Thursday, October 18, 2012

3 Crimes

     There has been a growing movement among Americans opposing the growing disparity between income classes.  The middle class appears to be joining the lower, while the upper class grows more wealthy.  The occupy movement has been the most visible, but virtually everyone has some resentment about this gap.  The real tragedy is the complete failure of the populous to identify the actual problem.  That's understandable; the real problem is large, old, complex, and scary.  I'll break it down into 3 crimes which are making the super rich, richer.
     Crime #1 Fractional reserve banking.  If this term is new to you I would recommend this video.  This is the practice now exercised by every single bank in the country (probably on the planet) in which they only keep on hand a small fraction of the money which has been deposited to them for warehousing, and take the large majority of it to invest wherever they think they will make the most money. Sometimes they buy treasury bonds at a guaranteed 3% interest, sometimes they invest it in a mortgage.  In any case, your money which you deposited is not all readily available  to you, it's been taken by the bankers, invested and profited from, big profit!  Now if you come a' calling for that money, and the bank doesn't have it, no problem.  The bank just calls the Federal Reserve, part of whose mission statement is to be the 'Lender of Last resort.'  The Fed then gives a 0% interest loan to the bank and it does this by printing those dollars, thus increasing the total supply of dollars, and decreasing the value of each individual dollar. 
      Crime #2 Corporations and the State.  Large corporations are basically amoral entities that just follow profit and loss.  They usually have no convictions, but they want to grow, and they want more money.  In a truly free market they would be a fantastic institution, since the only way they could make profit is by better satisfying the needs of the consumer, and increasing the number of their consumers.  to put it simply, the only path to success in free market capitalism is to serve the masses with a product or service that betters their lives.  This is not the case in a system where the State has great deal of centralized power, as is the case today.  In this case large corporations habitually petition and lobby the government representatives with millions of dollars seeking a monopoly.  The steel workers of PA spent tremendous effort to elect Abraham Lincoln because Lincoln promised to double the tariff, freeing the steel workers from competition, and enslaving the steel consumer to the domestic producers.  In recent years the industries lobbies have become much more frightening.  The many corporations which make up the military industrial complex profit from war, and thus are constantly engaged in electing those to congress who are the greatest warmongers.  The medical insurance corporations drafted the Obamacare bill which will at the point of a gun force states to sell their insurance, and force every person to buy it.  The medical drug companies use the state run American medical association, and the FDA to eliminate any threats to their most profitable lines regardless of life giving advances.  Dr. Burzynski developed a procedure which successfully treated inoperable brain cancer, and for his incredible contribution to science he was repaid with a decade long court battle with the FDA, who still does now allow him to practice medicine on the general public.  Chemo therapy is way too profitable a business for an innovator like Burzynski to take away.  The examples go on and on.
     Crime #3 Quantitative Easing:  Since the financial crisis of 2008 there have been 3 rounds of QE or Quantitative Easing from the Federal Reserve.  What they do is print a huge amount of money, and do one of two things with it; force loan it to banks at 0% interest, who then lend the money bake to the U.S. treasury to get bonds at 3% interest.  Or they buy up toxic assets, i.e. mortgages in foreclosure, junk bonds, bad derivatives.  The idea is to prop up the stock market by infusing money into it and clearing bad assets out of it.  The losers here are the American people.  The money printing devalues our paychecks, and these toxic assets are now just public liabilities, and this is all done for the benefit of the super rich hedge fund managers, and investment bankers.
     Calls for tax code tweeks, government regulations, and more watch dog agencies will only add to the problem.  As I've shown the problem is the very existence of a centralized government with coercive agencies who can be bought for a price.

Recommended reading:

'Organized Crime' by Tom DeLilorenzo
     
     
     
    

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