Latest Cartoon by Leon Kuhn: Government of the bankers
By Peter B. Meyer -13th of July 2012
The ability of modern representative government is that it cheats the masses into believing that they are insiders too. They are encouraged to vote and to believe that their vote really matters. Obviously, it matters not at all. Generally, voters have no idea what or whom they are voting for. Often, they get the opposite of what they thought they had voted for anyway. “Government is a phenomenon, not a system.” It is best understood as a fight between the outsiders and the insiders. The insiders always control the government, and use it to take control of the outsiders. Why do they want to do so? The usual reasons are Wealth, Power, and Status.” In short: Government is an institution wherein the “insiders” take the wealth, power and status from the “outsiders.”
Thomas Jefferson the elected third president of the USA (1801–1809) said in 1802: "My reading of history convinces me that most bad government results from too much government." - "The democracy will cease to exist when you take away from those who are willing to work and give to those who would not."
Further: "I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and institutions that will grow up around the banks will deprive the people of all property - until their children wake-up homeless on the continent their fathers conquered."
A democracy is nothing more than mob rule, where 51% of the people may take away the rights of the other 49%. The experience of all former ages had shown that of all human governments, democracy was the most unstable, fluctuating and short-lived. Said John Quincy the sixth President of the United States (1825-1829). Yet the protection of the minority, most importantly the individual, along with his private property, is the basis on which the system of government is built.
Government may provide a useful, even necessary, function — such as keeping the peace and maintaining justice. They sometimes redistribute wealth among the outsiders. They sometimes claim to be acting in the name of the greater good, and often do not. But they always take wealth, power and status from those who are not among the insiders. The Romans already provided proof of this statement whereas power, prestige and wealth flowed back to Rome.
By giving taxpayers a voice in government, the Dutch and British democracies provided creditors with safer claims for repayment than did kings and princes whose debts died with them. But the recent debt protests from Iceland to Greece and Spain suggest that creditors are shifting their support away from democracies. They are demanding fiscal austerity and even privatization sell-offs.
The ECB and EU bureaucracy are now imposing a creditor-oriented austerity on Europe. Ostensibly social democratic governments have been directed to save the banks rather than reviving economic growth and employment. Losses on bad bank loans and speculations are taken onto the public balance sheet while scaling back public spending and even selling off infrastructure. The response of taxpayers stuck with the resulting debt has been to mount popular protests starting in Iceland and Latvia in January 2009, and more widespread demonstrations in Greece and Spain to protest their governments’ refusal to hold referendums on these fateful bailouts of foreign bondholders.
The financial sector has gained sufficient influence to use such emergencies as an opportunity to convince governments that the economy will collapse if they do not “save the banks.” In practice this means consolidating their control over policy, which they use in ways that further polarize economies.
The basic model is giving priority to bankers and leaving economic planning to be dictated by the EU, ECB and IMF, after previously the nation-states was stripped of the power to coin or print money and levy taxes.
The resulting conflict is pitting financial interests against national self-determination. The idea of an independent central bank being “the hallmark of democracy” is a euphemism for relinquishing the most important policy decision – the ability to create money and credit – to the financial sector. Rather than leaving the policy choice to popular referendums, the rescue of banks organized by the EU and ECB now represents the largest category of rising national debt.
The private bank debts taken onto government balance sheets in Ireland, Greece, and now in Spain have been turned into taxpayer obligations. The same is true for America’s $13 trillion added since September 2008 including $5.3 trillion in Fannie Mae and Freddie Mac bad mortgages taken onto the government’s balance sheet, and $2 trillion of Federal Reserve “cash-for-trash” swaps.
Barclays’ bank insiders setting Libor interest rates to suit themselves, rather than be determined by sellers and buyers, is the ultimate scandal. But this is more or less what one had expected in a world of manipulated interest rates, where those rates are set lower for banker’s own benefit. As a show of honesty both the Chairman and its chief executive have been ousted with “golden handshakes”. But isn’t manipulating interest rates lower exactly what all-central bankers the world over do? They think they have the right. They say it will help to stimulate growth.
Financial proxies euphemized as technocrats are dictating this. Designated by creditor lobbyists, their role is to calculate just how much unemployment and depression is needed to squeeze out a surplus to pay creditors for debts now on the books. What makes this calculation self-defeating is the fact that economic shrinkage – debt deflation – makes the debt burden even less payable.
The result has been junk economics. Its aim is to disable public checks and balances, shifting planning power into the hands of high finance on the claim that this is more efficient than public regulation.
Government planning and taxation is accused of being “the road to serfdom,” as if “free markets” controlled by bankers give leeway to act recklessly if not planned by special interests in advance, in ways that are oligarchic, and not democratic. Governments are told to pay bailout debts taken on not to defend countries in military warfare as in times past, but to benefit the wealthiest layer of the population by shifting its losses onto taxpayers.
The failure to take the wishes of voters into consideration leaves the resulting national debts on shaky ground politically and even legally. Governments may act democratically to subordinate the banking and financial sector to serve the economy, not the other way around.
Despite all the phony governments’ interventions the recovery is not coming, it remains the same deplorable situation as the last two years. Recovery is impossible this isn’t an ordinary recession. The world faces a huge solvency problem and not a liquidity problem. New money supply cannot restore health to sick loans and government bonds. The only way to restore solvency to the financial system is to deflate the economy or slash the amount of debt through mass bankruptcy.
Nevertheless the elite will continue to defend their turf by printing more money until the bitter end, count with a long road down and a lot more unnecessary suffering.
Note: “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner, as the result of a voluntary abandonment of further credit expansion, or later, as a final and total catastrophe of the currency system involved.” Those are the words of Austrian economist Ludwig Von Mises.
The ability of modern representative government is that it cheats the masses into believing that they are insiders too. They are encouraged to vote and to believe that their vote really matters. Obviously, it matters not at all. Generally, voters have no idea what or whom they are voting for. Often, they get the opposite of what they thought they had voted for anyway. “Government is a phenomenon, not a system.” It is best understood as a fight between the outsiders and the insiders. The insiders always control the government, and use it to take control of the outsiders. Why do they want to do so? The usual reasons are Wealth, Power, and Status.” In short: Government is an institution wherein the “insiders” take the wealth, power and status from the “outsiders.”
Thomas Jefferson the elected third president of the USA (1801–1809) said in 1802: "My reading of history convinces me that most bad government results from too much government." - "The democracy will cease to exist when you take away from those who are willing to work and give to those who would not."
Further: "I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and institutions that will grow up around the banks will deprive the people of all property - until their children wake-up homeless on the continent their fathers conquered."
A democracy is nothing more than mob rule, where 51% of the people may take away the rights of the other 49%. The experience of all former ages had shown that of all human governments, democracy was the most unstable, fluctuating and short-lived. Said John Quincy the sixth President of the United States (1825-1829). Yet the protection of the minority, most importantly the individual, along with his private property, is the basis on which the system of government is built.
Government may provide a useful, even necessary, function — such as keeping the peace and maintaining justice. They sometimes redistribute wealth among the outsiders. They sometimes claim to be acting in the name of the greater good, and often do not. But they always take wealth, power and status from those who are not among the insiders. The Romans already provided proof of this statement whereas power, prestige and wealth flowed back to Rome.
By giving taxpayers a voice in government, the Dutch and British democracies provided creditors with safer claims for repayment than did kings and princes whose debts died with them. But the recent debt protests from Iceland to Greece and Spain suggest that creditors are shifting their support away from democracies. They are demanding fiscal austerity and even privatization sell-offs.
The ECB and EU bureaucracy are now imposing a creditor-oriented austerity on Europe. Ostensibly social democratic governments have been directed to save the banks rather than reviving economic growth and employment. Losses on bad bank loans and speculations are taken onto the public balance sheet while scaling back public spending and even selling off infrastructure. The response of taxpayers stuck with the resulting debt has been to mount popular protests starting in Iceland and Latvia in January 2009, and more widespread demonstrations in Greece and Spain to protest their governments’ refusal to hold referendums on these fateful bailouts of foreign bondholders.
The financial sector has gained sufficient influence to use such emergencies as an opportunity to convince governments that the economy will collapse if they do not “save the banks.” In practice this means consolidating their control over policy, which they use in ways that further polarize economies.
The basic model is giving priority to bankers and leaving economic planning to be dictated by the EU, ECB and IMF, after previously the nation-states was stripped of the power to coin or print money and levy taxes.
The resulting conflict is pitting financial interests against national self-determination. The idea of an independent central bank being “the hallmark of democracy” is a euphemism for relinquishing the most important policy decision – the ability to create money and credit – to the financial sector. Rather than leaving the policy choice to popular referendums, the rescue of banks organized by the EU and ECB now represents the largest category of rising national debt.
The private bank debts taken onto government balance sheets in Ireland, Greece, and now in Spain have been turned into taxpayer obligations. The same is true for America’s $13 trillion added since September 2008 including $5.3 trillion in Fannie Mae and Freddie Mac bad mortgages taken onto the government’s balance sheet, and $2 trillion of Federal Reserve “cash-for-trash” swaps.
Barclays’ bank insiders setting Libor interest rates to suit themselves, rather than be determined by sellers and buyers, is the ultimate scandal. But this is more or less what one had expected in a world of manipulated interest rates, where those rates are set lower for banker’s own benefit. As a show of honesty both the Chairman and its chief executive have been ousted with “golden handshakes”. But isn’t manipulating interest rates lower exactly what all-central bankers the world over do? They think they have the right. They say it will help to stimulate growth.
Financial proxies euphemized as technocrats are dictating this. Designated by creditor lobbyists, their role is to calculate just how much unemployment and depression is needed to squeeze out a surplus to pay creditors for debts now on the books. What makes this calculation self-defeating is the fact that economic shrinkage – debt deflation – makes the debt burden even less payable.
The result has been junk economics. Its aim is to disable public checks and balances, shifting planning power into the hands of high finance on the claim that this is more efficient than public regulation.
Government planning and taxation is accused of being “the road to serfdom,” as if “free markets” controlled by bankers give leeway to act recklessly if not planned by special interests in advance, in ways that are oligarchic, and not democratic. Governments are told to pay bailout debts taken on not to defend countries in military warfare as in times past, but to benefit the wealthiest layer of the population by shifting its losses onto taxpayers.
The failure to take the wishes of voters into consideration leaves the resulting national debts on shaky ground politically and even legally. Governments may act democratically to subordinate the banking and financial sector to serve the economy, not the other way around.
Despite all the phony governments’ interventions the recovery is not coming, it remains the same deplorable situation as the last two years. Recovery is impossible this isn’t an ordinary recession. The world faces a huge solvency problem and not a liquidity problem. New money supply cannot restore health to sick loans and government bonds. The only way to restore solvency to the financial system is to deflate the economy or slash the amount of debt through mass bankruptcy.
Nevertheless the elite will continue to defend their turf by printing more money until the bitter end, count with a long road down and a lot more unnecessary suffering.
Note: “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner, as the result of a voluntary abandonment of further credit expansion, or later, as a final and total catastrophe of the currency system involved.” Those are the words of Austrian economist Ludwig Von Mises.
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