Slight of Hand
“Smoke and mirrors are used to make us believe the U.S. economy is authentic, robust and sound, all of which is an elaborate illusion,” according to Richard Clark – and it’s astonishing to see how many Americans are taken in by the slight of hand.
“Out of the side of the establishment’s mouth,” he begins, ” we hear excitement about ‘green shoots,’ and out of the other side comes breathless warnings of fiscal cliffs and the urgent need for unlimited bailouts by the Fed in the form of ongoing ‘quantitative easing,’ which consists of the Federal Reserve Bank creating $ 85 billion a month out of thin air, and using it to buy two things: 1) huge amounts of government bonds from the U.S. Treasury Department, and 2) huge amounts of near-worthless mortgage-backed securities from private banks (i.e. banksters). What this amounts to is a kind of ongoing bailout and gift, which, at its core, is an ongoing transfer of wealth to rich banksters and other Wall Streeters, from the rest of us.
“We hear about even more people begging for jobs and the politicians promising them. But short of another WPA/CCC program, or massive funding for a national infrastructure bank (neither of which House Republicans would ever permit), politicians can’t (except by way of the military-industrial complex) create jobs in any significant number, despite the 32 million souls who are either unemployed or underemployed.
“Meanwhile, we see people camped out to buy stuff on Black Friday, indicating that the economy is thriving – only to find out that practically everything is being bought on credit.
“The corporate media does their best to distract us from seeing very much that’s real or truly important. We see it glorify Kim Kardashian who recently got front page coverage on Huffington Post because her cat died. Meanwhile the financial media makes the economy seem complicated, and they ban from the airwaves anyone who might speak truthfully and simply about it. Financial media pundits and commentators speak a kind of special language known almost exclusively by MBAs.
“Is it any wonder then why ordinary folks are angry and confused about the economy? Hopefully the following insights will help to begin to clear up some of that confusion.
“A. Superfluous-goods-sector Jobs: It’s not just that the ‘official’ unemployment numbers are a fraud, most of the actual jobs are in some important sense fake as well. Ask yourself how many workers today actually produce something of core value. And then understand that 80% of all jobs in the USA could disappear tomorrow and if it were the right 80% of them, it wouldn’t affect basic human survival or happiness in the least – provided everyone had enough money to buy the products and services that were still being produced – products like food staples and basic housing; services like basic health care, education, public transit and utilities. Yes, in our society we need money to survive, and jobs provide that money, but that doesn’t mean that any and every ‘job’ necessarily provides any core benefit to society. To wit:
“B. Problems Create Jobs; Real Solutions Don’t: We can’t possibly fix problems in the most rational and effective ways because that would destroy millions of these ‘superfluous, make-work jobs’ that keep money flowing into the hands of the consumers, who must receive it – and spend it in sufficient amounts – in order to keep the economy from collapsing. Examples:
“1. We couldn’t possibly end all our wars and military occupations, and bring all of the troops and other personnel home when the jobless rate is already intolerably high.
“2. For similar reasons we can’t end the War on Drugs because where then would the DEA agents, prison guards, courtroom staff, parole officers and the rest of their support staff go to work?
“3. We can’t simplify the tax code in any radical way because then millions of bookkeepers, CPAs, accounting professors, and tax attorneys would all go unemployed.
“4. We can’t greatly reduce the bureaucracy of government, or streamline healthcare with a Single Payer system, because most of these redundant paper pushers (employed by competing HMOs for example) have very few other skills.
“5. We can’t stop spying on Americans because this endeavor employs millions of people. (The Department of Homeland Security alone now employs, directly or indirectly, nearly a million people. Plus there are now something like 15 different intelligence agencies.)
“6. We can’t restrict the Wall Street casino, or limit its size and scope, or the number of people employed on Wall Street would be greatly reduced.
“7. What about all the superfluous production and consumption? If we ever stopped spending $ 100 billion a year marketing all that stuff, and workers had the option of working ten hours less a week (without losing their healthcare or their chance for promotion), half of that stuff would never be sold. Why not, exactly? Because most workers would prefer extra leisure time instead of the extra stuff. But if half of it were never sold, inventories would pile up, and the next thing you know, millions of unnecessary workers would have to be laid off.
“8. Finally, what will happen to university jobs when growing numbers of young people finally realize that, giving the ever-growing indebtedness that a conventionally-acquired college degree requires, a traditional formal education is, for growing numbers of them, simply not going to be worth the cost – as they increasingly discover that they can get essentially the same education online, at a much lower price? (Yes, this presumes that online education, with occasional face-to-face seminars and meetings will become ever more effective and successful.)
“In other words, our artificially-maintained economy needs these manufactured problems and inefficiencies, in order to create and maintain enough employment to keep sufficient numbers of us busy 40-50 hours a week, 11+ months of the year. But please understand that most of this employment is today a kind of artificially-created and artificially-based employment. It arises from the various absurdities referred to in the eight points just listed.
“C. Money Has No Stable or Inherent Value: Our money is loaned into existence with arbitrary interest rates set by a private monopoly (the ‘Federal’ Reserve Bank). Its value fluctuates based on the supply of that money that’s put into the economy – which, again, is controlled by a for-profit monopoly. (The only things with inherent value to humans are skills [labor], tools and materials, food and water, and energy.)
“D. The Fed Now Buys 90% of This Nation’s Treasury Bonds: By buying its treasury bonds, the Federal Reserve loans money to the U.S. government (its Treasury Department), which issues its bonds to cover the nation’s spending. Historically, most of these bonds have been sold on the open market, at auctions, to investors worldwide, who believe in the ability of the United States to make good on redeeming those bonds, with the interest promised. Apparently, however, the U.S. is facing a shortage of potential investors because the Fed must now buy 90% of new Treasury bonds. This phenomenon is called ‘monetizing the debt,’ or, in simple English, creating ever more money out of thin air. (When the Fed buys a treasury bond, thus loaning the U.S. government money, a Fed employee simply types up the cost of the bond on the Fed’s computer system and electronically transfers that newly-created ‘money’ to the U.S. Treasury Department.) This legerdemain acts to keep interest rates artificially low, because without someone purchasing these bonds at the current rate of interest that the bonds currently pay, the Treasury Department would have to raise interest rates significantly in order to attract outside ‘investors.’ And rising interest rates would guarantee a renewed recession and downward economic spiral. In a nutshell, our monetary system is a paper tiger as well as a house of cards.
“E. What is the Value of Anything? The price-discovery mechanism, or the process of determining the value of an asset in the marketplace, has become so convoluted that determining the genuine or inherent value of anything has become nearly impossible. For example, why does an ounce of marijuana ( a weed that can grow anywhere) cost up to $ 500? Is that the real value, based on labor and materials, and supply and demand? Of course not. Its value is inflated hugely by way of prohibitive laws and regulations. Hence marijuana has become one of the biggest cash crops in the USA, employing tens of thousands of people – all because of the laws against its sale and distribution. Without those laws, tens of thousands of additional Americans would be thrown out of work.
“F. Failure is Rewarded: You know we must live in an artificially-maintained and propped-up economy when failure is rewarded and success is penalized. Citizens everywhere are being told they need to tighten their belts and work harder so we can bail out our failed government, banks, insurance companies and even car companies. And when we work harder and achieve some success, they tax that success heavily so as to indefinitely pay for these large, too-big-to-fail, fraudulence-based institutions. Yet this enormous amount of money creation and taxation, necessary for the bailouts, is light years from solving the root cause of the problem. The reality is that the bankster-centric solutions are the problem! Why? Because they enrich the investor class at the expense of the middle class. Global bankers are gambling (most successfully, so far, since being bailed out) with taxpayer money, and the money of many future generations, in a global casino royale, which growing numbers of financial analysts say is destined to eventually fall. And they are stealing us blind in the press.
“G. Corporate entities have the same rights as humans, but not the same risks of punishment: When the Supreme Court ruled that corporations have the free speech rights of people, it was one of the final nails in the coffin of this republic. Monied interests can now openly finance ‘our’ elections and buy the legislation they need in order to operate with impunity. Corporations may be comprised of humans, but they are not subjected to the same standards as humanity. It was profoundly argued in the article, ‘What If BP Were a Human Being?’ that, judged by common standards of morality, decency, and previously agreed-upon definitions of criminality, BP would be judged both a psychopathic killer … and immortal. Ditto for the rest of those leading the predatory corporate rat pack, the most obvious being defense contractors. And since these corporations are now joined at the hip with government itself, what does that make our government?
“H. People buy things they don’t need, with money they don’t have: In a type of trickle-down debt whirlpool, our government’s rampant spending, without sufficient assets to back it up, is mirrored in the behavior of the American consumer. Despite inflation, rising unemployment, and a continued collapse in real estate, American consumers haven’t stopped their rampant credit-based spending. In fact, the Associated Press just reported that Americans swiped their credit cards much more often this last October than they did in the previous month, and borrowed similarly more to attend school and buy cars. As the Federal Reserve reported, consumers increased their borrowing by $ 14.2 billion in October over and above what they borrowed in the previous month. Total borrowing rose to an all-time high of $ 2.75 trillion. Borrowing in the category that covers autos and student loans increased by $ 10.8 billion. Borrowing on credit cards rose by $ 3.4 billion. Most troubling is the type of borrowing that was most prevalent: negative-return investments such as student loans, credit cards, and cars. All this reflects a kind of magical thinking that renders people completely blind as to where all this is headed.
“I. Engineered Slavery: Do you think slavery died in the 1800s? Think again. Economic hit-men (lenders, essentially) have successfully enslaved-by-debt practically everything and everyone on the planet: entire industries, entire nations, state and local governments, and individuals. And they bought your servitude with money they created out of thin air! So, even if an individual doesn’t have any bank financing or credit cards, they must still make payments to the privately owned Federal Reserve … through Fed-induced inflation and excessive income taxes. As author of Confessions of an Economic Hit Man, John Perkins, would say: The time has come for the banks to collect their ‘pound of flesh’ from average citizens – by way of higher taxes, fewer social services, and the confiscation of your pensions – i.e. ‘austerity.’
“Another, more obvious, form of engineered slavery is prison labor. Laws and regulations are specifically created to add to the prison population, which, when maximized, enriches the corporations that own them, while local communities actually become poorer and more dangerous. Until we are committed to doing something about the nine points above (A through I), we will remain in the grip of a kind of collective hallucination, caught in a downward socioeconomic spiral. On the other hand, there are encouraging signs in the form of protests worldwide, alternative currency movements, and myriad creative solutions in the most affected countries – like Iceland, Greece, and Spain – where people are finally beginning to shake off their sleep.” –
[But only a miraculous U.S. shipbuilding program can solve the world’s woes. Nothing else could.]