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.