Diary of a Mad Jubilado: (first in a series)

Jubilado Jubilee

“So much to do, so little time.”  That cliché never meant much to me.  The “so little time” part had no meaning.  I was busy with my life and there was always tomorrow.  It seemed as if I had all the time in the world. Careers go fast if you are busy and engaged. University teaching, for example, is not as simple or easy as most imagine if you take it seriously. In my case, like many professors, I was constantly challenged by students who were either ill-prepared or thought they already knew everything there was to know.  Many felt they merely had to get through this class in order to get that “piece of paper.” Any class was just another obstacle to getting the college degree.

Many unprepared students lack not only information about the world and about diverse fields of study; they also lack the critical thinking skills needed to excel in any field. That seems to be no deterrent to the ability of humans to be certain about whatever they happen to believe. Many just do not reflect on how they came to believe what they believe. It is very difficult to teach adults or even post-adolescent college students how to think clearly when most of the forces affecting their lives push them to believe one thing or another regardless of the evidence. Too much education is about accepting knowledge because of the authority behind it, rather than the evidence for it. Yet, many of my students retained their underlying curiosity despite the appallingly poor elementary and high school education that failed to prepare them for “higher learning.”

So here I am, more than a decade into ‘retirement’ now, with so much to do and so little time, it seems, to do all the things I want to do.  The term “retiree” always struck me as an odd word with a rather ominous tone, like “Senior Citizen.”  In some cultures, for example in the few “Blue Zones” around the world, where an inordinate number of elders live beyond 100 years, the local language has no word for “retirement.”

I have always liked the sounds of Spanish.  “Jubilado” is the Spanish equivalent of “retiree” in English.  “Jubilación” is “retirement” in Spanish.  Interestingly, the biblical meaning of “Jubilee” is “a yearlong period observed by Jews once every 50 years, during which Jewish slaves were to be freed, alienated lands were to be restored to the original owner or an heir, the fields were to be left untilled, and all agricultural labors were to be suspended. Lev. 25.” (http://dictionary.reference.com/browse/jubilee?s=t).  It seems that the underlying theme was not unlike our notion of a “vacation,” a distinct break with the ordinary oppressiveness of everyday life. Yet, those long-living denizens of the Blue Zones don’t take vacations, they just live consistent happy lives uncomplicated by industrial modernity.

Jubilee can also refer to the cancellation of all debts by the sovereign in ancient times when the accumulation of debt had become too burdensome and the concentration of wealth to extreme for the economy to function well. Wait, does that sound familiar? We may very well need a jubilee today. (For a fascinating account of debt and money in history, read David Graeber, Debt: The First 5000 Years.)

It all seems a matter of how human groups have defined their relations to material objects in relation to one another. Most folks today look at money and debt as absolutes. They are not.

Nobody has cancelled my debts; thus, I remain the “Mad Jubilado.”

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NOTE: An earlier version of this post first appeared in http://www.aparallelworld.com, a site that brought environmentally conscious consumers together with like minded vendors in their area, until trolls and Russian bots took it down by so disrupting it that it could not continue on its small budget… a sign of the times…

Making Money and Losing It

Ever wonder why you just can’t “get ahead”? Well, it’s all part of the larger scheme of things. Oh, I know, some folks do get ahead in one way or another and to one extent or another. But only the very few – the less than one percent – really make money and keep it or even accumulate enough wealth to leave a sizable inheritance to their children. The number of Americans literally living from hand to mouth has grown astoundingly high, especially since the ascendancy of the new financial elites with the deregulation of financial markets. To understand it all we have to step outside of our ordinary ways of thinking about money, value, and our lives.

In a moral economy, things would be different. But that’s not where we live. Our economic system has devolved from open competition of individual entrepreneurs in wide open environments, to a closed system of centralized economic growth in denial of limits. The perpetual-growth economy is controlled by giant investment banks and hedge funds and runs on debt-based money. That means money is created by debt itself.

On first thought that doesn’t make much sense; money is supposed to represent value, not debt. But that is not how it has been set up ever since the private central banks were given control, indeed ownership, of the creation of money. Instead, money is a product of the strange relationship between the nation and its private bankers. The Federal Reserve System was established as the “lender of last resort.” in 1913. This was meant in part to respond to fiscal crises such as the financial panic of 1907. The other part was a quiet takeover of the money system by the big private investment banks.

Making Money by Indebting a Nation
Some argue that the creation of the Fed as an independent agency was in fact a takeover of the function of a national central bank by the private bankers of the time. That view has significant historical validity. Though chartered by the U.S. Congress, the Federal Reserve System consists of twelve tax-exempt regional Federal Reserve Banks organized and operated as private corporations. Most importantly, the Fed was given control over the creation and lending of money.

Absurd as it sounds – and ever so costly –the national currency is not created by the Treasury. The Treasury only acts as a printing shop for the Fed. In effect, the Fed is a private banking cartel that lends to the government and to member banks the money it creates by generating public debt. So, to conduct its operations, the government has to “borrow” money from the Fed, which sells Federal Notes and Bonds to represent that debt. The U.S. Treasury can only offset that debt by collection of income taxes and other revenue. A lot of technicalities in this process obscure the basic fact that the right of the nation to produce its own money was high jacked by the biggest banks – “members” of the Fed – back in 1913. That has cost us all dearly ever since.

The Federal Reserve issues Federal Reserve Notes and Bonds. These draw interest for the buyer and charge the government, in whose name the Fed issues these debt instruments. So, the money the government ‘spends’ is owed to those institutions which ‘buy’ from the Fed the bonds and notes that signify the debt. One might say that the Fed is a “free rider” middleman. This process indebts the government – that is, the people – for all the currency, whether paper or electronic, that the Fed issues as part of its monetary policy.

Perpetuating Public and Personal Debt for Fun and Profit
The government becomes indebted in its turn to the ‘creditor’ institution or nation that bought the bond, for its face value plus any interest that accrues over time. The Fed is owned by its member private Big Banks, which have a sweet deal we’d all love to get a piece of but never will. The Fed issues credit to the Big Banks, say a billion dollars, and the Big Banks in turn loan out many multiples of the billions it ‘borrows’ from the Fed. Since the crash of 2008, the deal has been especially sweet, since the Fed charges a near zero interest rate. The Big Banks get to charge market rates for multiples of the funds borrowed for next to nothing. Huge profits beget huge bonuses for bank executives, not to reward some kind of executive performance, but for their just ‘being there.’

We should all be so lucky. But we are not. The average person, small business, or even not-so-well connected corporation has to borrow from the institutions run by the financial elite – the Big Banks – in order to initiate a major project of whatever kind. That borrowing had to be paid back with interest, so that whatever is done with the money has to “earn” more money than was borrowed in order to pay back the loan. That is often not easy. Just paying a mortgage seems to take forever. Even at a “reasonable” interest rate for a thirty year mortgage, most folks “pay back” more than double what we originally borrowed.

But in any case, what most people don’t understand is that the result of all this is that more money is always owed than is “out there.” If every loan requires repayment plus interest, where does the interest come from? Well, from “profit” or from wages, if the borrower is lucky. But that profit or wage comes from money already in circulation; that money in circulation was also created as debt. So, the only way for all money owed to be paid back is for more debt to be created, releasing more dollars into the money supply, paying off prior debt.

Reaching the End Game
Sound like a Ponzy scheme? If it does, that means you are paying attention. It is essentially no different than a Ponzy scheme. The whole house of cards stands on a perpetual expansion of debt that enables previous debt to be paid and the system to continue. That is only one of the reasons why the debt based economics of endless growth cannot ultimately be sustained. Debt cannot be expanded indefinitely.

There is another reason the debt-based growth economy cannot continue indefinitely. As with any exponential scheme of expansion, the limits of its environment eventually constrain it from continuing. That is where we are today with reference to “capitalism as we know it” and the material limits of the planet earth.

If you know anything about population growth, you recognize that a seemingly small percentage rate of growth after a few generations results in a very large number of people. From our current world population of around seven billion, growing at a moderate rate, we will soon have a population that by anyone’s measure cannot be sustained on one planet. One additional fact is important. A relatively small proportion of world population participates in the industrial growth economy but everyone else – of course – wants to. That is why more and more people everywhere find it increasingly difficult to “get ahead.” The game is almost over; it has reached its limits. Current world financial instabilities are symptoms. Economies with social purpose must replace mindless growth for the purpose of concentrating wealth in fewer and fewer hands.

Another way is possible and necessary. Money is inherently a public good. It is an inherent right of the nation itself to maintain sovereignty over its monetary system. The central banking system should be nationalized and subjected to public policy rather than be driven by private profit for financial elites in opposition to the public interest. Then, money could be based on credit, properly invested in the public interest, and thereby eliminate most of the false public debt it has caused by having been privatized.

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.

The Found Art of Self-Dealing and the Corruption of Everything

One of the effects of the penetration of money into every realm of life is the corruption of human values. The growing tolerance for, even blindness to, corruption in politics seems obvious. But it seems to pervade both everyday life and business as well.

Corruption is not new. Neither are bribes, theft, or betrayal. Americans used to cheerily compare our public institutions and business practices with those of ‘less developed’ nations considered endemically corrupt in their imputed ‘backwardness.’ When parking on the street anywhere in Mexico, U.S. tourists begrudgingly paid a small fee to a semi-uniformed “policeman” to guard their car. This “protection money” assured them that their car would be there, intact, on their return from shopping. In many “underdeveloped” countries, such services are typically offered by the otherwise unemployed. Americans look down on such activities as reflecting a corruption of the public function, nevertheless are grateful for the service. In the U.S., we prided ourselves for being ‘above’ such petty corruption. In our naiveté, we expected our public servants to perform their functions for a salary and never take bribes. Yet we quietly acknowledge much bigger backroom deals.

The disintegration of naturally formed communities in industrial society has been largely completed. Now we have “gated communities” where nobody knows their neighbor, and “sacrifice zones” where public agencies have abandoned the population. Individuals face a complex world of economic dependence on large institutions. They look forward to a fate based solely on their ability to navigate an economy uncommitted to anyone. With little or no social support, we each confront faceless institutions at work and in public. Sociologists have talked for decades about the ‘atomization’ of social relations.

Market Madness
Society is fragmented into a collection of individuals, each of whom has little if any relationships of commitment over time. We are urged to be committed solely to ourselves as “economic actors” seeking the best advantage in any situation. After all, that is the model of human behavior that has been promoted throughout the industrial era. These conditions of personal life, of course, make people most vulnerable to the power of the elites that control employment along with the rest of the economy. It’s a perfect environment for self-dealing.

Before money became the measure of everything, social norms and values were important – yet non-economic – factors that affected the decisions individuals made. People were morally bound to manage their behavior in certain ways that often served a public interest in sustained community cohesion. Sure, crimes were committed, people cheated, etc. But non-monetary norms of human conduct prevailed in most communities.

The elevation of markets as the paragon of progress imposed heavy costs on human morality and compassion. The virtues of normative communities are not cultivated by markets; the only “market virtue” is the goal of selfish gain. That breaks down bonds of affiliation and caring.

Monetizing Humanity
The assumed good resulting from the “invisible hand” that Adam imagined, does not exist in the fossil-fuel driven industrial era. Giant banks and corporations control both markets and government. Human values are sent to the back of the bus and are simultaneously declared attained. Adam Smith proffered the “invisible hand” as a metaphor to reflect the interaction of merchants and tradesmen in a local community. They bargained and produced goods and services on equal footings. They were also cognizant of community needs, standards, and judgment of their practices. Business conducted in real time in real communities occurred under conditions quite different than in today’s corporate state.

The crowning achievement of the industrial era is the monetization of everything and everyone. You are only as human as the purchasing power your employment or business dealings can demonstrate. That is the social measure of the person. But as Michael Sandel has so clearly shown in his book, What Money Can’t buy,* a full range of the most important of human dimensions from civic virtue to interpersonal honor to community solidarity, cannot be monetized except by the corruption their very essence.

This corruption of human values, of course, is a windfall for the financial, military, and industrial power elites running the corporate state. Community fragmentation and personal selfishness allow them to more easily manipulate populations by mass media indoctrination and massive distortions of the meaning and practice of justice.

Yet, the power of people recognizing the destruction of human values, cannot be overcome by advertising or the phony patriotism of war hysteria. Attention can be diverted temporarily, but people are waking up – as Occupy and the Climate March have powerfully demonstrated – especially as the elites charge headlong like lemmings as if their actions had no bearing on the destruction we all experience more and more.
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* Michael J. Sandel, What Money Can’t Buy: The Moral Limits of Markets. New York: Farrar, Straus, and Giroux.

Money Is Not Speech

What is money? What is speech? We take these concepts for granted and operate as if we know what they are, but do we, really? More importantly, does the Supreme Court understand the relationship between money and speech? Apparently not, or more likely, the Court is in denial about that relationship, for entirely political reasons.

“Money talks.” What does that mean? If money talks, what can it say? Of course, nobody has ever heard money actually speak. It is just a figure of speech to say that money talks – meaning of course that using money exercises power. In our times, money has become the most important factor in determining who gets to speak publicly and what s/he gets to say.

Money and power

Money is not any particular form of communication — or is it? We all acknowledge that money is a medium of exchange for valuing goods and services. So, as we all know, money has power. Is speech a “service”? Certainly, money can “buy” speech. One has only to listen to congressional speeches to know that! Money can be used to control material objects and even to control the behavior of people — including some speech. Why? Money represents value in the abstract and therefore can be used as a form of social, political, and of course economic power. Because everyone agrees to use money as an abstract symbol of value, it becomes inherently valuable in itself. Money contains the power to buy almost anything, including speech. But, of course, “money can’t buy me love.” Some human values may appear to be monetized, but what is bought or sold is really something else. So, such exchanges degrade the human value.

Money communicates value and therefore power over something — almost anything it is applied to. Money symbolizes power and when applied, it exercises power. But does it represent ideas, like language does, or are ideas just one of the things money can exercise power over? What does money communicate — power or ideas, or both?

Money Talks

Clearly, in the industrial world money can be and is used to produce mass communication. That has been enabled by technology. In the days of the founding of the republic, speeches were made in the town hall at face-to-face debates. The power of one’s voice and the persuasiveness of one’s ideas, not a microphone or transmission to other cities, made the difference. Newspapers were entirely local. No radio, no television, no Internet.

Today, political speech is widely distributed. But the speaker or his ‘sponsor’ must pay for the use of the technology required for mass communication. Speech is no longer free, at least if you want to be heard by many. A lot of money is needed to produce mass communication, marketing, etc. Sure, we still have political rallies, but the candidate is usually preaching to the choir. Such staged exercises are covered by the mass media as “political events.” When did you last attend a real face-to-face debate of issues of national importance?

Until it is applied to communication, money is merely abstract economic power — that alone can be a major influence over public policy. But money can used to censor speech and control who gets to be heard. The power of money is used to control the content or the channels of communication in society. Public speech depends on expensive technology to extend the power of ideas beyond the human voice in a face-to-face debate. Speech is no longer free.

Democracy Walks

Money is the exact means used by the corporate elites to control the political discourse, such as it is, in the U.S. today. They use their nearly unlimited economic power to frame so called “public debate.” Our constitutional right to “free speech” contemplated individuals speaking to groups of people in open political discourse. Nobody needed even so much as a microphone or other economic means to extend the reach of their communication.

Corporations are not persons, another cruel joke by the Corporate Court. The founding fathers worried over the potential of corporations to influence politics, even in the eighteenth century. Like Adam Smith, they recognized the potential that even early corporations had to manipulate otherwise free markets. The Supreme Court, with the greatest corporate bias ever, has merely enhanced the existing undue power of corporations over the American people.

Corporate propagandists try to conflate corporations with “the American People.” They are trying very hard to destroy “net neutrality” so that they can profit by controlling the flow and content of Internet communication. The corporate elites already control the content and distribution of ideas on television and the other mass media. We need freedom of speech for persons — over all media. The extended “management” of all public communication by the power elites will consolidate control of speech by the corporate state.

Yes, money is not speech. But the unlimited application of money to control political speech is the death knell of democracy.

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.