Trapped by Finance Capital: Business as Usual While Planet Burns. Part I: Control

Despite the absurd antics of a few fossil-shills in the U.S. Congress, most Americans now recognize the urgency of taking strong actions to mitigate the rapidly growing climate crisis. Mitigation has to mean stopping the flow of CO2 into the atmosphere and oceans so that the damage to ecosystems that is well underway can be slowed. It means bringing earth systems back into balance and relative stability. That is a tall order, which is unfortunately still treated by politicians as just another policy choice. The real choice is between mitigating climate chaos and the extinction of Homo sapiens.[1]

Without huge reductions in total carbon emissions (to near zero), human populations around the world will not be able to adapt to destabilized climate conditions. Growing climate disruptions are already threatening food production and diverse human habitats. Even the World Bank, ordinarily a promoter of fossil-fuel driven international development, has recognized the imminent dangers of continued global warming. But finance capital (the money investment banks and corporations use to finance capital extraction/production projects), whether on Wall Street, in Geneva, or even in Beijing, marches to its own drummer – business as usual.

Whatever rhetoric politicians may deploy trumpeting “personal freedom,” or “free markets,” or “free enterprise,” the locus of control of national and international economies is found in the central banks, large investment banks, and hedge funds around the world. For a very long time, the ideologists of “free market” economics have been able to successfully conflate “democracy” with the control of markets by Finance Capital. When these propagandists demand no public control over finance capital, they usually invoke “personal freedom” or “innovation” by “small business” – and investment needed by the “job creators.”

Political decisions are routinely made in the interests of the largest financial institutions in the world. Because of the creation and flow of money and debt is largely controlled by these powerful institutions, both corporate investment planning and government fiscal planning are almost always consistent with the interests of finance capital. We tend to think of the Federal Reserve as a government institution. It is certainly federally chartered. But it was given the power to create money and allocate government debt in the interests of its member banks – which own it.

Say what you will about the ideals of “democracy” or a “representative government,” it is the giant financial institutions that control the economy, not presidents, not Congress. Interests of finance capital and the fossil fuel corporations are closely aligned. Their actions confirm that. Corporate consolidation in various economic sectors facilitates implicit coordination and control. You do not need a back-room conspiracy when the interests and affiliations of large institutions are integrated.

The economic interests of General Electric, for example, control a large segment of the mass media communications sector. Owning Comcast cable, NBC, Universal Pictures, and Focus Features, helps frame the public consciousness. Content control helps align public beliefs and biases with corporate and financial interests, instilling fear about terror, a putative necessity for perpetual war, and the “threat” of immigration. All these contribute to its bottom line. GE is but one example. Need I mention Rupert Murdoch’s NewsCorp properties, such as the Wall Street Journal, Fox News, and the New York Post? Or the media content controlled by Viacom, Time Warner, Disney, and CBS? GE also manages a large segment of government military and “security” spending, along with a few other “defense” contractors. A mere six media giants control about ninety percent of what we watch, listen to, and read about the world. Most media content is highly consistent with the interests of finance capital.

This institutional structure keeps finance capital in a very comfortable political position. Making big-money-now is the core goal of finance capital. That does not leave much, if any, room for public responsibility. Business as usual for finance capital is to invest in more and more fossil-fuel driven economic growth. It is quite amazing when one thinks about men who manage the world’s largest financial institutions just not getting the threat to human existence that their continued climate-destabilizing practices ensure.

Or do they? Recent revelations about Exxon’s executive “leadership” knowing a great deal about the dangers of global warming posed by continued carbon emissions in the late 1970s reveal a human capability for evil on a planetary scale. With that knowledge, Exxon [2] promoted the lies of “climate denial” contributing to decades of delay on serious climate action. The scale of the ensuing chaos is so great that it is hard to fathom.

Part II of this 3-part series will deal with the planetary chaos that results from the distortions of the role of finance capital in controlling the economy today.
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[1] Gerardo Ceballos, Paul R. Ehrlich, Anthony D. Barnosky, Andrés García, Robert M. Pringle, and Todd M. Palmer, “Accelerated modern human–induced species losses: Entering the sixth mass extinction.” Science Advances. 19 Jun 2015: Vol. 1, no. 5, e1400253. Accessed at http://advances.sciencemag.org/content/1/5/e1400253
[2] See also investigative reports in the Los Angeles Times, “What Exxon knew about the Earth’s melting Arctic,” by Sara Jerving, Katie Jennings, Masako Melissa Hirsch and Susanne Rust (Oct. 9, 2015). Accessed at http://graphics.latimes.com/exxon-arctic/ . See also, Inside Climate News, “Exxon: The Road Not Taken.” Accessed at: http://insideclimatenews.org/news/22102015/Exxon-Sowed-Doubt-about-Climate-Science-for-Decades-by-Stressing-Uncertainty

Borrowing Nothing from Nowhere: Phantom Money and Phantom Debt

Borrowing money is a tricky thing to talk about, even trickier than talking about money itself. We all seem to have a love-hate relationship with the stuff. Well, maybe ‘stuff’ is not the right word. People disagree about what money actually is. Some, who I’ll call “money realists,” believe that the essence of money is that it is a physical thing that has intrinsic value. For the money realist, only a fixed commodity – usually gold – is “real” money. So called “fiat money,” valued because a government declares it as “legal tender,” is not seen as “real.” Some others, the “money representationalists,” believe that money is an object that has value because it represents something else that is valued, also usually gold. That is what the “gold standard” was about, but money also represents the value of anything we value. Borrowing is a major reason money is so troubling.

Money represents the value of a credit or debt, enabling the exchange of anything of measurable value (in monetary units of quantity) for that thing. Finally, for most people money is an abstract symbol of value based on some metric or quantity that measures the value of anything. That is why money can be transferred, borrowed, and lent electronically – it is a symbol, whether represented in paper or binary code, of a measurable value. Despite that abstraction, we usually treat money as a real object to be exchanged for other real objects, or for real services, or even for promises to provide such things later. Most money today is “fiat” money, because it is declared by a sovereign government to have a relatively stable measurable value for any exchange. But what is value? Is value real or do we just imagine it so?

You can read Wikipedia’s entries on money to get an overview of the conventional definitions of money, currency, credit, and debt. But something is missing. What is increasingly important today is how money is being transformed. Critics complain that the government is “printing too much money.” However, most money today is brought into being by electronically “posting” it to a computerized accounting system in a bank. An electronic bookkeeping entry creates money as a debt to a bank, not as printed currency.

Borrowing Nothing

A bank that is a member of the Federal Reserve, lends money into existence electronically when a customer borrows it. That’s right; it didn’t exist before it was lent, but it creates debt for the borrower and an “asset” (credit) for the lending bank in the form of a note or bond. The note or bond held by the bank obligates the borrower to pay back the amount borrowed plus interest. That means that more money is always owed (to the banks) than is ever borrowed, which is a peculiar problem in itself with deep implications for the entire economy. Think Greece; same basic deal.

The Federal Reserve oversees this process, called the fractional reserve banking system. “Fractional reserve” means that the bank gets to loan out a certain percentage more than it holds “in reserve” as deposits. This whole process must be carefully regulated or things can get way out of hand. Just before the financial crisis of 2008, banks were allowed to loan many more multiples of their reserves than ever. Leverage always entails risk.

Banks may lend some of the money they create to mortgage lenders and “payday” lenders, as well as to corporations and individuals. Mortgage lenders – savings and loan institutions, regional banks, etc. – will borrow from the national bank, make a home loan, and then sell the mortgage to another bank. Without vigilant regulation of the conditions of loans, things can get quite messy. If enough bad loans are written and if enough loans default, the whole system becomes unstable. This is especially true when loans are bundled into “derivatives” and sold to unsuspecting investors looking for a steady income stream.

Making Phantom Money

The gradual deregulation of banking and finance, starting with Bill Clinton, Alan Greenspan, and Larry Summers, has released the most powerful financial elites from societal controls. The 2008 financial crisis resulted from several factors, including the lowering of reserve requirements for the Big Banks. Mortgage brokers and other primary retail lenders loosened the lending requirements for borrowers. Regulators looked the other way. The resulting risky mortgages were then purchase and packaging into “derivative” financial instruments by the Big Banks on Wall Street. They were then resold to pension funds and other institutional investors, putting many people at risk. Lots of money was “made” in the form of fees and profits. In the process the entire world economy was endangered. After all, the banking system of the U.S. and other major industrial nations had already been integrated and these financial manipulations had spread world-wide.

The advent of high-speed electronic data processing and communications has allowed the creation of new forms of financial manipulation of the money system. High-speed computers can skim “value” from stock markets by engaging in electronic “trading” so fast that tiny differences in bid-ask pricing can be exploited in the interim between offers by ordinary traders. So-called “derivatives,” financial instruments comprised of abstracted fragments of mortgages or other debts, can be marketed to the point of risking collapse of markets. The largest financial institutions have transformed money from a public medium of economic exchange into a method of economic plunder and political control of society. But these financial absurdities only exist because of the greatest absurdity of all. We are all forced to borrow nothing from nowhere and it is costing (almost) everyone dearly.

Phantom Federal Debt: Who Needs It?

It has been generally taken for granted that “fiat” money is issued by sovereign governments for the benefit of their national economies. Not exactly. Most currencies are valued on the basis of the solvency of the government, its international balance of payments, and the stability of its economy. International exchange rates are based on such factors. But since the early 20th century, for the most part such assumptions have been a fiction. In the U.S., despite the Constitution, which authorizes the Congress “To coin money, regulate the Value thereof, and of foreign Coin,” the government does not create money. Yes, it still stamps out pennies and quarters, but the private banks, which own the Federal reserve, create most money. In 1910, the major private banking interests conspired at their infamous meeting on Jekyll Island to control the national monetary system. In 1913, Congress passed the Federal Reserve Act, empowering the cartel of private investment banks to control the money and banking system and “loan” money created out of nothing and from nowhere to the U.S. Treasure. Hence, the national debt. What a windfall for the banks – and a permanent indebtedness for the nation – unless we reassert our national sovereignty.

It has worked out much better – for the mega-banks – having the government borrow money from the private banking cartel called The Fed so that the banks can control everything and the rest of us can take on all the resulting debt! If our government were actually sovereign (instead of subservient to the mega-banks), it could ISSUE money rather than borrow fake money from corrupt banks. What a different economy that would produce.

The National Debt and Deficit Scam

Ever wonder why the richest nation in the world, the U.S., has become a “debtor nation”?  Oh, but they’ve already told you.  It’s those politicians, especially the ‘liberal’ ones who just spend too much.  You know, those “tax and spend” liberals.  Well, I’m no apologist for the liberals.  I agree with Chris Hedges that the liberal class of politicos is essentially dead.  They still talk some about their concerns for the “middle class” and “working people,” but their actions reflect the same servility to the rich and powerful as do the ‘conservative’ — the misuse of that term is a whole other story — Republicans who have been cutting taxes on the rich and shifting the costs of plutocracy to the poor for decades.  So, we sure have a clue as to why we are in so much debt.

The Banksters’ Coup

The history of money and banking is far more interesting than any economics course on the topic.  It is long and complicated, but the essence of how current economies have become debt-based can be condensed to some key elements in the struggle between the public purposes of money and credit, and money-lenders’ efforts to control the issuing of money and renting that money for profit.  A nice summary of the key historical events can be read in Ellen Brown’s latest book, The Public Bank Solution: From Austerity to Prosperity.  In that book she also explains effectively why we — both people and government — are all in such debt, but need not be.

The international private banking cartel was started with the Bank of England around the time of the American Revolution.  Ultimately, the Federal Reserve was formed in the U.S. as a private banking cartel, owned by its member private banks.  The Federal Reserve Act of 1913 was passed under great pressure from the major private banks in the U.S.  It ceded sovereign authority for creating money to the Big Banks we know so well today.  That raises important questions that are rarely discussed in public.  What is money if not a public utility for making the exchange of goods and services effective?  Why should a public utility be controlled by a private cartel?

Money, Sovereignty, and the Public Interest

Numerous examples of public banking throughout history demonstrate that for achieving public purposes, public banks are more effective than private banks.  But rather than argue the details of why — Ellen Brown’s book does that quite well — let’s look at purpose and principle.  Banks are a necessary part of any economy.  An economy is a crucial component of any operating society.  The public has an inherent interest in banks being operated to serve public purposes, primarily the management of the creation and circulation of money as the means for making economic exchange work and facilitating public projects.

Money is a public good; indeed, it is a public service.  Contrary to the mythology foisted on the people, the value of money exists in its movement.  Furthermore, it is a process, not a thing — its value is in what it represents, not what it is [paper, wooden tallies, gold, etc.].  And what it represents is credit.  Stored in a vault it means nothing… except in the illusions of whoever controls the vault.  Banking has become the epitome of the illusory game of acquisition of wealth.  From the perspective of the citizen, however, the circulation of money is the means by which the people are able to sustain themselves over time.  If “we the people” are sovereign, then why is not the monetary system owned by the public?  But on to the main point.

The Debt and Deficit Scam

Simply put, because it gave up its sovereignty over the creation of money to the private banking cartel, the government borrows money from the Federal Reserve (central bank), which it created and gave the power to create money.  Where does the Fed get the money it loans to the government?  Why, out of thin air of course!  An entry is made on an electronic ledger and money is created and loaned to the very entity — the government — that allowed that ledger [of the private banking cartel] to exist.  A federal debt is created.  How counter-productive — stupid — is that?  The only interest this proess serves is that of the concentration of wealth in the hands of the banksters.

Well, it’s very productive for the banksters.  After all, its free money to be lent out and for interest to be collected upon.  Wow!  We could all use some of that kind of deal.  Free money to loan out and make more money on.  Now, project that process into the whole economy and think of the result.

The underlying absurdity is that by structuring debt in that way, it can never be repaid.  Only by continuing to expand the economy to allow more loans can the principle and interest on existing loans continue to be paid.  With the recent financial collapse due to uncontrolled speculative manipulation of mortgage lending, the system was exposed for the Ponzi scheme that it is.

Is There a Way Out?

The Banksters are just too powerful to stop directly.  The financial elite virtually runs the federal government.  But, as they said in the 1960s, “What if they gave a war and nobody came?”  Several lines of action are possible.  The Bank of North Dakota — the only public bank in the nation — is a model of what states might accomplish.  But municipal and county owned banks can also be formed.  Local movements for local public banking are developing.  Meanwhile, take your money out of those Big Banks and put it into your local credit union.  Divestiture worked to stop apartheid in South Africa.  It is starting to work to turn around the carbon economy.  It can be a big part of the great transformation of banking from a private extractive industry to a set of public institutions serving the public interest.

Public Renaissance: What Ebola, Ferguson, and Finance Can Tell Us

Public concern over the possible spread of the Ebola virus epidemic from West Africa to the U.S. is growing. While the Centers for Disease Control (CDC) is taking various precautions, the situation is nevertheless of sufficient complexity to warrant concern. The outrage over the police killing of unarmed black teenager Michael Brown continues as a grand jury takes its time mulling over evidence. The Wall Street pundits on CNBC and the corporate economists claim the economy is turning around, yet most people are having trouble feeling it. What do these seemingly disparate events have in common?

It’s really quite simple. Each of these situations represents a larger problem that pervades our society. Ever since the Reagan presidency, well, ever since the economic reforms following the Great Depression, the power elites have tried to wrest economic and political control from the citizenry. The push to privatize public functions has succeeded in reducing the public interest in social and economic conditions to an afterthought. Importantly, these are only three examples among many. The corporate controlled political culture has carefully failed to recognize the public interest as a legitimate concern for citizens. Meanwhile, the cult of “free market” extractive economics has raised the specter of private greed to a nearly religious status.

Privatizing Public Health
The interest in public health as a concern for the entire society is almost universally recognized bymost nations, even those unable to provide adequate health resources. Universal healthcare is found in nearly every ‘advanced’ industrial nation, except in the U.S.A. With far lower costs, Europeans produce far better health outcomes for their citizens than we do and nobody is excluded. On many indicators of health and well being, we are down toward the bottom of the rankings. Further, in the interest of privatizing every public function imaginable, our politicians have been cutting budgets for the CDC and other public health institutions. But wait, there’s more.

Since the entire U.S. medical sector is organized around private profit for doctors, hospitals, insurance companies, and the pharmaceutical industry, only drugs deemed able to garner very high prices are developed. Flu vaccines are widely available in the U.S., since they are promoted by every medical institution and drugstore in the nation, subsidized by the federal government and profitable for Big Pharma. Ebola has been around for years. Some effort was made to develop a vaccine, but it was abandoned; little profit was projected. Public policy has not been driven by the public interest.

Jim Crow Law Enforcement
Ferguson is a symptom of a national failure to shape law enforcement policy in the public interest. Similar situations abound nationwide. Several trends converge to implement a destructive pattern resulting in what is best described as Incarceration Nation. The New Jim Crow, as aptly described by Michele Alexander, has created a caste of economically exiled men of color. The so-called war on drugs has been a war on young people of color prosecuted by increasingly militarized police targeting vulnerable neighborhoods.

Police no longer serve the public interest; they serve their interests in gaining funding and military equipment useful only for controlling an enemy population. The citizen is the new enemy and the police are the occupying force, as SWAT teams even serve minor warrants by heavily armed home invasion – innocents die. The bifurcation of police and public is palpable. Only a massive reorganization of police from top administration to recruitment, education, training and strict accountability of officers can come to serve the public good.

The Banksters and the Booty
The history of money is a mystery to most Americans. So is its current incarnation. But the essence of money is its function as a public medium of exchange. In societies where money is/was issued by the government to facilitate exchange of goods and services, economies have operated with stable prices and little taxation. Where money creation has been handed over to privately held central banks, governments have gone deeper into debt and taxes have grown to pay this arbitrary public debt.

The Federal Reserve Act of 1913 put the U.S. on the path of a debt-based money system. Instead of issuing money for public purposes, the government still borrows money from the central bank it authorized to issue money. There are many other absurdities in the U.S. debt-driven economy, but the basic problem is the same. A fundamental public function – issuing and managing the money supply for the nation – was given to a privately held central bank, which extracts booty in the form of interest and fees for the money it is allowed to create from nothing in its electronic accounts. Only public banks will manage money to serve the public interest.

Public Institutions for the Public Interest
Health, law enforcement, and the economic policies, among others, are three core elements of society that are inherently public functions. Their ‘privatization’ incurs extra costs and destabilizes the economy. In each of these areas, and others, we need public control over decisions in order to serve the public good. Until these important functions are returned to the people and their government, the plundering of the commons will continue.

Money: Banking on the Economy of the Absurd

Money and banking seem far too mysterious to far too many people.  Read all about it and you may feel that much of your time was wasted, simply because at root it seems not all that complicated.  Oh, the world of money and banking has been made quite complicated, but that’s because of who is running things and why they make decisions over all of our financial lives the way that they do.  With the endless elaboration of the complex institutions from which emanate the decisions that matter for the rest of us, the so-called “financial industry” has emerged as a much larger share of the economy than ever before.  But what does that mean?  Are we all wealthier?  Hardly.  As the “main street” economy has faltered while big corporations and banks grow ever larger profits, why has the financial industry—which claims to be so vital  to the nation’s economy—grown so large?

Along with the ideologically excused deregulation of banking and finance—driven, actually, by the growing influence of the big banks and their corporate companions over the laws that govern economic activity—have come a steady onslaught of banking practices that have made a very few people and corporations very, very rich and resulted in the rest of us falling further and further behind.  By expanding their control over the creation and lending of money, these institutions have expanded far beyond their usefulness to the nation. To big to fail?  Yes, if propped up by government bailouts.  But more important, too big to tolerate!

Have you ever wondered why over many generations people pay mortgages on their homes, yet very few of the succeeding generations ever live in a home without it being mortgaged?  Where is the accumulation of wealth?  Well, while complex interactions of a number of factors are at play, and individual cases vary, the “bottom line” is that we live in a debt-based economy, and it is debt based on purpose.  No, it wasn’t your idea and it wasn’t my idea.  It was the idea of the private bankers who took over the public function of banking way back when.  In a debt based economy, new money has to be created to pay the interest on old debt.  That requires endless economic expansion financed by new debt.  It is a never-ending cycle until one of two things happens:  1) a crash brought on by the excessive speculation in new debt—gambling—by the Banksters; or 2) the whole system expands beyond the carrying capacity of the ecological system on which we all depend.  The Great Depression of the 1930s has been matched by the real unemployment of the “Great Recession” of 2008-present as the absurd economy roars past sustainability.

Banking is an inherently public function.  In fact, money is a public institution.  Whether private banks control it has varied in time and place.  When you are playing Monopoly (the board game) the players are equivalent to the public but each acts as an individual, not as a member of that very small public—which helps to instill in the players an individualistic sense of what money is.  But the “play money” used in the game is “real money” for the purposes of that game.  One player is designated the banker, but only manages the allocation of money during play.  The players agree as to the initial distribution of money (usually equal) and to the rules of the game.

Eventually, through luck and skill, one of the players gathers so much money and property that the game is over—s/he won!  Oh, but then there’s no game anymore, unless the players want to start another game, in which case they have to redistribute the money so each player will have money with which to play.  In fact, once the game is over, there is no money, only amusing little pieces of colored paper in a box with the board and various symbols of property, etc.  But why does someone always win Monopoly?  The widely ignored fact of economic reality also ends every game of Monopoly.  Once a player has accumulated significant economic power, that player’s ability to gain economic power increases.  So it is in the real economy, with the added bonus of increased political power, which means that to keep the game going, something’s got to give.  The result has to be either collapse or some form of redistribution, that’s what history demonstrates.

So, you can see the difference between a game and social reality, or, technically, economic reality.  In the real world, the game can never be over, even when one element—the Banksters in our case—accumulates enough wealth to render the other players powerless to make a successful move.  In the real world, this holds right up to the point where some starve to death for lack of resources.  In the game, with all the money accumulated by a small number of lucky and/or skilled players, everyone else is out of the game.  In real life that is deadly and is bound to result in some kind of chaos, collapse, or major restructuring of the economy.  Look around, both in the world today and in history.  Money hasn’t been in play all that long.  It emerged slowly and in various odd forms when and where some surplus of valued goods was accumulated.  When, at various times when wealth became so concentrated in the hands of the elite, a monarch or emperor recognized that wealth had to be radically redistributed in order to keep the economy going.

The earliest examples of money and debt were in societies where sedentary agricultural practices replaced nomadic hunting and gathering.  Much of this is chronicled in David Graeber’s fascinating book, Debt: the First 5,000 Years.  Graebner is an anthropologist whose analysis of money and debt as cultural phenomena clearly breaks out of the illusions about money and debt upon which our deeply absurd, and equally unjust, economy is based.

Unless we face some very fundamental and widespread social illusions, we will be unable to grasp how debt drives our absurd economy and how deeply destabilized the system has become.  Sometimes these illusions have two sides, neither of which reflects economic or cultural reality.  For example, we have the “gold bugs” and the advocates of “fiat money.”  Gold bugs confuse symbols with reality and fiat money fanciers confuse wealth with abstractions of value.  Both obsess over the form of money, failing to see that the very essence of its existence is consensual rather than essential.

There is nothing in the essence of gold that makes it money and there is nothing in the essence of paper that prevents it from being money.  All manner of items at one time/place or another have been money because the conditions allowed and the people agreed to define them as money, from sticks to shells to stamped pieces of copper or other metal to beads to paper.  In no case did just any stick, shell or piece of paper do.  It had to have certain qualities or it couldn’t become money.

In one fascinating example, a stick with certain inscriptions would be split in two and the creditor and debtor each took a piece.  No other stick could represent that relationship of value-exchange because no two sticks will split in exactly the same way.  That made the stick parts a unique symbol of the value exchanged.  With gold, the size, ie., weight, of a nugget or shaped coin stands for its exchange value.  In every case of an object that becomes money, its value is designated in such a way that it cannot be altered.  So it is with paper.  With paper money, methods are devised to make it nearly impossible to duplicate without detection, but of course some counterfeiters have been very skillful, which results in a technology race between the legitimate and illegitimate printers of money.

Today, of course, most money takes the form of an electronic entry in computerized accounting systems controlled by banks and other financial institutions.  And that brings on an entirely new level of complexity and exploitability of what at base was a very simple relationship. But, as always, who controls the creation of money is still at the root of the way the money system works.

Because the nation so stupidly gave away the rights to control a fundamental public utility—money—to a cartel of private banks, the Federal Reserve, the creation of money (except for coins, which, trivially, are minted by the U.S. Treasury) is controlled not by public policy but by private banking interests.  “The Fed” is owned by its member big-private-banks yet is politically defined as a quasi-public institution even though it is entirely controlled by the cartel of private banks, except to the extent that the political system can influence its actions, which is almost nil.  Power flows from the banks to the government, not the other way around.

Well, you saw how well that worked out when the federal government essentially gave away the commonwealth by “covering” the bad bets of the world’s biggest gamblers—the Banksters, as I prefer to call them—because their agents, from Treasury Secretaries “Hank” Paulson and Timothy Geithner, Larry Summers, and the rest of the Wall Street gang were very much in control of the political response to the crisis.  These same Banksters had helped steer the congress to do away with the protections against gambling with depositors’ money that resulted from the Great Depression of the ‘30s.  The recent ‘Great Recession’ was the result of the same kinds of financial manipulations as precipitated the great crash, but now with lightning speed of computerized trading and lax limits on holding reserve capital to cover losses, as well as a whole new breed of “financial instruments” which are “derivatives” of complex combinations of debt.  The whole Dodd-Frank “reforms” were a smokescreen to cover continued abuse by the financial elite.

The whole system is, as they say, rigged.  And because it is entirely dependent on generating more debt in order to sustain profit, ultimately all that debt cannot be paid, since it is really a pyramid scheme basing illusory wealth on ever-expanding debt that cannot be sustained.  No, it is not about “the national debt” and “deficit spending” by the federal government, though they are part of the system.  And the “debt ceiling” is pure political theater.  It is about the centralized private control of the public means by which money is allocated to the actual people who participate in the economy as a way of sustaining their lives—through debt—with that private control being exercised in the sole interests of the so-called “masters of the universe,” the Wall Street Banksters and financial deal makers who have no idea what a real economy looks like.  It’s all about the art of the deal which generates paper profit [or, I should say, electronic profit] out of money generated with no other purpose, but which bounds the people to a system of debt over which they have no participation except as victims.

Therein lies the absurdity of the economy for you and me.  Money, the function of which had been to provide a medium for and a repository of actual exchange value—that is, the exchange of real objects and services of value to people in a real economy—has been perverted into a devise for generating false wealth—paper or electronic profit—which is treated as real wealth by the Banksters who control the Economy of the Absurd.