In a previous article, "Public Finance and Community Power Structure" at griffithlighton.blogspot.com, we discussed the function of bifurcating the power strucuture into spheres of public and private. Where the two spheres intersect is where the rhetoric resides to direct the winds of change.
We now here the conservative critique of the neo-classical, Keynesian means of facilitating the distribution phase of the business cycle (fiscal and monetary stimulus) as a futile attempt to "tax and spend our way to prosperity." This "liberal" means-to-ends, conservatives argue, is an empirically disconfirmed hypothesis.
The tax-and-spend hypothesis is empirically disconfirmed. The hypothesis is nulled by a significant history of Keynesian fiscal and monetary policy, only to lead to our current liquidity crisis of a monumental proportion.
The rhetoric ideologically plays on the bifurcation of the power structure and the bipolar ideological debate that boxes-in ideas and arguments that fuel the winds of change beyond the duopoly of false choices and a false pluralism.
A good example of properly utilizing the bifurcation of the power strucuture is the proposed cap-and-trade energy program of the Obama administration. Directing the tax revenue from this carbon tax into green energy technologies, instead of letting it all be untraceably sucked into the abyss of class-conscious rewards and inefficiencies, the "reinvestment" dimension will utilize the private sector element of the bifurcation to green the economy. Greening will be profitable with the reinvestment being directed from the public sector.
Conservatives, of course, object that the greening policy directed from the public sector disrupts the useful bifurcation of power because, instead of generating revenues to be consolidated and paid out to the upper echelons of power (operating to merely support the power and privilege of the private sector and the welfare of its power elite first), it will actually be greening (operating for the general welfare, including the power elite). Instead of a short-term capital gain for the immediate and wasteful gratification of a spoiled and greedy elite, the revenue will be reinvested for a benefit that cannot be defined as either public or private. The benefit is, rather, pragmatic change we ALL need beyond the artificial rhetorical constructs of power and politics for solutions that are purely economic with a clearly verifiable legitimacy of providing for the general welfare.
On the other hand, that the AMA will not see a reduction in their medicare payments indicates an unwillingness of the Obama administration to dispense with power politics for pragamtic solutions neither public or private.
While I understand that a more progressive tax code will be the vehicle for reinvesting in healthcare, and the doctors' income will be affected by the code (the more income, the more tax paid), the incentive will still directly exist to increase prices, and the taxes to finance it, well beyond the rate of inflation and the increased tax rate. The cost will runaway despite the progressive code to tax the higher income so that the market pressure will not be to control the costs, but to pay the doctors the highest price for the lowest quality.
While the administration is avoiding the incentive for doctors to greedily deny healthcare to medicare patients, holding healthcare hostage to their class consciousness, it needs to be clear that public health goes well beyond taxing tobacco, and who knows what else, to regressively finance their greed. Providing healthcare will be largely a function of controlling costs and assuring the highest quality through tried-and-true competitive market practices that do not solicit the greediest among us supported by regressive tax vehicles, but the most responsible to the wants a needs, the preferences, of The People in a free marketplace. It needs to be perfectly clear to the power elite, including the doctors, it is to be freedom before tyranny whether public or priavte!
What obtains outside the box of the liberal/conservative theories and practices is the real change we need. Ideas to fuel the winds of change can be found at griffithlighton.blogspot.com.
Saturday, February 28, 2009
Rebuilding the Economy
To rebuild the economy requires we consider, once again, the classical and neo-classical models of capitalism.
In a previous article, "Shorting the Economy" at griffithlighton.blogspot.com, I stated that there is no shortage of savings (the accumulation of capital). The question is who owns it, or how it is distributed.
Classical capitalism is composed of two macro-cyclical trends: the accumulation phase, and the distribution phase. At the macro scale, capital accumulates into ownership of those who have invested existing capital for a return on the investment. The process conserves ownership of the capital and successful businesses share in its distribution based on the return on that capital (the measure of the profit margin).
The foundation of the classical model is the fundamental elitist ownership of the capital with the money supply expanded by derivative financial commerce such as credit and issuing stocks and bonds. The process is classically the trickle-down economics model with the structural power of commerce extending from the top down where the capital (the savings) largely resides. Even the savings of non-elites, even if independently micro-managed by its small owners from personal accounts, is ultimately macro-managed at the upper echelon of capital management where the mass movement (the money flow measures) of capital dictate the bid within markets over time from the macro to the micro level of this power structure.
While being able to dictate the direction, the trend, of prices and markets is the antithesis of a free market, the frequency, the length of the accumulation trend is long enough to give the outcome the illusion of a free-market legitimacy--that no one person or entity can dictate prices and the direction of markets. The outcome appears force majeur when it really is the deliberate active management of the capital at the fundamental level of power to yield a reliable and easily predictable outcome in the long term--conserving the ownership of the capital at the upper echelon of power, or what a free market fundamentally is not.
If a free market is what we are all expecting to achieve equitably legitimate outcomes, this is where the legacy of the classical model of capitalism, the neo-classical model, fails us.
This brings us to the distribution phase of the cycle.
When the capital becomes so accumulated that expansion of the economy cannot continue without sharing the capital, and power, crisis ensues. It is the classical crisis of overproduction. The capital is so accumulated (the power so consolidated) that society cannot afford to buy the goods and services it produces, being in a condition of oversupply that is caused by a lack of demand (purchasing power). The effect is deflation. To reduce the oversupply (to increase the demand), credit is extended, but because the value has not been properly retributed to its source (its proper ownership), credit becomes over-extended and crisis ensues.
The way capital is shared without relinquishing its ownership at the upper echelon of the power structure, the means by which the surplused value is retributed, is by the extension of credit--an expansion of the money supply. So we see, there is no dirth of savings. Americans create plenty of value, and that value is saved plenty. It is not properly retributed. The effect is our current mortgage crisis and the crisis of illiquid financial markets, or deflation.
Whether the practical model is classical or neo-classical, the effect is the same--deflation. The improvement the neo-classical model provides is for the minimal payment of the retributive value to stabilize the system of power; to conserve the power structure.
The neo-classical model, Keynesianism, operates on the hyperextension of credit to provide the needed liquidity with government spending. It can be in any form and is paid for through Treasury and the Federal Reserve which is a binary organized technology for the extension of credit and its payment (i.e., expansion and contraction of the money supply, or monetarism).
Whether the tax code is regressive or progressive is the determining variable for the value, the distribution, of the capital. The more progressive the tax code, the less non-elites pay to repay the extended credit (expansion of the money supply) to retribute the value, and the less the debt is worth to the elite of the power structure. It is a zero-sum game.
When we now here conservatives argue that the call for a more progressive tax code along with monetarist expansion of the economy is a burden of debt to our children, they literally mean "their" children, the children of the wealthy. The savings of the non-elite increases. The savings of the elite decreases. The capital is more equitably shared and the value added to the fundamental capital properly retributed to its source.
The recovery and the reinvestment MUST BE from the bottom up in order to not be just another neo-classical, Keynesian tax and spend program that ensures the stability of the status quo.
Conservatives are providing the classical response to the neo-classical policies and programs we are now engaging. A progressive tax code is not alone enough, but it is necessary, and conservatives and liberals know very well that without a strategic reinvestment for pluralizing our economy--deconsolidating the capital, industry and markets, the cyclical crisis of accumulation and distribution is assured to be the vehicle for abuse of power well into the future.
Instead of being properly marginalized, the conservative element is co-opted into a binary system of toggling realpolitique of falsely competing ideologies. Ideology "A" effects realignment with ideology "B," to "A" to "B" and so on.... It is not the model of pluralism though it intentionally appears to be.
The conservative rhetoric is already setting up for the predictable toggle switch when the Keynesian recovery program from the top down fails to properly retribute the value and The People are left with the debtor assignment on the public debt by operation of a centrally planned, top down, capitalist economy--what the rhetoric currently describes as the burden of debt going forward that will bankrupt the government (The People).
Quite the contrary. Bottom-up reinvestment financed through a more progressive tax code will lead to robust growth and a recovery that is largely out of the hands of the power elite. The recent negative sentiment of the stock market is political, not economic. That will become apparent when the stock market turns into a raging bull with the prospect of 3 percent growth, and a rising rate of profits, in the next twelve months.
Without rebuilding (reinvesting, recapitalizing) the economy from the bottom up, the crisis of overproduction will successfully recycle by "the will to power" considered to be "beyond good and evil."
In a previous article, "Shorting the Economy" at griffithlighton.blogspot.com, I stated that there is no shortage of savings (the accumulation of capital). The question is who owns it, or how it is distributed.
Classical capitalism is composed of two macro-cyclical trends: the accumulation phase, and the distribution phase. At the macro scale, capital accumulates into ownership of those who have invested existing capital for a return on the investment. The process conserves ownership of the capital and successful businesses share in its distribution based on the return on that capital (the measure of the profit margin).
The foundation of the classical model is the fundamental elitist ownership of the capital with the money supply expanded by derivative financial commerce such as credit and issuing stocks and bonds. The process is classically the trickle-down economics model with the structural power of commerce extending from the top down where the capital (the savings) largely resides. Even the savings of non-elites, even if independently micro-managed by its small owners from personal accounts, is ultimately macro-managed at the upper echelon of capital management where the mass movement (the money flow measures) of capital dictate the bid within markets over time from the macro to the micro level of this power structure.
While being able to dictate the direction, the trend, of prices and markets is the antithesis of a free market, the frequency, the length of the accumulation trend is long enough to give the outcome the illusion of a free-market legitimacy--that no one person or entity can dictate prices and the direction of markets. The outcome appears force majeur when it really is the deliberate active management of the capital at the fundamental level of power to yield a reliable and easily predictable outcome in the long term--conserving the ownership of the capital at the upper echelon of power, or what a free market fundamentally is not.
If a free market is what we are all expecting to achieve equitably legitimate outcomes, this is where the legacy of the classical model of capitalism, the neo-classical model, fails us.
This brings us to the distribution phase of the cycle.
When the capital becomes so accumulated that expansion of the economy cannot continue without sharing the capital, and power, crisis ensues. It is the classical crisis of overproduction. The capital is so accumulated (the power so consolidated) that society cannot afford to buy the goods and services it produces, being in a condition of oversupply that is caused by a lack of demand (purchasing power). The effect is deflation. To reduce the oversupply (to increase the demand), credit is extended, but because the value has not been properly retributed to its source (its proper ownership), credit becomes over-extended and crisis ensues.
The way capital is shared without relinquishing its ownership at the upper echelon of the power structure, the means by which the surplused value is retributed, is by the extension of credit--an expansion of the money supply. So we see, there is no dirth of savings. Americans create plenty of value, and that value is saved plenty. It is not properly retributed. The effect is our current mortgage crisis and the crisis of illiquid financial markets, or deflation.
Whether the practical model is classical or neo-classical, the effect is the same--deflation. The improvement the neo-classical model provides is for the minimal payment of the retributive value to stabilize the system of power; to conserve the power structure.
The neo-classical model, Keynesianism, operates on the hyperextension of credit to provide the needed liquidity with government spending. It can be in any form and is paid for through Treasury and the Federal Reserve which is a binary organized technology for the extension of credit and its payment (i.e., expansion and contraction of the money supply, or monetarism).
Whether the tax code is regressive or progressive is the determining variable for the value, the distribution, of the capital. The more progressive the tax code, the less non-elites pay to repay the extended credit (expansion of the money supply) to retribute the value, and the less the debt is worth to the elite of the power structure. It is a zero-sum game.
When we now here conservatives argue that the call for a more progressive tax code along with monetarist expansion of the economy is a burden of debt to our children, they literally mean "their" children, the children of the wealthy. The savings of the non-elite increases. The savings of the elite decreases. The capital is more equitably shared and the value added to the fundamental capital properly retributed to its source.
The recovery and the reinvestment MUST BE from the bottom up in order to not be just another neo-classical, Keynesian tax and spend program that ensures the stability of the status quo.
Conservatives are providing the classical response to the neo-classical policies and programs we are now engaging. A progressive tax code is not alone enough, but it is necessary, and conservatives and liberals know very well that without a strategic reinvestment for pluralizing our economy--deconsolidating the capital, industry and markets, the cyclical crisis of accumulation and distribution is assured to be the vehicle for abuse of power well into the future.
Instead of being properly marginalized, the conservative element is co-opted into a binary system of toggling realpolitique of falsely competing ideologies. Ideology "A" effects realignment with ideology "B," to "A" to "B" and so on.... It is not the model of pluralism though it intentionally appears to be.
The conservative rhetoric is already setting up for the predictable toggle switch when the Keynesian recovery program from the top down fails to properly retribute the value and The People are left with the debtor assignment on the public debt by operation of a centrally planned, top down, capitalist economy--what the rhetoric currently describes as the burden of debt going forward that will bankrupt the government (The People).
Quite the contrary. Bottom-up reinvestment financed through a more progressive tax code will lead to robust growth and a recovery that is largely out of the hands of the power elite. The recent negative sentiment of the stock market is political, not economic. That will become apparent when the stock market turns into a raging bull with the prospect of 3 percent growth, and a rising rate of profits, in the next twelve months.
Without rebuilding (reinvesting, recapitalizing) the economy from the bottom up, the crisis of overproduction will successfully recycle by "the will to power" considered to be "beyond good and evil."
Wednesday, February 25, 2009
Public Finance and Community Power Structure
Distinct bifurcation of the public and private sectors becomes evermore blurred. While it was never a clearly defined distinction in practice, it is critical to the Hamiltonian model of power and political economy to maintain a binary system of power in theory because bivariate systems can practically operate with monolithic authority while giving the appearance of pluralistic freedom of choice--the phenomenon of false choice.
Bifurcating the power structure--a two-party system orperationalized with the organized bifurcation of the public and private sectors--provides a practical means for elitist control of the political economy with a free-market legitimacy. Where legitimacy of the outcome of one is called into question, Hamiltonians (elitists) can conveniently argue the maintenance of pluralism both in theory and practice, justifying their command and control as the operation of a pluralistically organized means of a popular consent. That consent, which is the most basic, the most natural, legitimacy of power and contained within our Constitution as the manifestation of the fundamental "natural" rights of humanity, was at first applied to limiting the power of the royal, "ruling" class and to expand the power of the business elite as the "ruling class."
The power of the King (government) is inept, wasteful and burdensome. It is to be limited to promoting the welfare of the business elite. Ensuring the welfare of the rich is fundamental to the general welfare and is the utilitarian aspect of the Hamiltonian model that gives it arguable strength, or virtue.
The phrase "some people are more equal than others" refers to the supposedly "natural," Nietzche-like superiority-of-elits argument. It does not contradict the bourgeoise argument for displacing the power of royalty, but confirms it with, paradoxically, the argument for a more pluralistic form of power. The free market, according to the argument, provides a constant format, an environment, that allows for a "natural" change of elits if necessary without bloody revolution. This "natural" selection of the fittest to rule is what the Hamiltonian concept of the "natural rights of man" largely refers to. It is the foundation of the Hamiltonian model of power and political economy and the bifurcated system of public and private sectors Alexander Hamilton and the Federalists generally favored at the inception of our nation to the very strongest objection of Jeffersonian Republicans.
We now see the people that organized, that engineered, the current economic crisis being rewarded with huge bonuses. They are not being rewarded for failure. They are being rewarded for organizing and operating within the Hamiltonian model with the "successful" result of deflating the economy and very clearly defining the class distinction of just exactly who is "more equal than others," or the ruling class.
The mostly Ivy-League educated MBA elite that have foisted our economy into the greatest crisis since The Depression are not being rewarded for failure. They are being rewarded for success and, as Hamiltonians know all too well, nature tends to replicate success, and this model for success is replicated across all jurisdictional boundaries, right down to the community level.
A significant difference between the Federalists and Republicans among equal elits was, and is, the power to issue currency for legal tender. Striving to be superior among elits is to entrepreneur your capital (your property) across jurisdictional boundaries. The bigger you are the better because it is the key to gaining power and keeping it, and controlling the money supply is as big and powerful as you can get--all of what Jeffersonians so strongly objected to. Understand, for example, that derivatives--the primary tool of MBA's to make themselves and their underwriters rich at the expense of everyone else--are a private sector expansion of the money supply, and having more money than anyone else--having the ability to command the bid--makes for more power than anyone else; hardly the model of a free-market economy. While the total GDP of the world is around $50 trillion, derivatives recently totaled over $500 trillion before becoming unwound, causing the monumental economic crisis we now have (an accumulation of wealth and consolidation of power that Jeffersonians warned of).
The 500 trillion was used to gain and consolidate the capital (the liquidity crisis we are now experiencing). Converting all that leverage into as much capital gained as possible has to come from somewhere that is considered legal tender (the official money supply), and that would explain where the $1 trillion of Federal Reserve funds reported mysteriously unaccounted for probably went--to make the value of the derivative instruments liquid. It also defines where the tax code needs to be progressed to quickly and effectively pull us out of recession with strategic reinvestment and reduction of the budget deficit.
The money supply and who controls it is at the heart of the public sector's current effort for economic recovery and reinvestment. It reverberates right down to the community level of power where states and municipals maintain the means of power--the bond and tax authority.
Since a state or municipality cannot print its money, bonds are floated, paid with the tax authority, and what we see now is, of course, all manner of regressive taxation to balance the budget.
Regressing the tax code is fundamental to the return-on-investment value of the bonds. It is antithetical to tax the people that can afford to buy the vast majority of the bonds in order to pay for them. Regressive taxation maximizes the value of the bonds to the holder and so are tax exempt, perfectly fitting the Hamiltonian model in which the "little people" pay the taxes, local government agents collect the taxes and distribute the funds to the ruling class busily legislating government projects and contracts that require floating bonds. The process takes on a decidedly feudal form.
While the regressive tax burden gives the bonds their value, the inherently elitist model of power it supports is ultimately deflationary, just as it is at the national level. The value of the regressive tax burden, the sacrifice, since it is no sacrifice for the elite of power (assuring the welfare of the rich in priority), bonds tend to be issued till the value of the bonds experience a falling rate of profit, or deflation (the inability to pay the value, or collect the tax). Not only is the bond process deflationary, but the means of public finance to support the private sector contracts (the profits) is also deflationary because it relies on regressive taxation. The public has less money to spend because it has been taxed to finance the profit and support the value of the bonds that diminish in value due to the deflationary tendency. The result is to tax the poor even more to make the rich richer: that is, to maintain the elite of power--the Hamiltonian model.
As we look to "shovel ready" projects for Federal funding we must keep in mind that it supports the Hamiltonian model that causes crisis and rewards it as "success." This is why President Obama is saying he will "call out" the agents of corrupt practices at the community level of power where the Federal government is expanding its money supply and enhancing the deflationary tendency of the tax/bond authority. Deflation is the problem to be solved here, providing the means of enhancing it is clearly not the solution.
For example, the Commonwealth of Kentucky recently legislated a huge tax increase on alcohol and tobacco. Despite that the governor was elected on a platform of not raising these taxes, of not balancing the budget with regressive tax measures, he pushed it hard and eventually got it. The incentive to commit such a blatant fraud is the "success" of working within the model of power. In the private sector this kind of fraud is a crime. In the public sector it is pragmatism with the sanction to be exacted in the voting booth. The governor and his legislative accomplices will not go to jail but will be rewarded with a firm station within the power structure, within the private sector if not public. Instead of providing for the commonwealth, the government was applied to regressively tax its citizens to finance making the elite rich, and even more ignominous, claim it to be the general welfare and falsely confirm the Hamiltonian hypothesis that the operation of government is the problem by causing the apparent evidence for it--operation of the regressive tax burden and its deflationary tendency by means of government authority.
The elite beneficiaries are not just the brick and morter contractors, real estate developers, brokers and agents, but healthcare professionals. Doctors in particular.
Kentucky's lieutenant governor is an M.D.. The chief legislative proponent for the regressive tax on tobacco, not alcohol, curiously, is an M.D.. Among the wealthiest citizens within the state are medical doctors. They every bit consider themselves to be the elite of society and should be the beneficiary of the primary means of Hamiltonian power--regressive tax policy.
Healthcare costs well exceed the rate of inflation, even with gas prices over four dollars a gallon, because the healthcare sector is feeding at the public trough, utilizing third-party billing practices to bilk the taxpayer and always needing tax increases to stay ahead of inflation that it is causing. Fat healthcare incomes factor prominently into the deflationary trend of our economy in true Hamiltonian fashion. Funding healthcare with regressive tax vehicles is entirely deflationary. Rather than reducing costs, it just provides the funds for price increases. The result is less money for the consumer to spend and small businesses to invest, a high debt-equity ratio and a cohort of wealthy doctors with the time and money to legislate big tax (income) increases.
Supposedly, the funds collected with Kentucky's new regressive tax increases will allow funding to be more available for healthcare, like the SCHIP. It is an argument non sequitor. Providing for the health and welfare is not accomplished with a regressive tax burden, by taxing the least able to pay, because it is deflationary. Even if fewer people drink and smoke, there will be the detriment of declining revenue and the need to increase taxes. It makes no sense because it is not intended to provide for the health and welfare of the citizenry, but to provide for the means of power--the regressive mode of taxation--Hamiltonianism, the fundamental source of the problem across all jurisdictional boundaries, not the solution.
Bifurcating the power structure--a two-party system orperationalized with the organized bifurcation of the public and private sectors--provides a practical means for elitist control of the political economy with a free-market legitimacy. Where legitimacy of the outcome of one is called into question, Hamiltonians (elitists) can conveniently argue the maintenance of pluralism both in theory and practice, justifying their command and control as the operation of a pluralistically organized means of a popular consent. That consent, which is the most basic, the most natural, legitimacy of power and contained within our Constitution as the manifestation of the fundamental "natural" rights of humanity, was at first applied to limiting the power of the royal, "ruling" class and to expand the power of the business elite as the "ruling class."
The power of the King (government) is inept, wasteful and burdensome. It is to be limited to promoting the welfare of the business elite. Ensuring the welfare of the rich is fundamental to the general welfare and is the utilitarian aspect of the Hamiltonian model that gives it arguable strength, or virtue.
The phrase "some people are more equal than others" refers to the supposedly "natural," Nietzche-like superiority-of-elits argument. It does not contradict the bourgeoise argument for displacing the power of royalty, but confirms it with, paradoxically, the argument for a more pluralistic form of power. The free market, according to the argument, provides a constant format, an environment, that allows for a "natural" change of elits if necessary without bloody revolution. This "natural" selection of the fittest to rule is what the Hamiltonian concept of the "natural rights of man" largely refers to. It is the foundation of the Hamiltonian model of power and political economy and the bifurcated system of public and private sectors Alexander Hamilton and the Federalists generally favored at the inception of our nation to the very strongest objection of Jeffersonian Republicans.
We now see the people that organized, that engineered, the current economic crisis being rewarded with huge bonuses. They are not being rewarded for failure. They are being rewarded for organizing and operating within the Hamiltonian model with the "successful" result of deflating the economy and very clearly defining the class distinction of just exactly who is "more equal than others," or the ruling class.
The mostly Ivy-League educated MBA elite that have foisted our economy into the greatest crisis since The Depression are not being rewarded for failure. They are being rewarded for success and, as Hamiltonians know all too well, nature tends to replicate success, and this model for success is replicated across all jurisdictional boundaries, right down to the community level.
A significant difference between the Federalists and Republicans among equal elits was, and is, the power to issue currency for legal tender. Striving to be superior among elits is to entrepreneur your capital (your property) across jurisdictional boundaries. The bigger you are the better because it is the key to gaining power and keeping it, and controlling the money supply is as big and powerful as you can get--all of what Jeffersonians so strongly objected to. Understand, for example, that derivatives--the primary tool of MBA's to make themselves and their underwriters rich at the expense of everyone else--are a private sector expansion of the money supply, and having more money than anyone else--having the ability to command the bid--makes for more power than anyone else; hardly the model of a free-market economy. While the total GDP of the world is around $50 trillion, derivatives recently totaled over $500 trillion before becoming unwound, causing the monumental economic crisis we now have (an accumulation of wealth and consolidation of power that Jeffersonians warned of).
The 500 trillion was used to gain and consolidate the capital (the liquidity crisis we are now experiencing). Converting all that leverage into as much capital gained as possible has to come from somewhere that is considered legal tender (the official money supply), and that would explain where the $1 trillion of Federal Reserve funds reported mysteriously unaccounted for probably went--to make the value of the derivative instruments liquid. It also defines where the tax code needs to be progressed to quickly and effectively pull us out of recession with strategic reinvestment and reduction of the budget deficit.
The money supply and who controls it is at the heart of the public sector's current effort for economic recovery and reinvestment. It reverberates right down to the community level of power where states and municipals maintain the means of power--the bond and tax authority.
Since a state or municipality cannot print its money, bonds are floated, paid with the tax authority, and what we see now is, of course, all manner of regressive taxation to balance the budget.
Regressing the tax code is fundamental to the return-on-investment value of the bonds. It is antithetical to tax the people that can afford to buy the vast majority of the bonds in order to pay for them. Regressive taxation maximizes the value of the bonds to the holder and so are tax exempt, perfectly fitting the Hamiltonian model in which the "little people" pay the taxes, local government agents collect the taxes and distribute the funds to the ruling class busily legislating government projects and contracts that require floating bonds. The process takes on a decidedly feudal form.
While the regressive tax burden gives the bonds their value, the inherently elitist model of power it supports is ultimately deflationary, just as it is at the national level. The value of the regressive tax burden, the sacrifice, since it is no sacrifice for the elite of power (assuring the welfare of the rich in priority), bonds tend to be issued till the value of the bonds experience a falling rate of profit, or deflation (the inability to pay the value, or collect the tax). Not only is the bond process deflationary, but the means of public finance to support the private sector contracts (the profits) is also deflationary because it relies on regressive taxation. The public has less money to spend because it has been taxed to finance the profit and support the value of the bonds that diminish in value due to the deflationary tendency. The result is to tax the poor even more to make the rich richer: that is, to maintain the elite of power--the Hamiltonian model.
As we look to "shovel ready" projects for Federal funding we must keep in mind that it supports the Hamiltonian model that causes crisis and rewards it as "success." This is why President Obama is saying he will "call out" the agents of corrupt practices at the community level of power where the Federal government is expanding its money supply and enhancing the deflationary tendency of the tax/bond authority. Deflation is the problem to be solved here, providing the means of enhancing it is clearly not the solution.
For example, the Commonwealth of Kentucky recently legislated a huge tax increase on alcohol and tobacco. Despite that the governor was elected on a platform of not raising these taxes, of not balancing the budget with regressive tax measures, he pushed it hard and eventually got it. The incentive to commit such a blatant fraud is the "success" of working within the model of power. In the private sector this kind of fraud is a crime. In the public sector it is pragmatism with the sanction to be exacted in the voting booth. The governor and his legislative accomplices will not go to jail but will be rewarded with a firm station within the power structure, within the private sector if not public. Instead of providing for the commonwealth, the government was applied to regressively tax its citizens to finance making the elite rich, and even more ignominous, claim it to be the general welfare and falsely confirm the Hamiltonian hypothesis that the operation of government is the problem by causing the apparent evidence for it--operation of the regressive tax burden and its deflationary tendency by means of government authority.
The elite beneficiaries are not just the brick and morter contractors, real estate developers, brokers and agents, but healthcare professionals. Doctors in particular.
Kentucky's lieutenant governor is an M.D.. The chief legislative proponent for the regressive tax on tobacco, not alcohol, curiously, is an M.D.. Among the wealthiest citizens within the state are medical doctors. They every bit consider themselves to be the elite of society and should be the beneficiary of the primary means of Hamiltonian power--regressive tax policy.
Healthcare costs well exceed the rate of inflation, even with gas prices over four dollars a gallon, because the healthcare sector is feeding at the public trough, utilizing third-party billing practices to bilk the taxpayer and always needing tax increases to stay ahead of inflation that it is causing. Fat healthcare incomes factor prominently into the deflationary trend of our economy in true Hamiltonian fashion. Funding healthcare with regressive tax vehicles is entirely deflationary. Rather than reducing costs, it just provides the funds for price increases. The result is less money for the consumer to spend and small businesses to invest, a high debt-equity ratio and a cohort of wealthy doctors with the time and money to legislate big tax (income) increases.
Supposedly, the funds collected with Kentucky's new regressive tax increases will allow funding to be more available for healthcare, like the SCHIP. It is an argument non sequitor. Providing for the health and welfare is not accomplished with a regressive tax burden, by taxing the least able to pay, because it is deflationary. Even if fewer people drink and smoke, there will be the detriment of declining revenue and the need to increase taxes. It makes no sense because it is not intended to provide for the health and welfare of the citizenry, but to provide for the means of power--the regressive mode of taxation--Hamiltonianism, the fundamental source of the problem across all jurisdictional boundaries, not the solution.
Science and Life
While we learn that science is for designing computers, orbiting satellites and going to Mars, the application of the scientific method is much more.
Science has application in everyday life. We tend not to apply it because it is impersonal and associated with abstruse mathematical language and a strict, unrelenting logic of always trying to disprove what we consider to be the truth.
Look at the state of our economy, for example. While it determines every aspect of our lives, we tend to analyze it with unscientific cognitive process.
For example, if we say that all fair-haired people are criminals, there will be a tendency to treat them as criminals, and they will, then, tend to be criminals at the margin of social acceptance and participation. It is a tautology, a deduction that proceeds from a false premise resulting in a false confirmation of the hypothesis by causing the evidence. The result is a false induction.
Now that we face verifying the effectiveness of the various means to stimulate our economy out of a great post-Keynesian recession (deflation) in which economists are falsely arguing is unprecedented and are therefore at a loss for what to verifiably do, our ability to give the scientific method an application to everyday life is being saliently challenged.
If we proceed from the premise that government intervention in the marketplace is bad, there is a tendency to treat the need for intervention as bad, and that will, then, tend to result in policies that directly or indirectly result in a regressive tax burden that has a deflationary tendency that causes the need for government intervention. It is a tautology, a deduction that proceeds from a false premise resulting in a false confirmation of the hypothesis by causing the evidence. The result is a false induction.
As we apply the scientific method it is critical that we recognize that empirical truth is not something that can be proven. It can only be continuously tested and disproven (not confirmed by the evidence). Truth, then, is always becoming evermore apparent, or cognizant, as we always try to disprove it. This is called the null hypothesis. Like Einstein once said, paraphrasing: science is the cognitive process of always trying to disprove the existence of God. Since the process of nulling the hypothesis is in continuous process, the existence of God is continuously confirmed. Rather than being in conflict, science and theism is thoroughly compatible, reinforcing, and is unreasonably rejected as a cognitive method for evaluating everyday life. Rather, God challenges us to null the hypothesis--to find the truth.
If we are to find the truth of our economic predicament, what about the working hypothesis has been nulled or disconfirmed?
That would be the "trickle-down" hypothesis, or the hypothesis that regressive taxation produces the general welfare or the greatest public good.
The hypothesis has been thoroughly tested and decidely nulled!
The course of action to be taken for economic stimulus and reinvestment in 2009 is empirically clear and convincing.
A progressive tax code will be a minimal government intervention that will maximize the ability to reinvest, recapitalize, our economy into a sustainably peaceful and prosperous pluralism without either monetizing the debt or burdening the least able to pay it only with the assurance of future deflationary trends that can in no way be defined as the general welfare or the greatest public good.
Science has application in everyday life. We tend not to apply it because it is impersonal and associated with abstruse mathematical language and a strict, unrelenting logic of always trying to disprove what we consider to be the truth.
Look at the state of our economy, for example. While it determines every aspect of our lives, we tend to analyze it with unscientific cognitive process.
For example, if we say that all fair-haired people are criminals, there will be a tendency to treat them as criminals, and they will, then, tend to be criminals at the margin of social acceptance and participation. It is a tautology, a deduction that proceeds from a false premise resulting in a false confirmation of the hypothesis by causing the evidence. The result is a false induction.
Now that we face verifying the effectiveness of the various means to stimulate our economy out of a great post-Keynesian recession (deflation) in which economists are falsely arguing is unprecedented and are therefore at a loss for what to verifiably do, our ability to give the scientific method an application to everyday life is being saliently challenged.
If we proceed from the premise that government intervention in the marketplace is bad, there is a tendency to treat the need for intervention as bad, and that will, then, tend to result in policies that directly or indirectly result in a regressive tax burden that has a deflationary tendency that causes the need for government intervention. It is a tautology, a deduction that proceeds from a false premise resulting in a false confirmation of the hypothesis by causing the evidence. The result is a false induction.
As we apply the scientific method it is critical that we recognize that empirical truth is not something that can be proven. It can only be continuously tested and disproven (not confirmed by the evidence). Truth, then, is always becoming evermore apparent, or cognizant, as we always try to disprove it. This is called the null hypothesis. Like Einstein once said, paraphrasing: science is the cognitive process of always trying to disprove the existence of God. Since the process of nulling the hypothesis is in continuous process, the existence of God is continuously confirmed. Rather than being in conflict, science and theism is thoroughly compatible, reinforcing, and is unreasonably rejected as a cognitive method for evaluating everyday life. Rather, God challenges us to null the hypothesis--to find the truth.
If we are to find the truth of our economic predicament, what about the working hypothesis has been nulled or disconfirmed?
That would be the "trickle-down" hypothesis, or the hypothesis that regressive taxation produces the general welfare or the greatest public good.
The hypothesis has been thoroughly tested and decidely nulled!
The course of action to be taken for economic stimulus and reinvestment in 2009 is empirically clear and convincing.
A progressive tax code will be a minimal government intervention that will maximize the ability to reinvest, recapitalize, our economy into a sustainably peaceful and prosperous pluralism without either monetizing the debt or burdening the least able to pay it only with the assurance of future deflationary trends that can in no way be defined as the general welfare or the greatest public good.
Economic Stimulus: What To Do, What Not To Do
The depth and breadth of the current macro-economic cyclical trend has everyone's attention. Its saliency is marked by a spreading economic detriment that reaches into the upper middle class. The current economic trend defines the distinction between being middle and upper class--the degree to which you sacrifice your net worth to the capital owned, consolidated, by the upper class.
Since the effect of the boom-to-bust trend is to define class distinction, there is a tendency to trickle down the demonstration of power by the middle class with regressive tax policies to address burgeoning budget deficits. Exacting a regressive tax burden is a demonstration of power that gives a sense of parity with upper class status. The financing for the SCHIP program recently legislated is highly regressive, for example, providing a source of revenue for members of the upper middle class along with a sense of being powerful enough to politically apply their economic self-interest (regressive tax policy) in the name of the public good or the general welfare, just like the upper class does.
Regressive tax poicy is highly deflationary. It is the first thing NOT to do if we are to stimulate the economy out of the deflationary phase of the business cycle, yet it was the first thing to do once a new administration took power and a new congress sworn in.
Where regressive tax policy thrusts us into the depths of recession, a progressive policy will effectively pull us out. If, as a practical example, we want to fund health care for those that cannot afford it, a progressive burden is the pragmatic measure, but the cohort that is to shoulder the brunt of the burden do not occupy legislative seats at any jurisdictional level of government.
For the middle class cohort seeking to demonstrate power in the throws of class distinction, a regressive tax burden is not in its self-interest. Rather, it sustains and validates a tax policy that is the source of its detriment, giving false confirmation to economic policy that is otherwise not confirmed in the most salient way, becoming the willing tool of the upper class and its confirmably disreputable mode of systematic operation by pragmatic means of a regressive tax burden.
Since the effect of the boom-to-bust trend is to define class distinction, there is a tendency to trickle down the demonstration of power by the middle class with regressive tax policies to address burgeoning budget deficits. Exacting a regressive tax burden is a demonstration of power that gives a sense of parity with upper class status. The financing for the SCHIP program recently legislated is highly regressive, for example, providing a source of revenue for members of the upper middle class along with a sense of being powerful enough to politically apply their economic self-interest (regressive tax policy) in the name of the public good or the general welfare, just like the upper class does.
Regressive tax poicy is highly deflationary. It is the first thing NOT to do if we are to stimulate the economy out of the deflationary phase of the business cycle, yet it was the first thing to do once a new administration took power and a new congress sworn in.
Where regressive tax policy thrusts us into the depths of recession, a progressive policy will effectively pull us out. If, as a practical example, we want to fund health care for those that cannot afford it, a progressive burden is the pragmatic measure, but the cohort that is to shoulder the brunt of the burden do not occupy legislative seats at any jurisdictional level of government.
For the middle class cohort seeking to demonstrate power in the throws of class distinction, a regressive tax burden is not in its self-interest. Rather, it sustains and validates a tax policy that is the source of its detriment, giving false confirmation to economic policy that is otherwise not confirmed in the most salient way, becoming the willing tool of the upper class and its confirmably disreputable mode of systematic operation by pragmatic means of a regressive tax burden.
Understanding Liquidity Crisis and the Measures to Correct for It
February 21, 2009
The current state of our economy is liquidity crisis. The capital has been allowed to become so accumulated, consolidated, that the economy can neither be sustained or expanded. The result is negative growth, massive unemployment and the declining rate of profit (falling prices following the stagflationary phase of the post-monetarist, Keynesian business cycle).
The profit (the pricing) that creates capital can no longer be sustained (the deflationary phase of the cycle) because that value has been accumulated and not pluralistically, systematically, redistributed by economic means of a free and unconsolidated marketplace. In order to return to profitability (for your 401k to gain rather than lose value to the accumulation of capital into the private property, the ownership, of a few plutocrats) the capital must be redistributed--recycled.
The lack of pluralism, the lack of a free-market economics, is the systemic economic risk, or instability, we are experiencing that comes with the accumulation of wealth and, therefore, power.
In order for the economy to move out of liquidity crisis (the deflationary phase of the business cycle), redistribution of the capital (the distribution phase of the business cycle) MUST occur. It is a necessary condition. Nothing else will suffice.
This description has been the "economics" of our current crisis.
The "political" description of the crisis is entirely a function of who owns, and therefore controls, the capital and the ability, the means and measures, to correct for liquidity crisis. For the plutocrats, this is a function of how much the non-elite are willing to suffer, or sacrifice, for the accumulation of the capital into the ownership, the controlling hands, the command, of the elite. The more the elite can make the non-elite suffer without retribution (loss of the value accumulated) measures the amount of political power and the amount of value that must be retributed in order to minimize the systemic risk-to-value obtained, or the retributive value.
The trick, the political process, is to go through the distribution phase of the business cycle without giving up ownership of the capital to the non-elite, or minimizing the retributive value. This is accomplished mainly by arguing that government--the means of retributing ownership of the capital--is the problem and not the solution so that the distribution phase of the cycle does not become an event of economic re-distribution that eliminates the reoccurrence of liquidity crisis.
Retributing the value at the distribution phase very simply minimizes the probability (the risk) of the massive liquidity crisis, the systemic risk, we are now experiencing. It forms the basis for pluralizing the economy so that it is not dependant on any one economic entity that holds us ransome to gargantuant bailout values (the amount of value to be retributed) like we have now.
Fully retributing the value obviates all the other complex political means and measures we are now engaging to preserve the current system, the ratio, of risk-to-reward.
Keynesian measures preserve the current risk/reward ratio. It is a political measure, not an economic one. That's why there is a general sense of dissatisfaction with the current mode of stimulus measures: it serves to redistribute value politically rather than retribute it economically for a fair-and-equitable exchange of value that makes for economic stability or low-to-no systemic risk.
The current state of our economy is liquidity crisis. The capital has been allowed to become so accumulated, consolidated, that the economy can neither be sustained or expanded. The result is negative growth, massive unemployment and the declining rate of profit (falling prices following the stagflationary phase of the post-monetarist, Keynesian business cycle).
The profit (the pricing) that creates capital can no longer be sustained (the deflationary phase of the cycle) because that value has been accumulated and not pluralistically, systematically, redistributed by economic means of a free and unconsolidated marketplace. In order to return to profitability (for your 401k to gain rather than lose value to the accumulation of capital into the private property, the ownership, of a few plutocrats) the capital must be redistributed--recycled.
The lack of pluralism, the lack of a free-market economics, is the systemic economic risk, or instability, we are experiencing that comes with the accumulation of wealth and, therefore, power.
In order for the economy to move out of liquidity crisis (the deflationary phase of the business cycle), redistribution of the capital (the distribution phase of the business cycle) MUST occur. It is a necessary condition. Nothing else will suffice.
This description has been the "economics" of our current crisis.
The "political" description of the crisis is entirely a function of who owns, and therefore controls, the capital and the ability, the means and measures, to correct for liquidity crisis. For the plutocrats, this is a function of how much the non-elite are willing to suffer, or sacrifice, for the accumulation of the capital into the ownership, the controlling hands, the command, of the elite. The more the elite can make the non-elite suffer without retribution (loss of the value accumulated) measures the amount of political power and the amount of value that must be retributed in order to minimize the systemic risk-to-value obtained, or the retributive value.
The trick, the political process, is to go through the distribution phase of the business cycle without giving up ownership of the capital to the non-elite, or minimizing the retributive value. This is accomplished mainly by arguing that government--the means of retributing ownership of the capital--is the problem and not the solution so that the distribution phase of the cycle does not become an event of economic re-distribution that eliminates the reoccurrence of liquidity crisis.
Retributing the value at the distribution phase very simply minimizes the probability (the risk) of the massive liquidity crisis, the systemic risk, we are now experiencing. It forms the basis for pluralizing the economy so that it is not dependant on any one economic entity that holds us ransome to gargantuant bailout values (the amount of value to be retributed) like we have now.
Fully retributing the value obviates all the other complex political means and measures we are now engaging to preserve the current system, the ratio, of risk-to-reward.
Keynesian measures preserve the current risk/reward ratio. It is a political measure, not an economic one. That's why there is a general sense of dissatisfaction with the current mode of stimulus measures: it serves to redistribute value politically rather than retribute it economically for a fair-and-equitable exchange of value that makes for economic stability or low-to-no systemic risk.
"Infusion" or "Distribution" Phase of the Business Cycle?
January 21, 2009
Financiers and conservative economists want to describe the phase of the business cycle we are now in as "the infusion phase."
Defining the distribution phase as "infusion" is a neo-conservative attempt to foist their ideology, their words, into action.
The next step for the Obama administration, if we are to quickly and effectively turn our economy around defined as "change we need," is to facilitate the distribution phase from the existing pool of consolidated capital through Treasury and the Federal Reserve system. Infusion of new capital--the neo-conservative, Keynesian approach--will defeat the change factor.
Infusion will keep the consolidated capital intact and will act to consolidate the infused capital going forward into "recovery" (another term, a word, to guide action) so that the distribution of economic, and political, power is status quo ante, or conserved in a neo-conservative (Keynesian) fashion.
Obama has been wise to define the hastening of the distribution phase with the necessary means to be taken--as a "reinvestment," rather than the ends--a "recovery."
Defining the government's action with the ends ignores and diminishes the importance and necessity of the means to effect, and define, the change we need as a long term solution that avoids or eliminates the crisis that cyclically consolidates wealth and power.
If we deconsolidate the capital and ensure the operaton of free markets in priority, we will usher in an age of peaceful prosperity in which a free market invokes the verifiable promise of freedom to provide and prosper rather than a means to tyrannize and deprive through a system of false choices and continuous reinvention of the promise.
An age of peaceful and prosperous pluralism is at hand. We should not allow neo-conservative rhetoric and policies, like funding programs with a regressive tax burden, to continue guidance into a tyranny of markets masquerading as freedom or the general welfare.
Financiers and conservative economists want to describe the phase of the business cycle we are now in as "the infusion phase."
Defining the distribution phase as "infusion" is a neo-conservative attempt to foist their ideology, their words, into action.
The next step for the Obama administration, if we are to quickly and effectively turn our economy around defined as "change we need," is to facilitate the distribution phase from the existing pool of consolidated capital through Treasury and the Federal Reserve system. Infusion of new capital--the neo-conservative, Keynesian approach--will defeat the change factor.
Infusion will keep the consolidated capital intact and will act to consolidate the infused capital going forward into "recovery" (another term, a word, to guide action) so that the distribution of economic, and political, power is status quo ante, or conserved in a neo-conservative (Keynesian) fashion.
Obama has been wise to define the hastening of the distribution phase with the necessary means to be taken--as a "reinvestment," rather than the ends--a "recovery."
Defining the government's action with the ends ignores and diminishes the importance and necessity of the means to effect, and define, the change we need as a long term solution that avoids or eliminates the crisis that cyclically consolidates wealth and power.
If we deconsolidate the capital and ensure the operaton of free markets in priority, we will usher in an age of peaceful prosperity in which a free market invokes the verifiable promise of freedom to provide and prosper rather than a means to tyrannize and deprive through a system of false choices and continuous reinvention of the promise.
An age of peaceful and prosperous pluralism is at hand. We should not allow neo-conservative rhetoric and policies, like funding programs with a regressive tax burden, to continue guidance into a tyranny of markets masquerading as freedom or the general welfare.
Where's the Supply?
December 27. 2008
If you recall, the promise of the trickle-down economics that has brought our economy to its knees was to add supply (so called, supply-side economics).
Instead of adding supply, the capital amassed was arbitraged to finance a leverage that exceeded 100/1 in some cases, and a false fundamental shortage was organized and executed to both inflate prices and deflate the economy, effectively, deliberately, short selling the entire economy.
The aggregate effect is to deliberately engineer payment of the leverage (the macro economic rent) at the highest possible rate through a complex routine of seemingly inchoate political-economic events. While it all looks disconnected, it all acts to pay maximum leverage at the lowest possible cost until the tax liability increases the cost.
Back when Bush was selected chief executive he declared, along with a Republican congress, that a regressive tax code would yield a supply-side benefit. It instead yielded a demand-side management, command, of the economy--a maldistribution of income that gives the power to command markets into a supply-side deficiency, causing stagflation, deflation and unemployment, as I said it would at the time.
Inflation has been controlled--commanded--by deflationary means (by reducing demand), not disinflationary means (by increasing supply).
A disinflationary (supply-side) means not only adds supply of goods and services but the number of firms available to produce it so that there can be full employment with low inflation due to the adequate supply. It also relieves dependance on just a few firms organized to be "too big to fail" which, as we have seen very well, does not produce an economics that resembles a free-market economy, but a result that can only be described as command economy--an elitist, not a pluralist, model of power and political economy.
Instead of The People deciding who is best to survive through pluralistic means of a free market, the worst survive the crisis they create, by virtue of their bigness, and consolidate even more. The worst survive and accumulate even more power by elite decisional process, deciding with techno-bureaucratic expertise who should survive to prevent the crisis they cause, and it will philosophically suffice to call this the inevitable "will to power" of our natural elite.
Pure and simple, the supply-side argument of the neo-conservative coalition was a lie. It has been very clearly disconfirmed by the evidence in the very biggest way once again!
Command control of the economy is the fully organized intent of the neo-conservative coalition now operating with political-economic complexity in the hope that We The People will not condemn their ideology to the dustbin of failed economic policies and programs empirically tested to a fare-thee-well.
The rhetoric now being proferred by neo-conservatives is the fear We The People should have of the alternative "ism" with its alternative set of beliefs and organized means of validation over verification--a self-similarity of organized means to ends that re-iterates the elitist model of power and political economy. Where a pluralistic process of verifiable accountability and legitimacy is needed, an elitist process will be iterated as a progressive, historical extension, and validation, of itself.
The method of neo-conservatives to determine "truth" is mostly an ideology of beliefs that are based on lies. They proclaim that they organize a free-market economy, for example, that they have done well to entirely discredit. The People should now fear the alternative ideology, effectively defining a re-iteration of the model as the alternative.
The non-iterative alternative is not ideological.
The People voted for freedom and democracy that comes with organizing for a real and verifiable free-market economy that not only provides plenty, supply, but that supply affords real and immediate, direct accountability that is not a function of ideology but of a pragmatic empiricism in which the truth has no ideological dependance and provides us with what we can all legitimately believe in despite all our differences.
If the captains of industry cannot, will not, subordinate to the rigors of a free and unconsolidated marketplace, out of greed, out of avarice, squandering what they have and coveting what they have not, organizing to deprive under the guise to provide, then We are not dependant on them as long as We ensure an organized free-market economics in priority. Someone else is always waiting to replace them and subordinate their greed, or the will to power, to the complete satisfaction of the consumer--the free marketplace that is The Will of the People and the legitimate profit that is its measure.
When the profit is not sufficiently reinvested to add supply but to deprive it on the demand side (the engrossment of capital, or the illiquidity we have now), the profit is then less a measure of preference than the power to determine the choice. The profit then becomes a measure of power and not of preference.
To correct for the distorted measure of the profit--the source and meaning of power it is supposed to empirically measure, instead of The People being subordinated to conservative ideology and the elite model with a bail out, the captains of organized micro means are subordinated to the clear and decisive macro means of a verifiable legitimacy that a free and unconsolidated marketplace provides and the "will to power" cannot avoid.
The "will to power" organizes to avoid being denied access to the marketplace rather than denying it. The only declarative knowledge is verification of a pluralistic process when the economy is freely participated independent of any "ism" declared to be absolute truth or knowledge. Adding supply is not dependant on belief, but maximum participation that leads to maximum innovation and productive efficiency dictated by the profitable demands of a free and unconsolidated marketplace.
If you recall, the promise of the trickle-down economics that has brought our economy to its knees was to add supply (so called, supply-side economics).
Instead of adding supply, the capital amassed was arbitraged to finance a leverage that exceeded 100/1 in some cases, and a false fundamental shortage was organized and executed to both inflate prices and deflate the economy, effectively, deliberately, short selling the entire economy.
The aggregate effect is to deliberately engineer payment of the leverage (the macro economic rent) at the highest possible rate through a complex routine of seemingly inchoate political-economic events. While it all looks disconnected, it all acts to pay maximum leverage at the lowest possible cost until the tax liability increases the cost.
Back when Bush was selected chief executive he declared, along with a Republican congress, that a regressive tax code would yield a supply-side benefit. It instead yielded a demand-side management, command, of the economy--a maldistribution of income that gives the power to command markets into a supply-side deficiency, causing stagflation, deflation and unemployment, as I said it would at the time.
Inflation has been controlled--commanded--by deflationary means (by reducing demand), not disinflationary means (by increasing supply).
A disinflationary (supply-side) means not only adds supply of goods and services but the number of firms available to produce it so that there can be full employment with low inflation due to the adequate supply. It also relieves dependance on just a few firms organized to be "too big to fail" which, as we have seen very well, does not produce an economics that resembles a free-market economy, but a result that can only be described as command economy--an elitist, not a pluralist, model of power and political economy.
Instead of The People deciding who is best to survive through pluralistic means of a free market, the worst survive the crisis they create, by virtue of their bigness, and consolidate even more. The worst survive and accumulate even more power by elite decisional process, deciding with techno-bureaucratic expertise who should survive to prevent the crisis they cause, and it will philosophically suffice to call this the inevitable "will to power" of our natural elite.
Pure and simple, the supply-side argument of the neo-conservative coalition was a lie. It has been very clearly disconfirmed by the evidence in the very biggest way once again!
Command control of the economy is the fully organized intent of the neo-conservative coalition now operating with political-economic complexity in the hope that We The People will not condemn their ideology to the dustbin of failed economic policies and programs empirically tested to a fare-thee-well.
The rhetoric now being proferred by neo-conservatives is the fear We The People should have of the alternative "ism" with its alternative set of beliefs and organized means of validation over verification--a self-similarity of organized means to ends that re-iterates the elitist model of power and political economy. Where a pluralistic process of verifiable accountability and legitimacy is needed, an elitist process will be iterated as a progressive, historical extension, and validation, of itself.
The method of neo-conservatives to determine "truth" is mostly an ideology of beliefs that are based on lies. They proclaim that they organize a free-market economy, for example, that they have done well to entirely discredit. The People should now fear the alternative ideology, effectively defining a re-iteration of the model as the alternative.
The non-iterative alternative is not ideological.
The People voted for freedom and democracy that comes with organizing for a real and verifiable free-market economy that not only provides plenty, supply, but that supply affords real and immediate, direct accountability that is not a function of ideology but of a pragmatic empiricism in which the truth has no ideological dependance and provides us with what we can all legitimately believe in despite all our differences.
If the captains of industry cannot, will not, subordinate to the rigors of a free and unconsolidated marketplace, out of greed, out of avarice, squandering what they have and coveting what they have not, organizing to deprive under the guise to provide, then We are not dependant on them as long as We ensure an organized free-market economics in priority. Someone else is always waiting to replace them and subordinate their greed, or the will to power, to the complete satisfaction of the consumer--the free marketplace that is The Will of the People and the legitimate profit that is its measure.
When the profit is not sufficiently reinvested to add supply but to deprive it on the demand side (the engrossment of capital, or the illiquidity we have now), the profit is then less a measure of preference than the power to determine the choice. The profit then becomes a measure of power and not of preference.
To correct for the distorted measure of the profit--the source and meaning of power it is supposed to empirically measure, instead of The People being subordinated to conservative ideology and the elite model with a bail out, the captains of organized micro means are subordinated to the clear and decisive macro means of a verifiable legitimacy that a free and unconsolidated marketplace provides and the "will to power" cannot avoid.
The "will to power" organizes to avoid being denied access to the marketplace rather than denying it. The only declarative knowledge is verification of a pluralistic process when the economy is freely participated independent of any "ism" declared to be absolute truth or knowledge. Adding supply is not dependant on belief, but maximum participation that leads to maximum innovation and productive efficiency dictated by the profitable demands of a free and unconsolidated marketplace.
Shorting the Economy
December 14, 2008
As we follow the oscillating valuation of capital assets with the advent of various retirement vehicles, massive pension funds and independent management of a person's savings, we have come to know the tricks of the arbitrage trade in a very close and personal way.
We have come to know the technique of short interest, for example.
First to be recognized is that there is no lack of savings. Americans save plenty and spend on credit to prevent the peril of the paradox of thrift. Conservatives argue, with a deceitful insincerity, however, that we should all save more when the acceptance and application of their policies and programs have acted to consolidate the savings (the capital) into their personal property by means to be discussed toward a fitting solution.
The fitting solution, amidst the current complexity of largely ideological solutions, is the rationalism we are all equally conferred by the good grace of God if we should be so wise to choose: a progressive tax code that finances an assured competitive multiplicity of the marketplace in priority, minimizing inflation, maximizing employment and a distribution of wealth and capital that effectively prevents manipulation of prices and markets through mass movement of consolidated capital and the crisis it knowingly and willingly causes.
"Quantitative easing" by the Fed is supposed to increase the money supply to add the lost liquidity--the value of The People's savings assets that have been consolidated into ownership of a few wealthy elits and their corporates--and alleviate the peril of the paradox of thrift.
The savings is of plenty. The problem is that it has been consolidated--horded, engrossed (the antithesis of a free market)--with the credit needed to drive the economy not in short supply but being deliberately withheld, shorted, deliberately causing crisis.
Our economy is deliberately shorted (deflated) in a neo-classical, keynesian, way. The end result is classical capitalism. The means is neo-classical.
The technique of shorting the market, selling high and buying low, requires an investor reserve (extra capital) because the potential loss can be more than zero--like being upside down on your mortgage. On the marco scale, wealthy elits that have the consolidated capital to command prices and markets, and thus the economy, have the exclusive reserve that commands the exclusive (class) benefit acquired at the cost of non-elits. The overall effect, both classical and neo-classical, is to short the economy. Your class status is defined by what side of the short sale you are on: whether you have bought dear and have to sell cheap by what you are told by the technocracy is a natural, non-anthropogenic cycle of boom and bust that is the paradox of thrift and the business cycle.
For plutocrats, this scenario is the very highest form of financial sophistication in which complex investment devices, like strike-price option strategies and various Ponzi (pyramid) schemes, give the appearance of pluralism or a stable diversification with a popular legitimacy of self-determination. It is the most sophisticated means of consolidating power (by shorting the economy) and making it look like the expropriation of value that confers the power was not deliberately expropriated but a "natural" event of the paradox of thrift. It is force majeur, so the argument goes, not a deliberate act of conferring detriment with an immoral import.
The scenario closely approximates Nietzche's concept of the elite being "Beyond Good and Evil." Expropriation of The People's wealth and power is, thus, "the will to power" that naturally, and always, enslaves the weak and rewards the strong. It is futile, if not immoral, to resist it.
Elits, following the Nietzche normative argument, consider the machinations of complex political-economic technologies to be THE moral imperative. It prevents a difficult, often tumultuous if not bloody, cycle of toggling between models of consolidation and deconsolidation of power--the "higher understanding" conservatives claimed they had regarding the prospect of "spreading the wealth around" in the last presidencial election.
Not only is Nietzche's philosophy the mere musings of a madman, its acceptance or application defines the criminal element and the enemies of a civil society where we now see the imperial rule of a corrupt and abusive corporate, and those who aspire to it, bent on convincing us We are being exploited for our own good--the public good or the general welfare. It is a normative nonsense that has rightfully earned its permanent place at the lunatic fringe of the political-economic spectrum.
Whether Nietzche's normative philosophy is accepted in priority, or applied in posteriori to its practice, the argument, in theory or practice, is a function of choice, of freedom. We are not determined to a "natural" existence of subordination to "the will to power" by those that aspire to subjugate and exploit. We The People will to power a self-detrmination by Natural Right, not the will of a power elite. One accepts freedom, the other accepts (chooses) tyranny.
The republic is not bestowed and validated by the heavy hand or inscrutable organized complexities of a power elite, but confirmed by the pluralistic, democratic means of The People's will to power. It is a republic that allows for a peaceful prosperity by means of continuous improvement, recruiting and organizing the talent of leadership in a continuously accountable process of verification and progress, not a continuous process of improving the means of applying tyranny and a validation of its legitimacy in posteriori that is speciously "Beyond Good and Evil."
While we tend to discount the value of philosophical analysis in the age of science, we ignore that our political-economic modeling fits a particular philosophical construct that comes to be a practical philosophy of a structurally self-fulfilled prophecy.
It is high time to assure the model of a peaceful and prosperous pluralism structured into the security of a prophetic philosophy sustainably self-fulfilled by the deliberate self-determination of The People.
Utopia is only what is not allowed to happen deemed to be the impossible.
Short selling the economy is an organizational technology continuously innovated in various forms to consolidate power and subordinate The People to those that have "the will to power," as Nietzche describes it. Rather than the "will" to power, however, it is more the "means" of power that is the determining variable.
Organizing the republic so that the will to power is subordinated to The People is not impossible, or unnatural, it is not allowed to happen.
It is time to choose the means of freedom for All The People, not just a few described as having "the will to power" and who will organize to short sell the means of self-determination and call it the natural cycle of doing business in the name of freedom only to defile the righteousness of the concept to solicit the acceptance of tyranny.
As we follow the oscillating valuation of capital assets with the advent of various retirement vehicles, massive pension funds and independent management of a person's savings, we have come to know the tricks of the arbitrage trade in a very close and personal way.
We have come to know the technique of short interest, for example.
First to be recognized is that there is no lack of savings. Americans save plenty and spend on credit to prevent the peril of the paradox of thrift. Conservatives argue, with a deceitful insincerity, however, that we should all save more when the acceptance and application of their policies and programs have acted to consolidate the savings (the capital) into their personal property by means to be discussed toward a fitting solution.
The fitting solution, amidst the current complexity of largely ideological solutions, is the rationalism we are all equally conferred by the good grace of God if we should be so wise to choose: a progressive tax code that finances an assured competitive multiplicity of the marketplace in priority, minimizing inflation, maximizing employment and a distribution of wealth and capital that effectively prevents manipulation of prices and markets through mass movement of consolidated capital and the crisis it knowingly and willingly causes.
"Quantitative easing" by the Fed is supposed to increase the money supply to add the lost liquidity--the value of The People's savings assets that have been consolidated into ownership of a few wealthy elits and their corporates--and alleviate the peril of the paradox of thrift.
The savings is of plenty. The problem is that it has been consolidated--horded, engrossed (the antithesis of a free market)--with the credit needed to drive the economy not in short supply but being deliberately withheld, shorted, deliberately causing crisis.
Our economy is deliberately shorted (deflated) in a neo-classical, keynesian, way. The end result is classical capitalism. The means is neo-classical.
The technique of shorting the market, selling high and buying low, requires an investor reserve (extra capital) because the potential loss can be more than zero--like being upside down on your mortgage. On the marco scale, wealthy elits that have the consolidated capital to command prices and markets, and thus the economy, have the exclusive reserve that commands the exclusive (class) benefit acquired at the cost of non-elits. The overall effect, both classical and neo-classical, is to short the economy. Your class status is defined by what side of the short sale you are on: whether you have bought dear and have to sell cheap by what you are told by the technocracy is a natural, non-anthropogenic cycle of boom and bust that is the paradox of thrift and the business cycle.
For plutocrats, this scenario is the very highest form of financial sophistication in which complex investment devices, like strike-price option strategies and various Ponzi (pyramid) schemes, give the appearance of pluralism or a stable diversification with a popular legitimacy of self-determination. It is the most sophisticated means of consolidating power (by shorting the economy) and making it look like the expropriation of value that confers the power was not deliberately expropriated but a "natural" event of the paradox of thrift. It is force majeur, so the argument goes, not a deliberate act of conferring detriment with an immoral import.
The scenario closely approximates Nietzche's concept of the elite being "Beyond Good and Evil." Expropriation of The People's wealth and power is, thus, "the will to power" that naturally, and always, enslaves the weak and rewards the strong. It is futile, if not immoral, to resist it.
Elits, following the Nietzche normative argument, consider the machinations of complex political-economic technologies to be THE moral imperative. It prevents a difficult, often tumultuous if not bloody, cycle of toggling between models of consolidation and deconsolidation of power--the "higher understanding" conservatives claimed they had regarding the prospect of "spreading the wealth around" in the last presidencial election.
Not only is Nietzche's philosophy the mere musings of a madman, its acceptance or application defines the criminal element and the enemies of a civil society where we now see the imperial rule of a corrupt and abusive corporate, and those who aspire to it, bent on convincing us We are being exploited for our own good--the public good or the general welfare. It is a normative nonsense that has rightfully earned its permanent place at the lunatic fringe of the political-economic spectrum.
Whether Nietzche's normative philosophy is accepted in priority, or applied in posteriori to its practice, the argument, in theory or practice, is a function of choice, of freedom. We are not determined to a "natural" existence of subordination to "the will to power" by those that aspire to subjugate and exploit. We The People will to power a self-detrmination by Natural Right, not the will of a power elite. One accepts freedom, the other accepts (chooses) tyranny.
The republic is not bestowed and validated by the heavy hand or inscrutable organized complexities of a power elite, but confirmed by the pluralistic, democratic means of The People's will to power. It is a republic that allows for a peaceful prosperity by means of continuous improvement, recruiting and organizing the talent of leadership in a continuously accountable process of verification and progress, not a continuous process of improving the means of applying tyranny and a validation of its legitimacy in posteriori that is speciously "Beyond Good and Evil."
While we tend to discount the value of philosophical analysis in the age of science, we ignore that our political-economic modeling fits a particular philosophical construct that comes to be a practical philosophy of a structurally self-fulfilled prophecy.
It is high time to assure the model of a peaceful and prosperous pluralism structured into the security of a prophetic philosophy sustainably self-fulfilled by the deliberate self-determination of The People.
Utopia is only what is not allowed to happen deemed to be the impossible.
Short selling the economy is an organizational technology continuously innovated in various forms to consolidate power and subordinate The People to those that have "the will to power," as Nietzche describes it. Rather than the "will" to power, however, it is more the "means" of power that is the determining variable.
Organizing the republic so that the will to power is subordinated to The People is not impossible, or unnatural, it is not allowed to happen.
It is time to choose the means of freedom for All The People, not just a few described as having "the will to power" and who will organize to short sell the means of self-determination and call it the natural cycle of doing business in the name of freedom only to defile the righteousness of the concept to solicit the acceptance of tyranny.
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