be using the same methods to derive income from natural resource extractions that any private landowner would use who is acting in their own fiduciary best interest.

Edit to add:  After completing the above essay I started to think about Puerto Rico and all the hardships they are facing in the aftermath of hurricanes.  Well, we should see ownership as not just in the business sense of the term, but also in the responsibility sense of the term.  That is, we as a country need to take ownership of the responsibility to take care of those citizens in our country when they are in dire need.  Puerto Ricans are US citizens living in a territory owned by the United States.  We as a country need to take responsibility for doing what it takes to help our fellow citizens out whether they are on an island in the Atlantic or our next door neighbors.  There are currently just over 2 million combined active and reserve military personnel in the United States armed forces.  The last I heard there have been only about 7 thousand US troops sent to aid Puerto Rico.  I realize it might not be practical to send a large proportion of those 2 million members to Puerto Rico and the US Virgin Islands, but I’m confident we could, without that much difficulty, send over ten times the number of troops currently there.  It seems like conditions there are extreme enough to warrant a large scale deployment to rescue, rebuild and provide food, water, generators and medicine and medical care to our fellow citizens over there in need.

Medicare for All for American Greatness

by Glen Wallace

To the editor:

In the article announcing Angie Craig's plan to run for Congress in 2018, Jason Lewis was quoted as saying: "One candidate already wants to threaten Medicare solvency with a government-run single payer plan...", presumably in reference to DFL Congressional candidate, Jeff Erdmann, and his support for Medicare for All.  I find Lewis's stance to be rather negative and pessimistic.  

I'm sure if Erdmann is elected to the House, he will work with the other members of Congress to find ways to fund Medicare to insure its solvency.  America's greatness is due to a history of big thinkers who had a can-do attitude and envisioned the wonderful possibilities that could be achieved through cooperation, perseverance and a positive attitude.  For instance, it was that positive attitude that Republican President Eisenhower had when he supported building the interstate freeway system -- a government built system that has provided the freedom for Americans to hop on the freeway, without charge, and enjoy a safer, more streamlined route between locations all around the country.  

Imagine what might have happened if Eisenhower had Jason Lewis's negativity and pessimism? Surely then Eisenhower would have then nixed the freeway plan after concluded that building such a highway system would lead to insolvency in whatever government department that took it on.  But fortunately, instead, we had an optimistic visionary in Eisenhower who made possible the single-payer federal government owned and operated interstate highway system that we largely take for granted today.
  
But still, unfortunately, healthcare coverage in America seems to be one area that got overlooked by the visionaries of yesteryear.  As a result we are left with the costly mess that is the private insurance based system -- a system that has been a drain on businesses funding employee coverage and a drain on families struggling to meet monthly dues and who sometimes find themselves mired in a struggle to get insurance companies to cover pharmaceuticals and needed surgeries.

But there is a way out of this mess and it's called Medicare for All.  To get there, all we need is some old-fashioned American can-do spirit.

Debt-Free Fiat to pay for government expenses

The following is my comment regarding this article

by Glen Wallace

A possible solution not mentioned is to begin using the US Treasury as a significant source of new money to fund federal government projects and operations. Currently, federal government and governing costs are paid for by either revenue, mostly tax revenue, or by debt revenue, mostly through the sale of US treasury bonds. However, I'm talking about the third option that very few others are even publicly considering; debt-free fiat dollars computer generated by the US Treasury to pay for much of the US budget that is not debt service. Such large pieces of the budget pie as SNAP (food stamps), defense, medicare, medicaid, highways and a host of earmarks could all be paid for without incurring any debt or dipping into tax revenue.

I believe the generation of debt-free fiat is the ideal situation under circumstances such as the ones we face now. Presumably, as the Fed unwinds all that debt it paid for with new QE dollars, it will be receiving back those QE dollars and proceed to 'shred' most of it, thereby reducing the money supply. Such a huge reduction in the money supply could have a very negative effect on the overall economy. The solution then is to balance out the unwinding of the debt-based quantitative easing rounds with debt-free quantitative easing by way of US Government spending. And unlike the Federal Reserve's QE that directed funds largely at Wall Street, my easing suggestion would be one that would flush mainstreet with a gusher of currency.

And I think concerns about excessive inflation are unwarranted given that the debt-free generated fiat would match with real goods and services being paid for. Excess inflation occurs when the money supply grows much faster than the supply of goods and services paid for with the money in circulation. However, when the new debt-free fiat is used to pay for goods and services at competitive market prices, the ratio between the goods and services and the dollars to pay for them remains largely the same.

Meanwhile, the debt service on all those mountains of public debt would be much easier to service using dollars obtained from usual means of revenue -- but now hopefully without having to again resort to taking on even more public debt.

Why hasn't Congresswoman Betty McCollum yet cosponsored H.R. 676 Medicare for all single payer act?

I just discovered that Democratic Party congresswoman Betty McCollum has not yet signed on as a co-sponsor of  H.R. 676 Medicare for All bill that has already garnered 112 cosponsors.  Here is the official listing of the co-sponsors.  I thought about this after watching a Jimmy Dore youtube video where he interviews a guy who is primarying against Nancy Pelosi -- Pelosi also not yet a cosponsor and has said words to the effect that she is against single payer.  This makes me wonder if maybe I should primary against McCollum, even though she doesn't represent my residential district.  That would be a little ironic because Represents congressman Jason Lewis 'represents' my district, but resides in McCollum's district.

Democratic constituents, in these congressional districts that lean so heavily Democratic that the Dem candidate is all but guaranteed to get elected, should see the primaries as brass ring opportunities to get the most progressive candidate possible.  By that I mean there isn’t much of a need in those districts for a candidate to compromise in order to acquire the moderate fence sitters that might get put off by the far left progressive positions of a candidate.  But instead, it seems more so that the opposite has occurred, whereby the constituents of perennial House Democrats settle for progressive mediocrity in electing very conventional neoliberal, corporate friendly candidates.

Michael Hudson, how do we extricate the economic parasites from the main street host?

Comment I posted following the above youtube video speech by economist Michael Hudson.

by Glen Wallace

I still have some questions.  I guess my main question, from which all my other questions or concerns regarding Michel Hudson's philosophy, revolves around how to safely extricate the parasitic elements of FIRE (finance, insurance and real estate) from the main street host.  I  say, the parasitic elements of FIRE, because I think it oversimplifies things to imply that all of FIRE is a parasitic malevolent force on society.  But reading and listening to Mr. Hudson, it isn't entirely clear to me whether he thinks all of FIRE is parasitic or for what aspects are so, how do we go about the extrication process safely.  It would seem to me that we living in a much more complicated situation insofar the parasite and the host are sharing the same 'blood supply', so to speak.  Therefore, just yanking off the parasite could be very hazardous to the health of the host.  While the top 5 percent may own the bulk of stock equities, I think a lot more than 5 percent of the population own a significant amount of stocks, usually through their 401k's or 403b's and IRA's.  So any actions that has knock-on effect of crashing the stock market and a lengthy trough could be financially devastating to much of the remaining middle class population.  While maybe the markets and the economy could have let Citibank fall, I'm not so sure about AIG.  While lending may be currently tight, correct me if I'm wrong, but I believe there is still a great deal of small business lending going on with banks and credit unions providing loans for businesses very frequently.   However, if that lending were to really dry up completely as we were warned could have happened if not for the infusion of stimulus cash into the economy soon after the fall of Lehman Brothers, then wouldn't we be facing an economic crisis on a scale severe enough to lead to a civil emergency similar to a natural disaster?

Further complicating matters, isn't that there is a legitimate element to each area of FIRE.  How are we going to, in any parasite extraction process, separate any legitimate actors from the malevolent ones?  I'm not saying it can't be done, but we need to make sure we aren't throwing the baby out with the bath water, so to speak.  To take an analogy from the movies that I think has some realistic relevance to main street finance -- let's make sure we don't take measures that bring down the Bailey's Savings and Loan of the world while trying to go after the Potter's empire of the world, from the movie 'It's a Wonderful Life'.  And to take examples not from the movies but straight from today's economic realities -- in terms of a mass discharging of debt, that sounds nice for the students facing mounting student loans but it doesn't sound so nice for the current and future retirees expecting municipalities and corporations to meet their highly underfunded pension debt obligations.

I don't mean to be a naysayer but we need to come up with a plan where we have covered all the bases so that we can not only answer the tough questions, but also to get to where we are to trying to go.   Indeed, I'm concerned that if we were to implement a plan, for instance, that did crash the markets and dry up small business loans, then the parasitic malevolent elements would sweep in like the Potter character from the movie previously mentioned, and say to the effect "see, you were wrong all along, so from now on let me do the thinking and planning while I buy up all of your land and shares for pennies on the dollar."

I have all sorts of ideas myself for how to go about the parasite extraction process.  I think Bernie Sanders has some good ideas that are a good start, but I think we can safely be a lot more aggressive with progressive reforms than even he is suggesting.  For instance, I haven't heard Sanders even mention what I think we need to delve into and that is Federal asset taxes on corporations and the top one tenth of one percent of individuals.  That, and we need to access revenue from other novel sources as well such as a Wall Street high frequency trading machine transaction tax.  We can also get revenue from increased Tariffs and Excise taxes.  We should also be better leveraging revenue when natural resources are extracted from federal lands.  Personally I would rather Federal lands be preserved as much as possible in their natural state, but if it is already decided to sell some of the land's resources, we might as well do so in a financially responsible manner.  So, instead of selling off the rights to all the timber in a tract of Federal land in a no-reserve auction, sell the timber for the going rate per board foot just as a private landowner would.  Additionally, the US Treasury could bypass the private Federal Reserve, and increase the money supply by minting more coins in larger denominations.  Then all this new revenue and money could be used towards instituting an FDR type of civilian conservation corp like program to rebuild our nations infrastructure.  Additionally we will be needing a lot of revenue if we are to have any chance of making up for the looming pension shortfalls that, if not remedied, will be hard on not only the pensioners, but also the overall economy due to the resultant lowering of aggregate demand from retirees have much less dollars to spend in their pockets.  

Wealth Redistribution to Lift All Boats

The dwindling middle class indicates that the only boats rising are yachts sitting in the torpid pools of wealth amassed by the capitalist sharks. Meanwhile, the middle class tributaries are running bone dry, leaving the middle class row boats sitting on dust. Therefore, the only logical solution is to install pumps in the form of asset taxes into those stagnant wealth pools to insure that the wealth gets rerouted and redistributed back into those tributaries. Trickle down economics has been proven false time and again. However, getting money into the hands of those who will in turn put those funds back into circulation by spending it, the middle class, has been shown to have a tremendous positive knock-on effect throughout the overall economy. But to keep the economy booming you need to keep those tax pumps going to insure money doesn't start stagnating again and rotting in those torpid wealth pools.

Everything is pointing to Hayek being completely wrong -- in fact he had everything backwards. Instead of a free-market being the road to freedom, it turns out that the term 'free-markets' is just a rebranding of the term 'laissez faire'. And laissez faire has always been and always will be the direct route to serfdom -- and with the struggling middle class we are seeing that first hand in the form of the handywork of Hayek's intellectual descendants, the Chicago School of economics. And despite the clear evidence that the Chicago school's laissez faire or freemarket methods of hands-off through repeal of Glass-Steagall and lack of oversight and control of the derivatives market lead directly to the great recession, there has been little corresponding acknowledgment or recognition of the evident refutation of the Chicago School's economic paradigm.

We can get the middle class back on its feet again, but we need judicious government oversight and regulation along with a good amount of wealth redistribution. One excellent means of redistributing the wealth would be through programs similar to FDR's programs involving the Civilian Conservation Corp. A massive government program to repair, rebuild and reinforce our nations infrastructure would go a long ways towards getting money back into the economy and refresh and enhance the conduits of commerce. It would be a win win for everyone, including the much more heavily taxed very wealthy who didn't even know what to do with all that they had, but with such a program, could be proud that their tax dollars were put to such good use; rebuilding a great America.

The Need for a Reserve Fund to Fund Underfunded Pensions

by Glen Wallace


Here is another one of my responses to another essay by John Mauldin about the looming pension crisis:

This is something that the federal government should be building a lock box rainy day reserve fund for.  We should be looking under every revenue sofa cushion for every extra potential revenue source and raising corporate tax rates and taxes on the wealthy -- those best able to absorb the increased tax rates.  There are all sorts of taxes that could be imposed on Wall Street such as a high frequency trading tax and special capital gains tax that would only be applied to stock gains realized by the wealthy one percent.

While some may claim that the looming pension crisis is not their problem, it may well become everyone's problem insofar as we are all tied to the overall economy that will be negatively effected when the crisis hits.  Part of the problem is that, as John touched on in his piece, if all these retirees have their pensions reduced or eliminated altogether, all those retirees will have less money in their pockets to spend on purchases -- a reduction in aggregate demand.

Additionally, don't forget that the last economic crisis almost sunk the entire economy.  Maybe the pension crisis, when it hits, will not be something that, like the last crisis, that we can muddle through and dig ourselves out of.  The pensions may be too big to bail.  And an economic disaster that the economists warned could have happened in 2008, if it were too happen, could lead to a physical disaster on the scale of a natural disaster.  All the goods and services we take for granted in a developed economy could be in jeopardy in an economic crisis because all the providers of those goods and services, and in turn their vendors, depend on the ability raise funds through the ability to borrow money.  If a pension crisis, perhaps combined with another crisis such as mass student loan default, a complete stalling of the economy could lead to an inability of the chain of suppliers of those goods and services, including groceries, to reach the everyday consumer.  But instead of engaging in massive financial reform and the building of a massive rainy day bailout fund, we've only seen some mild patchwork repairs and bracing that everyone can only hope, perhaps unrealistically, will safeguard us from another crisis like we saw in 2008.  People don't seem to realize how disastrous an economic disaster could be and how it could lead to a civil emergency or how close we came to that happening in '08.  

   We should be seeing any potential economic disaster as something that we need to invest big dollars in too defend against just as we invest big dollars in the military for defense -- whether we need to spend so much for military for defense is an open debate, but my point is that the public generally agrees that spending large sums on defense is considered worth while and so they should be considering the possibility that investing in defense against economic calamity is worth while as well.  Maybe we should be shunting towards economic defense reserve funds some of that massive sum currently spent on the military.

Venus Project oversimplifying scarcity and human behavior

by Glen Wallace

I think Jacque Fresco of the Venus Project is oversimplifying the principle of scarcity and how that relates to how humans value any given good or services.  People don't, wont and wouldn't act in a way that would fit in so neatly into his idea of how people respond to an abundance of any material good.  When some thing that is needed or wanted by the public becomes abundant, there is always some subset of the population that wants that abundant thing in an improved form that is not so abundant.  People often are not satisfied with some thing being merely adequate in a utilitarian sense.  It varies with the product as to how satisfied the general population of consumers tends to be with some product being merely adequate to getting a job done.

It is not difficult to find examples for demonstrating how the principle of dissatisfaction with adequate works and comes into play in everyday consumerist life.  In fact, the difficult part is in finding examples of products where satisfaction with adequate is nearly universal.  Instead, just look at any group of consumers in any category of shopping and you discover a plethora of varying desires and ideas for what they are looking for in a product beyond merely getting the job done.  

For a first example, think of any of the house shopping and house remodeling reality TV shows.  If you watch one of those shows, it wont take long to find either the potential buyer or seller or often both complaining about how a perfectly functional kitchen is outdated.  I watch such shows and I wonder to myself what are they complaining about as the kitchen usually looks perfectly fine to me.   And usually such kitchens are indeed perfectly functional but merely the style is no longer in vogue.  So in they come with all their drills, saws, pry bars and hammers and start ripping the thing apart, expending all sorts of human labor and money and time to get right back where they started from functional point of view.  

And even for a product where a large majority of the population is satisfied with merely getting the job done, there usually is going to be some subset of connoisseurs that are unsatisfied with adequate and still want something special in the product.  An example there would be the ordinary CD player that has become so ubiquitous that you can find them built into the cheapest boom box and still sound pretty good.  Nonetheless, audiophiles insist that the sound of CD players can be significantly improved through circuitry and better DAC chips.  As a result a demand quickly emerged in the audio market sufficient for a great number of manufacturers building and selling boutique CD players for prices ranging from hundreds of dollars for a single unit to many thousands of dollars.  The demand for a product and a scarcity of the higher end product emerged despite a dearth of scarcity of the adequate, lower end product.  

But from my understanding of Jacque Fresco, he seems to be claiming that people wouldn't do in his vision of the ideal Venus Project world what people are indeed already are doing time and time again here in today's everyday world.   Even if something is not scarce, people will continue to desire that same something in a deluxe form that some of those people believe is a better form, but is scarce in that deluxe form.  All this demonstrates two of my main concerns with the Venus Project and the Zeitgeist movement -- First, there seems to be disconnect with the reality of everyday world and how people behave in this world and how they would behave in the worlds envisioned by those movements.  The people behind those movements seems to have become so fanciful in their ideas that they never seem to come up with a starting point in today's world where the first 'baby steps' are taken that would move society towards their utopia and what those first steps would and should be.  The second concern is with the possibility that people might be told, by the powers that be in a Venus Project that has come to fruition, what they, the citizens, want or should want in terms of products.  Would the Venus Project political powers make it illegal to buy and sell scarce, hand crafted objects? 

 OK, now were delving into the area of where it might sound like I'm supporting the ideas of Hayek in his book 'The Road to Serfdom' -- but I'm not, at least I am not a universal supporter of the so-called free market system of economics.   Indeed, I think a great deal of government intervention is needed to create an environment where smaller entrepreneurs are on a more even competitive plane with the larger corporations.   It is these smaller crafts people that improve the merely adequate product, that have a more difficult time absorbing many of the costs of doing business compared with the giant corporation.   So with government intervening to redistribute the wealth of the big business towards the small business, the freedom of both the budding entrepreneurs ability to bootstrap and start a small business and the shopping consumers ability to choose from a greater variety of products, is increased.  With Hayek's brand of laissez faire economics, the economies of scale present inherent advantages to the large conglomerates that lead to monopolies and trusts that decrease the choices of the consumer, the worker and the budding entrepreneur.  

Free markets can not exist but the label is a tool of manipulation

By Glen Wallace

Advocating for a free market is like advocating for a square circle -- an impossibility.  Markets operate much like a game, and just like a game needs rules that all the players are bound by for the game to work, so does a market require rules that players are bound by as well in order for that market to operate at all.  The terms 'bound' and 'free' are mutually exclusive terms. 

I've never heard of a free market advocate suggesting, for instance, abandoning the Universal Commercial Code (UCC) that most all businesses abide and are bound by.  Instead there is a general recognition that there needs to be some set of rules that everyone in the business community more or less agrees to bound by in order for the markets to run smoothly.  The UCC is just one example of the myriad of different types of rules, laws and contracts that the market is bound by, both within and without, that even the free market advocates would agree are entirely necessary for the markets to exist at all, let alone run smoothly.

The 'free market' just seems to be some vague pie in the sky variable ideal that people fit into all their fanciful capitalistic hopes and dreams.  The problem with vague goals is that some powerful forces can use them as a means to reach their own personal goals by leveraging the masses that struggle for their goals using as their goal what they think is the same goal as the ruling elite.  What the masses never realize, is that the goal of the ruling elite and the masses never was the same but rather the goal of the elite is at the expense of the masses.  But still the elite create this deliberately vague goal that they call a 'free market' and convince the masses that reaching this goal will lead to
everyone's hopes and dreams being realized.  And of course the elite will give the masses step by step instructions on how to reach that goal.  The instructions are given because the elite cannot reach their own goal without riding on the backs of the masses who mistakenly think not that they are carrying the load of the wealthy and powerful trying to get more wealthy and powerful, but rather that they are working to achieve their own goals that they have fitted into the label of 'free market.'

But it has never been the plebs that have designed the so called 'free market' but rather it is the bourgeois that have designed the market system to operate in their best interest at the expense of the proletariat that have carried on their backs the bourgeois to any given market system.

Inevitably for those who fail in any market they either will blame themselves or blame the markets for being not free enough and often then will just work harder to create a system that the winners who have already designed the current system say that needs to be done to create a 'truly free market.' But what the winners who design the market system just try to do is tweak the markets in whatever manner will allow them to squeeze out a little more profit because there is never enough profit for them and it is always a fun challenge for them to see how much more they can gain the system in their own advantage.

But the point is there is a vague goal created such that a great variety of goals in the minds of individuals can easily fit their own goal into the vague goal in the sky.  Now you have a great number of people chasing after the goal with one label and therefore everyone chasing that goal with the same label thinks that they are chasing after the same thing even though the goal of each individual in the chase varies widely.  The only question left then, is who is going to design the path to the goal with the same label.  It will of course be those already with power that design the primrose path that
everyone follows because they are convinced that is the one route to their seemingly shared goal.  Now, everyone with different goals in their minds effective pull the ropes that pull the bourgeois chariot down the primrose path by advocating for legislation that the proletariat  have become convinced will help them reach what they believe is the same shared destination but in reality is the route to a very exclusive destination for the ruling elite that in all likelihood each member of the middle and lower classes has already been excluded from reaching.     

In Spain workers now have to sacrifice their labor for the sake of the banksters

By Glen Wallace

The New York Times article For Spaniards, Having a Job No Longer Guarantees a Paycheck , seems to be describing a situation in Spain that is more dire than how it appears in the mainstream media here in the U.S.   Apparently there is a fairly widespread problem over there of people with jobs getting paid either very irregularly in small amounts or not at all.  Often the workers not getting a paycheck see few options since they think they will have even less chance of finding another job at all if they leave there current  employer.  But on the other hand if they try to hold their employers publicly accountable for the non or slow payment of wages, the workers are afraid that will hurt the business they work for so much that it will tip over into bankruptcy. 

I had no idea this was going on over there.  I imagine many will blame their plight on socialism.  I would tend to disagree and if anything lay the blame in the opposite direction on the capitalist bankers that encouraged and profited from the indebtedness that has lead to the current European crisis.

The economic systems that we all live under exist not because it grew out of nature or as some law of physics, but out of the decisions of fallible humans.  None of the people featured in the article had any goal or expectation of living lavish lifestyles off of the income they were assured of from their employment.  Rather they just wanted to live a simple modest life from the fruit of their hard work in their jobs.  But now even though they are working and many more in their country are willing and desirous to work and be productive, they are struggling just to keep a roof over their heads by keeping up with the mortgage payments.  Isn't that kind of a funny expression -- 'keep the roof over our heads' -- I mean, where is roof going?  Is it blowing away and you're trying to hold onto it?  Of course not, but economics is supposed to be fundamentally about the relationship between humans and the material world that makes up modern civilization.  Those of us who are satisfied with a modest standard of living should demand an economic system that supports a symbiotic relationship between our participation in that system and an adequate maintenance of its supportive economic structure.  The roof is not going anywhere,  it is the bank that is deciding that the people living underneath the roof must go and the law enforcement that is supposed to be advocates for the people show that in reality they are advocates for the banks when they use force or the threat of force to evict the people living underneath the roof.

 It doesn't have to be this way -- remember, the laws that govern our economic system are not laws of physics but are rather malleable rules created by humans.  One of the individuals featured in the story, who is owed $13,000 in back pay, is a woman working in a factory hand rolling paint onto tiles.  I wonder how many square feet of wall space in houses all those tiles she has painted could fill?  I ask that question because I wonder how much labor is really needed to support a smoothly running modern civilization where most citizens simply want to live a modest life with a modest roof over their heads.  What if we were to forget about the big banks and debt?  Could we create a system that functioned solely with the goal of first meeting the basic needs of food, shelter, water, sewage, heat, electricity as the top priority and look to how that goal can be met given the available resources of labor and land.  If, and only if the basic needs for modest living are met, then those that are especially ambitious can be allowed to pursue a few extra niceties and comforts of life - but only if doing so in no way depletes or takes away from society meeting the first priority of basic needs.   Instead, in our current bankcentric economic model, I'd be willing to bet that tile painter is, in effect, through no choice of her own, sacrificing her labor in order to make sure debt obligations are met that keep the banksters living in luxury.  What kind of economic system allows that sort of injustice?  Clearly a rotten one that needs to be tossed into the compost bin.  And from the lessons we have learned we can grow a new fruitful society nourished by the soil fertilized by the mistakes we now know to avoid.  

Socialism and Regimenarchies

 By Glen Wallace


Sure, socialism as it has been practiced may not be the answer but there are many different forms of political systems that can be referred to as socialist.  And I am not about to abandon a plan that looks and sounds good just because it might be labeled socialist.  As a matter of fact many of the socialist systems of the past might better be labeled oligarchies due to the special privileges granted to the government officials running those systems.  Although 'oligarchy' might not be appropriate since so many government officials tend to benefit from their positions in those so-called socialist regimes -- perhaps we need a new term here.  Well, the Latin word for government is 'regimen' so I'll call the political form where the government and some of its enforcement and intelligence employees becomes unwieldy and oppressive to the people it is supposed to support, a 'regimenarchy.'  So, wouldn't it at least be possible to create a socialist system with all its nice safety nets and useful and pleasant services that is not a regimenarchy?

Categories of Capitalism

By Glen Wallace

In the movie Wall Street the character Gordon Gekko makes a famous speech before shareholders where he states "greed, for a lack of a better word, is good." I would counter that 'greed' is neither necessarily good nor bad. Greed, rather, is simply a motivational tool that can, if allowed, motivate people to make money by taking advantage of workers and the environment. But greed can also motivate someone who has lost their job to start a new small business that provides a needed good or service, along with perhaps some jobs to provide or manufacture the goods, to the community. Therefore the correct approach to greed and capitalism is a pragmatic one. Greed and capitalism should be seen as a powerful team of horses that needs to be directed to aid society, but if not guided would run wild trampling people everywhere. Herein lies the fundamental flaw of the free market capitalists: they seem to be in some kind of fantasy land where they only imagine how capitalism can be beneficial to society and assume that it then is always beneficial if allowed to roam freely unfettered by regulation or laws imposed by the government. First they don't recognize the fact that where the capitalistic business has benefited society, that business has been carefully directed to so by intelligent people with benevolent intent. Therefore, it is not capitalism itself that is acting like some intelligent machine or robot looking for ways to help humanity, it is people that are directing the machine properly. But if the robot of business is being run without regard to humanity by its operators, anyone in the way of that robot better scramble away or hope for luck that the robot randomly veers away from your direction. The only way that we can insure that the robot of business is directed in a manner benefiting the community is to have a powerful government oversight imposing regulations that mandate that the business robot or the team of greed horses are directed in a manner that will benefit the community and not trample it. How else can we insure that the human designers and operators of the capitalistic business are driving their machine with benevolent intent? The free market capitalists, however, never bother looking at the manifold examples that refute the belief that unfettered capitalism is so great for the whole world. The free marketeers would rather live in their lala land where every business is this nice mom and pop operation that pays all their employees great wages, never dumps any toxic sludge out the back door, provides a product or service that the community greatly needs and would be facing hardship if the business never existed in their community. This brings me to my theory of the three basic forms of capitalism: 1) Crony 2) Parasitic 3) Symbiotic. The free marketeers in the fantasy land of their own minds prefer to imagine that if it were only allowed to roam free, then all businesses would be operating under the third form of capitalism, symbiotic. The symbiotic form is one that exists much like the mom and pop business example I described above where there exists a mutual benefit between the owner of the business and community where that business exists. The parasitic form of capitalism is where someone finds a way to drain money off of the flow of currency without putting anything back from where the money was drained. The best example of the parasitic capitalist brings us back to the start of this essay: Gordon Gekko. In the movie he gives the example of a painting he bought for X amount of dollars and could turn around and sell it for a much greater Y amount of dollars today. He didn't do anything to the painting -- he didn't improve it in any way. That is the goal in parasitic capitalism -- to take out from the flow of currency more than you put in. Any example of 'flipping' is an excellent example of parasitic capitalism. The term flipping is often used in the sale of houses where someone buys a house and immediately turns around and sells it for a profit without doing any improvements to the house. If that is the definition, buying something and without improving it in any way, sells it for more than what was payed for it, then most all forms of stock market trading would be considered flipping. The only possible exception would be if someone in buying shares used that opportunity to use their stake in the corporation to influence the board of directors as to how the company is run. It is a little ironic that we come back to him since he's the one that said that greed is good. But in parasitic capitalism the only sense of 'good' exists for the parasite himself. Now it sounds like I'm painting a rather bad picture of parasitic capitalism, but I think just as with capitalism as a whole we should treat this subset of capitalism pragmatically as well. While due to its nature, it's hard to see how parasitism could be beneficial to the community at large, I do think there can be, like in the biological world of parasites, where the negative effect for the host is either insignificant or nonexistent. Perhaps, to a degree, I'm trying to defend myself since I have in the past and am currently trying to 'play the markets.' In so doing I'm trying to come up with some way to realize some capital gains, but I'll have to admit I don't see how what I'm doing in playing the markets, in itself, will benefit humanity. However, if I succeed, that will leave me with more time to write essays like this one with intent to benefit mankind and without regard to the commercial success it might have with whatever I write. Additionally, especially considering the very small amounts I have to play with, I'm lead to believe that I'm engaging in the neutral form of parasitic capitalism where there is little or no negative impact on the host of commerce. But like in nature where there can be parasites that are very harmful to the host, the same problem exists in the world of commerce. An example of malevolent parasitic capitalism exists in the movie Wall Street (and I suppose I should issue a **spoiler alert** for what follows for those who haven't seen the movie) where Gekko tries, after buying it, to break up and sell off in parts the fictional Blue Star Airlines. Along with the break up, all the jobs would be lost along with the all benefits of the airline to the community where it was based. Gekko was planning to sell the airline, in parts, simply because he thought he could suck off more capital gains that way than by running it as a symbiotic business. Of course there is very often a great deal of overlap in all the categories of capitalism when looking at real world examples of how businesses are run. A business may alternately by parasitic at times and symbiotic at others or some parts or divisions of the same business may each be engaging in the different categories. However, its hard to imagine that one particular business act could be simultaneously parasitic or symbiotic. It would seem that the two terms are mutually exclusive if were using them as the business equivalents of the same two categories in the biological field. That is, if the relationship between two or more entities is mutually beneficial then I don't think that in biology that it would be correct to call the relationship parasitical. Rather the relationship if mutually beneficial would necessarily be called symbiotic. While the free marketeers seem to be completely oblivious to the reality of capitalism often devolving into malevolent parasitism, they do, to their credit, recognize the harm to society of capitalism engaging in its third basic form: Cronyism.