Profit Before Growth

The economic theory in operation that has led to this current fiancial crisis, just like during the Reaganomics era and the savings and loan crisis, is that ensuring profits through welfare for the rich produces economic growth. Of course, it does not. It results in stagflation and general economic crisis.

Just like the savings and loan crisis in which loans were made to develop commercial real estate before the economic growth was there to support it (the trickle-down theory of economics), the current credit crisis was caused exactly in the same way, through real estate development, and has solicited exactly the same remedial measures.

Are we so stupid that we MUST make the same mistake over and over again?

The recovery plan offered by the treasury secretary for the financial system was predictably Hamiltonian, and opposition to it goes back to the inception of our nation and the modeling of our political-economic system.

The recovery plan is unpopular with The People, favorable to those who do not consider themselves to be a part of "the mob" described as The People. Accordingly, Alexander Hamilton's model of political economy calls for the privilege of profit in priority, assured without risk and financed by taxing The People regressively to secure the welfare of the privileged few first.

The Hamiltonian model was problematic with the popular consent of The People from the start. Not long after Independence, we had the Jacksonian era in which democracy was being reasserted as the legitimacy of power. Much of that revolved around the organization, control and practical administration of the financial system by private ownership of a small elite who considered themselves beyond the legal status of The People. Exactly the same scenario we have today.

The Hamiltonian model of political economy is what is wrong with our financial system. The model needs to be abandoned for a more pluralistic model of power and political economy. The elitist model clearly does not work for The People. The evidence is absolutely overwhelming and is decidedly confirmed by the empirics of a popular non-consent of The People. Ignoring the consent of the governed is fundamentally unconstitutional. It is illegal. Disallowing for the wisdom of popular consent, for the efficiency of pluralistic process and determination, is not just a political liability, it is a crime against civil society.

Deconsolidation of political and economic power, replacing the elitist model with the pluralist model, is fully in order.

We do not have to keep making the same mistake over and over again. We should allow the collective wisdom and righteousness of pluralistic processes, like democracy and a free and unconsolidated marketplace, to be assured in priority over a conceited, self-righteous socio-political-economic elit of an overwhelmingly verifiable incompetence!

We must abandon the profit-before-growth model of political economy (the elitist, Hamiltonian model).

The recovery plan offered by the treasury secretary is to provide the liquidity to the banking system (buy the bad debt that could not be paid due to insufficient income due to overconsolidation) and that will trickle-down to The People and stabilize the economy.

The trickle-down theory has been thoroughly tested and it verifiably fails The People with 100 percent reliability. Offering a trickle-down economic solution is an insult to human intelligence! It is nothing but the selfish conceit of a bunch of economic animals incapable of the intelligence required to admimister power toward the General Welfare. These elits do whatever they can to defeat the pluralistic processes of power because it renders their selfish incompetence obsolete.

The defining, and critically operational, characteristic of the Hamiltonian model is the regressive tax code. The first step to a more pluralistic model is a more progressive tax code.

The liquidity necessary to grow the economy before profit must be accessed where it has been consolidated into the wealth of upper incomes whether it be a business or an individual's income. If this measure is not taken, the probability of financial crisis is 100 percent, proven over and over again. It does not mean that a person or their business cannot grow and prosper. It means wealth and power cannot be consolidated into crisis proportion.

Ensuring a free and unconsolidated marketplace in priority and a progressive tax code organizes the process of ensuring growth before profit that maximizes efficiencies and innovation, ensures an easily verifiable legitimacy and productive equity, and a peaceful prosperity that, instead of always being the means of impending crisis, is not a struggle to maintain.

Very best wishes.