We are so far from the commonwealth it is not likely to obtain a presence of value anytime soon. Sure, we talk about conserving the value of self-determination and self-reliance grounded in the fundament of self-interest as if it obtains. Empirically, however, we have become so reliant on externalized, expert management of the risk that self-interest is more an amusing apparition of speculative philosophical inquiry than a practical measure of either the means or ends of its application.
Reducing our self-interest to the application of public policy is to render it so collectively large and complex that it is, paradoxically, out of our hands.
Recognizing the natural tendency to pluralism resolves the paradox peacefully and prosperously. The binomial organizational model employed to obtain the current value of popular consent, however, is a false empiric. The two-party system is a false pluralism designed to impede the natural progression of the commonwealth.
In order for the risk to gain the current value of the commonwealth we must abandon theories and practices that only appear to confirm its presence.
When, for example, the causes of economic crises suffer fundamental attribution error, we suffer a lack of expertise we rely on to effect good public policy; and since the means of achieving popular consent is reduced to a dummy variable, the error recursively accumulates with the semblance (the false inference) of a popular consent. The pluralism of the commonwealth (and the fundamental wisdom of a popular consent that manages the risk to a commonly peaceful prosperity) becomes progressively more distant (and The People more collectively reliant in the name of conserving the value of self-interest). It creates a class of people evermore reliant on the extensive management of the risk. The self-interest of The People (the commonwealth) is evermore alienated (extended) from the fundament.
When the risk is extended to you, you still have the power, the freedom, to not take it in your self-interest. The power elite literally banks on the probability you will take (consent to) the risk, however, and not demand the wealth be more common in your self-interest. The dichotomy is so well extended--the probability you will take the risk so high, the probability of the gamma risk being extended to the power elite is equally low.
When hedge funds, for example, bought long but sold short, the risk was extended to the common interest without the reward--thus the term "hedging the risk." Now that the hedge has converted value into systemic risk (the gamma risk proportion and the object of public policy), the capital gained is prepared to consolidate the risk into current value through venture capital, merging and acquiring distressed assets that resulted from hedging the risk. Venture capitalists now argue, of course, they are providing for the common wealth by providing liquidity (buying distressed assets).
As the gamma continues to accumulate, validating the elite hypothesis that The People do not know what their self-interest really is, the wealth is commonly consolidated and redistributed. The People's wealth is retailed at a profit and the risk extended, with interest, in the form of credit. The profit plus interest equals the inability to pay the economic rent (classically referred to as the extension of the rents). The result is economic crises that extends (is managed and conserved, merged and acquired into an economy-of-scale) in your self-interest as a matter of public policy.
Now that the President has outlined the probable direction of public policy that will determine the extent of the risk, the wealth is being prepared to trickle down. Most of the current value needed to reverse the recessionary trend will be applied to mergers and acquisitions.
While M&A is touted as being a precursor to economic recovery, the capital acquired at low interest rates will be used to consolidate the marketplace rather than pluralize it. Bank of America's M&A division, for example, is poised to pounce on distressed assets, which is what they mean when they advertise "we are investing in our communities."
Democrats have a trickle-down plan for economic recovery. It is a matter of public policy, whether Democrat or Republican, to direct and extend the risk from the top down with the objective of controlling the common element of risk--the systemic risk. Policy is designed to fail-safe the system for continuous conversion and consolidation of value in the form of private property, merged and acquired to extend the current value of the risk at the expense of the commonwealth.
An economy in a state of being merged and acquired is not pro-growth. It produces current value by extending the value (the risk) of unemployment and slow growth (limited supply). Supporting this plan is a matter of public policy--achieving an economy-of-scale efficiency (mergers and acquisitions). It is a false common-wealth efficiency.
The President was not heard saying economy-of-scale consolidation is inimical to the commonwealth. Rather, it is generally accepted that consolidating risk you must take when extended (the certain value of the risk) is good public policy. You are then forced to rely on government authority to relieve the extent of risk (the individual's only "salvation" as the President described it, implying what our self-interest really is applied from the top down); and it will not be a relief, as Republicans argue, to reduce government reliance without first eliminating the need (the extent of the risk).
The current value of the risk is politically rendered but economically motivated. It is gamma risk. Relief (risk) is reduced to a zero-sum with a high order of intention (empirically verified by income-class distinction) that is considered the collective (extended) consent of the governed. It has the force and legitimacy (the current value) of public policy and authority.
Risk, politically extended by means of public policy, confirms income class and the current value of the risk.
Saturday, September 11, 2010
Friday, September 10, 2010
Risk of Reliance
Citizens of the commonwealth take up the risk, it is not extended to them. The commonwealth does not rely on the state to dole out the risk, or legislate to prevent it.
Citizens of the commonwealth take the opportunity--organizing production, producing value, solving problems--as they see fit within their own policy space. Freedom is the common element, the causal factor, operationalizing an unlimited number of choices with the freedom to organize an ontology of continuous improvement. It is the goal of the state to maximize the probability of this pluralistic ontology; it is not the role of government to determine the extent of the risk, but to ensure the freedom to take it.
Without reliance on government authority, the risk is fully extended a' priori--it is fundamental, alpha risk. (To hear a politician talk about extending unemployment compensation, extending tax incentives to create jobs, or government-backed security to extend credit is unlikely.) It is not until the risk is allowed to consolidate with the capital that risk becomes an extension of the state. Not only do The People then rely on the extension of the risk, but a wealthy elite who consider themselves to be beyond the power of The Sovereign are also subjected to the ontology of accumulated power. Both classes rely on government authority to manage, and extend, the risk which tends to be over-extended. The risk goes gamma, achieving a crisis proportion.
While it may seem risk averse to consolidate the risk into an economy of scale, it runs the risk of reliance. A lack of common self-reliance diminishes the capacity of pluralism. It diminishes the opportunity (the probability) of continuous improvement (economic growth, for example). At the same time, it enhances the probability of making the same mistake over and over again (cyclical economic crises, for example), making the risk recursively manageable by operation of large governing bodies networked into a too-big-to-fail ontology (the political-economy we have now to network the externalities into a gamma risk proportion).
The people that lost there homes if not their net worth did not take the risk, it was, for the most part, extended to them. The sense of being cheated extends from the risk (the gamma risk), accounting for the populist sentiment a power elite recursively attributes to class envy.
Fundamental mis-attribution of the risk supports analytical models that harbor faulty assumptions. The accumulation of errors always runs the risk of relying on overextended controlling authorities inimical to a free society and the achievement of a commonwealth.
Citizens of the commonwealth take the opportunity--organizing production, producing value, solving problems--as they see fit within their own policy space. Freedom is the common element, the causal factor, operationalizing an unlimited number of choices with the freedom to organize an ontology of continuous improvement. It is the goal of the state to maximize the probability of this pluralistic ontology; it is not the role of government to determine the extent of the risk, but to ensure the freedom to take it.
Without reliance on government authority, the risk is fully extended a' priori--it is fundamental, alpha risk. (To hear a politician talk about extending unemployment compensation, extending tax incentives to create jobs, or government-backed security to extend credit is unlikely.) It is not until the risk is allowed to consolidate with the capital that risk becomes an extension of the state. Not only do The People then rely on the extension of the risk, but a wealthy elite who consider themselves to be beyond the power of The Sovereign are also subjected to the ontology of accumulated power. Both classes rely on government authority to manage, and extend, the risk which tends to be over-extended. The risk goes gamma, achieving a crisis proportion.
While it may seem risk averse to consolidate the risk into an economy of scale, it runs the risk of reliance. A lack of common self-reliance diminishes the capacity of pluralism. It diminishes the opportunity (the probability) of continuous improvement (economic growth, for example). At the same time, it enhances the probability of making the same mistake over and over again (cyclical economic crises, for example), making the risk recursively manageable by operation of large governing bodies networked into a too-big-to-fail ontology (the political-economy we have now to network the externalities into a gamma risk proportion).
The people that lost there homes if not their net worth did not take the risk, it was, for the most part, extended to them. The sense of being cheated extends from the risk (the gamma risk), accounting for the populist sentiment a power elite recursively attributes to class envy.
Fundamental mis-attribution of the risk supports analytical models that harbor faulty assumptions. The accumulation of errors always runs the risk of relying on overextended controlling authorities inimical to a free society and the achievement of a commonwealth.
Wednesday, September 8, 2010
The Capital Requirement
The commonwealth requires a healthy distribution of capital from the accumulation. A distribution is required that does not cause systemic risk.
A capital market that borrows its way out of debt (a debtor-financed recovery) over-extends both the risk and the credit needed to support it. If we monetize the debt without sourcing the value accumulated, we increase the risk of inflation without adding supply. The risk is not abated, it is extended, which for the most part defines the failure of the Obama administration.
Precipitous decline of the administration's popularity, and the Democratic faction generally, directly correlates with the unwillingness to source the accumulative value and invest the marketplace with economic expansion (disinflationary addition of supply). Instead, with ample opportunity to reverse the trend, deflation got support, discouraging expansion.
The failure of both the Democratic and Republican factions is clearly confirmed by the evidence: an economic landscape conflicted with both inflationary and deflationary tendencies, putting the economy into a tailspin of volatility.
Understand that volatility gives useful, current value to the risk. That extension of the risk is arbitraged into certain future value largely commanded by an over-accumulation of the capital (a mal-distribution of the risk). An over-accumulation is required to command the distribution of the risk and, therefore, the reward. The only counter-measure is to invest the marketplace and require a deconsolidation of the capital, but we are doing the opposite.
While consolidation of the risk may plausibly seem to provide a common protection from risk, it really functions to commonly apply it to a negative extent (the probability of negative growth and a zero-sum detrimental accumulation of value that we must protect ourselves from by requiring ever-larger capital reserves).
If big firms are required to reserve more capital to deter systemic risk, then the capital is not available to bail out foreclosed homeowners, for example, and restore the lost value. The lost value, at best, is being used to protect the victims from a detriment that has already perpetrated, and that, of course, is a dismal failure. Meanwhile, the capital is being required to consolidate to cover the future systemic risk rather than prevent it.
The capital is being used to consolidate the value of the risk systemically derived and extended, setting The People up for a fall that is deliberately induced. It is not hard to predict a considerable amount of popular disapproval (a lack of legitimate popular consent).
Consolidating the risk to minimize it for common consumption is a mechanism of economic pathogenesis that plagues the common capacity for wisely applying tools, like the capital. It prevents us form using all the tools derived from the capital to shape the future to a common benefit.
Dispelling from the traces of declarative memory the notion that recession is normal, for example, is inhibited by the derived complexity of the tools used to manage the consolidation of risk and its extension for common consumption. The use of capital is made so complicated--derivatively assumed and consumed--that the value derived appears to be an ontology of undirected, free-market risk.
To reduce the dissonance between "what is" and "what should be," we tend to philosophically re-trace the problem. We may, for example, engage an Ayn Rand type of re-cognition, re-programming what we all know to be a deliberate, elitist objective into an empirical ontology permanently installed into the circuitry of declarative knowledge.
Implied in the disapproval statistics, however, is a common call for investing a free-and-open marketplace that allows for a common, rather than an elitist, management of the risk. A free market requires that capital minimize the risk by seeking the reward of popular consent. In that way, the useful value of capital is delimited to adding supply without reducing demand (economic growth), and thereby limiting the need for government by maximizing the probability for a common self-determination, or The Commonwealth.
Binomial recursion of the risk rigs the market to resist the commonwealth distribution implied by two-party rhetoric. Both factions claim the path to making the wealth more extensive, not more common (verified by the recursion). The President today, for example, disclosed a plan to "extend" the benefit of wealth to everyone. If you have followed these articles on the extension of risk, however, the promise serves as much to indicate an extension of the problem (credit extending from the accumulation) acting as the solution as it is to extend the hope of relief.
Letting the tax cuts expire for the top two percent of income class is as much a $700 billion extension from the accumulation as it is a redistribution of the risk. Not only is it still a low rate anchored to the prior rate, but the capital will be used to support a debtor-financed recovery (financial recovery with extended unemployment). The difference between the upper-class increase and the middle-class reduction is more a debt reduction measure than a pro-growth measure. The capital will still be too consolidated to relieve the extent of the detriment (the extension of the risk).
The administration's plan will not be enough to reverse the deflationary trend any time soon. It is more to alleviate the pain of a detriment that has long perpetrated and extended to a massive consolidation of net worth, deliberately rendering uncommon wealth that is commonly derived by the capital requirement.
A capital market that borrows its way out of debt (a debtor-financed recovery) over-extends both the risk and the credit needed to support it. If we monetize the debt without sourcing the value accumulated, we increase the risk of inflation without adding supply. The risk is not abated, it is extended, which for the most part defines the failure of the Obama administration.
Precipitous decline of the administration's popularity, and the Democratic faction generally, directly correlates with the unwillingness to source the accumulative value and invest the marketplace with economic expansion (disinflationary addition of supply). Instead, with ample opportunity to reverse the trend, deflation got support, discouraging expansion.
The failure of both the Democratic and Republican factions is clearly confirmed by the evidence: an economic landscape conflicted with both inflationary and deflationary tendencies, putting the economy into a tailspin of volatility.
Understand that volatility gives useful, current value to the risk. That extension of the risk is arbitraged into certain future value largely commanded by an over-accumulation of the capital (a mal-distribution of the risk). An over-accumulation is required to command the distribution of the risk and, therefore, the reward. The only counter-measure is to invest the marketplace and require a deconsolidation of the capital, but we are doing the opposite.
While consolidation of the risk may plausibly seem to provide a common protection from risk, it really functions to commonly apply it to a negative extent (the probability of negative growth and a zero-sum detrimental accumulation of value that we must protect ourselves from by requiring ever-larger capital reserves).
If big firms are required to reserve more capital to deter systemic risk, then the capital is not available to bail out foreclosed homeowners, for example, and restore the lost value. The lost value, at best, is being used to protect the victims from a detriment that has already perpetrated, and that, of course, is a dismal failure. Meanwhile, the capital is being required to consolidate to cover the future systemic risk rather than prevent it.
The capital is being used to consolidate the value of the risk systemically derived and extended, setting The People up for a fall that is deliberately induced. It is not hard to predict a considerable amount of popular disapproval (a lack of legitimate popular consent).
Consolidating the risk to minimize it for common consumption is a mechanism of economic pathogenesis that plagues the common capacity for wisely applying tools, like the capital. It prevents us form using all the tools derived from the capital to shape the future to a common benefit.
Dispelling from the traces of declarative memory the notion that recession is normal, for example, is inhibited by the derived complexity of the tools used to manage the consolidation of risk and its extension for common consumption. The use of capital is made so complicated--derivatively assumed and consumed--that the value derived appears to be an ontology of undirected, free-market risk.
To reduce the dissonance between "what is" and "what should be," we tend to philosophically re-trace the problem. We may, for example, engage an Ayn Rand type of re-cognition, re-programming what we all know to be a deliberate, elitist objective into an empirical ontology permanently installed into the circuitry of declarative knowledge.
Implied in the disapproval statistics, however, is a common call for investing a free-and-open marketplace that allows for a common, rather than an elitist, management of the risk. A free market requires that capital minimize the risk by seeking the reward of popular consent. In that way, the useful value of capital is delimited to adding supply without reducing demand (economic growth), and thereby limiting the need for government by maximizing the probability for a common self-determination, or The Commonwealth.
Binomial recursion of the risk rigs the market to resist the commonwealth distribution implied by two-party rhetoric. Both factions claim the path to making the wealth more extensive, not more common (verified by the recursion). The President today, for example, disclosed a plan to "extend" the benefit of wealth to everyone. If you have followed these articles on the extension of risk, however, the promise serves as much to indicate an extension of the problem (credit extending from the accumulation) acting as the solution as it is to extend the hope of relief.
Letting the tax cuts expire for the top two percent of income class is as much a $700 billion extension from the accumulation as it is a redistribution of the risk. Not only is it still a low rate anchored to the prior rate, but the capital will be used to support a debtor-financed recovery (financial recovery with extended unemployment). The difference between the upper-class increase and the middle-class reduction is more a debt reduction measure than a pro-growth measure. The capital will still be too consolidated to relieve the extent of the detriment (the extension of the risk).
The administration's plan will not be enough to reverse the deflationary trend any time soon. It is more to alleviate the pain of a detriment that has long perpetrated and extended to a massive consolidation of net worth, deliberately rendering uncommon wealth that is commonly derived by the capital requirement.
Tuesday, September 7, 2010
The Party of Independence
Declare your independence!
Demand your state be the practical model of the commonwealth.
The commonwealth is not a pie-in-the-sky idealism that promises everything and accomplishes nothing.
A policy process that provides plenty of diagnoses but changes nothing needs the effectiveness of an independent variable. Inertial forces can be countered with a more pluralistic process, vectoring prognoses toward a more optimal distributive value that avoids, if not prevents, crises rather than ensuring its extension.
Binomialism is a pathogenic mechanism. It inhibits optimal organizational health, resulting in political dyskinesis. Cognitive capacity is limited to the binary variation, limiting the capacity for needed change.
Ineffectiveness of a party platform that promises change we really need predictably yields a conservation of the values to be determined when a binomial model is applied. Back testing that model indicates a future value that is limited to the practical extension of the risk--distribution of the values that support the problem to be solved (demand deflation and credit inflation).
Supporting the problem as the solution is pathological.
Testing the current value of policy alternatives against the practical, binomial model in operation yields a second economic stimulus with the same results as the first.
Policy alternatives binomially (ideologically) determined will not cure what ails us. If anything, it extends the problem into the future, which defines the future value of the risk and delimits the value of taking the risk to means that test a high score on the value of creditworthiness (the problem).
Recycling the debt (extending the credit risk) into crisis proportions does not solve the problem. The only way to achieve a distributive probability of the values that infers a commonwealth modeling of the risk is the deliberate intervention of third-party political risk.
If you have not been much affected by the current cycle, do not be deluded. The risk recycles and extends at progressively higher frequencies. It will eventually extend to you in forevever innovative ways to test the means of risk tolerance.
Innovative means of extending the risk far outpaces the means to avoid it. So, we always end up mitigating the value of the risk which, binomially determined in the public policy space, is arbitraged into a beta valuation and re-extended (re-novated) into the current, useful value of the capital required to make the wealth more common.
Theoretically, the commonwealth will eventually converge with the analytics. Instead of perpetually recycled in the form of beta and gamma risk (authoritative management of volatility), capital eventually gains the value of a common requirement. That revaluation would not, however, occur without taking a considerable political risk associated with the fear of change (like losing your freedom) that tends to pathological expression, like a binomial determinism.
Requiring the capital to fully assume the risk of a free-and-unconsolidated marketplace does not present the political risk of lost liberty. Instead, it represents the economic means of attaining it.
By allowing for an economic test of political hypotheses (limiting the role of government to allow for that test), the risk is "freely" innovated by The People to produce the stable and predictably useful value of the capital for the commonwealth.
Demand your state be the practical model of the commonwealth.
The commonwealth is not a pie-in-the-sky idealism that promises everything and accomplishes nothing.
A policy process that provides plenty of diagnoses but changes nothing needs the effectiveness of an independent variable. Inertial forces can be countered with a more pluralistic process, vectoring prognoses toward a more optimal distributive value that avoids, if not prevents, crises rather than ensuring its extension.
Binomialism is a pathogenic mechanism. It inhibits optimal organizational health, resulting in political dyskinesis. Cognitive capacity is limited to the binary variation, limiting the capacity for needed change.
Ineffectiveness of a party platform that promises change we really need predictably yields a conservation of the values to be determined when a binomial model is applied. Back testing that model indicates a future value that is limited to the practical extension of the risk--distribution of the values that support the problem to be solved (demand deflation and credit inflation).
Supporting the problem as the solution is pathological.
Testing the current value of policy alternatives against the practical, binomial model in operation yields a second economic stimulus with the same results as the first.
Policy alternatives binomially (ideologically) determined will not cure what ails us. If anything, it extends the problem into the future, which defines the future value of the risk and delimits the value of taking the risk to means that test a high score on the value of creditworthiness (the problem).
Recycling the debt (extending the credit risk) into crisis proportions does not solve the problem. The only way to achieve a distributive probability of the values that infers a commonwealth modeling of the risk is the deliberate intervention of third-party political risk.
If you have not been much affected by the current cycle, do not be deluded. The risk recycles and extends at progressively higher frequencies. It will eventually extend to you in forevever innovative ways to test the means of risk tolerance.
Innovative means of extending the risk far outpaces the means to avoid it. So, we always end up mitigating the value of the risk which, binomially determined in the public policy space, is arbitraged into a beta valuation and re-extended (re-novated) into the current, useful value of the capital required to make the wealth more common.
Theoretically, the commonwealth will eventually converge with the analytics. Instead of perpetually recycled in the form of beta and gamma risk (authoritative management of volatility), capital eventually gains the value of a common requirement. That revaluation would not, however, occur without taking a considerable political risk associated with the fear of change (like losing your freedom) that tends to pathological expression, like a binomial determinism.
Requiring the capital to fully assume the risk of a free-and-unconsolidated marketplace does not present the political risk of lost liberty. Instead, it represents the economic means of attaining it.
By allowing for an economic test of political hypotheses (limiting the role of government to allow for that test), the risk is "freely" innovated by The People to produce the stable and predictably useful value of the capital for the commonwealth.
Saturday, September 4, 2010
Representing the Commonwealth
The concept of the commonwealth is not new, but it is revolutionary. The concept of the commonwealth was a deliberate novation of the risk (see the article, "Novation of the Risk") that pluralistically diffused the risk to facilitate the greatest expansion of economic wealth (and power) the world has ever known.
The Revolution continues, testing the practical concept of the commonwealth (deconsolidating the risk). Currently, the risk is so consolidated there is virtually none available unless extended from large, consolidated, too-big-to-fail, economy-of-scale, organizational entities, including government. Taking the risk (economic growth) is virtually not available except by extension of consolidated authority both public and private. Our current status fails the test of deconsolidating the risk that represents (confirms) the commonwealth.
The Obama administration, for example, is looking to pass a "jobs bill." Since the risk is being extended from the top down (hence the lack of credit extended to support it and thus the recurrent need for a bill), it does not represent the commonwealth (although it is being sold as making the wealth more common).
Nor do Republicans represent the commonwealth.
Republicans represent common expansion of the wealth as a zero-sum redistribution (a moral hazard). Making the wealth more common is identified (just like the king did) with a punitive retribution of the value accumulated that results in disfunctional, non-productive, class warfare. The etiology of what ails us is then reduced to an endless, ideological debate--a game, a polemic--to be won or lost in the political arena without risk the reward will be identified as a zero-sum detriment that prevents the commonwealth.
So, who represents the commonwealth?
After the American Revolution to deconsolidate the authoritative extension of the risk from the crown (from the top class down), the risk was to be "authored" (taken) from the bottom up, producing the state of the commonwealth.
Many states defined themselves as being a "commonwealth" following The Revolution. The Commonwealth of Kentucky, for example, represents freedom from tyranny and the risk it imposes (extends)--or does it?
Governor Beshear's administration has done nothing but extend the risk.
Following a Republican administration that engaged highly regressive tax increases to support the state's bond rating (its credit score), Beshear was elected on a no-tax-increase platform. He then proceeded to administer the biggest regressive tax increase in the history of the Commonwealth. In the private sector, such a sudden reversal is tantamount to a corruption of trust worthy of swift and decisive prosecution with punitive and compensatory damages--and the damage, heading into the Great Recession, was extensive.
Although Beshear, and the Legislative Research Commission, was advised well in advance of the recession that such a massive, regressive tax increase was extremely detrimental to the Commonwealth, they passed the measure anyway, magnifying the detriment extending from the recent financial crisis (which resists a good credit score, by the way).
Beshear has since engaged in massive tax expenditures with a budget that is every bit in dire financial crisis due to a huge regressive tax burden. That burden robbed consumers of much-needed "discretionary spending" and gave it to wealthy businesses to relieve their tax burden (putting pressure on both taxes and the rate of interest). The "discretion" was, rather, "taken" (usurped) and redistributed by a government authority representing anything but the commonwealth.
Massive, tax-incentive expenditures pressure taxes up. The larger return on this so-called investment is higher taxes to satisfy the demand--the expectation of the reward against the extended risk of unemployment. In a commonwealth, however, employment is not supposed to be a function of tax incentives that regresses the tax burden, keeping the wealthy rich at the expense of the common wealth.
No. Taking the risk does not extend from the upper class in a commonwealth. Managing the risk is not a function of a consolidated authority either public or private, but is freely consumed and labored into wealth with a reward (the profit) commensurate with the risk determined by discretionary income that must be commonplace to reward (verify) best practices, best prices, and best behaviors.
The commonwealth delimits the need for an intrusive governing authority. It governs what limits our freedom to an authoritative extension of the risk that always exceeds the reward in a crisis proportion.
Yes. The commonwealth is a place where a person can still get rich, but without having to plunge everyone else into the depths of depression. Raiding the treasury to prevent crises (budget deficits and tax expenditures) is a thing of the past. It would no longer be necessary to tolerate tax and fiscal policy that supports the probability of recurrent crises in the name of resisting it.
Beshear's open-wallet method for economic development, for example, is raiding an already depleted treasury, and shifts the burden to the least able to pay the accumulative debt. It is a classic over-extension of the risk that is completely antithetical to the practical concept of a commonwealth.
Hard to believe that after such a dizzying sudden and detrimental reversal of policy, and hooking-up with an even more notorious open-wallet spendthrift like Jerry Abramson, Beshear is actually going to run for re-election. Incredible!
While common sense can at times be as uncommon as the wealth, let's hope The People of The Commonwealth will have sense enough not to re-elect Beshear and the entire complicit cohort of complete incompetence.
The Revolution continues, testing the practical concept of the commonwealth (deconsolidating the risk). Currently, the risk is so consolidated there is virtually none available unless extended from large, consolidated, too-big-to-fail, economy-of-scale, organizational entities, including government. Taking the risk (economic growth) is virtually not available except by extension of consolidated authority both public and private. Our current status fails the test of deconsolidating the risk that represents (confirms) the commonwealth.
The Obama administration, for example, is looking to pass a "jobs bill." Since the risk is being extended from the top down (hence the lack of credit extended to support it and thus the recurrent need for a bill), it does not represent the commonwealth (although it is being sold as making the wealth more common).
Nor do Republicans represent the commonwealth.
Republicans represent common expansion of the wealth as a zero-sum redistribution (a moral hazard). Making the wealth more common is identified (just like the king did) with a punitive retribution of the value accumulated that results in disfunctional, non-productive, class warfare. The etiology of what ails us is then reduced to an endless, ideological debate--a game, a polemic--to be won or lost in the political arena without risk the reward will be identified as a zero-sum detriment that prevents the commonwealth.
So, who represents the commonwealth?
After the American Revolution to deconsolidate the authoritative extension of the risk from the crown (from the top class down), the risk was to be "authored" (taken) from the bottom up, producing the state of the commonwealth.
Many states defined themselves as being a "commonwealth" following The Revolution. The Commonwealth of Kentucky, for example, represents freedom from tyranny and the risk it imposes (extends)--or does it?
Governor Beshear's administration has done nothing but extend the risk.
Following a Republican administration that engaged highly regressive tax increases to support the state's bond rating (its credit score), Beshear was elected on a no-tax-increase platform. He then proceeded to administer the biggest regressive tax increase in the history of the Commonwealth. In the private sector, such a sudden reversal is tantamount to a corruption of trust worthy of swift and decisive prosecution with punitive and compensatory damages--and the damage, heading into the Great Recession, was extensive.
Although Beshear, and the Legislative Research Commission, was advised well in advance of the recession that such a massive, regressive tax increase was extremely detrimental to the Commonwealth, they passed the measure anyway, magnifying the detriment extending from the recent financial crisis (which resists a good credit score, by the way).
Beshear has since engaged in massive tax expenditures with a budget that is every bit in dire financial crisis due to a huge regressive tax burden. That burden robbed consumers of much-needed "discretionary spending" and gave it to wealthy businesses to relieve their tax burden (putting pressure on both taxes and the rate of interest). The "discretion" was, rather, "taken" (usurped) and redistributed by a government authority representing anything but the commonwealth.
Massive, tax-incentive expenditures pressure taxes up. The larger return on this so-called investment is higher taxes to satisfy the demand--the expectation of the reward against the extended risk of unemployment. In a commonwealth, however, employment is not supposed to be a function of tax incentives that regresses the tax burden, keeping the wealthy rich at the expense of the common wealth.
No. Taking the risk does not extend from the upper class in a commonwealth. Managing the risk is not a function of a consolidated authority either public or private, but is freely consumed and labored into wealth with a reward (the profit) commensurate with the risk determined by discretionary income that must be commonplace to reward (verify) best practices, best prices, and best behaviors.
The commonwealth delimits the need for an intrusive governing authority. It governs what limits our freedom to an authoritative extension of the risk that always exceeds the reward in a crisis proportion.
Yes. The commonwealth is a place where a person can still get rich, but without having to plunge everyone else into the depths of depression. Raiding the treasury to prevent crises (budget deficits and tax expenditures) is a thing of the past. It would no longer be necessary to tolerate tax and fiscal policy that supports the probability of recurrent crises in the name of resisting it.
Beshear's open-wallet method for economic development, for example, is raiding an already depleted treasury, and shifts the burden to the least able to pay the accumulative debt. It is a classic over-extension of the risk that is completely antithetical to the practical concept of a commonwealth.
Hard to believe that after such a dizzying sudden and detrimental reversal of policy, and hooking-up with an even more notorious open-wallet spendthrift like Jerry Abramson, Beshear is actually going to run for re-election. Incredible!
While common sense can at times be as uncommon as the wealth, let's hope The People of The Commonwealth will have sense enough not to re-elect Beshear and the entire complicit cohort of complete incompetence.
Friday, September 3, 2010
The Commonwealth
As the wealth became more common (the risk becoming more diffused than consolidated), the role of the crown to manage the risk became more uncommon. The commonwealth emerged with the function of government authority limited to keeping the wealth commonly private in the hands of The Sovereign (The People).
Today we look to government agency to manage the risk. The Financial Stability Board (FSB), for example.
While the FSB is a trans-national organization, it specifically describes itself as providing governance.
The result of the 2009 G-20 summit, the FSB is to provide international risk management of capital markets along with the IMF, World Bank, and WTO.
Since the risk is globally extensive, and with fewer firms remaining to broker international finance after the Great Recession (making them too big to fail), the need to consolidate the management of the risk into a form of authoritative governance (collusion) is critical for maintaining the distribution of the reward in a crisis proportion.
It should be clear that all the measures being taken to address the tendency to economic crisis are not to prevent it, but to tolerate it. The goal is risk tolerance and a stable means of discovering the future value of the risk in order to price the options that derive its current value, arbitraged from the volatility of probable crisis derived from commanding the timing. In other words--to rig the market; and in a free market economy, rigging the market is not only opprobrious, it is criminal.
Rigging the market is offensive to the commonwealth of nations and its sovereign people. Standing its offenders before commissions of inquiry and subjecting them to the standards of a risk-tolerant authority does not deter the criminal element, but cultivates it.
Prosecute the criminals, deconsolidate their criminal means and we will secure the stability we all want without sacrificing the freedom we all deserve. What The Sovereign wants is well at hand with the commonwealth of nations well established and conserved.
Today we look to government agency to manage the risk. The Financial Stability Board (FSB), for example.
While the FSB is a trans-national organization, it specifically describes itself as providing governance.
The result of the 2009 G-20 summit, the FSB is to provide international risk management of capital markets along with the IMF, World Bank, and WTO.
Since the risk is globally extensive, and with fewer firms remaining to broker international finance after the Great Recession (making them too big to fail), the need to consolidate the management of the risk into a form of authoritative governance (collusion) is critical for maintaining the distribution of the reward in a crisis proportion.
It should be clear that all the measures being taken to address the tendency to economic crisis are not to prevent it, but to tolerate it. The goal is risk tolerance and a stable means of discovering the future value of the risk in order to price the options that derive its current value, arbitraged from the volatility of probable crisis derived from commanding the timing. In other words--to rig the market; and in a free market economy, rigging the market is not only opprobrious, it is criminal.
Rigging the market is offensive to the commonwealth of nations and its sovereign people. Standing its offenders before commissions of inquiry and subjecting them to the standards of a risk-tolerant authority does not deter the criminal element, but cultivates it.
Prosecute the criminals, deconsolidate their criminal means and we will secure the stability we all want without sacrificing the freedom we all deserve. What The Sovereign wants is well at hand with the commonwealth of nations well established and conserved.
Thursday, September 2, 2010
Novation of the Risk
Back before the Writ of Extent became obsolete, and a republican form of government was creeping to the fore, it provided for a re-assumption of the risk.
While the Writ was chiefly for collecting debts owed directly to the crown, the risk of default--since the risk was consolidated into the extensive means of the crown--extended to the entire kingdom. The practice emerged of retributing the risk of debts not contracted directly with the crown to the crown, but was abandoned due to extensive abuse.
What was then called a Writ of Extent in Aid is now what we call novation.
It was in the crown's best interest to assure that all debts could be paid to avoid a cascade of defaults which, essentially, would negatively affect the crown's credit score--what we today call a sovereign-debt crisis. It is in the sovereigns self-interest to keep everybody solvent--thus, the practice of novation or what we call today, monetizing the debt (borrowing money to pay the debt).
It is probably safe to say that the process of risk novation has become, as in the past, abusive, but it is not likely to be abandoned anytime soon because it extends the risk disproportionate to the reward which, of course, over-extends the risk.
Novation was a prominent feature of the Great Recession. Derivative transactions were novated on a daily basis to avoid being stuck with the risk. An organizational tool called "the tri-party repo mechanism" was used (or more aptly abused) to essentially novate and extend the risk into a crisis proportion.
Ultimately, the risk was re-novated by government authority. It is now being redistributed in the form of public debt--a process that neo-classically consolidates and re-extends the risk with the force and legitimacy of public authority, keeping the reward accumulated in a crisis proportion, over-extending the risk.
In both the archaic and modern form, novation of the risk is intended to prevent killing the host that provides the current value of the risk--the reward (class distinction).
The ruling class is compelled to novate (renew or innovate) the risk, or be stuck with it.
It's time for the ruling class to be stuck with the risk and keep the Sovereign (The People) solvent.
It's time to re-novate the risk and retribute the value accumulated.
While the Writ was chiefly for collecting debts owed directly to the crown, the risk of default--since the risk was consolidated into the extensive means of the crown--extended to the entire kingdom. The practice emerged of retributing the risk of debts not contracted directly with the crown to the crown, but was abandoned due to extensive abuse.
What was then called a Writ of Extent in Aid is now what we call novation.
It was in the crown's best interest to assure that all debts could be paid to avoid a cascade of defaults which, essentially, would negatively affect the crown's credit score--what we today call a sovereign-debt crisis. It is in the sovereigns self-interest to keep everybody solvent--thus, the practice of novation or what we call today, monetizing the debt (borrowing money to pay the debt).
It is probably safe to say that the process of risk novation has become, as in the past, abusive, but it is not likely to be abandoned anytime soon because it extends the risk disproportionate to the reward which, of course, over-extends the risk.
Novation was a prominent feature of the Great Recession. Derivative transactions were novated on a daily basis to avoid being stuck with the risk. An organizational tool called "the tri-party repo mechanism" was used (or more aptly abused) to essentially novate and extend the risk into a crisis proportion.
Ultimately, the risk was re-novated by government authority. It is now being redistributed in the form of public debt--a process that neo-classically consolidates and re-extends the risk with the force and legitimacy of public authority, keeping the reward accumulated in a crisis proportion, over-extending the risk.
In both the archaic and modern form, novation of the risk is intended to prevent killing the host that provides the current value of the risk--the reward (class distinction).
The ruling class is compelled to novate (renew or innovate) the risk, or be stuck with it.
It's time for the ruling class to be stuck with the risk and keep the Sovereign (The People) solvent.
It's time to re-novate the risk and retribute the value accumulated.
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