A Tale of Two Presidents
Sheila Bair is a former chairman of the Federal Deposit Insurance Corporation. She should be running for president. She’s ‘way smarter than anyone else in Washington, and her article in last Friday’s Washington Post proves it. Although it appeared as though she was writing “with tongue-in-cheek”, there’s a great deal of merit in what she proposed. In fact, for a long period of time a privileged segment of our society – surreptitiously – has been operating exactly as she described.
“Are you concerned about growing income inequality in America?” she asked. “Are you resentful of all that wealth concentrated in the 1 percent? I’ve got the perfect solution, a modest proposal that involves just a small adjustment in the Federal Reserve’s easy monetary policy. Best of all, it means that none of us have to work for a living anymore.
“For several years now, the Fed has been making money available to the financial sector at near-zero interest rates. Big banks and hedge funds, among others, have taken this cheap money and invested it in securities with high yields. This type of profit-making, called the ‘carry trade,’ has been enormously profitable for them.
“So why not let everyone participate?
“Under my plan, each American household could borrow $ 10 million from the Fed at zero interest. The more conservative among us can take that money and buy 10-year Treasury bonds. At the current 2 percent annual interest rate, we can pocket a nice $ 200,000 a year to live on. The more adventuresome can buy 10-year Greek debt at 21 percent, for an annual income of $ 2.1 million. Or if Greece is a little too risky for you, go with Portugal, at about 12 percent, or $ 1.2 million a year. (No sense in getting greedy.)
“Think of what we can do with all that money. We can pay off our underwater mortgages and replenish our retirement accounts without spending one day schlepping into the office. With a few quick keystrokes, we’ll be golden for the next 10 years.
“Of course, we will have to persuade Congress to pass a law authorizing all this Fed lending, but that shouldn’t be hard. Congress is really good at spending money, so long as lawmakers don’t have to come up with a way to pay for it. Just look at the way the Democrats agreed to extend the Bush tax cuts if the Republicans agreed to cut Social Security taxes and extend unemployment benefits. Who says bipartisanship is dead?
“And while that deal blew bigger holes in the deficit, my proposal won’t cost taxpayers anything because the Fed is just going to print the money. All we need is about $ 1,200 trillion, or $ 10 million for 120 million households. We will all cross out hearts and promise to pay the money back in full after 10 years so the Fed won’t lose any dough. It can hold our Portuguese debt as collateral just to make sure.
“Because we will be making money in basically the same way as hedge fund managers, we should only have to pay 15 percent in taxes, just like they do. And since we will be earning money through investments, not work, we won’t have to pay Social Security taxes or Medicare premiums. That means no more money will go into these programs, but so what? No one will need them anymore, with all the cash we’ll be raking in thanks to our cheap loans from the Fed.
“Come to think of it, by getting rid of work, we can eliminate a lot of government programs. For instance, who needs unemployment benefits and job retraining when everyone has joined the investor class? And forget the trade deficit. Heck, we want those foreign workers to keep providing us with goods and services.
“We can stop worrying about education, too. Who needs to understand the value of pi or the history of civilization when all you have to do to make a living is order up a few trades? Let the kids stay home with us. They can play video games while we pop bonbons and watch the soaps and talk shows. The liberals will love this plan because it reduces income inequality; the conservatives will love it because it promotes family time.
“I’m really excited! This is the best American financial innovation since liar loans and pick-a-payment mortgages. I can’t wait to get my super PAC started to help candidates who support this important cause. I think I will call my proposal the ‘Get Rid of Employment and Education Directive.’
“Some may worry about inflation and long-term stability under my proposal. I say they lack faith in our country. So what if it cost 50 billion marks to mail a letter when the German central bank tried printing money to pay idle workers in 1923?
“That couldn’t happen here. This is America. Why should hedge funds and big financial institutions get all the goodies?
“Look out 1 percent, here we come.” –
In case you think Ms. Bair was just being facetious or sarcastic, consider what Mike Rivero is trying to get across to dumbed-down Americans:
“In the good old days,” he begins, “after George Washington and the boys won the war to free us from the bank of England’s predatory and impoverishing practices, they set up a ‘revolutionary’ economic system. The government created and issued all the public currency, spending it into circulation to purchase what the government needed, then after the currency circulated through society to fuel commerce, was taxed back to the government to balance the books. Simple!
“Banks existed, of course, but they were kept off to one side, and use of the banks was optional for the people of the United States. It was possible to go through one’s entire life without dealing with a bank if one chose to do so. And it was a stable system, because as debt increased, the people could voluntarily choose to stop borrowing from the bank! That was one of the most important freedoms won during the revolution.
“Then, in 1913, a corrupt Congress and a corrupt Woodrow Wilson changed the structure of the nation’s economy. The power to issue money was taken away from the government and given to the bankers, and from that day forward, ALL money in circulation was created as the result of a loan at interest from the bankers to the government, to business, and to the people. There is no exception. Every dollar paid in salary, spent to purchase food or gas, or paid in taxes, began as an interest-bearing loan. There is no money in circulation in the United States that did not start out as a loan at interest from the bankers at the privately-owned Federal Reserve System.
“From that moment on, the freedom of the people to refuse to borrow from the banks and to refuse to pay interest was stripped away. To participate in the commerce of the United States at all means being forced to use money loaned at interest, to the profit of the bankers and to the impoverishment of the public. And because more money is owed to the bankers than actually exists, no matter how hard you work, no matter how much you sacrifice, the debt can never be paid off. The system is intentionally designed to trap the nation’s population permanently in unpayable debt.
“This is the purpose behind the design of the Federal Reserve, the International Monetary Fund, the European Central bank, and indeed every private central bank issuing the public currency as a loan at interest. This is why today every nation is drowning in created debt, and enslaved to the private bankers. That is the reason for ever-increasing taxes and decreasing benefits; to pay the bankers their unpayable interest on the public currency.” –
Guess who made the following confession:
“I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is now controlled by its system of credit. We are no longer a government by free opinion, no longer a government by conviction and the vote of the majority; but a government by the opinion and duress of a small group of dominant men.” –
You guessed it. Woodrow Wilson made that admission in 1919.
If President Wilson could speak from the grave today, however, here’s what he’d be saying:
“Let’s resurrect the ‘revolutionary’ economic system that George Washington and the boys set up. Let’s have the government create and issue all public currency, spend it into circulation by doing what the people want done, then after the currency was circulated through society to fuel commerce, it would be returned to the government, by means of taxation, so that the books could be balanced. Wouldn’t that be a great idea?”
“Yes, Mr. President,” we’d answer. “It would be a great idea because it once was a great idea – until you sold us out.”
More than 3,000 Washington Post readers commented on Ms. Bair’s article, but reading between the lines, it was easy to see that most of the comments were submitted by folks who were already on the gravy train and resented Ms. Bair’s attempt to bring their greed to the attention of the general public. Not to worry, though. The dumbed-down general public is interested only in bread and circuses.