Psychology of Risk

Assessing the risk requires psychological valuation of the players, which indicates the probable direction the risk will take.

Currently, for example, in order to reverse the deflationary risk, we need to put capital to work. Instead, the players are hiding in fear, seeking safe haven to avoid losing value to a deflationary trend caused by trying to avoid the risk. Unfortunately, this means they are causing it by trying to avoid it. It's not exactly rational, but when you are rich and powerful, you can afford to be irrational at everyone else's expense (until "the risk" goes gamma, anyway).

As the risk accumulates, the more incentive there is to avoid it. Thus, the risk feeds back into a crisis (gamma-risk) proportion (which demands government intervention to save consolidated capital from itself, like the multi-trillion dollar bailout we just experienced and are now expected to pay for with deflationary spending cuts or an inflationary burden of debt).

Realizing that risk cannot be avoided, it accumulates (like in a deflationary spiral), requires an analytical cognition that is apparently inhibited by the profit motive.

The motive to profit by avoiding risk drives the direction of the risk. In the current environment, analysts that realize this assessment will predict a winning market position (and public policy analysts will be prepared to protect us from ourselves as we irrationally let the risk patriotically accumulate out of control in our self-interest).

Causing the risk to be avoided by trying to avoid it--the classic "dog chasing its tail"--is not exactly the model of sanity or intelligence. While economically the rich have little to lose by converting their wealth into working capital, the majority of the nation's wealth is being horded to avoid the risk, which foolishly puts it at risk of being confiscated at large. It is not the government putting their wealth at risk, it is themselves.

We can either infer they do not know what their self-interest is, or they are demonstrating power--projecting power by playing politics.

Perhaps we can reasonably conclude that chasing your tail is just a form of amusement, which is a very important aspect of the psychology of projecting power.

American politics is elegantly played to exact detriment by making the masses believe it is in their self-interest. For consolidated capital, this is what civil society is. If The People no longer believe the game is being played in their self-interest, then it is the responsibility, the noble obligation, of the power elite to maintain civil order. Raw power must then be applied, overtly demonstrated, to keep the capital safely consolidated, and protect us from ourselves. Is this not what we hear our elected representatives telling us about our representative form of government?

Democrats told us we would know what was in the health care bill after it passed. Now Republicans tell us that it is necessary to raise the tax burden for people who struggle just to pay the rent and put food on the table so that Bank of America can meet its capital requirements as they leverage our future into the pit of the next deflationary crisis. When that crisis occurs, too-big-to-fail entities will be there to feast on the famine--not to provide, but to deprive, consolidating value that will be leveraged into the next crisis in an ever-larger proportion.

So, we're mandated to buy a Democratic health care plan we cannot afford to pay with a Republican economic plan that has an outlook that is progressively more dismal. I dare say, the rating on this is hardly triple A!

Let's STOP and reverse right here.

Increasing GDP over debt is a coefficiency that works. Everyone benefits--even the upper class. The majority of Americans have the income to pay health care and the rich still get rich--unless, of course, we find it necessary to make people suffer to feel powerful, which is just sick! It is just a psychological disorder...criminal insanity that a real free market will in no way tolerate. The only way this insanity survives the marketplace is because it is bred into the false efficiency of economy-of-scale modeling.

Deconsolidate and this problem is solved!

Putting Democrats back in the majority will not solve this problem. According to them, bigger is better! Yes, indeed, $14 trillion and more better! So, who do you think is going to pay for that?

We have to demand that the capital be used to increase GDP. This means that industry and markets will expand, NOT consolidate (i.e., GDP increases over the debt). Economy-of-scale efficiency is a psychological trick--a con game perpetrated on good-natured people who want to pursue life, liberty, and happiness, not be the plaything of pious frauds who want us to believe that taking advantage of other people is a providence divinely endowed and legitimately earned.

Making it so that people have to struggle to make ends meet is not the pinnacle of civil society--it is not the measure of success--and it is not endowed by God.

It is time to stop empowering people who cause debt by consolidating capital into economies of scale, and people who solve this problem by consolidating the risk it accumulates into public debt.

We are psychologically manipulated by an increasingly consolidated risk proportion. It gets so big that it seems the only solution is a big solution. We have ample evidence that this is incorrect, but we are so risk averse, we are vulnerable to the machinations of a power elite who want to herd us like so much cattle and corral us into an economy of scale that is but a Skinner box for operant conditioning. We are so conditioned, we tend to rely on the bought-and-paid-for experts who manage and direct the affairs of business and government consolidated evermore into a controlling, sovereign authority.

No! We the People are Sovereign! We can think for ourselves. We are born free and will live free despite the ambitions of would-be tyrants.

Freedom reduces to a natural coefficiency of governance that has been cognitively dissonant. Now we must choose. It is time to actualize freedom by operantly conditioning our behavior through pluralistic processes, not the tyranny of consolidated processes. Human nature is greedy and selfish to a fault only if we are structurally conditioned to select those behavioral attributes for success.

In a free, unconsolidated marketplace, selfish greed reduces to providence. Those that seek to profit by greedy deprivation can only survive by rigging the market to consolidate its otherwise divisible, not-too-big-to-fail power into an indivisible, too-big-to-fail proportion.

We have been conditioned to believe that consolidating the risk provides security. It clearly does not! It intentionally provides debt well in excess of productivity...it intends to make us slaves to the debt proportion. The choice we have reduces to debt or GDP.

We can lower the deficit and reduce debt or raise GDP. Trying to do both at the same time does neither--it supports the dissonance. It is a psychological trick that will keep us in chains with what appears to be by the consent of the governed. No! We are Sovereign. We choose by Divine Right naturally endowed.

It is time to choose prosperity over debt. Although we are being conditioned to believe that reducing debt will bring prosperity, it will not! It will accumulate even more debt.

Reducing the deficit and debt does not increase GDP, increasing GDP reduces the deficit and debt.

The deficit is not the problem, it is a symptom of the problem. We have been conditioned to believe that the debt is the problem so we infer cutting the debt solves the problem. This is an error of fundamental attribution--it is a cognitive disorder that leads to dissonance and uncivil behavior due to failure of expectations. It is an unnecessary condition because WE are Sovereign! WE have the power to choose it not happen. WE have the power of self-governance.

Artificial Risk?

A common assessment of the current sovereign-debt crisis is that it is artificially constructed. What this analysis is essentially saying is that the risk does not present as ontological.

If we thought philosophical analyses are not important or irrelevant, we were wrong.

We detect a lack of apparent ontology because the analytical space is packed with artifice. Just because we tend to nurture nature toward specific performance does not in any way mean that these artifices are unnatural. In fact, this concept of "natural" is completely wrong and analysts that rely on this false valuation of probable risk will get burned by unexpected, trend reversals.

Manipulating nature (risk, for example) does not make the outcome any less ontological, and this is where analysts are presented with the angst-principle and the gamma-risk dimension.

Since angst is a feeling (which tends to be politically accumulated and expressed in the gamma dimension), empirical analysts tend to ignore it as unmeasurable (and, wrongly, unreasonable). Market analysts use the VIX indicator, but it is largely post-hoc data with limited predictive value. Ignoring the angst-principle, however, is like trying to land on the moon by ignoring the effects of gravity. The probability you will be successful is nearly zero, but successfully landing would not be in any way unnatural whether it is by chance alone or not.

The debt-limit debate (the sovereign-debt crisis) is no different. Just because the ceiling can be raised with a routine stroke of the pen does not mean that this is a false crisis. Yes, it may be artificial (a political artifice) but it is not false. The crisis it presents is real and easily predictable in the gamma dimension.

Understand, for example, that the political artifice is packed with retributive value--it is saturated with angst. Not only was the angst (the motivated level of determination) the determining variable that predicts the crisis, but its support and resistance predicts the probable political-economic trend after it.

Without the necessary, conceptual tools, analysts, both political and economic, will quite naturally miss the target.

Organizational Modalities Indicates Probable Trends

When investment banks reorganized into commercial bank holding companies to take the TARP funds, they traded the alpha and beta risks for the gamma risk.

Being too big to fail and the highly leveraged, unregulated organizational type indicated the probability of the Great Recession (and the gamma risk) we are now experiencing long before it presented.

At the outset of the organizational changes made to bank regulation that allowed for horizontal and vertical integration of the industry and markets (networking the externalities), political economists who raised red flags were villified by both Democrats and Republicans as anti-free-market doommongers.

These political economists were merely identifying a technical indicator, an organizational typology: consolidation of industry and markets that, by recognition of the empirical evidence, always causes (indicates) the recessionary trend (and the necessary management of the systemic risk) we are in now.

There is a very clear cause-effect relationship. Getting to the Great Recession was no random walk.

The alpha and beta risk is so well commanded and controlled in the short and intermediate term by being too big to fail that the only probable risk is gamma. Managing the gamma predicts a merger (consolidation) of public and private function into an organizational typology with predictable trend indicators.

Macro sector consolidation to manage the sytemic risk immediately indicates that too big to fail is a confirmed efficiency to be conserved. This is the leading, trend indicator suggested by organizational type.

Intervention of the gamma risk will be managed co-operatively, indicating the recessionary trend will be long and slow with public authority now in a position to take the blame for the negative effects of the trickle-down economics of a consolidated capital.

The organized modality indicates a money flow. The flow is the relative trend, the probable path, of the economy. Since the organizational type necessitates a trickle down flow, the strength or weakness of the recovery will be determined by "control" of that flow. That is what this modality is intended to do--control the gamma risk intervention and the distributional value of the accumulation.

How the accumulated value is distributed determines what balance sheets and income statements look like and when. So the organized modality not only indicates the probable strength of the macro economic trend, but the valuations of sectors and markets over time. It has a market timing determinant.

Whether from the public or private sector, or both, command of the economy from the top down will have a mean frequency of both time and money. The small investor needs to keep in mind, however, the ability to be unpredictably arbitrary and capricious is not only an emblem of power but a means of technical manipulation.

Being able to dictate what the technicals look like tends to position investors to fall for false indicators.

In the short term epspecially, small investors looking for that technical hedge on the risk are easy victims to the law of large numbers. Flash trades and large volumes at the last minute of trading can present false indications. The frequency distributions can be arbitrarily distorted till the favorable condition for the consolidation presents for execution. While the short term indicators look noisy in retrospect, the long term may present as a normal distribution.

Organized consolidation of the capital allows for this trending by directive. Goldman Sachs predicting that energy prices will retrace record levels, for example, sets up a trage. It positions investors for surprising reversals all dependant on their position at any particular time.

While the aggregate position, the threshold, that triggers an execution to consolidate the accumulated value has the appearance of being a legitimately organized process of self-determination (a pluralistic, free-market mechanics), the director is always the probable winner with the risk almost entirely eliminated. Being "free" of risk is the stock in trade of hedge funding with a large volume of capital (the law of large numbers).

The law of large numbers can also act positively from the bottom up. It is a trend the current organizational mode does not indicate occurring anytime soon but would do much to facilitate the time of recovery. The money used to drive futures contracts at the top would drive the recovery from the fundament if it were used as liquidity at the root instead of waiting for it to inadequately trickle down, with or without a gamma risk intervention. The price of energy would then be fundamentally driven, but not at a rate that delivers that magnified, exponential hedge-fund return that entails high gamma risk and indicates support of the deflationary trend. Rather, the profit on the demand pressure very simply indicates recovery.

Goldman Sachs' prediction for energy prices indicates support of the recessionary trend, largely determined by the organizational modality.

The small investor will be sure to hear big financial analysts, and pop media analysts generally, touting indications of recovery, but it is a way to position the retail investor for a trage consolidation.

Given the indicated organizational modality, the recovery will not be indicated till the retail volume has been consolidated. At that threshold, the capital has no where to go to make a profit but to finance the fundament and economic recovery. It is the classical model of capitalism in which markets are allowed to consolidate and the long wave shows a normal distribution. While the process looks "largely" normal, unfortunately this modality operates at the very highest cost to the vast majority to provide, to finance, the benefit.

Energy prices will not, then, retrace peak levels at the time of recovery as Goldman Sachs suggests. Prices will be generally deflated. The peak price of energy indicates deflation given the organizational model in operation, and will consolidate the value positioned for recovery.

Weak energy prices, and a gamma risk that controls the speculative demand--a public-private organizational modality, will signal a near-term recovery.

Peak energy prices will not be an indicator of recovery.

Surprise!

It is absolutely critical the small investor understand that market sentiment (the irratonal exuberance) is driven to absurdity by non-free-market forces.

The historical tendency to attract investment and overvalue assets to an absurdity is an organizational problem.

For example, grappling with healthcare reform, providers want to talk about everything but price. If controlling the cost is the goal, it is necessary to talk about the price, not just lifestyle choices and the accumulation of capital needed to drive technological innovation.

Talking about everything but the price rigs (organizes) the market to command it.

If, for example, consumers talk about "organizing" a healthcare co-operative, the consumer empowers a democratic organizational typology in which to demand the price in a disinflationary, free-market fashion instead of the inflationary command-model fashion that accumulates value and deflates the economy.

The determining variable is the organizational modality.

Controlling the Future(s)

Big or small, the investor is looking to predict the future. Big investors, like hedge funds and private equity firms, can control trends--a sure predictor--in spite of the technicals.

The effect, the intended result, is the small investor, the small business, the small income at the mercy of big, consolidated capital, inimical to a free-market economics.

The data generated by the small investor is easy to track by big financial firms. The technicals that the small investor relies on to divine the future are easily manipulated to create "surprising" market valuations that are based on the position of the small investor.

A "surprise" means you missed it and will not share in the wealth. Rather you will have lost value, if not directly, indirectly so that you will not properly associate the cause with the effect, the cost with the benefit, the profit with the loss.

Without a proper correlation of cause and effect there is no proper accountability. There is no legitimacy "demanded" of the outcome, the intended effect that is not supposed to be legitimately commanded.

If you are playing poker, the player that stacks the deck, deals the cards and knows what everyone in the game is holding is always likely to win with the legitimacy of the law of averages. The player in command of the game induces and accumulates a retributive value, a risk, that must be managed which includes keeping the other players in the game with a false legitimacy, like just being lucky.

If the small investor goes long, big money managers go short... and so we have the recent move to limit naked shorts by regulatory decree, for example, to defend a free-market legitimacy of the outcome.

The element of surprise also presents in the irrational valuation of derivatives, like commodity futures, which affects (supports) their "derived" equity valuations in an upward trend while demand is being reduced to support (effect) a deflationary trend. Combined with the ease of monitoring who owns what when, the small investor technically does not stand a chance.

The result of the action of this consolidated capital is, as the evidence of late clearly demonstrates, a massive reduction of net worth and further consolidation. Technical corrections for the result in posteriori by government decree (what conservatives argue is inimical to a free society and economic growth) only serves, as we see, to support the macro trend of consolidation.

For conservatives and the neo-conservative opposition, it is a win-win outcome. The allowable political choice is two types of conservatism that conserves the consolidation of wealth and power by administration of Ivy-League Hamiltonians.

Despite all the "hope" for "change we really need," the future of a consolidated capital is being technically well conserved.

Consolidated capital operates with inequity that naturally causes crisis and dispossession. The massive loss of net worth by the vast majority of Americans has been accumulated (consolidated) and used against them in futures markets to "defend" a command position and support the deflationary trend.

The consolidated value is now being prepared to be resold, distributed, at a profit. This value added will be falsely characterized as economic growth. It is a zero-sum loss (a detriment) shammed as a collective benefit (the accumulated profit). The benefit is not collective if it is accumulated, or exclusive. It must be distributed to be inclusive.

The distribution on the accumulated profit (reducing the surplus of supply that supports the deflationary trend by increasing demand) is the investment that fuels the recovery and provides the false collective benefit of providing for economic growth, which is not growth at all. It is a "recovery" (a distribution) of what had been lost in zero-sum in order to sustain the process of the business cycle in a state of disequilibrium--an inequitable distribution of income that defeats the equilibrity, and collective legitimacy, of the free-market mechanism.

The cycles provide the recurrent crisis and the business transactions necessary to consolidate wealth and power. The transactions, the buying and selling, gives the process a collective legitimacy of market mechanics. Without the demand dimension being the full determinant, however, it is a false collective legitimacy.

Where the command dimension is largely in operation, as it is now, the economy lacks a free-market legitimacy. It is necessary, then, to correct for the lack of legitimate power.

The gamma risk is operationalized with the retributive value that accumulates along with the consolidation of power (the illegitimate means to command the economy). It operates to manage the lack of demand economics--the free market, democratic dimension that provides a genuine, collective legitimacy of the process.

Technically correcting for the retributive value accumulated reduces (manages) the risk inherent to conservation of the command economy and the distribution of income that determines it.

The sacrifice of income that finances the zero-sum accumulation of value gains a collective legitimacy by operation of public process, mitigating the loss with the force and legitimacy of public authority. Without it, the legitimacy of the outcome is at severe (gamma) risk, and the means to the ends is technically corrected to manage the externality of the retributive value.

The retributive value accumulated on the current cycle is immediately about $2 trillion, which is about the value lost in net worth of the average income in the last quarter of 2008. The amount of deficit spending is quickly approaching that nominal value to correct for (mitigate) the accumulated loss to maximize conservation of the accumulated benefit. Thus we have the tension between the interjection, the demand, of the gamma risk and the imposition, the command, of the consolidated capital in a conflicted, volatile trend of deflation and inflation.

The recovery will be considered an inflationary trend by the Ivy-League managers of the consolidated capital. The result will be sustained unemployment and an aggregate effect of defending the value of the accumulation with a deflationary consequence of incurring the gamma risk (a disincentive for capital investment, being crowded out by public finance--deficit spending). The trend is thus in an almost complete command mode with capital moving into commodity futures to "hedge" against the inflating dollar by inflating the profit (the continued accumulation of income) without growth.

Administering this process of deprivation, of course, according to Hamiltonians, deserves a bonus because it provides for the public good (the sacrifice necessary for the consolidation of capital that finances the investment for economic growth).

Administration from the public sector in combination with the private sector, like the Federal Reserve, is to give the command a "demand" dimension.

The Federal Reserve saved us from financial firms that were allowed (a choice) to be too big to fail. The intended effect is coercion--extortion, racketeering--characteristic of a criminal element.

A free-market economy is supposed to be dominated by the element of choice (demand), not the element of having no choice (command). It is the very essence of freedom, or the lack of it--the legitimacy of power.

According to the Fed, we have no choice but to bail out the agents that caused the crisis and pay them bonuses to continue to use the bailout money in a manner that caused it, reinforcing the behavior because it is profitable. The consequences are fully intended to support the command structure of the economy and resist the democratic element of demand to form an elitist model of power: a bureaucratic model of power and political economy in which the public and private sectors are effectively merged to command and control, to resist, pluralistic, democratic tendencies.

If the economy is allowed to be in a demand mode, the consumer (the vast non-elite of "unbonused" if not unemployed) is the primary determinant of economic trend.

Instead, the sacrifice required to surplus the capital for investment is really being used to reward (bonus) the administration of the command mode. It is being used to conserve the consolidation of value in a neo-classical, neo-conservative manner.

The distribution by the public sector on the value accumulated is being operationally accumulated by the MBA, "bonus" bureaucrats in the private sector. The result is a stagflationary trend, keeping the economy out of a demand mode.

With each indication of recovery is a spike in energy prices. The data confirms that consumers are spending more than they make with these steep oscillations in price. (The short, sharp oscillations keep the profit high and the rate of substitution, as well as demand destruction, low, rigging the market for stagflation.) Continued erosion of net worth, and consolidation of that value, is the aggregate, intended result, always supporting the deflationary trend with a reduction of demand.

That reduction of the "demand" dimension results in a spike in bankruptcies, which has also been confirmed by the most recent data, further reducing the "choice" dimension of the economy with fewer small businesses and a reduced ability to pay, or to choose.

The unemployed sacrifice, suffering the deflationary demand reduction to provide, or finance, the benefit. The unbonused employed sacrifice as costs rise while their incomes decline, continuing to erode their net worth, financing the so-called collective benefit of consolidating the capital to achieve maximum economic efficiency (the economy of scale and networked externalities by horizontal and vertical organizational integration).

The collective benefit of the sacrifice is false. It is a zero-sum distribution. It is a loss with the vast majority of individual incomes incurring the detriment without fully participating in the benefit, rendered by a process of exclusion.

The growth, the purported benefit, is really not growth at all following negative growth with the supply having been "conserved" by the sacrifice of the excluded non-elite (the unsophisticated masses who willingly sacrifice without fully sharing in the benefit).

Conservation of the supply is critical to understanding the indirect scheme of consolidating value so that it looks legitimately unconnected and "uncommanded." This is where our Ivy-League economists tell us the value is forever lost, and not a zero-sum consolidation.

Supporting the deflationary trend by controlling the future(s), along with extracting the value by such incremental means as flash trading (which also manipulates the technical data), means the value of the existing supply is in cantango.

The value of the existing supply, because the investment to expand it is being invested to conserve it (the liquidity crisis), is realized, or consolidated, when the recovery finally includes the unemployed who must bid up a limited existing supply. The intended effect is to mitigate the cyclical decline in the rate of profit described by all classical economists; and so, neo-classically, we now hear pop analysts heralding the coming cyclical bull market with better-than-expected profits despite increasing unemployment...suprise!

Rising employment will be the fully expected (fully intended) unexpected, surprise premium (the zero-sum loss/gain) that the Ivy-League economists say does not exist.

The rate of profit is neo-clasically supported through the deflationary phase while resisting employment (demand). The inflation is not supposed to happen, classically, in the deflation phase because the demand is not there to support it.

Keynesian stagflation is the neo-classical result, allowing for profit margins that are to be unexpected without the demand (employment). It is really value that has been surplused and later consolidated so that it is not readily, immediately, clear where the profit is coming from. That inflation, that profit, is explained away as the capital formation necessary for growth, rather than the means of limiting growth (limiting demand) to increase the marginal profit.

The inflation will be deemed "fundamental." However, it will have been caused (commanded) by elite control of the economy, and that command and control will be extended to the Fed to control these "market forces" (the cyclical trend) toward a so-called collective benefit by increasing the interest rate, which supports the deflationary trend.

Increasing the interest rate is a regressive burden on incomes. People that must borrow to pay the cost of living (to demand in the marketplace) receive the debtor assignment on the public debt. By default they pay the debt held by those with the ability to buy the debt (to command in the marketplace).

Those with the greatest ability to pay are then, by legal process, those who are the exclusive beneficiaries of The People's collective sacrifice (Hamiltonianism).

The value of the recessionary trend was not lost. Consolidation of the value (the sacrifice) was just timed to appear disconnected with the benefit in the recovery phase of the cycle. That value is also expressed by conserving the ability to command who sacrifices to achieve the efficient formation of the capital.

After the sacrifice (the accumulation of the capital--the loss of net worth by the vast majority), the next phase of the business cycle is deflation. It is the phase the economy is in now.

In the deflationary phase, prices are pressured to fall due to the reduced demand (the sacrifice). Falling prices reduces the surplus, but does not eliminate it. Growth goes from negative to positive. The surplus (the sacrifice) is conserved and the process for expropriating the benefit is maintained to achieve the so-called collective benefit of so-called economic growth.

The recovery phase of the business cycle is then achieved in zero sum. The diminished surplus is replaced, not really adding supply.

Adding supply controls inflation. Disinflation provides the purchasing power necessary for sustained, positive growth, actually adding supply, improving choice, adding demand, reducing the command dimension of the economy.

Disinflation creates savings, which is turned into capital that finances growth and innovation in the pursuit of profit (the return on investment). Deflation is financed by negative growth--the sacrifice that reduces net worth in zero-sum. The value is accumulated to consolidate the wealth and power into an elitist organizational form that is to be systemically self sustaining, but not without risk of having to repay some of the benefit to its source (the retributive value).

The sacrifice necessary to keep the elitist form self-sustaining is what is currently referred to as the systemic risk. It is the risk of systematically incurring more cost than benefit with the legitimacy--the free will--of a collective process of self-determination, like a market system in which individuals choose to participate.

If by the necessity of participating in the marketplace to survive means having to be the one to sacrifice, or to be a non-elit, the pluralistic legitimacy is empirically failed. That incurs a "risk" to the value that finances the elite and conserves the surplus. There could be a "demand" for the illegitimately gained value to be retributed if it is not successfully organized, timed, and argued legitimate on the basis of economic efficiency.

The systemic risk is commanded and controlled by the elite of power through the market system and the business cycle in the name of achieving the highest economic efficiency--consolidated economies of scale that minimizes risk and maximizes the profit (the surplus of capital) for reinvestment. That organized largeness of scale also includes the co-operation of the public sector.

The non-elit participant, who pays the debt (borrowed from the surplus) and suffers the deflationary reduction of net worth that finances (conserves) the surplus, is greatful, relieved, that the value surplused is trickled down enough in the recovery phase to survive by the good grace, the noblese oblige, of the elite.

Relief of some of the sacrificial burden is systematically substituted for retribution of the accumulated value. It is just enough income to sufficiently pay down the debt, according to an arbitrary credit score, allowing for enough demand to reduce the surplus inventory (the sacrifice and the value to be retributed).

Suffering the deflatonary phase of the business cycle not only elicits an increased demand (a distribution on the accumulation) to support the value of the surplused inventory (matching demand with supply without disinflation), but solicits a demand to retribute the entire value of the sacrifice.

The demand for more participation, for more purchasing power (for more democracy), is a risk to conserving the distributional value of the system.

The systemic risk is controlled by substituting it with a gamma risk that is easily co-opted.

The latent demand elicited to retribute the value is transformed into a demand for elitist command and control. Congress responds with a technocratic delegation of extended representative authority who manage the risk without direct accountability to the electorate.

A lack of full accountability succesfully co-opts the demand for full retribution of the value into a technocracy for managing the risk and conserving the structure that commands the distribution of power and authority.

The bureaucratic model of power and political economy successfully displaces the natural demand for full retribution of equilibriating value. It is placed into the elitist realm of esoteric knowledge so that we must suffer deprivations for reasons we cannot begin to fully understand. This systemic induction of ignorance condemns us to a deductive systemic legitimacy of command and control for our own good; for the general welfare.

We are paying the people that act to reduce our net worth to continue doing it with our tax money because it is for our own good? Despite what behavioral economists say, this can only happen by force and legitimacy of public authority; by a process of command, not demand!

Critical to the cyclical command of the process is the legitimacy of the outcome: being defined as elit or not by process of surviving the business cycle, and whether you are a buyer or a seller within the recovery phase of the cycle. At this point the commanders are merely sellers in the marketplace; the commanded, merely buyers, freely engaged in the process of doing business, being retailed lost value and property.

Merely containing the elements of freedom (choosing whether to participate in the economic process or not) and market mechanics, the organized processes of consolidating capital and the business cycle is argued to be proof of a free-market system and not a command economy in operation. The necessary legitimacy is merely deduced from the elements being semantically present in the argument, not verified, or induced, from the evidence which, of course, tells quite a different story.

Timing the market (controlling the cyclical trend) is essential to the false legitimacy of a consolidated capital as a free-market system freely participated in toward a legitimate, collective outcome.

The longer the slope of the recovery phase, the more the consolidation of value and wealth looks like a "natural," undeliberate process with a free-market legitimacy of collective action.

It is necessary for the market process and the cyclical effects to appear legitimately free. The process must appear to be a product of self-determination instead of a tyrannical command and control and expropriation of ownership that can only be reacquired by borrowing from the accumulated value (being resold) by incurring a debt and the emblem of subordination.

The vast majority of Americans do not have to be slaves to the command and control, the tyranny, of a consolidated capital.

Deconsolidate it!

A highly progressive tax code and reinvestment of the capital to pluralize the marketplace without a huge debt either public or private will achieve "real" economic growth and a real freedom that conservatives argue is an evil tyranny to be resisted.

We hear all the time in pop media that the way to freedom and prosperity is the well-trodden path...the old, or conservative, way of doing things (toggling between Democrats and Republicans).

Believing the solution is the old way that always results in crisis is irrational. The only way to evade the fundamental simplicity of this truth is to convince The People they lack the elitist, secret knowledge necessary to fully understand that the best way to solve a problem is to ensure its recurrence.

The conservative argument is, then, reduced to this plausible absurdity: the problem is not really a problem at all, but a collective benefit that is erroneously perceived by the ignorant masses to be a problem because they must be made to sacrifice to achieve the general welfare.

The public good will not be achieved unless we are forced to do it, as the behavioral economists argue. So, for example, the best way to achieve the public good of providing healthcare for all is to force a public option--a simple dummy variable that will consolidate the market into no choice.

Pluralism is abandoned for the unaccountable better judgement of elite authority in which application of the irrational becomes a measure of power (success); like cutting healthcare costs by ensuring medicare doctors get a pay increase.

A free market does not tolerate the irrational. It is the consolidation of power that tolerates the irrational. It is an emblem of power to be "conserved" by its confirmed application (like toggling between dummy variables).

Consolidation is argued to be the empirical model, the natural tendency, of efficiency because the pluralistic, free-market model tends to be "irrationally exuberant." The exuberance, however, is caused by mass momentum of consolidated capital following organized economies of scale (large size of horizontal and vertical integration) in every case since the dawn of what we now call capitalism and the crises of boom and bust we needlessly experience to this day.

The free market is not the natural problem, it is the natural solution.

Free-market economics is resisted by being organized into a consolidated capital not because it does not work, but because it does.

The economic problems we look to solve are organizational. Allowing the economy to organize into economies of scale that are too big to fail is the problem, not the solution. It is nevertheless being applied as the solution in the name of The General Welfare.

While networked externalities (organized consolidation) hedged the risk and caused the formation of capital at the inception of capital markets, it "naturally" led to boom-and-bust cyclical trends--crises in which eager small investors became the willing, dispossessed dupes of consolidated wealth and power.

Two hundred years later, the small investor is still being duped into believing the wealth was lost, evaporated, not consolidated. The risk is "freely" taken, but the reward is to be found in the loss of value resold as a profit, bought with a debtor's share of the wealth. Thus was borne the credit economy and liquidity crisis we now endure as free-market economics.

The small investor must now identify where the consolidated capital moves next--where the next bubble will occur. (The bubble never really "bursts," it just "moves" around. Deflation in one area inflates another. The result is the cyclical trend.)

The system of buying and selling, the market system, is the means by which consolidation is "freely" transacted, making it look like the public needs to be saved from itself, and the conservative argument that elite command and control (consolidation) is a necessary condition to ensure the efficiency of markets. The efforts of the Obama administration are, then, perfectly rational, and consistent with conservative philosophy--a confirmed belief in the efficiency of free markets and the need to command and control its irrational exuberance (the gamma risk).

The action of the private sector to avoid the gamma risk requires being in the dark.

Hiding in the dark, the phenomenon of "dark markets," is what a free market definably is not. It is nevertheless what the dark marketeers say they are doing as long as government does not interfere with their freedom to pursue it.

A dark market is a complex maze of seemingly disconnected cause-effect relationships. It is a scheme of buy and sell transactions across market sectors and segments that includes time sequencing and quick, flash transactions that are nearly imperceptible. The more the cause of an effect cannot be detected, the less confirmable liability for illegitmate gains; specifically, gains acquired by means of rigging the market through a system of timed buy and sell transactions of various contractual classes, like options and futures contracts.

Happily hiding in the dark where dirty deeds are not clearly identifiable is the pursuit of not being accountable to either a democratic process of free-market economics or government oversight (avoiding the risk). It is a pursuit that effectively minimizes freedom, not maximizes it, which is the ultimate, Constitutional, measure of success.

As places to hide become fewer at this point, big money will move into a traditional, classical mode of consolidation of real assets, buying distressed businesses and investing in businesses that the recesson had put out of business.
Economic entities will be merged and acquired satisfying the traditional model of maximimum value that draws the most investment (a bubble). This will be a move into cyclicals and will confirm an economic recovery phase of the cycle indicated by the increased gama risk in dark financial markets and a retrace on the value of those assets to an oversold condition, gaining support more at the the fundamental. A secular bull market will then occur.

Controlling the future(s) has become the philosopher's stone of neo-classically managing the risk inherent to the consolidation of the capital. It conserves an organizational modality despite the tendencies to subject it to the risk demanded by The People in an evolving modern world of constitutional legitimacy.

Control of futures will innovate ahead of the gamma risk. Trends will be indicated not only by the path consolidated capital takes, but how it is reorganized into modalities.

Identifying organizational modes will indicate the future of trend analysis by identifying the means of not just profitably predicting the future, but commanding it; not by means of managing the risk, but by virtually eliminating it.

Energy Futures, Healthcare and Controlling Deflation: Recognizing Trend Indicators in the Gamma Risk

The stated primary mission of the new congress and administration is to control the deflationary trend. Control of macro trends requires command measures that produce a gamma risk. It is a risk that is purely political with economic consequences.

Not only are trends reliably indicated by identifying the gamma risk, but practical solutions to macro-economic problems are also indicated as the risk factor is created and managed with the public demand for resolution.

Americans need to fully recognize that the source of the nation's economic crisis is a massive redistribution of income into upper income classes. Deflation is the persistent, verifiable result.

Consolidation of capital, industry, markets, and income, always results in crisis. Unwillingness to accept this fact condemns us to suffering the effect of economic crisis both now and in the future.

Solutions that allow the capital to remain consolidated and managed by the determination of elits applies the problem as the solution.

Without treating the cause, the effect will persist. "Change we really need" will just be a perpetual mantra of self-inflicted suffering.

The redistribution of income that has resulted in a massive reduction of the average income and household net worth is by indirect, systemic means. No one came to your door and robbed you directly. No one's wealth was directly plundered by marauders of the moyenage.
The means of accumulation has evolved into the elegance of indirect systematic process--the systemic risk we hear so much about to be managed.

Using futures to control and plan our economy, oil futures mainly, is incurring a gamma risk as the CFTC begins shining light on this "dark" (unregulated) market.

The slope of the economic recovery is determined by the flow of a consolidation of capital of unprecedented proportion. The effect is the deflatonary trend that dominates the current economic landscape and that the public sector is to reverse without dictating the marketplace, or destroying the pluralistic legitimacy of free-market economics.

Since a high concentration of capital is a blatant indicator of the ability to command and control economic trends, the activity must be hidden, or dark, in order to maintain a free-market legitimacy.

The Obama administration has found taking control of the economy requires creating a gamma risk, forcing capital into pro-growth investment. The private sector is leading. The public sector is reacting, or following. The effect of a slow recovery will then be falsely blamed on government intervention "causing" (in reference to a time-series that is not a causal relationship) the long, slow slope of the trend, deflating the wages and salaries that make for a quick recovery.

While the CFTC's action appears to be adversarial (protecting the public in lieu of free-market economics), the gamma risk is really a complete organizational model operationalized to minimize that risk. It is the bureaucratic model of power and political ecnomy. It is a command and control (elitist) model, not a free-market (pluralist) model.

As the consolidated capital moves out of dark, defensive positions, it moves to support a cyclical trend. Private equity and hedge funds are now organizing holding companies for distressed properties, for example, that will complete the consolidation of property by means of classical capitalism and resell it to the dispossessed in economic recovery. The recovery is thus indicated.

Neo-classical measures, like Keynesian stimulus and regulatory reform, are props to secure a free-market legitimacy for the practical operation of an organized command and control. It is a fraud, a systematic tyranny that needs to see the light of day.

There is no distinction of public and private sectors. The gamma risk is created and operationalized to secure a legitimate means of command and control, and mired in complexity to shield the tyranny from the light of day.

The amorphous distinction between what is public and private naturally evolves into a practical recognition of non-distinction.

The tendency for public function to be operationalized with private enterprise is not necessarily adversarial.

Operating in priority, the public sector can operate to maximize economic efficiencies by ensuring a free and unconsolidated marketplace. It is just as well accomplished as conserving the inefficiencies and crises of consolidated capital, industry, and markets with technical corrections in posteriori.

While not difficult to administer, government that ensures a free and unconsolidated marketplace in priority is strongly resisted because it will maximize growth through a more equitable distribution of income and wealth rather than "conserving" supply by reducing demand.

The reduction of demand reduces growth by causing a surplus. The surplus is created through high prices. The result is high profit margins with slow-to-no growth. This stagflation is contrary to the legitimacy theory that high profits indicate the impending investment for growth (adding supply and controlling inflation).

In practice, the high-margin accumulation (the surplus that deflates growth) is invested in the organized means of achieving a high margin with little or no growth (consolidation of capital, industry and markets). CIT, if allowed to fail, for example, will not be rendered merely dissolute, its business will be consolidated.

The practice of organized consolidation is contrary to the theoretical economic efficiency (the legitimacy) it purports to maintain.

Allowing industry and markets to consolidate is supposed to achieve an economy of scale that promotes growth (investment) on a "scale" that would not be likely without it. Big profits, supposedly, minimize the risk and maximize return, thus causing investment.

Why, then, if consolidation of the capital is so efficient, is there so much systemic risk to be controlled? Why is there $4 trillion on the sidelines when the risk has been minimized by allowing the capital to consolidate for investment and economic growth? Why is the economy contracting and not expanding at a high rate of efficiency, and how can an investment bank have record profit (the measureable effect of growth) without economic expansion?

The result of consolidation, rather, is slow-to-no-growth, and the lack of economic expansion is the source (the cause) of the profit. The profit, then, is not the measure (the effect) of growth, and the profit without growth must be explained away as "a jobless recovery."

A jobless recovery is no recovery at all. It is a deliberate control of the deflationary trend (causing a risk that demands management and produces indicators), redistribiting wealth and income from the bottom to the top, indicative of a command, not a free-market, economy.

A gamma risk must be created to gain the legitimacy of "organized consolidation equals optimal growth." It is necessary to cause a distribution, the incentive, that produces growth. The profit may then function more like a measure of, as well as the incentive for, achieving growth rather than a means of restricting it to enhance the marginal profit. The profit will not merely be a measure of the efficiency to extract value without growth, or as Obama's chief economist describes it, "suffering the effects of an overleveraged economy for some time to come."

The "suffering" (the sacrifice) is the extraction of value without growth, consolidating the value into the upper class of incomes (an accumulated cost with an equal accumulated benefit). The current congress and administration has done nothing to relieve that inequitable burden, and everything to support it, with regressive tax and subsidy measures.

The proposal to fund healthcare with a progressive tax, for example, will do little if nothing to control costs, which will keep income consolidated in the upper income class. It is the problem offered as the solution. It is deflationary just like the SCHIP, redistributing income to the upper income class.

The legitimacy of the general, collective benefit--increased healthcare coverage--is more than offset by the increased cost due to more money being made available for price increases. It is a reliable means of delivering the price, and the profit, the healthcare system commands. It will be made so unaffordable that government finance is the only option.

The healthcare plan now being offered will force the market into the public option where the price, and lifestyle choices, are more in command and control of elite authority. It is a raketeering scheme: a means of rigging the market with the legitimacy of public (collective) process, gaining a false legitimacy, claiming the consolidation is by free market forces. The force is from the top down (by elite authority), however, not the bottom up (by The People).

The profit is forced into a gamma risk that must be politically managed, or determined; and within that elitist process of self-determination (the freedom of choice) will be complex schemes of tax and subsidy with a regressive burden--maintenance of the cost-benefit structure--largely conserved.

Talking about the total political-economic effect is taboo, not because healthcare professionals only have the good intention of providing for the public good, but because it provides a zero-sum gain to their income at the expense of the public good. It exposes a racketeering scheme of consolidating the means to command the price as well as dictate tastes and preferences (exactly the opposite of freedom and what a free market is) to accumulate a benefit that far exceeds the public good.

The benefit is extorted with the threat that healthcare, the public good, will not be adequately provided without the accumulation of the benefit (without supporting a deflationary trend that bankrupts the average income, making healthcare even more unaffordable, along with everything else).

We see then, for example, the unwillingness to cut payments to Medicare doctors despite the overwhelming public demand for reducing the cost of healthcare. Controlling the cost incurs a substantial gamma risk (a risk that is both political and economic).

The doctors will not deliver the healthcare without commanding the price which, of course, makes it less affordable unless it is paid by a third party payer--monetized by the government--in which the sky is the limit. The scheme is less to do with providing healthcare than to maximize the accumulation of income (the measure of success). It is an extortionist command and control that has nothing to do with a free market, but the distribution of costs and benefits by decree, successfully managing the gamma risk by operationalizing it with the concept of providing the public good.

The argument is that maximizing the accumulated benefit (and the associated cost, like a budget deficit) maximizes the public good. It is the Hamiltonian argument that policies and programs benefiting the accumulation of wealth and power in priority is the greatest good, or the general welfare.

The consolidation of power is for our own good, so the Hamiltonian argument goes. Healthcare that is so expensive to crowd out discretionary spending choices (which includes the effect of sin taxes), or in command of limiting other market, lifestyle choices in order to be affordable is nothing but an abject tyranny! It will not improve health, it will make life less affordable, be a restraint of economic activity (limiting the economic activity to black markets, facilitating a criminal element), and give a false legitimacy to tyrannical organizational tendencies inimical to a free society.

It creates a society of elite control in which freedom is less an inalienable right than the anachronistic privilege of a few self-satisfied autocrats to deliver the ignorant masses into the torment of their righteous ways and subject them to the means of ensuring the consolidation of their power.

The elegant means that has evolved to command and control is to support a deflationary economic tendency by allowing, with a false but plausible, pluralistic legitimacy, the accumulation of income in an upper class of incomes (like our healthcare system does and will, apparently, continue to do); by means of cyclical macro-economic trends to support the Hamiltonian model of power and political economy.

The allowable direction of healthcare policies and programs, combined with the scheme to manipulate the price of energy and other commodities through futures markets, clearly indicates a determination for a long, slow deflationary trend.

The healthcare plan offered by the new congress and administration is not the change we need. It is an innovative way to again offer the problem as the solution by clothing it with progressive taxation.

The progressive tax policy is specifically identified to fund healthcare, not reverse the deflationary trend. That would be to admit that a more progressive tax code can effectively reverse a deflationary trend.

The progressive tax to fund healthcare will, rather, support the deflationary trend by providing the funding for highly inflated costs. The cost is supported (monetized) by means of public finance and regressive tax burdens like the SCHIP, providing the funding for price increases, which is why the AMA endorsed the proposed plan.

With so much deflationary pressure, it is necessary to induce a gamma risk to temper the deflationary trend (the lack of purchasing power, or liquidity crisis).

Where a distribution on the accumulation of income in the upper income class does not sufficiently occur, it will be induced to "trickle down" by government intervention to control the depth and breadth of the crisis without defeating the effect of consolidating the wealth. The result will be the so-called "jobless recovery."

By inducing the gamma risk, the profit (the accumulation of income) is rendered more like an effect (the measure of effectiveness) rather than the cause of economic growth (like providing healthcare) in a positive or negative trend.

Inducing a regulatory reform like regulation of derivatives, or as in the case of healthcare, the public sector competing with the private sector in a duopoly (a dummy variable, a tyranny, not to be confused with a free-market pluralism), is intended to induce a free-market effect, or a credible legitimacy of the process.

Introduction of the gamma risk renders both the desired effect (the profit) and the interpretation of the effect (as a measure of effectiveness, or success) with the means-to-ends legitimacy required of a collective process be it deemed public, private, or both. It reconciles the cause with the effect by adjusting for the externalities (the retributive value) to maintain, or to conserve, the overall distributive value that causes the problem, the crisis, to be solved.

The proposed progressive tax to fund healthcare, then, for example, will not effect the provision of healthcare by increasing income and reducing costs, but by providing the funding through tax and subsidy. The gamma (political) risk is then shifted back to the consumer where the distribution of income (the determinant of the ability to pay) is converted into being dictated preferences and the distribution of costs and benefits by a not always easily visible and directly accountable ways and means (by command and not demand).

In the case of American healthcare, the way it is now, the profit is more a measure of accumulating wealth and power by maximizing the cost and securing the means to pay for it without sacrificing the accumulated income to lower income classes. It is organized to efficiently provide a profit (the measure of effectiveness), not necessarily to "effectively" deliver healthcare, which is what the profit margin is supposed to be effectively measuring.

The high cost and the number of Americans that are priced out of the market (rationing) or go bankrupt participating supports the pro-profit hypothesis of healthcare policies and programs. Nor is there any evidence to suggest it being nulled any time soon with the latest proposals designed to assure the maintenance of healthcare incomes at the expense of consumers, which supports the deflationary trend.

The reason the recession continues to track a broad and deep trend is not because of a technical error, a miscalculation of how bad it really is, but because the policies and programs of the congress and the administration have supported it, and that support is to continue.

With, for example, a general progressive tax burden on the consumer, rather than a specific value-added burden on providers, financing the healthcare system will continue to be deflationary because the income, the ability to pay, will be retained at the top, which requires a regressive scheme to keep it there. It will not satisfy the requirement for a more progressive tax code to reverse the deflationary trend any time soon and provide the distribution of income necessary for consumers to decide what they want, at what price, with the profit properly being the measure of that success or failure--more like what a free-market economic model really looks like.

Taxing the value (the increased price) as it is added, discourages the behavior that increases the cost, just like taxing tobacco reduces smoking.

A tax that increases with the unit of value added will collect revenue and control costs at the same time by directly taxing the accumulated benefit where it is added without any misdirection or misattribution--where the price is marginally increased as determined by the provider on command.

Even if an excess of value added is not discouraged by the tax, the value is nevertheless recycled to pay it. Even better, the value is redirected to the consumer (retributed) to reward or deprive as they see fit, in a free market fashion, so that the price (the cost) is demanded rather than merely commanded by the provider. This will provide the income necessary for free-market mechanics to occur with a disinflationary, rather than a deflationary, effect; increasing the income needed to control the cost rather than pulling it up at a high rate each year like we have now.

The way it is now, America's healthcare system reduces the income necessary for the consumer to demand cost control. Rather, the cost (the margin) is commanded by the provider and paid largely by government finance. Controlling the cost is a function of the gamma risk (a command function): providing the income--the value added--that is redistributed into upper income classes and deflates the economy.

Disinflation requires the value be credited the consumer, not retained by the government because the large pool of public money will be misdirected through political process, resulting in an indirect means of collecting the deflationary value added by operation of tax and subsidy.

Redirecting the value added to the consumer--giving the consumer the power to control (choose) the cost by increasing "discretionary" income--will be more in keeping with a free-market model, a direct democratic process, in which the legitimate collective outcome is directly supported (caused by) the choice of individual action, unlike the decision to tax tobacco.

Taxing tobacco use minimizes choice (income) to maximize the revenue. Like a "command" rather than a market "demand" price, it pays the cost to excess without any competitive incentive to reduce it. The result is a deflationary rather than a disinflationary, "discretionary" income effect that very clearly indicates (causes) stop and reversal of a recessionary trend.

With the consumer's dollar vote available to be used in any other sector (increasing income through the tax on the value added), the healthcare sector must compete for that dollar by reducing the cost; something healthcare will not do as long as the funding is readily available by means of tax and subsidy (public finance) and by rigging prices through the AMA's price schedules.

Mandating insurance just rigs the price. It acts to support the price because it eliminates the discretionary, disinflationary value of free-market choice, making it less affordable. There is nothing more efficient than redirecting (retributing) the value to the consumer.

The tobacco tax, for example, increases healthcare costs with evermore anticipation of more funds always being made available for price increases (the value added), which provides evermore power to finance political campaigns that will provide the regressive tax and subsidy schemes to finance it.

The tax and subsidy scheme to finance healthcare, even as it is now being shrewdly presented with the element of a progressive tax by the Obama game masters, is inflationary. The cost is pulled up with available funding, which in turn pushes the need to tax, allowing for a deflationary accumulation of income. The deflationary spiral is easily defeated by the tax on the value--the price increase--as it is added.

Without reversing the trend, the final result of the upward redistribution of income is stagflation. It is an economic condition that is also accompanied with a financial volatility caused by conflicting trends driven by short-term accumulations (deflation) and distributions (inflation) of a consolidated capital (stagflation). These are the short term oscillations that the CFTC is now identifying as excessive speculative demand that deflated the economy, and continues to control the trend.

While wealthy speculators (hedge and private equity funds) were engineering the deflationary trend, the CFTC attributed the cause to fundamentals. Now the CFTC says it was speculation in commodity futures, indicating a gamma risk that will vector the slope to a more positive trend, indicating a long, slow recovery.

As the accumulation of income is largely invested in speculative demand instruments, like commodity futures, a high return with a low risk is ensured, provided by the mere mass movement in and out of the markets. The dynamic is the means by which the net worth of the average income is consolidated, supporting the volatility and the ability to command the direction of the economy and duration of its cyclical trends. It is not a free-market dynamic and solicits the demand for a gamma risk to ensure a technical correction.

In the case of healthcare, the consumer is being offered a "healthcare exchange." Something that resembles a free market without relinquishing "control" of it, most importantly the distribution of income (the cost control) that determines the ability to command economic trends.

Since the demand for healthcare is relatively inelastic, like the demand for energy, allowing for its consolidation allows for the command and control of income distribution and, thereby, the means to command and control the economy.

The demand dimension (the need) determines the ability to command the supply, and thus the price and quality. Here, if a free market mechanism is not assured in priority, is where the demand for government intervention (the gamma risk) is the greatest. It is where there is the greatest potential for command and control by consolidated organizations instead of the individual in the marketplace.

The command and control is achieved with the ability to determine the flow of income, or the ability to pay. The means of rewards and deprivations is the determinng variable.

The ability to pay, the means test, is the typical criterion for participation in government programs with the biggest cost (and benefit). Income is the determining variable, and the demand, the need, is not limited to the needy. It also controls the slope of deflationary trends and protects the benefit (the income distribution) from the accumulation of a retributive value. Distribution of that value over time is the larger part of creating and managing the gamma risk.

In order to maintain the determining causal variable (income distribution), it is necessary to maintain it on the effect side of the equation. Programs tend to be reactive, providing relief without a cure.

A proactive measure requires a redistribution of income; what the conservative element says is inimical to a free and productive society and the new congress and administration apparently relucts, advancing largely remedial, relief-oriented measures.

Where the free market does not properly obtain there is a big demand for government, and we see a big demand for government intervention in the healthcare space.

Government intervention (the gamma risk) should be limited to providing what the demand for it indicates is fundamentally lacking--the free market mechanism. That will limit the risk to curative measures. Remedial measures provide relief, not solutions, and condemn us to an endless sea of reformative rhetoric that tends to anomie and skullduggery.

A more free-market model, with the profit being the measure of effective healthcare, provides the reward (the measure) of effectiveness as determined by the consumer. Otherwise, the price, preferences and distribution of rewards and sanctions (the profit measure of effectiveness and satisfaction) are dictated by elits in lieu of free-market mechanics.

The AMA argues, of course, that healthcare professionals must exercise a tyranny in the marketplace to secure the public health. The argument for an authoritarian, if not totalitarian, model is not to be mistaken for the adequate provision of public health or a necessary condition for the adequate provision of any public good!

With a gama-risk intervention, the profit is rendered more like the legitimate effect of a free-market, pluralistic model rather than the means of restricting growth or rigging prices. The profit margin (the distribution of costs and benefits, or income) seems less an act of deliberate deprivation, like pricing consumers out of the market or bankrupting them. Whether it is by the cost being solely determined by the provider/producer or a tax on lifestyle choices, or both, the benefit has a deflationary cost (a lack of purchasing power). Maintaining the benefit supports the deflationary trend and elicits the gamma risk.

According to the Obama administration's chief economic advisory, the lack of purchasing power (the over-accumulation of income in the upper class--the liquidity crisis) will result in a long deflationary trend because average income classes will be saving and paying down accumulated debt for some years to come (the paradox of thrift). Accordingly, the solution to this "problem" (the sacrifice, the deprivation) is to let it play out. Eventually the capital will be so over-accumulated that the only thing left for it to do is to be distributed to reverse the trend. It is the classic model of consolidated capitalism that elicits the risk.

If we were expecting something like "change we really need," the expectation is suffering a miserable failure.

Reversing the trend can be accomplished without waiting for the wealth to "trickle down," facilitated only by a gamma risk intervention that will keep the wealth consolidated and conserve the Hamiltonian model in Ivy League fashion.

Ensuring a free and unconsolidated marketplace in priority renders the paradox of thrift and liquidity crisis a public/private enterprise of capital formation that is not a function of dispossession, but possession; not of depriving, but providing; not as a means of a "natural," unavoidable tendency to inequality, but the deliberate ethic of a rationally righteous pursuit of liberty and happiness that is an easily verifiable General Welfare, Constitutionally endowed.

Rebuilding the Economy

To rebuild the economy requires we consider, once again, the classical and neo-classical models of capitalism.

In a previous article, "Shorting the Economy" at griffithlighton.blogspot.com, I stated that there is no shortage of savings (the accumulation of capital). The question is who owns it, or how it is distributed.

Classical capitalism is composed of two macro-cyclical trends: the accumulation phase, and the distribution phase. At the macro scale, capital accumulates into ownership of those who have invested existing capital for a return on the investment. The process conserves ownership of the capital and successful businesses share in its distribution based on the return on that capital (the measure of the profit margin).

The foundation of the classical model is the fundamental elitist ownership of the capital with the money supply expanded by derivative financial commerce such as credit and issuing stocks and bonds. The process is classically the trickle-down economics model with the structural power of commerce extending from the top down where the capital (the savings) largely resides. Even the savings of non-elites, even if independently micro-managed by its small owners from personal accounts, is ultimately macro-managed at the upper echelon of capital management where the mass movement (the money flow measures) of capital dictate the bid within markets over time from the macro to the micro level of this power structure.

While being able to dictate the direction, the trend, of prices and markets is the antithesis of a free market, the frequency, the length of the accumulation trend is long enough to give the outcome the illusion of a free-market legitimacy--that no one person or entity can dictate prices and the direction of markets. The outcome appears force majeur when it really is the deliberate active management of the capital at the fundamental level of power to yield a reliable and easily predictable outcome in the long term--conserving the ownership of the capital at the upper echelon of power, or what a free market fundamentally is not.

If a free market is what we are all expecting to achieve equitably legitimate outcomes, this is where the legacy of the classical model of capitalism, the neo-classical model, fails us.

This brings us to the distribution phase of the cycle.

When the capital becomes so accumulated that expansion of the economy cannot continue without sharing the capital, and power, crisis ensues. It is the classical crisis of overproduction. The capital is so accumulated (the power so consolidated) that society cannot afford to buy the goods and services it produces, being in a condition of oversupply that is caused by a lack of demand (purchasing power). The effect is deflation. To reduce the oversupply (to increase the demand), credit is extended, but because the value has not been properly retributed to its source (its proper ownership), credit becomes over-extended and crisis ensues.

The way capital is shared without relinquishing its ownership at the upper echelon of the power structure, the means by which the surplused value is retributed, is by the extension of credit--an expansion of the money supply. So we see, there is no dirth of savings. Americans create plenty of value, and that value is saved plenty. It is not properly retributed. The effect is our current mortgage crisis and the crisis of illiquid financial markets, or deflation.

Whether the practical model is classical or neo-classical, the effect is the same--deflation. The improvement the neo-classical model provides is for the minimal payment of the retributive value to stabilize the system of power; to conserve the power structure.

The neo-classical model, Keynesianism, operates on the hyperextension of credit to provide the needed liquidity with government spending. It can be in any form and is paid for through Treasury and the Federal Reserve which is a binary organized technology for the extension of credit and its payment (i.e., expansion and contraction of the money supply, or monetarism).

Whether the tax code is regressive or progressive is the determining variable for the value, the distribution, of the capital. The more progressive the tax code, the less non-elites pay to repay the extended credit (expansion of the money supply) to retribute the value, and the less the debt is worth to the elite of the power structure. It is a zero-sum game.

When we now here conservatives argue that the call for a more progressive tax code along with monetarist expansion of the economy is a burden of debt to our children, they literally mean "their" children, the children of the wealthy. The savings of the non-elite increases. The savings of the elite decreases. The capital is more equitably shared and the value added to the fundamental capital properly retributed to its source.

The recovery and the reinvestment MUST BE from the bottom up in order to not be just another neo-classical, Keynesian tax and spend program that ensures the stability of the status quo.

Conservatives are providing the classical response to the neo-classical policies and programs we are now engaging. A progressive tax code is not alone enough, but it is necessary, and conservatives and liberals know very well that without a strategic reinvestment for pluralizing our economy--deconsolidating the capital, industry and markets, the cyclical crisis of accumulation and distribution is assured to be the vehicle for abuse of power well into the future.

Instead of being properly marginalized, the conservative element is co-opted into a binary system of toggling realpolitique of falsely competing ideologies. Ideology "A" effects realignment with ideology "B," to "A" to "B" and so on.... It is not the model of pluralism though it intentionally appears to be.

The conservative rhetoric is already setting up for the predictable toggle switch when the Keynesian recovery program from the top down fails to properly retribute the value and The People are left with the debtor assignment on the public debt by operation of a centrally planned, top down, capitalist economy--what the rhetoric currently describes as the burden of debt going forward that will bankrupt the government (The People).

Quite the contrary. Bottom-up reinvestment financed through a more progressive tax code will lead to robust growth and a recovery that is largely out of the hands of the power elite. The recent negative sentiment of the stock market is political, not economic. That will become apparent when the stock market turns into a raging bull with the prospect of 3 percent growth, and a rising rate of profits, in the next twelve months.

Without rebuilding (reinvesting, recapitalizing) the economy from the bottom up, the crisis of overproduction will successfully recycle by "the will to power" considered to be "beyond good and evil."