Archive for October, 2009

I suppose it might be difficult for some members of the extreme right wing to accept, but God did not invent Capitalism.  Another fact, equally hard to accept for the extreme right wing is that Jesus did not condemn Communism.  I know.  It’s hard to believe. After all, if Jesus was alive today, wouldn’t he be a Capitalist?

Of course there is the difficulty of some of the things Jesus is quoted as saying.  I am referring to expressions like, “It is easier for a camel to go through the eye of a needle than it is for a rich man to enter the Kingdom of Heaven”. Or, “Sell all you have and follow me.”  I wish I could find a Republican extreme right wing Christian who could explain these discrepancies to me, because I just can’t figure it out. And, since the Christian right wing seems to be exclusively Republican, I figure they must know the truth about this.  Please feel free to explain this to me.

Meanwhile, I’ve been wondering.  Have you noticed in our Capitalist economic system, where everybody supposedly has an equal chance to be a millionaire, how it seems sort of like the system is sort of rigged in favor of the people who already have a lot of money?  For example, take a look at our laws on taxing estates – that’s what is left over when you die.  Under the administration of President Bush the tax on estates of less than $3.5 million was reduced to zero. Yes, zero dollars.  The wealthy can pass on their gains to their heirs and pay absolutely no tax on anything under three and a half million dollars.

What about income tax?  Surely the wealthy pay their fair share there, don’t they? Well, under President Bush’s “tax cuts” the tax on the wealthiest Americans dropped by almost 40% while the tax on the poorest Americans dropped less than 1%. Our American tax system favors the wealthy. Why? Well, for one thing who do you think writes the tax code? It surely isn’t the poor people. Senator Kerry is the richest man in the Senate, worth close to a billion dollars.  A lot of the Senators are worth many, many millions of dollars. Overall the median (not the average) net worth of U.S. Senators was $1,700,000 in 2007. For Congressmen it was $684,000.

President Obama has talked in the past about restoring the tax rates to be the same as they were under President Clinton.  At that time the wealthy paid a larger share of the country’s tax burden.  However, since his election there hasn’t been much talk about tax reform, even though one might think that recirculating some of that tax money might help to stimulate the economy.  I get the impression that Congress is not too eager to vote for a tax increase on their own pay. So the money of the wealthy just continues to sort of clot up in their bank accounts.

Here’s something to consider: the bonuses for the bankers on Wall Street are growing astronomically while everyone else’s salary is just sort of keeping up with inflation. Goldman Sachs employees will receive bonuses of about $700,000 apiece this year. How fortunate for them!  And even more so because of George Bush’s tax cuts:  they will have to pay very little tax on their bonuses. Aren’t you glad for them?

Meanwhile, average Americans are continuing to lose their homes to foreclosure.  Millions are out of work and can’t find a job.  One can only ask one question: is this right? I don’t mean in a legal sense – of course it’s legally right – the laws of our country have enabled this. The question is this: in a moral sense, is it right? The thing I find it hard to understand is how the “Christian” right – those diehard Republicans who claim to be true Christians and just love the George Bush style of government – reconcile this with the teachings of Jesus. Are we reading the same Bible here?

It’s a simple question. Are the Capitalist values of America and the resulting coagulation of wealth for a very small number of people in America, at the expense of the vast majority of people, compatible with the teachings of Jesus? A simple yes or no will do, but if anyone can explain how they truly are compatible I would love to hear the explanation.

And here’s a second question for the Republican “Christian” right: if you cannot answer my first question then why do you call yourselves Christians?  I would love to hear that answer too.

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It seems like such an easy question: how much is my house worth? The problem is that this is not an easy question – and that fact that that is a problem is the real problem.  Let me explain…

A long time ago, when Tricky Dick Nixon was President of the United States, our country was running up a huge bill trying to pay for the Vietnam war.  There was only so much money coming in from taxes so we had to borrow money by selling treasury securities to other countries and Americans too.  Treasuries were a pretty safe bet – as good as the dollar, which in those days had its value fixed in relationship to gold.  At one time you could redeem your paper dollar for its equivalent in gold. Later, the paper dollar could be redeemed in silver, if you felt like carrying around bags of silver with you. The point was that a dollar was nothing more than a proxy for your ownership of some precious metals that were stored at Fort Knox or somewhere else.  Nixon’s problem was that there was only so much gold and silver in our vaults – so we could only print so much money.

At some point Nixon or his advisers came up with the perfect solution, disconnect the dollar from any relationship at all to any precious metal – in fact detach it from anything physical. The dollar became a Federal Reserve Note, not redeemable for anything.  This allowed Dick Nixon to print as many dollars as he liked so when it came time for people to cash in their Treasury securities they would be paid back in dollars that were worth much less than if they had been backed by a certain amount of gold. The value of the dollar had dropped – or, another way of looking at it is that the value of gold went up a whole lot.

Which brings us to houses – almost anyway.  There is little doubt that the increase in house prices and lots of other stuff since Dick Nixon inflated his way out of Vietnam War debts was not the same thing as an increase in value. The value of things didn’t change much, just the price because the dollar was losing its purchasing power. OK. So that’s it? No. Not exactly.

If we are talking about the value of a house, and not the price – which we can now see is not the same thing – how do we actually determine its value?  Well, the common sense way of determining the value of something ought to take into account the value of the things that went into it, like wood, stone, paint, drywall, and so forth.  Then there is the cost of labor – a bunch of carpenters, electricians, plumbers and so forth had to be paid for the value of their labor. So we have to figure in that value too. Then there is the value of the land.  How large is the lot? Is it swampland? Is it next to a superhighway? Is it level? Is it cleared?  Some of these items are easy to value, for example, if the lot isn’t level we need to pay for a bulldozer to level it.  And so forth. On the other hand, there are some items that are sort of intangibles, like the proximity to a superhighway.  How do you value that?  This is where things get a little difficult.

The issue we are faced with is trying to place a value on something that has no intrinsic value. It doesn’t cost anything more to build a house next to a superhighway than it does to build it far away.  However, it does make it less desirable.  So, we enter the world of supply and demand, where the value of things is not related to tangible things but to emotional things like desire.  This is where the trouble begins too.

Several years ago we entered a fantasy world of house prices.  The price of houses was going up because…because…well, because the price of houses was going up.  It was a fabulous game anyone could play.  Buy a house, flip it, and make a lot of money.  Except there was nothing tangible supporting the price of houses.  Sort of like the Emperor’s New Clothes, only with houses.  For the past couple of years house prices have been in a near free fall in some parts of the country and they are expected to continue falling. So how far will they go?

Now that the balloon has popped it seems that house prices will have to fall until the “irrational exuberance” of home buyers and the equally exuberant lending banks is completely dead. House prices have to fall to the point where they reflect the actual construction costs of the house, i.e. materials, labor, and land, plus some sort of adjustment for the desirability of its location as determined by the local market.  But all the price inflation due to the irrational exuberance of flipping houses has to go.

Oh. There is one other thing. The dollar isn’t what it used to be either. You need to account for the inflation of the dollar since you bought your house. Figure somewhere between 5% and 10% per year – roughly. It’s a cumulative effect so you need to calculate each year of ownership separately – a computer program might help a lot.  Then there is depreciation. Things wear out. Houses get old and start to fall apart, so unless everything is fixed up like new you need to deduct the loss in value from normal wear and tear, plus the natural aging and decay of things.

All things considered, your house is probably worth a lot less than you think it is – unless you happen to live in one of those parts of the country that, for some reason or other, never got caught up in all the irrational exuberance. For those areas out west like California and Arizona and in the east like Florida, homeowners face more pain to come in the great housing value reality check.

House values are a bit difficult to figure at anytime because of all the ingredients that go into their value like materials, labor, loss of value of the dollar, and so forth.  Irrational exuberance is not part of this equation. It doesn’t add value; it only increases the price.  The problem is that as the irrational exuberance of home buyers fades, so does the price.  Eventually, houses will return to their real value, but it looks like a lot of formerly exuberant, but many ordinary American citizens will continue to have an extremely painful reintroduction to reality.

Thank God the banks are OK.

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Granted the 21st century is still fairly young, there is little doubt that the Balloon Boy Hoax will go down as one of the greatest hoaxes of the century, even by the time the year 2099 comes around.  Just think about it, for a couple of hours the entire world was watching television, the people were transfixed by what they saw and what they imagined. A little six year old boy was trapped in a high flying, saucer-shaped balloon, soaring across the United States. His fate was uncertain, and the mightiest nation on Earth was powerless to do anything to rescue the poor child.  All the king’s horses and all the king’s men…

The say that it is an ill wind that blows no one any good.  I wonder if perchance a bit of good might also come out of this escapade?  For example, has this incredible story told us anything about television?  No, I don’t mean about the capability of TV to cover live events; I mean the quality of what is on television.  Here was an incident that caused everyone to stop and watch.  People who would have been doing something else – certainly not watching the vast wasteland that we call daytime television – were glued to their sets, wondering what would happen to the poor child.  Yes, if there is one thing the Balloon Boy points out to us it is this: regular TV is awful.  Devoid of creativity, devoid  of interesting ideas and concepts, devoid of anything relevant to our daily lives, television generally sucks.

But, is there anything else we can learn from this episode?  After all, we already knew that daytime television was not great drama – that’s why nobody watches. Yes, there is something else we can learn. With all the outrage going on about how these people perpetrated a fraud on the entire world we have, at least for the moment overlooked one little fact: our multi-trillion dollar military, our police, fire, ambulance, emergency rescue teams – everyone who we would have thought, in some way, ought to be able to do something to rescue the boy before he floated away forever, couldn’t and didn’t.  Now there is something to think about.

All those tax dollars we spend on all that high-tech, high-priced equipment; all that specialized training, all those expensive radar tracking systems, fighter jets, helicopters, rapid response teams – you name it, and we can’t rescue a kid floating away in a balloon.  You have to admit, it was a grand deception.  The balloon, I mean.  You didn’t think I was talking about all of our gigantic expenditures on our extraordinary defense, security, and rescue capabilities, did you?

Just wait.  A year from now we will all look back and shake our heads when we think about this. Man, we were all fooled by a truly grand deception.  Meanwhile though, we must figure out an appropriate punishment for these nasty masters of tomfoolery.  So, what will it be? A half-million dollar fine?  Five to ten years in jail?  Put their children in foster care FOREVER?  Hmmm…just what is the appropriate punishment for foolishly fooling with the Masters of our State and making them look powerless?  What shall we meet out to those who have the audacity to point out that the Emperor has no clothes?

The simple truth is this: we’ve been punked.  Actually the whole world has been punked.  I can understand why the AUTHORITIES are unhappy.  After all, the whole affair made them look really bad and more or less completely incompetent – from the federal level all the way down to the local level.  But for the rest of us, well it was like watching a combination of Greek drama and P.T. Barnum.  It was a lot better than what is on TV this afternoon.

Maybe the guy should get his own TV show.

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In 1791 the first amendment to the United States Constitution was adopted.  It was part of the Bill of Rights and it was created out of a concern that the Constitution, as written, gave too much authority to the Federal government. This amendment placed limits on what the government could do. Among other things, the First Amendment stated that Congress could not make any law that limited the freedom of speech. The founders of the country knew from their own experience that one of the ways that a government could exert too much control and influence over the people was by controlling the information they received.  If the government could prevent or limit the dissemination of the truth then it had a clear advantage in maintaining power.

Some, actually many, modern but repressive governments in other countries have used this method to keep their hold on power.  Some have gone even further and besides restricting what people could say, they also disseminated false or misleading information to their citizens in order to keep control of the populace.  In recent history, the Tass News Agency of the old Soviet Union was famous for this sort of propaganda.  Tass continues today in Russia but it appears to have changed it ways quite a bit, if not completely.

In the Western world we have prided ourselves not only on the accuracy of our news but also on its fairness of reporting.  We have also been proud of the separation of the press from the government.  Today some notable examples of matter-of-fact reporting of the world news can be found in England’s BBC, Germany’s Deutche Welle, and Ireland’s Radio Telefis Eireann (RTE).  If you click on any of these links you will find news that is of interest to the inhabitants of those countries reported in a straightforward way, i.e this is what happened and when and who was involved. Just the facts.

The U.S., long a bastion of free speech and straightforward news reporting has been going through a change in direction. Just look at any of the major news networks: ABC news, NBC news, CBS news, or Fox news.  Notice anything different compared to the European news or even the Russian news?  It is the inclusion of things like polls on the front page, it is the reporting of an event with an interpretation of that event in the same sentence, it is the emphasis on sensational news like grisly murders and so forth, and it is the insertion of politics into so many of the stories that are reported.  Why?  Why the morphing from solid, straight-talking news articles to a more tabloid, emotionally targeted news? Is it because that is what the public wants?  Is it because that is what sells?  Or is it something else?

It is no secret that there are news empires in this country.  Imagine the power a single person could have if they owned the radio, television, and newspaper industries!  They could feed the public whatever they wanted, deciding what they wanted the people to know and what they didn’t want them to know.  Sort of like the old Soviet Tass News Agency.  The question is this: are we evolving, or have we already evolved – one step at a time – to a system of news dissemination where the news we receive is the news someone wants us to receive in order to promote a hidden agenda?  Could it be that some news is omitted because it would contradict a hidden agenda?  Could it be that much of our news is broadcast primarily to push forward a hidden agenda?

What about the role of opinion in the news?  Doesn’t it seem that the opinion of news reporters is blending more and more smoothly into the news itself?  It seems that the demarcation line between actual news and opinions about the news has been blurred or, in some cases, completely erased. And in those cases where it has been completely erased the opinions often seem to come from the lunatic fringe, but they are presented with a straight-face as if they were actual news instead of the garbled meanderings of Neanderthal minds.

The question we need to ask is this: how much of this new “news” that enters our homes these days via television, radio, internet, and newspaper is actually valid news and how much is propaganda?  And if it is propaganda who is creating it and spreading it and why?  Here’s a question to consider: have you ever tried to buy a television station or a newspaper?  Probably not.  They cost a lot of money. Your average person couldn’t possibly afford to buy one, let alone a whole bunch of them.  But some people can: really, really, wealthy people.  But why?  Why would someone invest all that money in these industries when there is so much more money to be made in investing in banks and insurance companies?  Could it be because these industries allow the wealthy to shape and control public opinion?  And if you can control public opinion it isn’t a far leap to controlling election results is it? And once you control the results of an election, could it be that you have also earned a hidden voice in the government itself?

Could it?

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The worldwide economic meltdown has focused a lot of attention on the role and power of banks and insurance companies in our country.  In addition, the current debate on health care legislation also highlights the power of the health insurance companies.  In the part 1 and part 2 of this series I wrote about the way these money-making industries use their financial power to influence our government, through the intermediaries we call lobbyists, to essentially purchase legislation that is beneficial to the bottom line of these companies, at the expense of the American citizen.

There is another group of wealthy people we don’t often think of as wealthy because they prefer to stay in the background.  They don’t have the names or jobs of the famous robber barons of the past, names like Rockefeller and Morgan, but they are quietly there nonetheless and we were warned about them many years ago by one of our presidents.  It was a warning our government chose to ignore. I am talking about the military-industrial complex. The warning about this group of for-profit businessmen was issued by President Eisenhower. Over the years since World War II, our U.S. military industrial complex has grown rich – bloated might be a better word.  In spite of President Eisenhower’s warning this industry has grown so large that it is potentially a larger factor and therefore a larger potential danger to the economic well being of the country than the banks and the insurance companies put together.

Today the total budget of the United States is about $3.1 trillion dollars.  Of that amount, about half, $1.49 trillion dollars will be spent this year on military-related costs. When George Bush was president he attempted to hide the growth in this part of the budget by keeping the costs of the Iraq War and the Afghanistan War out of the budget. These costs are instead appropriations.  He went even further to distract attention from the total military costs in our budget by making the “Global War on Terror” a separate line item in the defense budget, separate from the line labelled “Department of Defense”.  It’s like having a budget for a fire department where we might have a set of costs labelled “Fire Department” and another set of costs labelled “Putting out fires”.

The simple fact that defense spending, one way or another, eats up half of our tax dollars shows implicitly the effect the military-industrial complex has on our economy.  The point here is not that we are spending a lot of money on a war that was started by our enemies. The point is that we are spending a lot more money on “defense” that is unnecessary.  A good example is the USS George H W Bush, a nuclear powered aircraft carrier that was launched at the end of the George W Bush administration.  This aircraft carrier is a dinosaur, a creature of an age of Soviet/American tensions and it is designed to provide a deterrent against a foe that doesn’t even exist anymore.  In an age when our primary strike weapons have become stealth bombers that fly non-stop from the U.S. and remote controlled drones that launch missiles directed by operators sitting in control rooms in the U.S. mainland, the aircraft carrier is headed for extinction, just as the battleship did before.

However, it is not about aircraft carriers and battleships that I am concerned.  It is our the decisions that are made to produce weapon systems that are either outdated, ineffective, inappropriate, or just the wrong thing at the wrong time.  I am concerned about the decision making process in military procurement that creates a condition where we send in soldiers to Iraq using Humvees as their primary patrol vehicle while these vehicles are without any armor at all.  Meanwhile we spend huge amounts of money building tanks and other armored vehicles that are of little use.

The list of useless, ineffective, inappropriate, and just plain awful products that our military buys from the industrial complex is a very long one.  And some people get very rich selling these products to the government while other, more effective products, are shunted aside and never purchased at all.  Why? Because it is all about connections.  Connections between the wealthy owners of the manufacturers of the weapons and the people who sign the purchase orders.  It is about connections between lobbyists and Congressmen when decisions are made about what to buy and what not to buy.  There is a flow of money, just as in the banking and insurance industries, from the military equipment manufacturers, via lobbyists, to our elected representatives and that is how decisions are made: not to buy the best product for the best price, but to buy the product that will put money in someone’s pocket.

And that, in a nutshell, is how your government spends about half of your tax dollars.  On the other hand there are other countries, European countries, that spend far less of a percentage of their national budget on “defense”.  Did you ever wonder what those countries do with all of their excess money that they don’t waste on frivolous defense expenditures?  Here’s one thing they do: a lot of them provide free medical care for their citizens.  Here’s another thing: some of them also provide 100% free college costs for their citizens.  While our government lurches from “crisis” to “crisis” the rest of Western civilization is pursuing a more constructive path, making better lives for their citizens.  That’s because they are not burdened by a system of power that starts with the wealthy and proceeds, via a group of lobbyists, directly to our elected representatives.  In many countries the elected representatives actually try to help the people and not just help themselves to a bigger piece of the pie.

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In Part 1 of this series, I wrote about the role of the banking industry in our government and how, via the lobbying industry, they were able to influence our government to create or remove laws regarding the banking industry.  You might call it a buyout of our government.  One of the rather unique features of the banking business is that it doesn’t create a tangible product, like washing machines or automobiles.  It just loans money to you and then its meter starts running, and you have to pay back the money plus an additional amount – and that additional amount can be enormous.  For example, if you take out a $100,000 mortgage on a house at 5% interest for 30 years, by the time you have paid back the bank you will have paid $193,255, almost twice the purchase price of the house. If you have the misfortune of having an adjustable rate mortgage you might find your total repayment to be a lot more. Which is one of the reasons we are now in a worldwide recession.

There is another financial industry that is a close cousin to the banking industry.  It also produces no tangible product, but unlike the banking industry, where if all goes well you eventually wind up owning your own house, in this other financial industry, if all goes well you wind up with no return on your investment at all, i.e. you get nothing.  I am, of course, talking about the insurance industry.  Little more than legalized gambling on the probability of personal disasters, the insurance industry is one of the big money-making businesses in our country, and if we care to recall the activities of AIG and credit default swaps, it is also one of the leading causes of the worldwide recession too.

Like the banks, the insurance industry is in the business of taking more money in than it gives out.  Today we have insurance for life, health, accidents, fire, hurricanes, you name it.  You can get insurance for just about anything.  If you are an average American you will never collect as much money in claims as you pay in premiums.  It has to be that way, otherwise the insurance companies would lose money – and that isn’t going to happen.  Like the state lottery, your chances of winning when you buy insurance are small – and the insurance companies want to make your chances ever smaller.

Which brings us to the topic of health insurance.  Until Barack Obama became president the insurance companies were pretty content with their system of health insurance, i.e. don’t insure high risk people and set the cost of insurance high enough so that even when the expected number of people have legitimate claims there will still be enough money left over for a fat profit.

Enter President Obama.  Without waiting to hear the details of his plans for health care reform the insurance companies began their anti-reform campaign.  Why? Were they worried that the American consumer would be hurt by reform?  Were they concerned that it wouldn’t be fair to some citizens?  Were they worried that some people might be left out?  Were they worried that our medical system would be inundated with millions of new patients when everyone had insurance and therefore the quality of healthcare would deteriorate? No.  They were worried about losing money, that’s all.  They had a good thing going by only selling insurance to people who would probably never use it.  That last thing they want to do is to sell insurance to someone who is going to run up a big medical bill.  So, they had to take action.

The health insurance, and entire health care industry, began a massive spending campaign on lobbying Congress – much larger than their usual massive campaigns. In the first quarter of 2009 this group of businesses spent over $35, 000,000 lobbying members of Congress. Ummm, let’s see now… there are 100 Senators and 435 Representatives…so 35 million divided by 535 is, uh, $65,420.56 per person.  Not bad. Of course that’s just in the first quarter too.  Who knows what the total amount will be by the time the voting is done.  And, naturally, the money is not spread around evenly.  You can bet there is strategy involved. There are certain key Senators and Congressmen whose votes might make the difference.  It’s a great system we have. If you own a business, you send your money in to Congress and then you tell them how to vote so that your business makes a fat profit. The fact that by so voting a Congressman might actually harm rather than help his/her constituents is just not part of the equation for many members of Congress.

The direct link from wealthy owners of major companies to our government representatives via lobbyists is well known.  The remarkable thing is that the American people do not seem to be very upset about our system.  Of course, when things don’t turn out good in the end the people always vote out the bad Congressmen and even Presidents, but these people are just replaced by a new and eager crop of recruits, eager to participate in the same process – i.e. pocketing money from lobbyists. We have the best government that money can buy.

That of course is the problem.  It is the wealthy who have the money to spend in this way, and it is the wealthy who hire the lobbyists, and it is the wealthy who then tell our elected representatives how to vote.  In Part 1 of this series I showed how this invisible hand of the wealthy directly led to the failure of our banking system and the worldwide economic meltdown. Now we have the same process occurring in one part of our insurance industry – namely the health insurance industry – and the result could well be as catastrophic, because if health insurance reform doesn’t happen the cost of insurance will continue to escalate while the insurance companies continue to find reasons to disqualify treatment for certain diseases, even for people who have paid their premiums.  This is what the insurance companies want – maximum profits and minimum losses.  Our government should be protecting us from these vultures, but how can that happen when the elected members of our government are receiving millions and millions of dollars from them?

The invisible hand of the wealthy isn’t really all that invisible, but it is very powerful because it pervades the entire economy and budget of the country.  We have already seen how the banking and the insurance industry exerts its control over our government.  However, the wealthy are involved in other industries too.  We’ll look at that in Part 3 of this series.

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It is nearly fifty years since Stanley Kramer’s movie, “It’s a Mad Mad Mad Mad World” , was released.  It is an Oscar winning comedy that points out an important truth about the world we live in: sometimes we can’t see things that are in plain view.  In the movie, a group of people search for a hidden treasure buried beneath a “big W”, but they are unable to find the big W.  It turns out that the big W consists of the crisscrossed trunks of some palm trees, and the people have been running around the base of the trees, looking for the big W, but never realizing it was right in front of them.

A  few days ago, Bill Moyers pointed out another big W in our world.  It’s one that we are only dimly aware of; it’s one that we have an inkling of – but no more. And we fail to realize that this modern big W has unseen branches that deeply affect our lives.  The thing about the big W is this: it’s not that we don’t see it, it’s that we don’t realize what it really is.  When we do see this massive structure and finally grasp its significance we can’t help but be awed by its size and power, and we can only wonder why we didn’t see it before – just like the characters in the movie never recognized that the tree trunks were not just tree trunks, they were a massive W, and they were therefore the marker for a buried treasure.

In the most recent edition of Bill Moyers Journal on PBS, he talks with MIT professor Simon Johnson and Congresswoman Marcy Kaptur about the economic meltdown.  It is in listening and watching this that I realized that, however dire a picture the three of these people paint – and it is dire, there is much more that is not seen.  I decided then to write about the aspects of this “dire picture” in multiple parts.  In all parts the theme is the same: the invisible hand of the wealthy and the consequences to our country.  In this part I will follow the lead of Bill Moyers and write about the byzantine relationship between our financial system and our government.  But don’t think our modern Byzantium ends there – I will discuss other aspects of this “hidden in the open” system in future writings.

Let’s suppose that you took your car out to the freeway one day and floored it.  You drove your car at its absolute limit of capability regardless of other traffic, road conditions, police presence – anything.  You just drove as fast as you possibly could. What would happen? We all know. You would eventually crash. Now, would you call that an accident?  Is it an accident when something happens that is completely predictable?  The fact that you were driving with reckless abandon doesn’t mean you had an accident, you knew you would crash eventually. The fact is that you had a crash, you didn’t have an accident.

In the aftermath of the Great Depression, President Franklin Roosevelt and his administration created a set of financial system rules and safeguards that would prevent the collapse of the economy as it happened in 1929.  These rules and safeguards amounted to constraints on our financial system – our banks. They also consisted of an independent government agency, the Securities and Exchange commission, they would be the police that watched the bankers and stopped them from speeding again.  Beginning with the Clinton administration, and maybe even before for all I know, this system of protection was dismantled.  It’s destruction was completed during the reign of George W. Bush.  We all know the result – the liar loans, the mortgage debacle, the credit default swaps, the implosion of the banks, the bailout of the banks by the taxpayers, the destruction of the world economy.

The thing we don’t realize, the thing that Bill Moyers points out, is that this was not simply the doings of one or two Presidents who used bad judgment.  This was the doings of Congress as much as it was the actions of the Presidents.  But it all started with the financial industry. It began with money – the unending, ceaseless desire for the accumulation of more and more wealth by America’s wealthiest people.  The issue was not making money by honest means – it was about making money by any means possible – honest or not.  The financial industry, via their lobbyists, managed to convince Congress to make the financial laws they wanted and to repeal the financial laws they didn’t like – and then the  Presidents went along with the whole thing.  The financial industry put its foot on the accelerator and floored it without regard to the certainty of an eventual crash. And our “police” not only looked the other way, they cleared the road.

Why?  Money. Money in your pocket – if you are a Senator or a Congressman.  Sure, we all get to vote for the Senator and Congressman of our choice, but once they get to Washington who do they listen to?  Not us – they don’t need us anymore.  The vast majority listen to the siren song of the dollar bill. It is a fine system we have created here.  Enormously wealthy people wielding enormous power with payoffs, via lobbyists, to our elected representatives. And the lobbyists themselves?  Almost every one of them is a former Senate staffer who knows exactly how the system works, and is also someone who has a close personal relationship with our elected representatives in Congress.

We have in this country an invisible shadow government, a government made up of the wealthiest of citizens who rule not by threat or demands, but by the allure of money – lots and lots of it. No Mafia tactics needed here, no extortion or midnight bombings, no arm-twisting coercion.  Just money that flows unceasingly to the people who have been elected by us.  They now have the power to make and unmake the rules and laws, and they do – and they did – all for the benefit of the financial industry. It’s right there in front of you if you care to look.  It’s a big W staring you in the face.  There is no need to sit and wonder how this economic catastrophe happened.  The thing to wonder about is who got rich from it?  You know all the money that was lost? Where did it go? Somebody made a lot of money in all of this: the smart ones who knew it was as certain as a car crash. And, undoubtedly,  some of the really wealthy people got a lot wealthier.

Here’s something to consider: is this hidden hand of the wealthy the entity that really runs our government? Are our elected representatives nothing more than pawns for the owners of the banks ?  You might think so, and it certainly is a major part of the picture, but there is a lot more to our big W than just the banks.  I’ll write about that in Part 2.

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