Raise My Rent (The Fully Assumed Risk of Loss)

When the President announces increased margin requirements for energy speculators, by executive authority of the CFTC, he is raising the rent. There is a fully assumed risk of loss that has been pulled into current account, but we have to remember that speculators are flush with cash.

With repeal of Glass-Steagill the financial sector consolidated and Wall Street speculators literally have money to burn (money used to cause economic problems consolidation is supposed to avoid if not prevent). Functioning as one big investment bank (which is an organizational model that led to the Great Depression and the Glass-Steagill Act), money is being borrowed from the Fed at near-zero rates because the Great Recession has demanded it to pay the rent.

Increasing the margin requirement makes a highly exclusive market an even more exclusive domain, which raises the rent, not on speculators, however, but on the victims of the Great Recession who have had enough already!

Raising the margin requirement for Bank of America and Goldman Sachs does not in any way retribute the value accumulated. Instead, the capital formed from the overextended, deflationary risk (the liquidity crisis) of '08-09 is being horded to squeeze more and more rent out of the 99 percent using the Fed's current accounts. This, you see, is not banking--it is not a business model designed to meet consumer demand in the marketplace, adding liquidity to buy homes, refrigerators and dishwashers--it is racketeering. It is a bunch of gangsters dressed in pretty suits, looking prim and proper, going to church on Sunday.

Rather than making markets that are more distributive (more efficiently risk averse), we have markets being made more accumulatively retributive. The Great Depression, for example, was the price (the rent) inevitably paid to retribute the accumulated risk-value.

Despite our quest for dominion, nature will retribute value on demand. This does not mean our fate is determined in priority, however. We choose whether the fully assumed risk of loss is organized and managed to express in a catastrophic proportion or not by identifying moral hazards, which are best determined by empirical method rather than, for example, Ayn Rand's Aristotelian logic, which leads us to a theory of markets efficiently structured to administrate from the top down rather than empirically "on demand" like in a free market.

(Remember that maintaining a free market in priority economically retributes value in small, political proportions rather than large, catastrophic proportions that demand executive administration of power to control the rent on command. See the article, "The Bureaucratic Model of Power and Political Economy" on this website.)

We have the power to determine our natural fate in the future, and this power is being used with a quantum expertise that cannot be in any way considered ontologically exculpatory and non-retributive. Quite the contrary, our future is highly predictable, and rather than being beyond good and evil, it is an objective reality deontologically determined, loaded with moral value that is empirically verifiable and completely culpable.

Supposedly, futures markets are operating to manage the assumption of risk (loss) by hedging it, but what we see is the risk being manufactured (recreated or transformed) in the dark to predictably occur (transfer) in the future to make a profit (the process referred to as "creative destruction"). Capital is gained (that should not be taxed because it kills jobs) by timing the market with predictive efficiency--thus, the theory of "efficient markets," which is administered, not "on demand" by We the People, but by means of executive authority.

Empirically, "We" have found out again and again that administration by executive authority, even when posed as free-market efficiency, accumulates value to be retributed. We rediscover, again and again, why the Revolution occurred--because economic risk managed by executive authority is always catastrophic!

Efficient-markets theory has been such an obvious failure that even right-wing conservatives have gone radical (which indicates the risk is going gamma). Despite the Tea Party movement, for example, we don't have Revolutionary results because the power structure is too consolidated, which makes the value accumulated even more retributive and the risk even more catastrophic if we don't move to deconsolidate it in priority.

Margin requirements and position limits do not deconsolidate the risk, and if this is the best we can expect, then the risk of loss is fully assumed without failure of expectation.

(Remember that failed expectations are essentially the quantum value of the risk proportion. If efficient markets are supposed to reduce retributive value but the result is the Tea Party movement, the risk, rather than being managed in small, divisible, non-catastrophic quanta, is being intentionally managed as catastrophic, indivisible, quantum value that technically indicates the objective.

The gamma-risk proportion is a fully assumed value, and so, with all due reason, proponents of consolidation argue, it is best to manage it with skillful, technical efficiency, which is the domain of higher authority.

We expect the risk to go gamma and determine how the rent is paid on command. As an expected value, elite authority legitimately determines how the risk is attributed, which determines how the value objectively retributes emerging from a crisis proportion.

After the Great Depression, for example, value retributed in the form warfare and began distributing in the form of welfare to avoid the accumulation of a risk proportion that led to the Great Recession. Since, obviously, welfare alone, and monetizing the debt that occurs, doesn't work, deconsolidation is apparently the missing value. With the Reagan revolution, however, more value was given efficient-markets theory in which the accumulation of value--America being "a place where a person can still get rich," as Reagan described it--is considered non-retributive.)

From the Great Depression, the value of the risk retributed until the Reagan revolution. By the end of the Clinton administration the correction was fully reversed with the repeal of Glass Steagill, allowing risk-value to again more fully consolidate through executive management using the "theory of efficient markets."

(Since how big a business grows is the measure of success, the economy never fully deconsolidated after WWII. Despite knowing the risk, large corporates actively pursued inorganic growth. The predictable result is inflation and unemployment that requires the acumen and arcanum of an administrative, technical elite to manage with efficiency.)

Using this theory of "efficient markets," in keeping with the working model of consolidated capitalism, markets are made to be volatile and prone to crises, creating the opportunity to make money. Supposedly, operating with so-called market efficiency, plenty of money is made to pay the rent--paying off the public debt, for example, which is repeatedly disconfirmed because it always, knowingly, overextends the rent into large-scale risk proportions, adding to the budget deficit. Being risk-prone, by default, shifts the fully assumed risk of loss to a time determined by exclusive market activity (the efficiency), which consolidates market value, makes markets accumulatively more retributive, and predictably more risk prone.

While risk cannot be rendered non-retributive, there is a point at which the risk is non-transferable. It is the risk fully assumed in priority.

Non-Transferable Risk

The fully assumed risk of loss (transformed into predictable use value, using "risk-transfer vehicles," for example) is the retributive value that capitalism considers to be non-retributive.

As value is being conserved in historical perspective, quantum mechanics reveals there is a phase transition that accompanies a change of state (like a resurgence of market consolidation before deconsolidation occurs). A fundamental, existential reality is revealed in which, instead of being and nothingness, there is being and somethingness to which all things retribute.

(When conceptualizing retributive value and non-transferable risk, consider, for example, the Pythagorean, base-ten number system. Analytically, the number 10 is pluralistically meaningful while, at the same time, holistically, it is the quatum, non-transferable value 0 from which the relative value of all the other numbers derive and to which they all retribute.

Retributive value is empirical, comparative value in which to measure, or reference, objective reality. It is the value that politically and economically measures the angst of our natural existence, tested by the strength--the virtue--of moral intelligence that exists in priority along with the fully assumed risk of loss.

Catholicism, for example, conceptualizes the fully assumed risk of loss as "original sin." It is value that represents the human condition in priority and the suffering a person knows will be bourne by living a moral existence.)

In the late 19th and early 20th Century, robber barons told us that capitalism marked the end of history in its consolidated state. John D. Rockefeller, for example, considered a free market to be "wasteful and inefficient" if it is not consolidated into elite management and control. Two world wars later, we reconsidered the value of managing reality in the image of elite objective and deconsolidated the risk proportion with the Glass-Steagill Act, which rendered the value to be retributed divisibly smaller and less catastrophic, more like a free market.

(Keep in mind that the objective was not to eliminate poverty but to make it less severe. Social Security, for example, is administered to manage the retributive value--the angst, the affective, psychological condition that foments the revolutionary spirit and transforms the fully assumed risk of loss into objective reality.)

While retributive value is a psychological component of risk, it has real, quantum value that can be measured and managed. When big business consolidates to manage risk (what is called "networking the externalities"), the efficiency produced is in the form of retributive value that capitalists want to ignore, and raise my rent.

Ignorance is bliss until you realize the risk (the price, or rent, to be inevitably paid as a consequence of action taken). When conservatives react by vilifying liberal reactionaries for waging class warfare, the quantum value to be retributed is not being ignored. It is being binomially managed in the gamma-risk dimension to conserve the accumulated value of the risk in historical perspective.

(Remember that while capitalism operates with ownership of private property, we don't really own nature. It owns us. We just rent it. When we use natural resources--labor, for example--to a detriment, because it is bought and paid for and so we can use it any way we see fit, and nature exacts retribution, we pay the rent.

The risk of loss is fully assumed. It is not a matter of if, but when, and managing the value to be retributed is a political function; something that a free market, for example, manages with a risk ontology that is free, open, and operates with immediate accountability. In opposition is a government apparatus that slowly cycles and recycles the risk proportion with limited accountability and late-order effects that can be described and explained with changing attributions.

With an authoritarian, political-economic regime--rather than simply buying or not buying in the marketplace to politically sanction by means of adverse selection, which has the effect of converging natural and positive law--market participants are presented with causal, risk factors that appear ideopathic, non-local, and thus non-retributive. The unknown quantity of causality is managed politically in the gamma dimension where it gains causal attribution, and regardless of the attribution, typically ideological, the rent will be paid on demand.

The attributive value will transform into retributive value, and without recognizing the quantum value that primarily causes the effects, we can always claim ignorance, if not stupidity, when bad things happen, like the Great Recession, without apparent attribution. Ideopathy then reduces to the absurd where psychopathy thrives as declarative knowledge of objective reality, occupying space in the gamma dimension where value is not in any way protected from its fully assumed risk of loss, but progressively more likely.)

The political management that occurs is an extension of "networking the externalities" so that when the consequences are shifted for future consumption it is not immediately apparent to consumers that the rent has been raised. Distracted with all the political gaming to apply attribution, consumers are subjected to fundamental attribution error and the accumulation of error will be impulsively managed into a corrective wave that will pay the rent. If we bank on ignorance, if not stupidity, we are sure to get what is coming to us in an oversized proportion.

It is not necessary to accumulate retributive value into an oversized proportion by organizing to avoid it. Since the risk of loss is fully assumed, it is best to manage the risk and let the corrective wave occur in a smaller risk-dimension.

In the alpha-risk dimension, a free market manages the corrective wave in small proportions. Risk, rather than being eliminated by objective, is conserved in a freely transferable and non-catastrophic state, free of phase transitions (sudden inversions) that affectively distort the position and the probable, future value of the risk with irrationally impulsive waves (greed, fear, and the resulting anxiety of avoiding the fully assumed risk of loss).

Non-catastrophic market risk requires the direct, integral value it yields not be derivative in late order and considered non-retributive. It cannot be allowed to consolidate and exchange in exclusive markets where the value derived gains a non-retributive attribution because nobody knows how it works except the experts--the people that cause risk events and thus are always positioned to profitably avoid, and verify, the retributive value.

In a free market, the value produced and consumed is immediately retributive with little or no error of attribution, and what error does impulsively occur is quickly corrected to conserve the reward (the value) integral to the risk. Rather than accumulatively derived and fully assumed in late order, the risk is fully consumed (fully retributive) in a short-order, non-catastrophic proportion.

Without fundamental attribution error, risk aversion transforms into risk adversion--the risk has a real, immediate, and objectively verifiable measure. It has adverse value to which capitalism has a natural aversion and so consolidates to give the value a non-retributive attribution that distributes the expected adversity (the price to be paid) in late order (fully assumed to occur sometime in the future). Anxiously, we know risk events will occur...but when?

Creating uncertainty over the timing creates an irrational, impulsive psychology of the risk proportion. Risk that is not politically managed with a free-market ontology tends to impulsively consolidate and overextend in order to avoid it, which is a fundamental misattribution of the risk proportion.

As soon as capital is allowed to consolidate, the error of attribution occurs. The fundamentals, while being descriptively maintained as declarative knowledge about the way things really work, appear to work in unpredictable, non-fundamental ways. The unpredictability is the timing factor (phase inversions) within the occupied space, which is the "opportunity" (phase inversions transformed into phase adversions) that Mitt Romney refers to when he describes and explains what it means to be free in America.

Phase Adversion

It is easy to predict the location of the detriment at any particular time if you have the power (the freedom) to cause it. By being organizationally risk-averse, capitalists tell us, risk is not eliminated but it is possible to render it less adverse if we organize to reduce the rent--specifically, if we render labor value competitively disinflationary against rising prices by consolidating the capital. It is no coincidence that this increases deflationary risk, which provides the opportunity to cause the risk supposedly being averted and the property adversely possessed.

Consolidation does not make risk more averse (more avoidable and the rent more affordable), but it does make it more adverse. It is prone to crises proportions in which debt (retributive value) is surplused and managed through an over-extension of monetary and fiscal policy. The overextension causes inversions that phase the market risk into adversity (you know the old saying...just hold your losses until the correction occurs but, of course, the correction won't occur until you have realized your losses).

Occupying the available policy space, the effects of monetary and fiscal policy gain a causal attribution, and so the reaction is more risk prone than averse. Error accumulates, having an overall effect that is adversely selective. The system is designed for failure, which for the capitalist is the opportunity to "make money."

Despite being "the job creators," capitalists admit that they are not in business to create jobs, but to make money. The more money they make, they say, by causing unemployment (adversity), the more jobs will be aversely created (working more for less to avoid being unemployed) as capital is consolidated to avoid the adversity. Eventually the derived value (the cause) becomes so retributive that government gets into the job-creation business and inflates the money supply (the effect), creating jobs in the form of debt, which makes money through rising prices (higher rent).

The more consolidated the capital is, the more value can be extracted from labor (unemployment) while continuing to raise prices (inflation). Deliberately structuring value to derive from detriment is why modern economists measure labor value as consumer demand--a phase transition that has attributional value.

If labor value is identified as "expropriated," then the analysis admits that the rent is too high. Economists, however, want to argue that the rent is too low with the objective of raising it in compliance with their sponsors (the consumer) on demand.

Since the value is managed by objective, the effect is neo-classically described as "structural unemployment" because value that derives from adversity is non-retributive if it naturally occurs in predictable (and thus expected), algorithymic cycles.

Businesses (like Bain Capital) naturally cut costs (with money borrowed from the discount window) to expand the margin, and so when we hear that the current rate of unemployment is the "new normal" (i.e., it has entered a new phase) it is naturally endowed. It is an expected value along with the value adversely possessed and accumulated in the top income class who, as consumers, expect full compliance with their tastes and preferences on demand.

It is no coincidence that the "job creators" demand labor pay more rent than it can afford, which has the predictable effect of declining consumer demand. The diminished capacity for self-determination (rising prices against declining income) is not a risk of loss fully assumed, but is because consumers choose to overleverage their incomes.

We are all consumers, but most of us spend ourselves into adversity (trying to achieve class mobility without the income that determines it). Assets are adversely possessed by default, and consolidation naturally occurs, because consumers demand more than they can afford to buy. Net worth naturally diminishes because the rent is too low, not because it is too high, and so we need the Romney-Ryan plan, which is sure to raise my rent!

If labor value is considered consumer demand, the analysis can ignore the integral value of labor to derive the benefit. Debt accumulates because consumers are spendthrifts (because they demand it), not because labor is not paid enough to consume what is produced. Consumer theory of labor value tends to attribute the source of accumulated value (inflation and unemployment) to profligate consumer spending (quantum self-determination), not the detriment deliberately exacted in the form of hyper-extended debt, which measures to the penny the value (the distribution) needed for "consumers" to truly self-determine.

According to the proponents of managing markets with an economy-of-scale efficiency (the "efficient markets" theory), inventories are not deliberately managed to command high prices. (The theory of efficient markets, remember, according to Greenspan, for example, does not allow for fraud but, nevertheless, led to a massive accounting fraud and the Great Recession.) Supply gets low because consumers demand it with debt. The argument can then be made that labor is extended too much value and that consolidation of industry and markets is necessary to control consumer demand (by raising the rent). Businesses gain an economy-of-scale efficiency (and cause inflation and unemployment that capitalists blame on government intervention) to conserve scarce resources (with prices rising at a higher rate than labor is paid to demand it), not to conserve the accumulation of wealth that derives from the adversity (by causing default).

Never mind that consolidating power and raising the rent causes default. What the king did in the name of divine right we now do (inversely) in the name of natural law and market efficiency, conserving the retributive value in historical perspective.

The system we have now, called capitalism, has been structured to turn criminals into kings. Often referred to as gangster capitalism, the implication is that the structure lacks moral content. If we just had the moral content, supposedly, then we will structure for the moral content capitalism requires to be the benign and benevolent form of organization that it is touted to be. There is really nothing structurally wrong with the way capitalism tends to organize, so the argument goes, it's just a phase we're going through toward full maturity and self-determination.

(Keep in mind that the measure of power--the capacity to self-determine--is the retributive value. For the king, if the value consolidated is not retributive, he is not powerful, and the measure of that is the demand to demonstrate it when, for example, his subjects become restless, revolutionary, and want to occupy his space.

The reason the Fed is opaque--its proceedings during the 2009 financial crisis being, for example, highly redacted for public consumption--is because the value it produced is highly retributive. Allowing information to be freely accessed is to share power, which is why it is structured for its classified consumption with the force and legitimacy of public authority.)

Structurally there is the incentive to cause detriment--it is necessary to consolidate (conform) in order to be successful. The moral sentiment that capitalism requires at the macro level is lost to providing for one's family, for example. The value of probable detriment is accumulated at the quantum, micro-level of calculated risk (heuristic self-determination) which requires buying-in to the philosophy of risk that postulates consolidation is the model of efficiency (expands the pie) and deconsolidation is a moral hazard that causes deflation and unemployment.

Realizing that deconsolidation causes disinflation (rising buying power) and rising employment (the need for less government) requires a kind of quantum leap in the moral realm--a structural unification of theory and practice (a transitional, phase adversion) our political-economic system is conceptually modeled, according to ideological principles, to prevent.

Moral sentiment is a string-like entanglement. A probable, structural change at the general, relative level is constantly implied by the moral position observed at the quantum level, and is essentially what is meant by "the risk of loss fully assumed" in the gamma dimension.

When value accumulates and consolidates, instead of actually applying democracy, a free market is used to apply a false ontology. The outcome is the result of consumer demand, but not necessarily popular consent.

In order to prudently regulate in a free market, the prudent regulator requires income, and the more income acquired the more ability to regulate--to govern--with a prudence that is self-determined.

There is quantum incentive at the macro level to determine the self in conformity with the perceived, relative, value of the risk. Conformity to that value is used to falsely confirm the critical, relative-quantum value of popular consent (the naturally occurring gamma risk) in which the risk of loss is fully assumed.

The relative-quantum value to be controlled to the point of critical mass is the prudential regulator who when allowed to be radically free will adversely phase the status quo into current account. It is necessary, then, to keep the account transitionally phased into probable value, which the Fed, for example, along with the CFTC, assures is a risk of loss fully assumed in the future.

We are forever being offered two possible choices--regulation or deregulation. Again we see the necessity of reducing policy to a binomial space...a dummy variable that over time ensures the stakes (the risks and rewards) are systematically structured to be conserved.

With the risk of loss always fully assumed but never fully consumed, there is the appearance of stability through probable change. Being cast into a binomial variation, quantum change occurs over time while occupying the same space. Consolidating risk into that space, rather than expanding it in the alpha dimension, only renders the appearance of stability. Although it is not an objective reality, the outcome of the dummy variation has both the deliberative, prudential legitimacy of a due process while, at the same time, the risks and the rewards are conservatively self-regulated by limiting the possible, policy options.

Binomially limiting the options to more regulation or less ignores the quantum value (the risk proportion) of the prudent regulator. It allows for change without ensuring the capacity for self-determination (self-governance) in the alpha dimension.

Deregulation, keep in mind, does not yield alpha risk. The risk consolidates even more unregulated, gaining higher entropic value, becoming evermore entangled with the need for government. Thus the need to locate one's self-interest there, occupying the space of good offices to command and control risk rather than prudently demand and regulate it, democratically, in the marketplace, entangled only with individual tastes and preferences, directly applied with low entropic value.

Deconsolidation will result in deregulation by empowering the prudent regulator in priority.

The alpha quantum is a function of deconsolidating the risk proportion, not its regulated and deregulated consolidation. Once the alpha phases in, its value will locate over time within the space occupied by government. The fully assumed risk of loss will be functionally adverse--resisting, rather than supporting, rising rents.