Where the Buck Stops

According to the Federal Reserve's Open Market Committee, the best way to regulate too-big-to-fail is for "too-big" financial firms to be even bigger.

The theory is that the economy-of-scale reduces the risk of lending--it will circulate capital--so that markets will be free and open. By ensuring the low risk (what is too big to fail), the marketplace is fully liquid. However, what happens is that big financial firms use the capital to deflate the economy by causing headline inflation. Instead of ensuring the marketplace is fully liquid, too-big-to-fail firms act to ensure the marketplace is fully liquidated.

The easiest way to make a profit without risk is to NOT invest the capital, like we have now with cash balances on corporate balance sheets at record levels. As long as the capital is not being invested in growth (employment and added supply) in an economy-of-scale proportion, the risk is too high and the reward too low to invest for growth. It is much more profitable to not invest in growth unless, of course, the profit is taxed away--but that is a moral hazard (i.e., it does not fit the Hamiltonian model).

As consumer confidence declines, the higher risk of investing growth accumulates into a crisis proportion. The risk (the crisis) is a self-fulfilled prophecy of an economy-of-scale proportion that liquidates the marketplace. Equity is deliberately (knowing and willingly) turned into debt with the highest degree of efficiency (which entails an inherent liability that manifests as growing budget deficits and the need to tax). Instead of economic growth, what grows is the public debt.

Too-big-to-fail is an empirical failure. Look at the numbers--as the capital has moved into commodities to produce massive, economy-of-scale profits without risk, the public debt has increased to a gamma-risk proportion (with the political threat of sovereign default, which does not, by the way, fit the Hamiltonian model and where the risk fully converges with the reward).

The buck stops here. Instead of circulating, providing liquidity as the Fed postulates, the buck stops producing GDP. Equity becomes negative, efficiently produced in a too-big-to-fail proportion.

According to Dodd-Frank, the buck stops with the Fed. It is the Fed's charge to command and control the too-big-to-fail, economy-of-scale proportion through a committee that ensures open markets (i.e, so that the market system fits the Hamiltonian model of rigging it to ensure the wealth always consolidates into the upper class in a crisis, command-and-control proportion).

Reversing a political-economic model that is 200 hundred years old appears to be dauntingly complex and administratively impossible. All we need to do, however, is to recognize too-big-to-fail being the empirical failure it is, but according to the Fed, our economic woes are not due to the size of firms.

According to the Fed, the persistent risk of SIFI's can be attributed to specific risk-management practices. It is not generally a function of size.

This piece of fundamental attribution error--declared to be "empirical truth" from the highest level of administrative, state authority--means that Systemically Influential Financial Institutions will continue to be systemically influential...and the buck stops there.

Where value consolidates is where the buck stops. It stops circulating (it causes a liquidity crisis). It is where the error of fundamental attribution accumulates into a political, crisis proportion as value accumulates, and churns, at the top. It is the Fed's job to manage the churning, inflated, crisis proportion and conserve the value of the accumulative error, which is why we often hear high-level technocrats remind us that crises will occur no matter what we do, formulating a hypothesis that needs to be empirically tested by deconsolidating the risk proportion.

Gaining empirical value, rather than validation, from the administrative state is entirely possible and, given the high proportion of gamma risk, likely.

The buck stops with the upper class, and risk consolidates into a persistent crisis proportion, until we decide it is better to ensure a more consensual, pluralistic, free-market model.

Until we decide to ensure a working, free-market model from the bottom up, instead of command and control trickled from the top down, value will persistently accumulate into a crisis, too-big-to-fail proportion. Risk, as we have seen again and again, that grows outside of its legitimate proportion to the reward (remember that being "too big" yields high reward at virtually no risk of failure) requires an ever-larger economy of scale to manage it, but with less and less direct accountability. If we want a true, free-market legitimacy, it is then the legitimate charge of the administrative state to ensure a free-and-unconsolidated marketplace, not firms so consolidated they are too big to fail in priority.

Being even more too-big-to-fail is not the cure for being too-big-to-fail.

Firms that are "too big" to fail are, simply, too big! Not admitting it is to knowingly harbor the tyranny we are told we so exceptionally abhor.

Firms allowed to get too big are firms that are not empirically verified by a popular consent of the governed. They become firms you have to do business with, not because you want to. Too-big-to-fail then tyrannically governs the marketplace by virtue (the strength) of size alone; and when rulers are not empirically ruled (verified) by the governed, but validated by default, there is a crisis of legitimacy that the rulers can no longer avoid. The risk reaches its fullest, political proportion and inexorably moves toward a more practical, consensual, pluralistic model, a' priori (with the risk of loss always having been fully assumed, which will inexorably verify).

We are free...free to choose at any time, a' priori, whether we allow the risk to verify, by consensus, or not, catastrophic.

Extension of Credit

Credit extends with the risk. A person that contracts for credit is scored according to the extension of the risk--your net worth.

The empirical valuation is dismally economic. Reducing human value to the probability of the risk is something expected of a self-interested application of power, and the deliberate application of a detriment does not suggest a compassion verified by the active moral strength of an elitist hypothesis.

If The People are to find security under the protection of a well-educated, well-financed elite (like being subjected to the crown), and the verifiable hypothesis in operation largely relies on one's credit score (the extent of the risk), then the application of the means is a dismal failure.

Prospects are dismal if we continue to ignore the detrimental value of consolidating the risk, interpreting it to be the inviolable application (the absolute value) of self-interest. The detriment is rationalized as always beneficial in some form, adding empirical value to the measure of risk whether those detrimented recognize the value added or not.

If the credit score measures the extent of your risk (and the value you can add), a high score means you are willing to sacrifice for the benefit of the crown (the ruling economic elite who do not have to extend you credit, and do so only in their self-interest), or maybe it means you are unwilling to take the risk of rebellion (exercising your right of self-determination) in your self-interest. "Your" self-interest is paradoxical, and nature abhors (it will resolve) a paradox.

If we are to embrace the moral value, the virtue (the strength), for example, of Ayn Rand's self-interest constant of power, victims of systemic risk should always be glad that self-interest is always being applied for the greater good--the extension of the risk in which we are to be scored.

The score of power (successful application and preservation of self-interest), according to the Rand moral constant, is verified by the distribution of reward and deprivation. The empirical, moral measure is always, unavoidably, "what should be" and "is" therefore. Self-interest "is" therefore, an inevitable moral ontology that resolves in spite of any altruistic sentiment we may score it to.

Keep in mind that if your credit score is zero, the risk does not extend to you...nor will the credit without paying a high rate coefficient with a low score representing the extent of the risk.

We live in a credit economy, even people who do not need credit use it to magnify their profits; and the profit, magnified, has to come from somewhere, magnified (reduction of the credit score which increases the extent of the risk and access to credit delimited to the ability to lend, not the need to borrow). The result is the extension of risk (extension of credit, or leveraging) to a crisis (gamma risk) proportion (securitized debt, collateralized debt obligations, and credit default swaps).

According to Ayn Rand's reduction of the argument, for example, magnifying the need for credit is the virtue of self-interest, motivating people to sacrifice for the greater good (reducing demand, increasing supply) with a high order of deliberate intent (productive self preservation). It is government sheltering and pampering the less credit worthy that is the cause of our problems. Eliminating government (without eliminating the need) liberates The People from the only active element of tyranny that rewards and deprives by fiat. Self-interest provides, government deprives according to the Ayn Rand, classically conservative hypothesis.

Rand's hypothesis does fit a post-modern, neo-classical, credit economy if we ignore the extension of the risk. Neither the king or plutocrats intend to deconsolidate the risk and finance the competition, however, and acceptance of the Rand hypothesis, with all things remaining equal, suggests a self-interest that is anything but enlightened.

Consolidating all the risk into a single entity, like the crown or the state, arguably affords the social benefit of relieving individuals of the burden of power, leaving its subjects free to live the good life (applying self-interest as Rand points out). Individuals find out what their self-interest really is with the guidance and protection of the state.

The agents of the American revolution--our rebellious founders, however, acted to establish the individual as the singular quantum of sovereign power in the pluralist form. The state exists to protect and defend the natural rights of the sovereign power (individuals) from tyranny, rejecting the argument that consolidation of risk, and its extension (tyranny), protects and defends the right of individuals to act in their self-interest.

There was no reason to believe the extension of risk and credit from the crown and its agents was in our self-interest at the time of The Revolution, any more than it is now extending from a ruling class elite.

Being a slave to one's credit score is just the latest extension of tyranny shammed with the false benefit of consolidating the risk.

Fake 'N Bake

The speculative tape is overbought. Just about worn out. Capital is so consolidated, all big money managers can do is fake a trend and bake a sudden reversal like so much pop'n fresh dough yielding a baker's dozen.

Despite all the innovative ways cooked up to buy and sell, suggesting a healthy appetite for capital being prepared for economic growth, providing the fundamental fare a hungry tape needs, the low volumes, however, suggest a fare that smells like bull but tastes like bear.

Now, Americans are being told the bull they've been fed is really bear, (as if we didn't know the difference?), but bull is still on the menu.

The Fed downgrades the economy, but extends monetary easing. Bear is being served, but there's bull in the oven.


Though the waft of baking is in the air,
Bear is still the common fare;
And if even more
We should forbear--
To tax and spend the common fare,
Make no mistake,
It's no fake,
The People are happy
To just eat cake.


Over-levening provided by the master baker between 0-.25 percent will quickly make a cake. Over-leveraging, however, will put growth on a slow burn, yielding plenty of time to fake the bake and take the cake.


Quickened bread
Provided by the Fed
Is a famonous feast
Provided for the least.


Consolidation of the capital yields slow growth and the ambivalent flavor of the bitter with the sweet. Inflation and deflation tug of war, never fully resolved without a deconsolidation.

Unfortunately, deconsolidation is a side order, served-up on the table of finacial reform in only the smallest amounts.

Maintaining if not increasing the level of consolidation is the main course, indicating it gets worse before it gets better, as the FOMC has suggested.


Without our daily bread makes fat
Bank of America
And Goldman Sachs;
And though reform is cooked post haste
To cleanse away
The after taste,
The recipe change for common fare
Is like Blankfein with
A head of hair.


Pending financial reform is just more fake n' bake. The bad economic numbers indicating a floundering outlook that resembles the previous eight years is no mistake since the financial system's structure and incentives had not changed.

Lawmakers face mounting pressure to reform. The stimulus had largely been absorbed by the problem--it had been quickly consolidated. It has to "trickle down" and bake-in to be effective.

The reform will not avert impending crisis, but manage around the problem that causes it. The benefit, like consolidation of the stimulus, will be conserved, resulting in an accumulation, rather than a distribution.

More stimulus will be needed but exhausted. Budget-deficit exhaustion is the impending crisis--the austerity that bakes our daily bread by deprivation.


Unemployment benefits?
That's not kosher;
But extending tax cuts
Will give us cloture.


Job one, by unanimous consent, is being sure big financials have plenty of cake to bake, but the truth be told, more likely fake.


And as we kneed our daily bread,
We're sure to keep
Uncommons fed,
Who stand and fight
By natural right
To satisfy their appetites.

If, by chance of course, it all be fake,
There surely must be
Some mistake.
The truth is out there,
But it must be hide'n,
Can it be found,
Obama-Biden?

Averting crisis is a fake,
The best of promise is
Slow bake.
It will not give us
Less volatility,
With the promise of growth
A low probability.


Beta volatility indicates an overaccumulation in need of distribution, being withheld for favorable tax policy that conforms to the Hamiltonian model.

While the model does not expect government authority to cause a distribution without market distortion, Hamiltonians literally bank on it nevertheless.

Kneeding the dough for favorable tax policy bakes up the same old fare for public consumption.


After the bread and circuses
Of stimulus and reform,
A volatility
Is sure to take shape
That will give real meaning
To "let them eat cake."

The reform we need
Should not be like poetry,
Rich in concept
That works metaphorically.

Indicators of Classical Economic Modeling

Independent investors need to determine the objective of current political-economic activity to protect their capital from the fully intended predations of classic economic modeling--to consolidate the capital (your savings and the value of your investments).

The intention to confirm practical application of the classical economic model well into the future is fully indicated by innovative political means that correlate directly with the innovations within the financial sector. Federal Reserve chairman, Bernanke recently refered to innovative financial instruments and practices as a healthy market efficiency that needs to be closely regulated to both prevent this deep recession from getting deeper and prevent innovation that is systemically destabilizing in the future.

Bernanke is confirming the intent to support the predatory results of allowing the capital to consolidate into innovative market mechanisms that are a function of massive money flows and momentum that CAUSE "bubbles" (extreme overbought conditions that lure investors into a false-positive with the valuation being speculative and not fundamental--like $135/bl for oil and eight years of false economic growth policies--only to burst the bubble and consolidate the monetized value). The next phase of the business cycle, neo-classically refered to as the "infusion" phase in which new capital is injected by monetary expansion (monetarism), is when the unconsolidated capital intended to restore liquidity with minimal redistribution from the consolidated value (the distribution phase of the cycle) is carefully regulated to that end and allowed to be innovatively consolidated later in the accumulation phase of the cycle. (Buy-and-hold is a good strategy at this point of the cycle when the Dow dips below 7500 which has become a false support beyond which the market is overvalued in the next six to twelve months).

Bernanke is applying the Hamiltonian model of ensuring the welfare of the rich in priority (what is too big to be allowed to fail) that CAUSES the systemic crisis, ensuring the organization and operation of the systemic risk in order to prevent it (?). Capital is allowed to consolidate, antithetical to the legitimate means of a free-market (pluralist) mechanics. Expert (elitist) adjustment of the negative externalities occurs at the end of the process since financials will innovate to avoid non-market regulation. The result is an ends-justifies-the-means legitimacy of a command economy with a false free-market legitimacy.

Causing crisis, and the systematic mechanism of predation, in the name of innovative technical management of the systemic risk by operation of careful regulatory authority (state capitalism) administered by a professional class of MBA's is a confidence game intended to conserve the consolidation of the capital and a defeat of the free-market mechanism it pledges to ensure. This is where the political economy becomes so complex, so difficult to understand and confirm, that the machinations of the elite easily achieve the consolidation of power with a false pluralistic legitimacy.

That the political economy is being reinvented (innovated) to ensure the fair and equitably legitimate outcome of a free-market economics by public regulatory authority just indicates one thing: the market is being rigged so that the small investor will always be at a systematic disadvantage with a free-market legitimacy by operation and declaration of public authority.

The practical philosophy that we must replace the free-market mechanism with the operation of a public authority is not paradoxical, it is a contradiction. It indicates a fraud, not the operation of a genuine civil service acting in the public trust, but a bureaucratic political economy of elits entrusted to conserve the distribution of wealth and power in a continuous crisis proportion that always demands its elite management and the "bonus" compensation of a sub-elite class of loyalists to administer it.

The bonus payments to retain the elite talent to administer state capitalism (to administer a non-free-market organizational technology with a free market legitimacy, or to perpetrate the fraud) buys the loyalty of what is otherwise a tendency to be free and fair, rewarding the most corrupt and morally incompetent. For the investor, this affects the bottom line. It is not just an ethological and ethical consideration. It indicates what the macro-economic model will look like despite the recent political changes, and I am sorry to say it is a faux political change that will not ensure the cure for what ails us: a regulatory authority that ensures a free and unconsolidated marketplace in priority (pluralism).

Recent political change is an innovation that conserves the consolidation of wealth and power by systematic predation and a means of managing the retributive value (the full value to be distributed to recover from, and prevent, liquidity crisis) shammed as technocratic management of systemic risk and punctuated crisis that will ensure the probability of its recurrent accumulative and distributional macro-economic value. The classical economic model of capitalism in which the measure of success is to defeat free-market mechanics as a function of organizational size is conserved with the pluralistic legitimacy neo-classically administered, and carefully measured in posteriori, rather than ensuring its legitimate means, and the probability of fair and equitable results, in priority.

Ensuring an organized deconsolidation, and the plurality of opportunistic investment that will naturally occur, is a pragmatic priority easily set to be accomplished in the first 100 days. The Democratic party executive and legislative leadership, however, do not understand the economics well enough to effect the needed change even if they could see beyond the self-satisified dictates of their ideology and the thrill of politically gaming for it despite the president's penchant for pragmatism.

The change we really need (pluralism) is highly improbable. So, load up and hold on to equities of companies that are too big to fail the liquidity crisis they are organized to cause both now and in the future with the very highest probability being very clearly indicated.

Recovery Phase Indicator

Oil prices near $50 per barrel signals a stop and reversal of the deflationary phase and the beginning of the recovery phase of the business cycle.

Commanding the price of energy and food (core CPI) commands the depth and breadth of the cycle. Command has been accomplished with deregulation of a consolidated capital and the use of futures and options contracts. All that is required to reverse the deflationary trend is to stop buying futures contracts and allow prices to return to a "fundamental" bid rather than the speculative bubble bid of a consolidated capital.

It does not indicate the deconsolidation of the capital, but the active management of it by not inequitably bidding up the price of commodities and taking the value of your income, the value of your home and your savings. That value is now consolidated to the point of diminishing return. Specifically, at the most fundamental level of finance, it is the point at which the only people left capable of paying taxes--paying the debt and financing real estate dvelopment--is the upper class of incomes.

The value consolidated is now considered, by the principles of conservatism, to be the rightful ownership of those who own the consolidated capital--the people Obama is going to raise taxes to fianance our economic recovery. Opposition to it is solely a function of class distinction, of what defines the ruling class: you do not pay taxes, you collect them.

If the money needed to bail out the financial system you wrecked with leverage finanace must be borrowed from you through Treasury and the Federal Reserve system, you cannot be assigned the creditor status if you are the only party, class, that can pay it. Thus, economic growth, or the recovery phase of the cycle, marked by the reversal of core CPI indicators like fuel and food.

We now have a chief executive not incumbent to the creditors of our debtor-subject society. This is not a realignment from conservative to liberal identity that perpetuates the cycle of preserving conservative values and principles that verifiably result in overaccumulated wealth that causes cyclical crisis.

The larger cycle of a diffusion of power is in operation. As the retributive value is paid, rather than borrowed, through a peaceful pluralistic process that comes with a deconsolidation of wealth and power, the human condition is that much closer to actualizing an identity of self that was once the utopian fantasy of the dystopic critique.

Try as we may, there is no stopping the ideal whose time has come.

The ambition to power and dominion has been hoisted on its own petard. Where aspiring to a social position that by definition we cannot all have produced great wealth and power, the utility has diminished into large-scale economic inefficiencies and an absurd quality of existence in a a kind of existential Skinner Box where the self is condemned to the reward of the promise of freedom on command.

The contradiction is so profound to be irreversable. Our lives are no longer to be defined by the absurdity of being the slave aspiring to be the master. Our moral intelligence has matured to the empirical, practical realization, in the words of Abraham Lincoln, "As I would not want to be a slave, I do not want to be a master."

Real Critique of Free Markets or the Consolidation of the Capital?

Predicting the Future of Political-Economic Organization


Concentration of wealth commands power. If the wealth is shared, or "spread around" as Republicans have cheaply described it, saying it will cause us to be unproductive and lead us into crisis, power is also shared, or pluralized, which reduces the probability, the risk, of crisis and the elitist management of it.

Pluralizing power maximizes the probability for a peaceful prosperity and direct accountability of the ambition to take power and exercise it. A person that wants to take power and command the fate of others, the processes of power must be consolidated politically and economically. Key to the process is the legitimacy of power because it causes, by cognitive process, the political will necessary to consent to the status quo or not.

Saying that sharing the wealth is inimical to prosperity and peace is necessarily argued as an absolute principle, like a natural law, of an uncomprimisable logical proof in spite of the overwhelming empirical evidence to the contrary. If the principle is defied, the proof of its veracity is the consequence of economic crisis.

The deepening economic crisis will be blamed on policies and programs designed to "spread the wealth around" so that the legitimacy of conservative principles will retrench and be operationally conserved.

In the past, the causal factors of the crisis have been conserved by being applied as the solution. Treasury now says the bailout money is to be applied by not buying worthless assets, but by buying an equity stake in risk-prone financial firms and encouraging them to consolidate, or too big to fail, which makes them risk prone.

The problem is applied, reinvented, as the solution. It is a technical trick of the bureaucratic model of power, making the process and outcome of power appear to be decisionally pluralistic and legitimately accountable. The wealth is thereby consolidated with a false legitimacy that will result in crisis.

The bureaucratic management of the consolidation is something private enterprise used to do in the name of free markets by detroying it. The practice has been used into an obsolesence of obvious practical absurdity.

Rather than destroy the causal relationship, the elitist process of power has been reinvented to give it a pluralistic legitimacy. It will result in crisis because the legitimacy is false: it is not a free market if industry and markets are allowed to consolidate nor is it accountable to The People. The process is not legitimately pluralistic and accountable if it is being commanded, evaluated and reinvented by elits to be organized and reorganized into "too big to fail."

The taxpayer as preferred shareholder in the bailout plan is antithetical to the process of private enterprise operating as a means of governiing with the power to tax in the form of "pricing power" that comes by means of consolidating the wealth and, therefore, power. Government by and for The People is, then, an evil to be described as "the problem and not the solution." Reverse this elitist model scenario and We have the solution that serves The People instead of The People serving the feudal ambitions of an elite ruling class drunk with the incompetence of a non-pluralistic accountability that iterates an unfettered greed and avarice throughout the social structure with the result being the crisis it has always been argued and practiced to prevent.

When after applying the problem as the solution and government is required to prevent massive suffering of The People, like famine and war, and the problem is just reinvented and retrenched, We The People are then told by conservatives We are "getting the government we deserve," meaning We are better off with no government and, therefore, no accountability at all. Accountability is best organized and applied, conservatives argue, through the free market and private enterprise which, of course, has been consolidated to prevent its legitimate operation and causing the need for government that the elitist model argues We do not need and are better off without.

The result is a power structure organized to consolidate wealth and, therefore. power. Rather than a champion of The People, the constitutional guarantee of government by and for The People is an orgainized adjunct to give private consolidation of wealth and power the force and legitimacy of public authority which acts, in contradiction, to command the consent of the governed. The contradiction ensures the probability of cyclical crisis at 100 percent.

The policies and programs of Treasury will result in perpetuating, not alleviating the crisis. It will act to reinforce dependancy on credit in our debtor economy, which has been the fundamental source of the problem--liquidity crisis and reliance on the failed Hamiltonian model with a false legitimacy of power that promises to produce the General Welfare without the wisdom. the accountability, of the collective will of The People.

Reinventing the Conservative Element of Power

The change of party identity in 2008 is more than just a political realignment from Republican to Democrat with an eventual cyclical swing back to Republican.

As it was at the founding of our nation, the power structure is dependent on The People buying-in to the structuring of its elements that are not properly identified by party identification. Foremost among The People's concerns was that The Revolution should not result in a strong central authority that will tax them into subjugation, and Jefferson warned of the effects of a Hamiltonian economic structure that would be very well realized by mid-Nineteenth Century in which The People were literally starving in the streets. Hardly the model of the General Welfare and a perfecting of the union.

Rejection of the conservative ideal is by deliberate cognition. We should not allow it to be reinvented in the guise of party realignment to cause a retrenchment of conservative principles, and the party apparatus that administers them, as We have in the past.

Disconfirmation of the conservative means-to-ends legitimacy has been declared by a collective action of non-consent. It is now necessary to restructure the elements of power so that its means-to-ends hypothesis is the clearly verifiable legitimacy of a popular consent, not the declaration of a power elite validated by authority of a controlled public process.

Where the conservative element of power originated with the nascent consent of the governed within a newly established nation with the promise of life, liberty and the pursuit of happiness, it has been rendered to be but by the consent of a ruling class of would-be kings, just as Jefferson surmised.

Freedom, sovereignty, is not bestowed, protected and defended from the top down. It is simply practiced from the bottom up. Structures that impede pluralistic processes of power must be eliminated if We want freedom. The first step, the political will, has been taken to reject the principles of conservatism in which the consolidation of power is legitimized by the nascent consent of the governed.

Rather than reinvented to once again assume the thrown of a popular consent by the partisan processes of collective identity, the conservative element of power is to be properly placed within the structure of power. It has properly earned its place at the fringe of credible political-economic theory and practice.

The conservative model of power provides us with what We should not do, and very surely indicates what we should.

Toggling party alignment is no substitute for a logically positive intelligence of The People toward a verifiable continuous improvement. Realignment of the party identifier is just a verifiable means to secure the ends of the status quo ante.

The change we need eminates from the decisive consent of the governed extending from the individual to identify the state rather than the public processes of the state giving identity to The People. One is a will to subjugation, the other is the will to freedom that is the clearly identifiable Will of The People that identifies the state with a properly clear and verifiable means-to-ends legitimacy.

The success of pursuing life, liberty and happiness is not the successful subjugation of The People so to define yourself as the rightful owner of consolidated wealth and power, having then earned identity as the power elite with the capacity to determine the extent, the opportunity, for The People's right to self-determination. The available choice, and the citizen's identity, is defined by a dummy variable, just like two-party politics, of compliance or non-compliance (no reward) with the satus quo ante. The election of 2008, however, has rewarded the choice of non-compliance the impetus for change empowered with the the force and legitimacy of publiv authority.

The Right to Self-Determination is every bit a Natural Right, forever poised to assert itself, by means of our own choosing, one way or another whether the proponents of the elitist (Hamiltonian) model of power like it or not. Resisting what is morally imperative by operation of our intellect (allowing for by administering to the collective wisdom, the General Will, and benefit, of The People) needlessly imperils civil society with punctuated events of natural correction typically characterized by needless suffering.

The suffering that accompanies the choice to ignore the righteousness of pluralistic means to ends is what The Constitution of the United States, to which our leadership swears to protect and defend, is fully designed to prevent. It provides us with the choice of freedom in our natural condition of a political self-determination, not to be improperly confused with, as conservatives would like us all to believe, socialism.

Conservatives that operate with the principle of rightfully subjecting The People to the reward of their rule apply a means to ends that is antithetical to our constitutional form of government. Self rule is not verified as a limited, exclusive reward of determining the self of others and crowning yourself the ruling class.

Our current economic crisis--rising prices, falling incomes, loss of savings and unemployment for The People (Reaganomics)--is not the result of a beneficent ruling class. No. It is the result of a maleficent class of elits determined to deprive The People to confirm and sustain what they consider the "rightful ownership" of your wealth in surplus.

The legitimacy of that surplused value, according to classical economic theory, is for reinvestment in YOU, not a reward of success to be horded and witheld by an elite to assume the role of tyrant (to govern with the sovereign right to rule) for the determination of YOUR fate and the opportunity to pursue YOUR life, YOUR liberty and YOUR happiness (the Jeffersonian critique of the Hamiltonian economic model that conservatives call soicalism and a tyranny Jefferson knew ensuring pluralism operates to prevent). It is an illegitimate model of power that neither extends from The People or protects them from enemies either foreign or domestic but, rather, operates to protect the enemies of civil society from the legitimate power, the legal sovereignty, of The People.

A peaceful and prosperous pluralism, a deconsolidation of power, ensuring power be exercised from the bottom up, aspiring to a more Jeffersonian form of government, is clearly in order as the change we need with the force and legitimacy of public authority.

We must be sure to understand the identity of the conservative element is entirely dependant on structuring the political-economic means of class society. Deprivation of The People, and the possibility of majority rule, is a necessary condition. It has always, and will always, result in economic crisis like what we have now because We cannot all be upper class by definition.

The conservative element will identify the measures required to eliminate the crisis as depriving you of the opportunity, the aspiration, to be upper class.

Understand that consolidation of wealth and power renders the opportunity for upward mobility virtually zero. Limiting opportunity is what it is designed and intended to do. Innovations are quickly consolidated and often its efficiency deprived to protect upper-class income at the expense of all other income classes. It is a virtual fraud. Consolidation of wealth and power ensures your being poorer, not richer in every respect, politically and economically.

The only way to ensure the wealth of our nation without events of punctuated crisis that make the rich richer and everyone else poorer is to ensure the deconsolidation of wealth and power. That will maximize the probability, the possibility, for the production of wealth, and the full and immediate effect of innovative efficiencies both in price and quality, with a secure stability, propogating throughout our global economy as the model of success.

Maximizing the opportunity for the production of the wealth of nations is the best way to protect ourselves from enemies both foreign and domestic. War and violence to secure an equitable share of the wealth, and power, is rendered obsolete. The distribution phase of the business cycle will not be dependant on a crisis phase of a cycle in which We keep making the same mistake over and over again, but the self-corrective, empirical means of forming a more perfect union with the operant means of a self-determination, and an intelligence that far exceeds the capacity of an exclusive, elitist access and administration of power.

Reinvention of the conservative element will be the opportunity that does not exist.

It's No Mistake

As we progress into the distribution phase of the lomg-term cycle on an accumulation of income in the top 10 percent not attained since 1938, or The Great Depression, the rhetoric will now be that the crisis it causes is just a bureaucratic mismanagement of our economy, like blaming Greenspan, or Paulson, or Cox....

It's no mistake. The long-term cycle is confirmed, and it has been skillfully managed to where we are now to successfully consolidate the wealth and allow the disribution phase to occur under the banner of the Democratic Party.

If the Party does not take the opportunity to operate with a new economic model to replace the disconfirmed model, the cycle, both politically and economically, repeats itself.

The change we need will be described and explained by mainstream economic theory as a moral hazard. The rhetoric will be presented as declarative knowledge, despite being disconfirmed.

The attribute of the moral hazard is why economics is known as "the dismal science." While we know that the general utility of depriving The People of necessities so that a high income class can enjoy the fruits of labor and. therby, trickle it down to be enjoyed by everyone else is a disconfirmed hypothesis, and categorically immoral, mainstream economics maintains that abandoning the theory that supports the hypothesis is a moral hazard.

The hazard, described as moral because of its dimension of behavioral modification, is dismally described as a non-productive incentive that historically brings societies to collapse.

As Jefferson carefully noted, profligate accumulation of wealth and power is historically a sure indicator of impending collapse, avoided by constitutional provision for a plurality of power and not its consolidation. That way, the prosperity of The People is peaceful, sustainable, and ensured through an empirical process of historical improvement in which making the same mistake over and over again is not supposed to happen. If the society is not allowed to learn from its mistakes, modify its behavior, then the processes of pluralism are not being allowed to fully operate.

So, we have a distribution phase of the cycle that ensures we make the same mistake over and over again. The mistake is a "normative" cycle that if modified is a moral hazard.

What is dismal about the dismal science is that it tends to be dismally unscientific. Instead of describing and explaining the brutal truth of economic existence, it serves to validate the brutal reality of it with self-fufilled mechanics and detrimental effects explained away as misfeasance that if thrown out would be morally hazardous. That hazard is, of course, validated with the name of "science," suggesting it is not a property of belief, or bias, but knowledge.

The scientific method requires confirmation or nullification--verification, not logical proof or disproof--validation.

Something is either verified or not. Having to prove or disprove something through argument and rhetorical manipulation indicates an unwillingness to accept the empirical method and the knowledge it produces.

Much of what is presented for analytical public consumption is a validation process, not a verification process for continuous improvement. That is why we recycle the same "mistake" over and over again.

The change we need is to preserve the value of The People's assets, and doing that will also be the means for economic growth, and stability, that We The People can describe and explain as the moral imperative that verifiably avoids the moral hazard.

Obam/Biden 2008!

Managing The Capital

Circunstances for the way The Capital is organized to be managed change, but the outcome is the same. Over the course of U.S. political-economic history, statesmen and entrepreneur-statesmen wrestled over whether the banking system should be public or private enterprise.

Where Jefferson wanted to keep the financial system small, private and parochial, Hamilton wanted to establish a national bank with regional branches under a central banking authority, much the way it is organized today, but our financial system is privately owned under private bureaucratic authority of the Federal Reserve Bank, allowing for a Jeffersonian legitimacy with Hamiltonian results.

For Jefferson, having a national bank was a sure way to consolidate power for exploitation of The People like the monarchs did. Hamilton knew that without a central bank with a common currency and coordinated action, economic development for nation building is severely restricted, and he was right, as Jeffersonian Republicans quickly realized.

After the War of 1812, a central means of finance was clearly needed and Jefferonian Republicans occupying the executive went to a national banking system to coordinate national production and build needed infrastructure. Western expansion beyond the Appalachians was financed by the central banking system. The financiers in the system leveraged the assets based on the appreciated value of the land (the labor being put into it to make it productive), so even land that was not productive became overvalued (a bubble).

Of course, that bubble burst and the leverage scheme, the pyramid scheme of borrowed money from the central banking system, collapsed, or as we call it today, unwound.

Banks could not repay the loans from the central bank and had to foreclose on the settlers. This was the panic of 1819. The workers lost everything and moved back to the cities in the East. Now, our Ivy League economists are telling us that the loss of value was just an imaginary value (the bubble). No, the value was collateralized by the labor value and was foreclosed on--it was consolidated, but we are not allowed to talk about that part of it without invoking the fear of socialism.

Instead of fear, and an apoplectic acceptance of the status quo, the virtue, the strength, of our intellect.

Management of The Capital needs to be decentralized for The People. This does not mean we are going to bomb ourselves back to the stone age! Neo-conservatives want us to believe that because it will preserve the power of concentrated capital to maintain a suboptimal sharing of the wealth, and power, or what is wrong with it, just as Jefferson anticipated.

Obama/Biden!

Really Real Negative Rates

A couple of months back I told you about our economy in a state of real negative interest rates in which a dollar invested in treaury bonds yields a negative rate of return with inflation.

For the past few years, as I have pointed out to you, technical analysts have observed yield inversions, where short-term rates (the over-leveraged demand on credit that is now illiquid) exceed long term, indicating the high probability of a recessionary trend, that we are now experiencing, largely due to over-leveraging of capital and the resulting low-to-no growth.

When the music stops, and the allowable 1/30 leverage ratio must be paid by the "system," no one wants to be stuck with the toxic-waste (the bad debt) it produces, which has now been devolved to the taxpayer with a regressive tax code by public authority (state capitalism, not state socialism).

The deflationary trend, the over-leveraging, has produced a T-Bill rate so low, with liquidity taken out of circulation and parked in treasuries, deflating the economy into a credit crunch, that, with inflation, buying treasuries is at a loss (really real negative rates, and so the treasury has now issued policy to pay interest and to issue a three-year bill). However, because the loss is a deflation of real assets (the real economy), the capital will move back in (liquidity) to buy the deflated assets to resell at a profit (the Warren Buffet-tyle investing). It is a thorough fit of the Hamiltonian model of administrative finance and model of power. It is a highly predictable, 200 year old model of political economy. The rich get richer, everyone else gets poorer in a (cyclical) dependancy model of power.

The Sabilization Act is more a place to dump the toxic debt, not provide liquidity. Available liquidity will be solely determined by the price and volume of deflated assets to be bought and resold. The Act is just an extension of the leverage scheme.

The People are dependant on the elitist determination of liquidity of a consolidated capital. The only legitimate self-determination that obtains in this model is at the very upper echelon of the power structure. Hardly the legitimate model of "We The People," of us all being in this thing together.

No. What we have here is a false legitimacy of pluralism in operation. It is inimical to a stable, peaceful and prosperous society. The Stabilization Act is in support of this outmoded model of political economy that is verifiably, time and again, not in the self-interest of "We The People" and the legitimacy of self-determination.

The model needs to be junked for genuine pluralistic processes.

The Sanction

The Heritage Foundation, for example, says the consequences for not passing the Wall Street bail-out legislation will be quick and sure.

If you own and operate a small business and experiencing the crunch on cash flow and need to borrow to continue operations, you will be sanctioned quick and sure.

Notice how the risk, the sanction, is a function of a firm's size. The bigger the firm--the more cash (solvency) you have to leverage in a credit economy--the more this Hamiltonian sanction is positive and not negative.

Understanding the mathematics of leverage finance is key to understanding the operation of the Hamiltonian model of political economy, identifying the problem and applying a fitting solution (see the article at griffithlighton.blogspot,com}.

The argument is being made that not passing the bail-out plan is causing negative market sentiment. That is a fraud and is indicative of what is wrong with the analytics.

Market sentiment was negative going into the legislative process with low confidence that the proposed plan could reverse the deflationary trend. The continued negative sentiment is just a confirmed lack of confidence of a legislative measure that is not characteristically Hamiltonian and the model of what does not work!

Your Self-Interest and the General Welfare

Pluralistic processes produce a social interaction of legitimate outcomes that is the application of an individual's choice, preference, that is the General Welfare.

If power is allowed to consolidate, to become non-pluralistic, but the legitimacy of the outcome is maintained to be pluralistic, there must be a mechanism in place to achieve this fraud.

The latest application is the current economic rescue plan being deliberated and soon to be legislated as the General Welfare.

Remember that the regressive tax policy of the Bush administration--the tax cuts for the wealthy that McCain says we NEED to make permanent--was argued to be everyone's self-interest, or the General Welfare.

The policy was decidedly not the self-interest of the vast majority of Americans, and management of this inequitable outcome--the rescue plan--is being sold as the General Welfare. Bush has, again with very certain terms, stated that not passing the rescue plan will mean a fate even worse than rewarding the corrupt and incompetent for an inequitable outcome that his administration argued with absolute confidence would not occur.

Yes, a crisis worse than we have now, that we were told would not occur to begin with, is definitely not in the self-interest of the vast majority of Americans. Notice how the self-interest of the vast majority has been sacrificed to preserve the self-interest of the rich all the way and is being called your self-interest.

This is how the Hamiltonian model of political-economy operates: exploitation of your self-interest is in your best interest. Slick, huh?

You should be ever-lov'n, hopp'n mad!

Let's try pluralism for a change!

Having It All Your Way

If you can have it all your way in the marketplace, it is not a free market.

Republicans have stalled the damned-if-you-do-or-don't rescue bill. They want to include a provision for a capital gains tax reduction in order to attract the liquidity "sitting on the sidelines" needed to resolve the liquidity crisis.

Republicans effectively propose increasing the regressive tax burden that causes liquidity crisis so that providing liquidity--financial service, investment, banking--is made without any tax burden. People that are withholding liquidity and willing to cause hardship for "The People" unless they get a favorable tax burden for causing crisis, and then act like they are our saviors when we have to pay them to save us, is nothing but the very height of corrupt--a lack of practical moral intelligence.

The application of this Hamiltonian model of political economy is a model for having it all one way. It is not a free market model. Yet Republicans argue the legitimacy of the capital gains tax reduction, to validate the operation of free-market "principles" (the private ownership of the capital), to be provision for the free-market model with a competitive tax rate in a rescue bill deemed to be otherwise socialist.

Application of the Hamiltonian model reduces the "competitive" dimension of a free market to a "necessary" use of the surplus, the capital, without a tax burden which, by the overwhelming evidence we have staring us square in the face, causes socialism of the capital.

If socialism is not what you want, don't do what causes it.

What we see here is the application of rhetoric for the development of public policy. Where verification, the scientific method, is needed to produce an effective public policy, validation--the rhetoric of ideological "principles"--is instead being applied.

If you recall, at the outset of the Bush administration, Bush said he would execute "the principles" of conservative economic policy, which are the tax cuts that the McCain camp says it will make permanent. Chief among these cuts was the capital gains tax and the perverse incentive to leverage profit before growth which produced this extra-extensive liquidity crisis that, in the end, cannot, predictably will not, produce the growth to pay the debt (the leverage).

Lowering the capital gains tax is the proverbial putting the fire out with gasoline!

Obama says he will not increase the capital gains tax to increase the incentive for consolidated capital to distribute its consolidated, frozen, liquidity. It is a measure that conserves the consolidation of capital where deconsolidation is needed. It is a pragmatic measure to provide short-term relief, not a confirmation of the necessity for making regressive tax policy, and what causes the crisis, permanent.

The pressure for a tax free use of the consolidated capital is extortionate. Extortion is characterisitic of a criminal element and indicates a lack of choice, a tyranny, where choice must obtain for a legitimately free market economics. It is a means of illegitimately having it all your way.

Profit Before Growth

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Very best wishes.

The Taxpayer

"We The People." The phrase denotes a legal status. It defines who is legally sovereign, or who rules or governs. According to this legally defined status, The People are constitutionally endowed with the "power" of self-determination--freedom.

Within the general case of legally conferred sovereignty is the freedom to achieve a class status. While it is illegal to achieve a royal status, it is legal to achieve what is considered to be a ruling-class status. Members of this class, largely defined by economic, or financial, independence consider themselves to be beyond the legal status of sovereignty which is relegated to the crude ineptitudes of The People, royalty, and government (regulatory) authority generally.

Where government authority (the sovereignty of The People) must act, it should only act in support of the competent ruling class with the empirical proof of private sector success (Hamiltonianism). Treasury secretary Paulson is currently on Capitol Hill making the case for the Hamiltonian model of power and political economy because, he argues, if we do not support the ruling class, the sovereigns (The People) will be much worse off.

The argument effectively separates a class from the legal sovereign status and elevates it to a supra-sovereign status that is not "considered" a royal status but a managerial class with the impunity of a necessary natural condition of rulers and ruled, of forging order from chaos.

According to Paulson and other elitist bureaucrats, congress must act to finance the ability of the supra-sovereigns to forge order from the chaos, and without it, general crisis is assured. This is nothing but a subsidy, welfare, for the rich to maintain an oversurplus of wealth and power (the cause of the crisis), and a surplus of retributive value that "requires" central command and control to manage it and to be paid for by The People, the ruled, the subjects, the taxpayer (Hamiltonianism).

Legally, the status of the managerial class is subject to the sovereign--The People. It's time to exercise the legal power, the constitutional right, the righteousness, the collective wisdom of pluralistic processes that will ensure the general welfare and not the conceits of an illicit power elite that corrupts the Natural Rights, the peaceful prosperity, of The People.

Supra-sovereigns disclaim their exclusive status when it comes to the tax authority of The People. Why, the elit managers argue, do The People want to tax themselves? Obviously "We" do not. It is exacted by elit authority in an illicit ruler-subject relationship that can only be shammed as democracy, freedom and justice that supports an exclusive status that corrupts Constitutional authority and the virtue of the Natural Rights of Humanity (pluralism).

Interesting how the conceit of supra-sovereign status becomes The People when it comes to needing to tap the liquidity required to cultivate general peace and prosperity through the tax authority. So, we have McCain, for example, saying that tapping the needed liquidity, as Obama/Biden propose, "will increase your [The People's] taxes."

The People are looking for the liquidity, the water, that cultivates prosperity. If you want water, you have to go where the water is. That would be the upper class of incomes, the class that otherwise discalims the status of sovereignty for the ruling class, and rulers exercise the authority to tax. Indeed they do!

The sovereign, the rulers, We The People have the authority to tax. It's time to properly irrigate the fertile fields of peace and prosperity with the liquidity that is being deprived by the corrupt conceits of an exclusive, illegitimate command and control that exercises the politics of deprivation as the will of The People.

Obama/Biden 2008!

Very best wishes.

Overproduction, Consumption, and the Weak Dollar

Overproduction is a classical economic description of the over-accumulation of capital. In the case of an over-consolidated capital, it specifically refers to sub-optimal compensation of wages and salaries and overcharge on the economic rent (the cost required to participate in the economy--the cost of living--which includes the over-compensation of top executives to administer the capital).

The leading indicators for impending overproduction are executive over-compensation, high prices (inflation) due to high speculative demand (administered by the executives), and a devaluation of the currency.

The result of inadequate compensation (the lack of consumption) is unsold inventories of goods and services, or overproduction. The effect of that is a weak dollar.

Notice that today's steep drop in oil prices occured with a weakening dollar value again. The weak dollar is an effect, not a cause, of the inflated, sepeculative demand price because the inflation reduces adequate compensation for the productive value of goods and services.

The cause of the overproduction is the high speculative demand that results from an overaccumulation of capital from prices exceeding income, which is what we have now. The technical explanation offered by the overpayed administration and its subordinates is scarcity. The contradiction then appears: scarcity and overproduction at the same time, to be explained with all manner of confusing political and economic interpretation.

Even though, for example, demand for gasoline has been substantially reduced, the speculative demand for crude oil is still strong due to the sub-optimal compensation to consumers (the over-accumulation and over-consolidation of capital and markets). Compensation, not the commodity, is where the scarcity is, and fully explains the contradiction.

Disbelievers will be quick to argue that there is a fundamental scarcity of an essential commodity input--oil. That is incorrect. The free-market will provide ample supply in all its possible forms if it is not allowed to consolidate due to inadequate compensation. The scarcity is the free market, not the commodity. The problem is the way the economy is politically organized, not the available supply.

The way the economy is politically organized (whether it is modeled pluralist, elitist or bureaucratic) determines (effects) the available supply. Conversely, the available supply will effect the political organization. The result may very well be just another version of consolidated power, and in the case of perceived scarcity most certainly will.

The reorganized process of consolidated power with a national-socialist legitimacy will only increase supply by direct state rationing of limited resources, much like what we have now in the form of state capitalism in which the speculative demand receives a subsidy in the form of regressive taxation. This is a bad way to figure out that ensuring a free and unconsolidated marketplace maximizes both economic efficiencies and direct political accountablility.

It takes pragmatic leadership with a high moral intelligence to accoucher a peaceful and prospersous pluralism. The way will be paved not by affective flip-flopping, but the practical utility of effective pragmatism.

Obama 2008!

Very best wishes.

Bailing Out the Bush Economy

If you do not like the Bush administration's economy, do not vote for McCain!

Bush says it is not good for the government to bailout the economy. It is self-correcting.

Herbert Hoover, during the Great Depression, said, roughly, it is not the function of government to provide for the general economic well being of the people.

No difference. Keynesian adjustments, manipulating the money supply (monetarism) is no substitute for lessons learned and continuous improvement. According to conservatives, however, including McCain, what we have now, as it was then, cannot be improved.

From Hoover to Bush, the model is "trickle down" economics. It has nothing to do with capitalism or socialism. It is about keeping the apparatus of power consolidated, that is the primary function of government...and that is what is wrong with it!

Sure, if you keep your hands off it, the way it is now operating with a premise of consolidated power, the economy will naturally cycle around to recovery, just like everything in nature, cycle up, cycle down.

Conservatives want us all to forget that humans have the capacity to manipulate or control natural cycles to our benefit, and that can be described as "the general well being of the people," and not just a power elite. This is a matter of rejection and acceptance of a working practical model, like rejecting superstitious beliefs and pratices for scientific knowlege and technology. The time is right to take this step in matters of political economy.

Keeping the apparatus of power, business and government, consolidated is the problem, not the solution.

It should be the primary function of government, rather, to keep the apparatus of power unconsolidated.

The billions of liquidity the Fed has pumped into the economy is being used to support financials from the top down. It has improved profitability without growth, which is what is wrong with it. A pro-growth application would be those billions pumped in from the bottom up, but that would not fit the working model.

Bottom-up priming increases the probability that eager entrepreneurs will incorporate new banking entities not burdened with the failures of the existing "competition." Consolidated entities do not want to encourage a competitive advantage, thus the trickle-down model.

The problem is not a function of a free and unconsolidated marketplace that conservatives say we should keep our hands off for it to correct itself, but the very lack of it. The model for self-correction is not in application, so the economy will not cycle toward verifiable improvement, but the validity of its predictable conservation.

Trickle-down economics is the problem. Now is the time to accept a model of political economy that genuinely applies and effects the general welfare with empirical measures of continuous improvement, not cyclical measures of crisis management.

Build the coalition for Obama, 2008!

Noticing the Innocuous

Dow Chemical is to buy Rohm and Haas in a multibillion dollar deal financed by investment banks with a proven track record of inimical operation in the marketplace of current memory a la former senator, Phil Gramm.

The deal will also be financed by the Kuwaiti Finance Authority and Berkshire Hathaway.

The chemical industry's equity prices are floundering under deflationary pressure of energy price inputs--oil--creating the environment for a continuous consolidation of power by deliberately organized (political) means, specifically, by cartel.

All seems innocuous enough, free market enough, buying and selling assets in the marketplace.

No! This is a free-market fraud! Consolidation to improve profit margin is not to be financed, it is to be prevented in priority by allowing financing to occur only for promoting pluralism that avoids the crisis of consolidated capital and markets we are currently in; the crisis that the Fed says it needs "the tools" to centrally manage to "allow" it to happen instead of preventing it. Allowing for crisis is the source of the problem, not the solution.

When the fundamentals, the obvious, is being ignored for complex regulatory schemes to manage the natural retributive value, you know you are in big trouble!

The predictable result of this kind of free-market fraud is the false rejection of free market economics to produce the general welfare. The crisis of evermore consolidated capital will result in state ownership and an arbitrary and capricious exercise of an elitist model of power that will make the free-market fraud look like a babe in diapers.

The tools for crafting our perpetual peace and prosperity are there, we just need to start using them, and the craftsmen are not Phil Gramm, Ben Bernanke, Henry Paulson, or John McCain.

Pragmatic pluralism is what we need, not the proven inefficiencies and preventable risks of plutocrats.

Obama 2008!

Very best wishes.

Immunity of Power

The Bush administration, neo-conservatives generally, equate power with immunity from wrongdoing, and prosecution of it. The argument is: our power is dervived from the constitutional consent of the governed, it is therefore immune from prosecution except where it is "originally" intended by the Constitution. This is the political contract of representative (republican) government that Jefferson referred to as ideal--it operationalizes the leadership talent and the ambition for power with the general welfare, or the public good.

It fails because the ideal is operationalized into a Hamiltonian model of government in which an elite rules, and they rule with immunity and impunity. According to this practical model and working hypothesis of power, the best leaders will not be available for public service under threat of prosecution for exercising power, which fallaciously implies that power is necessarily corrupt and must be immune from prosecution. It is a tautology, a circular argument, a fraud in which Hamiltonians masquerade as Jeffersonians, and it is not exclusive to Republicans by any means.

We need a pragmatist of power for the public good whose immunity from prosecution is the popular consent of election and reelection to "good" office by being in service to "The People" (Jeffersonianism) not the people in service to the ruling class (Hamiltonianism).

Fannie May and Freddie Mac, for example, are a Hamiltonian model of central banking that Jefferson warned would lead to political instability and propogates the need for central command and control (the Fed and the new rules) inimical to The Constitution of the United States and the fundaments for freedom that cannot be allowed to fail. It is exactly what Declaring Independence and the Constitutional endowment of Natural Sovereignty is intended to avoid.

Obama is the pragmatist we are looking for to obtain a more Jeffersonian model of government in which the risk of our financial system, for example, is spread naturally among many pluralist elements in a peaceful and prosperous manner of both a distributive and non-distributive benefit (Mancur Olson); a systematic risk that does not conflict individual freedom with the utility of a collective action, or free market economics.

Very best wishes.