Money's Swan Song

In the beginning God created the heavens and the earth.

Well a lot has happened since then.

Our Creator had done some amazing creating through that original sparkle, and has given us the wherewithal to jump in there and participate in the creative playing out of all things in our domain.

The power to create was not given to other species on our planet—only to us.

We humans have done some pretty amazing things with our God-given talents.

After hunting and gathering, we planted, harvested and ate the fruits of our labors.

in the course of history, we have moved far beyond just eating, drinking and homesteading.

It’s been ever onward and upward for us, since we got a hold of this divine spark thing that we call creativity.

We’ve built pyramids and great walls, temples, mosques, cathedrals, skyscrapers, great bridges and machines that move across those bridges.

We’ve built roads, rails, blazed trails, had great successes and fails. We’ve devised tools, schools, lots of rules; we’ve forged implements, arts, coins, currency, and we’ve maintained a steady errancy.

We’ve painted, sculpted, interpreted the real world as works of art. We’ve disrupted, interrupted, corrupted and upended nature itself.

Now our carbonized creation turns—in some ways—against us.

Back at the olden time, when we received the power to cultivate earth, we were instructed to subdue those elements of the natural world that seem to be active against us—like, say, lions and tigers and bears. Such critters we had to subdue, so they would not make mincemeat of us.

Earthquakes, volcanoes, storms, tsunamis, etc.— these adverse forces we could not subdue, so we took shelter. As the ages rolled by, our sheltering instincts developed into elaborate structures.

And we have done pretty well with that. We homo sapiens have taken control of the planet—or at least we think we have. The planet may yet rise up to bite us in the ass. We shall see what happens with that.

A major sea-change that happened along the long odyssey of our progress was: we devised ways to substitute real goods into artificial representations of wealth.

Better known as making money.

Land, food, livestock, clothing, shelter and such commodities that are essential for survival—all these are now exchanged by monies, currencies, paper-backed assets. And the latest thing is: electrons seem to be our new currency.

Our ancestors carved trails out of the wilderness. They gathered grains, sowed seeds, domesticated animals, and sold to neighbors or merchants all the produce thereof.

As those primary goods coalesced over the ages as markets, their value was measured and traded as money. This we called trade. Then we called it commerce, then business, and now. . . economics. We humans invented the system a long time ago because . . . well, because . . . I don’t why.

lt’s just what we do I guess.

For one thing, it made the process of manipulating wealth easier.

In economics, wealth was and is evaluated in terms of dollars or yuan or yen, or marks, francs, drachmas, denarii, zlotys, rubles, pesos, pounds sterling, etc.

Euros are the new kid on the block. They seem to have trouble making that one work.

The difficulty with retaining true value in these currencies is related to the fact that they’re—in real survival life terms—not really worth anything.

They only represent wealth. But they are not really the real thing.

I say the EU is having trouble establishing the value of their Euro. This goes way back.

The Brits, for instance, were having trouble in the 1930’s retaining the value of their pound. It seemed that their constructed currency could not maintain its value compared to gold.

Who the hell can compete with gold?

Gold goes way back.

Way back.

The second chapter of Genesis, for instance, mentions gold.

“The name of the first (river) is Pishon; it flows around the whole land of Havilah, where there is gold.”

I suppose there’s a reason why gold goes way back in our history. Even though you can’t eat it, drink it, or keep your household warm with it, it is . . .

quite shiny.

Beautiful stuff, that gold. Precious!

Back to the Brits. As the world economy was falling apart back in the ’30’s, many savvy persons decided they would trade their British currency—pounds—for gold.

So many savvies were wanting to get back to gold, that the British government quit selling it.

What would happen after such an arrangement?

I think it was that fellow Keynes who figured out that—guess what—the economy just kept on cranking—all the goods and stuff and commodities and products and financial instruments and whatnot—just kept swirling around in international commerce.

The world didn’t stop turning. Business just kept on doing their thing. Rich get richer and poor get poorer and hey what else is new.

What else is new? Nothing. Nothing new under the sun.

Guess what. We didn’t really need gold to back currency! It was just a phase we were going through—the golden age of gold.

Back in ’73, Nixon pulled the same trick as the Brits had done in the ’30’s. He and his Bretton Woods powers-that-be decided we could no longer afford to sell gold for dollars. Too many folks wanted the gold instead of the dollars.

So we see that man-made currencies are not foolproof, and the gold bugs are always trying to make a comeback.

Money is a habit; that’s all. A very old habit.

Folks are born and bred into this modern economic world.  We are commercialized, or socialized (depending on your politics) to just keep spending those pounds and dollars and cents and euros and yuan and yen and SDRs and thusandsuch.

Nowadays we don’t really even use the money any more. Now it’s just electrons flowing around that represent debits and credits.

And that’s why—I suppose— the central banks of the world can keep cranking out their reserves, because the right to assign value is now reserved to them. It has nothing to do with gold or fiscal guarantee.

The central banks, in the fatal footsteps of every financial crisis, have reserved the right to “create money out of thin air.”

I told you we were creative!

The greatest discovery of the modern world:  we don’t even need anything to take the place of gold.

Money is just an old habit we have; we’ll never put it to rest. So somebody has to be “printing” it somewhere.  We spend so much money that all the .govs of the world are running deep debts trying to keep all the citizens fat 'n happy.

There’s so much liquidity in the world today that the dark swan of excess has smooth sailing. 

Someday, some Leninish strongman will come along and dissolve all that debt into even more liquidity.

It will be a meal ticket for everybody. Yes, Virginia, there is a free lunch, doesn’t matter who’s paying for it.

It’s only money.

Glass half-Full

What about this Post-capitalism?

There are a many constructive ideas floating around in the world today.

Some are commendable, others not so much. If people propose plans for making the world a better place, then let’s hear them. Let’s consider those plans.

In our present big picture, the hot-button point of contention seems to revolve around the fate of free-market capitalism, in an age of diminishing planetary tolerance.  Is capitalism as we know it an appropriate framework for just and equitable economic development in our present, allegedly climate-changing world?

Are free-market institutions still appropriate for our collective life in the postmodern 21st-century?

Can free-market capitalism even be retained in our planetary future? Or will it be overpowered by some new 21st-century tamed-down socialism?

Generating from some academic and technocratic quarters, we find revisions of the old Marxian ideology, along with assurances that the world has certainly learned hard lessons through the disastrous failure of 20th-century communist experiments.

At  https://www.socialeurope.eu/postcaptalism-unbearable-unrealism , Paul Mason writes:

    “Moving to postcapitalism does not entail eradicating market forces overnight or accepting the command-planning methods of Soviet economics. The aim is to design a controlled transition in which market forces cease to operate as the primary allocator of goods and services on the planet, in which the state shrinks and the debt mountains are dismantled.”

and

   “In the past 15 years we have built a highly dysfunctional system, which is unsustainable on all traditional assumptions. It is a system of permanent single monopolies, with massive rent-seeking and financial exploitation, the creation of low-wage, low-skilled jobs designed to keep people inside the system of credit and data extraction, and massive asymmetries of power and information between corporations and consumers.”

Now, as a centrist conservative American, I read those above words and they somehow ring true. There is a sense in which I feel there is maybe some realistic MainStreet experience  missing there, but I see that Mr. Mason raises valid points, which are worthy of our consideration.

On the other side of the debate, Jordan B. Peterson has a different take on our world problems and how to solve, or at least address, them.

At  https://www.youtube.com/watch?v=YXgZAdaMtS8&t=35s,      he says:

     “If you’re tilting toward the left, and you’re temperamentally inclined that way—and half the population is—then you have an ethical problem on your hands, which is . . . how do you segregate yourself from the radical policies of the 20th century? “

and

“. . . two things exist in a very uneasy (leftist) coalition in the West—there’s care for the poor, and hatred for the successful.  Those two things are not the same at all . . . and it looks to me that one of the things that really happened when the communist doctrines were brought into play , and also by the way we did the multi-national experiment.  It doesn’t matter where you put these policies into play . . . the same bloody outcome occurred. Didn’t matter whether it was Russia, or China, Cambodia or Vietnam—pick a random African country—or Cuba or Venezuela, for that matter. . . it was an unmitigated catastrophe. That has to be dealt with.  The intellectual left in the West has been absolutely appalling in their silence on the communist catastrophe.”           

Dr. Peterson, the speaker of these words just above, is a Canadian professor of Psychology at University of Toronto.

Down here Stateside, we have a sizable number of Americans who agree with his assessment. That supportive group includes the this blogger.

Back in 1989, freedom-cultivating citizens, such as I, thought we heard the ringing resonance of a Liberty bell when the Soviet Union fell apart and the Berlin Wall came down. We were patting ourselves on the back after those historic events, especially because Kennedy had gone to Berlin in 1963 and spoke:

    “There are some who say that communism is the wave of the future. Let them come to Berlin. . . Freedom has many difficulties and democracy is not perfect, but we have never had to put a wall up to keep our people in . . .”

And then later, Reagan went over there and said:

    “Mr. Gorbachev, tear down this wall!”

Well, the Germans did tear down that damn wall, and the subjects of Soviet domination throughout that terrible empire wasted no time in tearing down—not only a wall— but much more. . . the Soviet Union itself.

Like Humpty-Dumpty it was.

So the question remained: Would they, could they, tear down all that Marxist communist ideology that had built that wall under threat of gulag imprisonment? Could they expose and dismantle the Statist oppression that had built all the gulag walls? and the Stalin statues, and the tanks and the nukes, etcetera etcetera.

That would take a long time, and it has taken a long time. But in some ways, that early 20th-century tide of Marxist oppresso-utopian wishful thinking is seeping back as a kind of theoretical, kinder, gentler socialism.

So the question becomes: is there any part of the Dr. Jekyll Marxian collectivist ideology that is workable and fair? and, as for the Mr. Hyde alter ego: Is there any part of that disgraced Soviet that would creep back as fierce totalitarian servitude?

On the other side of 21st-century civilization, at the same time, and as long as we’re at relative peace in a cooperative globalist attitude, another question arises: What parts of FreeMarket Capitalism are still workable?

Advocates of our free-market democratic republic must admit, for instance, that yes, Virginia, Freedom and free-market capitalism does have its problems. It always has, although those troubles do not necessarily disqualify the free market as a model for economic well-being.

The weak spot in our capitalist framework was exposed in 2008-9, when our financially engineered wall street perpetual profit, speculative machine flew apart, and sent all of us free-marketeers high-tailing it for the exits.

Statistics reveal that since that disruptive correction in the fall of ’08, a stubborn stagnation has taken hold of our economy. Even though the Fed cranks out statistics to reinforce the notion that we have recovered . . .we have not recovered.

You call this a recovery?

No way!. I grew up in the ’50’s; I know what a real recovery looks like, and I worked my way through the ’90’s.I know what a truly busy, productive economy feels like.  And whatever we got now—this ain’t no real recovery.

  This is stagnation.

The Feds got all their numbers trying to convince us that all is well, but the truth is: So many folks are not making enough money to prosper. They’re just gettin’ by. Meanwhile so many speak of a widening inequality gap, and although I don’t really see the world in those “class warfare” terms, I suppose that, in some sense, yes Virginia, the rich are getting richer and the poor are getting poorer.

But then, hey, hasn’t that always been true? We shall see.

 At any rate, let's not get all commie-bent out of shape about it. Just keep busy. Find something helpful to do. As Jordan says, responsibility gives life meaning. You can start by cleaning your room, and thereby making the world a little bit better place.

Glass half-Full

A New Bretton Woods?

We were in Rome about a year and a half ago, as part of a traveling celebration of our 35th wedding anniversary.

One evening as we were lollygagging through the busy rain-slicked streets and sidewalks, we passed in front of a very special building. It was the Rome headquarters of the European Union, or "EU".

I wanted to take a picture of the building's entry, because that is what tourists do--take pictures of important places. Seeking a broader view, I crossed the street. While positioning myself and the phone to snap a pic, the guard across the street noticed my activity. He started waving at me frantically, indicating that what I was doing was not permitted.

Excuse me. I was taking a picture of a public building.

In America, we take pictures of .gov buildings, because we have, you know, a government of the people, by the people and for the people, which means, among other things that the people can take pictures of their headquarterses (as Golem might say.)

Is this not the way you do it in Europe? No pictures of the RomeEU headquarters?

Nevertheless, here is my smuggled pic:

If you squint at my little jpeg here, you may discern the guard's upraised right alarm, a gesture of command intended to communicate a stop order on my touristic activity. It vaguely resembles another raised-arm signal that was in use in Europe 75 years ago, during the regime of Mussolini and that German guy who considered the Italian dictator to be his own puppet.

Or maybe I'm being too cynical about this incident. Maybe the guard was saluting me in some way, acknowledging my importance as an American tourist in the city of Rome.

Now, a year and a half later, this morning, seated comfortably in my own humble domicile, back in the USSA . . . I was pondering the idea of government--whether it is truly "of. . .by the people", or is it something else? Is it, as many citizens insist during these times of tumultuous societal change, actually an institution through which the "1%" (or as they said back in the old days, the "rich and powerful") project their oligarchical manipulations upon the rest of us?

I was thinking about this after reading online an article about how the worldwide financial system that has evolved.

http://seekingalpha.com/article/3993559-back-square-one-financial-system-needs-reset?ifp=0

In this Seeking Alpha blogpost, Valentin Schmid, as "Epoch Times" examines our international monetary system. His analysis appears to be generated from a well-informed position in the world of money, assets and power.

Mr. Schmid raises the question of whether the current (worldwide) debt load can ever be repaid, because there isn't enough "real money" to go around.

This got my attention, because I have been thinking for a while that there isn't enough "real money" to go around.

Haha, as if I knew about such things. I don't know much about money; if I did, I would have more of it.

Anyway, Mr. Schmid's question is answered by his guest interviewee, Paul Brodsky, in this way:

. . . "I would argue central banks lost the ability to control the credit cycle. Some relatively minor event could trigger a series of events that creates the need for a sit-down among global monetary policy makers who finally have to acknowledge publicly that their policies are no longer able to control the system, the global economy, which is based on ever increasing demand through ever increasing credit.

And what might occur is a natural drop in output. So you'll see GDP growth begin to fall. Real GDP growth across the world maybe even be going into contraction and that would spell doom for these balance sheets. And this is not something I'm predicting or trying to time at all, but the natural outcome of that would be a sit-down like a Bretton Woods where arrangements are reconsidered."

https://en.wikipedia.org/wiki/Bretton_Woods_Conference

So what is coming is, perhaps, this:

To compensate for a stalling of global productivity, the movers/shakers of the world may construct a new, top-down rearrangement of the world financial system. The purpose of this revision will be to fix the problem of not enough money to go around. Such an extensive reconstruction as this would be has not been done since the Bretton Woods agreement that was promulgated by delegates from 44 Allied nations in 1944.

In a 21st-century world inhabited by billions of inhabitants, our accessibility to natural resources has heretofore been determined by how many holes we could drill in the ground to extract natural resources; and how many acres of crops we could plant to produce food; how many factories we could build, and so on. . . building an economy to work toward spreading the bounty around.

In the future, however, we will be moving to a "knowledge" economy. Wealth creation will not be about how much you can dig in a day's time, nor how much you can plant, nor what you can cobble together in your back yard or over on Main Street.

Wealth generation in the future will be determined by what you know, so start learning now.

The first three essential things to know are these:

Reading, Writing, Arithmetic.

Well gollee, maybe it won't be such a brave new world after all.

However this thing plays out, if enough of us can master these three skills, .gov of the people, by the people and for the people will not perish from the earth, we hope.

Glass half-Full

The life song of J Alfred Bourgeois

We've worked hard for what we've got;

maybe we're smart and maybe we're not.

Thanks to the courage of long-dead soldiers,

we can grow and prosper and manage to get older.



We've read about .gov by the people, republics, and democracy;

we try to stay decent, clean, and free from hypocrisy.

And yes, we've heard of that Marx guy, and Lenin and whatnot.

but I'm here to say we aint no proletariat.



We don't wanna change the world;

we like stars and stripes in the breeze unfurled.

Dinner on Sundays, work on Mondays, weekends for fun days;

this is what we like, and cultivate in predictable ways.



Jefferson said let's do .gov by the peoples.

We say along with that came letting folks raise their steeples.

Marx, on the other hand said we need dictatorship of the proletariat,

but this home-making bourgeois boy giveth not a plug nickel for all that.



We're happy to be plain ole boojwazee,

with a washer, dryer, car, and a home someday mortgage-free.

There are plenty out their who wanna die for the Cause;

we just like living in freedom under reasonable laws.

Glass half-Full

Ole Uncle Sammy

My uncle Sammy worked hard; he worked every day.

He made good money, and he put some away.

He made a good living; but then he got older

Ole Sam carried the weight of this world on his shoulders.

I was told that in his gathering of wealth,

he had worked the land, done well, and maintained his health.

He managed to save a little more than he needed

so he squirreled it in the bank where his fortune was seeded.

He figured, you know, everybody's got to eat

so he opened a burger joint, it was quite a feat,

because his humble, capital enterprise

eventually become a growing franchise.

And in America, you know, everyone wanted wheels,

so Sammy expanded into more wheels and big deals;

he got things going, built up a good team;

he was riding in style, living the dream.

But then ole uncle Sammy, one day, up and died,

so we laid him aside; he went out with the tide,

No longer an icon on tracebook, nor twittee,

maybe we'll see him in eternity city.

Glass half-Full

Dark Rivers of Dark Money

Seismic moneyanamis hit the fan in a big way in Panama two days ago. Multiple georlnalists are reporting that massive dark rivers of dark money have been detected bubbling to the surface in that central American domain. Surreptitious sources indicate that the ultimate origin of these fluidizing liquidities may be the Dark Side of the Moon, an area of high-flying international magnaminity heretofore undetectable to the common man. To this present time in our planetary history, only one witness of this phenom has ever been reported-- a shadowy figure known to some money-watchers as Pink Floyd.

If these reports are confirmed, it could be that how the money world really works will at last be known, according to Tom OnPointe.

Geornalists pouring over the erstwile infamous Panama Papers in a sort of secret cave in London have detected vast streams of dark money sloshing beneath the streets of London, in the sewers of Paris, and beneath the mysteriously enigmatic monoliths of Moscow. Entry points for these large liquidities have been traced to specific hotspots in the British Virgin Islands, Cayman Islands, Switzerland and now, for the first time we can remember, Panama.

But hey, the Dark Rivers of Panama have been showing signs of volatility for a long time-- since even before Teddy Roosevelt led an exhibition to that star-cross'd country to recover a failed French experiment in canal-building. Boldly sporting a Panama hat, ole rough-ridin' Teddy went down there in 1904 and established yankee hegemony over the sluggish Panama Canal project; he assured the world that within a few years the Atlantic and Pacific liquidities would be flowing freely.

Thank our lucky stars, in the 1914 wake of the completed Panama Canal development, vast volumes of worldly goods began floating uninterruptedly from the east ocean to the west ocean and vice-versa for lo these many years. And you know how human beings are in a situation like that. Wherever you've got vast volumes of worldly goods barging past each other going both ways, you're bound to have vast volumes of financial liquidities flowing as well.

Thanks to the ICIJ, we now know that vast portfolios of them insinuated assets are subterranean, which is to say under-the-radar liquidities swishing ever'wheres from Delaware to Doha to Dubrovnik-- 11 million documents worth, they're reporting, revealing trillions of terabytes of wealth hidden between the slipstreaming electrons of international excessive exuberance, implicating perhaps 689 corporations who are no doubt knowingly transferring magnanimous wealth from them that don't have it to them that do, which is to say like maybe from Lucknow to London or Newark to New York.

Which is to say, like it's always been. Rich get richer; poor get poorer. But now on an international scale.

We have obtained photographic evidence of an allegedly rich nation sucking the monetary life out of a poor country. Apparently this is nothing new on the face of the earth.

So the best the thing a man or woman can do is get him/herself a little back 40 or .40 of terra firma for his family so's he can do a little something with it in case something unforeseen happens or the big bad wolf decides to float in and do business on a liquiditous stream of financial privilege.

News at 11.

Glass Chimera

Time for Soul-searching

America needs to find something else to do besides argue and complain. Each man, each woman has a destiny to fulfill. Get hooked up with some person or organization with which you can at least partially agree; get your hands, your feet, your mind busy, to solve the problems that confound you now. Act on behalf of those whom you love-- those for whom you are responsible; assist those who are responsible for you. If you are in a mess, Big Brother is not going to get you out of it. The government may toss a few greenbacks and food stamps your way, but ultimately you are responsible for your own life. You go-getters out there--no corporation will fill your destiny. If you want to become an integral link in a corporate structure, remember: its all about what you can do for the company, not what the company can do for you. You do your job right and the good stuff will come after many days. Get busy. Look around you. Find something in your vicinity that needs doing, and do it, whether that makes you underpaid, underemployed, or seemingly underutilized. There's a lot of work that needs to be done out there in getting this country turned around from our present dead-end of overinstitutionalism and overgovernmentalization. We need to restructure from the ground up. And I do mean the ground literally. This could involve growing some vegetables or something like that. If you're at a loss as to how to find some direction, take some time for a little soul-searching. That's what I did a few decades ago, and I was never the same afterward. I wrote a song about it: Like Moses, like Martin Luther King, I took a walk up the mountain. CR, with new novel, Smoke, in progress

The Malaise? again?

The question of whether the news is good or the news is bad--

whether America is in decline or not,

whether anything can be done about it or not,

whether we are citizens or are we just consumers,

whether the government must needs be the initiator

of of all our rehabilitative and wealth-generating strategies,

or whether the corporate powerhouses that be are bound

to lead us out of this withering prosperity that so easily distends us,

or whether by some miracle the people shall rise up

by yon legendary bootstraps and from within themselves

and through their own God-given and/or earth-extracted resources

take on the responsibilities and burdens of their own freedoms and

well-being (let us not call it welfare),

whether we shall or whether we will not--

that is the question. My vote is: go for it.



Glass half-Full

Blogenomics and The Economist

What's amusing is that The Economist employs a lyrical framework from John Lennon's Revolution song, to contextualize their current analysis of blogo-economics. While the late Mr. Lennon fancied himself a working-class hero, the clever writers at The Economist fancy themselves as pop-culture revisionists, capable of synthesizing Liverpoodlian sardonics with marginal economics.

The Economist, that notable London rag conceived in the fervor of British mercantilism 170 years ago, has scored quite a smashing insight with its treatment of Marginal Revolutionaries, on page 51 of the current print edition, the last of 2011. While minting out differences between the the three currently relevent blogecons--Neochartalists, Market monetarists and Austrians--this magazine has also managed to expose its own most fundamental blind-spot.

After a page or two of expostulating on the nuanced difference between the two Keynesian perspectives--the Neochartalists and the Market monetarists, the Economist's exploratory prose finally hovers about the Austrian school. Those frugal, post-von Mises thinkers, harboring such "pre-Freudian inhibitions" as they do, argue that central banks distort the business cycle with "malinvestment." The long and short of it is that such overblown, centralized malinvestment distortion diverts precious capital-- which should be opportunized for "long-gestation investment projects"-- to "more immediate gratifications", or short-term stuff. Such as, I presume, the meandering shopping notions of a fickle consumer public.

But what really got my goat--cluelessly intuitive Austrian neophyte that I am--is this statement, which occurred at the conclusion of The Economist's Austrian exposition on page 54 or the article:

"But this malinvestment cannot explain why 21.8 Americans remain unemployed or underemployed five years after the housing boom peaked."

To which I was, like, lol, and like, duh!: Outsourcing!

What's America going to do? What's America going to do now that developing nations are producing, at a third the cost, all those durables that we were cranking out so prodigiously a hundred years ago?

The grand ole days of American industrifest destiny are gone forever! Gone, for the most part, are the washing machine assembly lines. Flownaway are the Maytags and the Whirlpools! Where are the great teeming steam-belching factories of days gone by? Cranking out microwaves and cars and blenders and suspenders and goodness-knows-what-all? Gone to BRICs, almost every one. When will they ever learn? Your unabashedly globalist predisposition doth bare naked your naivete, Mr. Economist.

Back in the day, we used to dig gargantuan tonnages of raw stuff out of the ground and expend vast amounts of capital, labor, energy, and toil and sweat to produce copious goods that were shipped off to Sears and Wards and then Kmart and what not, so that the huddling masses yearning to be free of discomfort and liberated from their meager immigrant existence could graduate to becoming middle class Americans with picket fences double garages dogs in the yard microwaves not to mention tvs and radios and then vcrs, personal computers, xboxes, pet rocks and laptops.

But now? What do we yankess make from nothing now? Carbon emissions? Ha!

Nowadays, about the only thing that Americans produce from raw resources is food: grains and meat, vegetables. The only true wealth that we generate comes from our vast breadbasket of food production, farming and ranching. The third world hath undercut us with their burgeoning new economies, and left us first-worldians in the dust!

Think about that. Its time for us couch potatoes to get back to the earth. Maybe the woodstockian children of God walking along the road (as Joni called them) were on to something: Gotta get back to the land and set my soul (my economy) free. We are stardust, baby! because you see, as Ringo once explained in a car commercial: "This is not your father's Oldsmobile."

Now there's your Revolution, Mr. Lenin! or excuse me, Mr. Lennon. And there, Mr. Economist, is your fourth estate of the emerging blogosphere econs: the fundamentalist school of economics. To whit: People have to eat. And although they may "consume" manufactured goods and services, they do not eat most of them. We cannot digest iPads, nor iPods, nor drycleaners nor hairstylists, nor federal reserve notes, no matter how easily our banks and bigboxes have quanitatively acquired them.

Oh ye media-lobotomized Americans! Food is where its at. Do your due diligence now; prepare to invest in it. Dig into the back .40. Get your hands soily. There's the "real" growth potential with which those NGDP (nominal gross domestic product)-touting market monetarist free-spenders will someday eat their theoretical words.

Glass half-Full

Schumpeter's "creative destruction"!

Several centuries ago, capitalism germinated out of the decomposing European feudalism that preceded it.
Because capitalism became so prolific in its unprecedented capacity for creating wealth, it was simultaneously destructive of the pokey old way of doing things in the feudal world.
.
Creative destruction is not just an operative dynamism of capitalism's beginnings; it is a working principle by which wealth-generating capitalist enterprises compete with each other. Just as any team on an athletic field strives to build up its own score while destroying the opponent's defenses, so does the successful capitalist enterprise hone its productivity and efficiency in order to build its own market share, while at the same time destroying its competitors' efforts to do the same thing...

while expanding more, more, and more, until what began as free-market entrepreneurial wealth creation has morphed into monopolistic constriction that stifles new enterprise.

Ironically, the creative dynamism of capitalism's modus operandi is the very same thing that ultimately sets the stage for its own obsolescence and...demise.
Will Capitalism, in the long run, work itself out of a job, and gobble up fledgling entrepreneurs to the point of snuffing out the very entrepreneurial spirit that give birth to it? Might capitalism shoot itself in the foot, and maybe even, by its own "creative destruction," someday destroys itself?

Suffocate itself with layers and layers of derivatives and credit default swaps? Maybe, or maybe not. We shall see, perhaps in our generation.

Joseph A. Schumpeter, a Moravian/American economist of the 20th century, very cleverly coined a phrase, "creative destruction," to identify this fatalistic tendency of capitalism. Here are a few quotes that I pondered from his 1942 book, Can Capitalism Survive?, which is part of a larger treatise, Capitalism, Socialism, and Democracy.

~"It is true that the facts of industrial concentration do not quite live up to the ideas the public is being taught to entertain about it."

~"The capitalist process pushes into the background all those institutions, the institutions of property and free contracting in particular, that expressed the needs and ways of the truly 'private' economic activity."

~"The capitalist process, by substituting a mere parcel of shares for the walls of and the machines of a factory, takes the life out of the idea of property. It loosens the grip that once was so strong--the grip in the sense of the legal right and the actual ability to do as one pleases with one's own."

~"Unlike any othe type of society, capitalism inevitably, and by virtue of the very logic of its civilization, creates, educates and subsidizes a vested interest in social unrest."

Tonight, Monday night, I was considering these points from Joseph Schumpeter's seventy-years-ago observation, and how he thought that capitalism's ruthless opportunism might ultimately become its demise. Then the ravenic trepidations of another writer, one who had lived a century before Joseph Schumpeter, crossed my mind, and...


"while I nodded, nearly napping,
suddenly there came a tapping,
as of someone gently rapping,
rapping at my chamber door..."

quoth the Capital, More, more, more!

How much more is there?

CR, with new novel, Smoke, in progress

Why I am a Republocrat

The other night Pat and I were enjoying a meal in our home with a couple of dear friends. Our after-dinner conversation turned to heartfelt expressions about past, present and future. In the midst of some shared recollections about previous phases of our life, I wondered aloud about how this idealistic young McGovernite college kid could now find myself, at age sixty, running with a bunch of Republicans.
Then last night, Pat asked me why I am uncomfortable being a Republican. I found myself unable to offer an answer. But today, after some mulling the question over, I collected a few thoughts.

I am in fact not a Republican at heart, although I am registered to vote that way. But that’s because I’m not a dam Democrat either, and wouldn’t want to be caught dead anywhere near their gov’ment-take-all way of doing things.

Here is why:
I believe in the power, proven in our American history, of a free people to do great works. I believe in the limitless possibilities of a free people who, with their individual liberties constitutionally assured, can do what needs to be done, and prosper while performing it, both individually and collectively.
I believe in free enterprise, free markets, free trade, the invisible hand, Main Street, and God.
I believe human life, from its earliest inception , is worthy to receive the protection of the law.

These days, although I empathize with the opportunity-challenged. underemployed Occupy wall street 99% crowd, I also have no complaint with the so-called 1% gathering as much wealth as they can accumulate. The rich cats can only squander so much of the gravy before spreading some of that prosperity around as expenditures and investments, whereby the rest of us 99% can catch a little of the action.
Philosophically, I do not favor the practice of governmental income redistribution, and I surely do not want to see government take over everything-- not health care, not business, not philanthropy, not any of that stuff that good citizens ought to be doing from the abundance of their own hard-earned resources.

Now perhaps you can see why I am not a Democrat, and here’s why I am not really a Republican either.
Beginning about 200 years ago our pioneering American spirit began to focus on settling and developing the north American continent. Figuratively speaking, yankee industry, southern agronomy, widespread entrepreneurship and nascent capitalism took on the challenges of capitalizing and developing this exceptional experiment in democratic/republican nationhood that we call the United States of America.
Led by wealth-seeking industrialists and prosperity-seeking workers, we built in short order an amazing infrastructure of railroads, electricity grids, highways, airways and communication networks. Thousands, yea I say unto thee millions, of folks got in on the action and got a slice of the copious wealth. We were in high cotton for 150 years or so, in spite of a depression or recession or two.
But now we’ve gotten lazy. And I’m not just talking about couch-potato consumers. Now, American business, unwilling to take on the risks—and the sweat and the toil and the uncertainty—of capitalizing the upgraded prerequisite infrastructure for 21st-century prosperity, dithers with profit-obsessive derivatives and credit default swap schemes, instead of venturing out into the new frontiers of what really needs to be done.
The infamous, phantasmic Wall Street, whatever that is, refuses to capitalize for us a way out of the self-destructive oil addiction rut in which we find ourselves cluelessly bogged down. I can’t blame the Dems for taking a stab at these dependencies when our famous free enterprise entities won’t, or can't, take a chance on it. So the self-appointed prophets and the planners and the socialists and the gov’ment do-gooders and the democrats and the intellectual elites want to take on the burdens of what unbridled industry used to do. Maybe they’ve overregulated the captains of industry into neutralized industrial impotence, I don’t know, but now it seems that the Dems want the government to initiate everything. Meanwhile, the Repubs are still dreaming in lala land about bonuses, unfettered capitalism and tax shelters.

If I could, I would cast out both the demonDemo bureaucrats and the corporatublican devils.
What has happened to our business leadership in this country? Have they abdicated the wealth-generating mantle of industrial innovation?
President Reagan, patron saint of the Repubs, said that government IS the problem. But now, thirty years later, that’s only half the picture. We’ve got a new problem: business.
Business is the problem—not enough of it. Why has business shrunk from the profit-possibility challenges of the 21st century? Why have the capitalists conceded the venture-risking function to government? Why? Because there’s not enough money to be made, and too much risk and expense required to do the work that needs to be done. Call uncle Sam, even if he’s broke busted and his mother can’t be trusted. He''ll take the risk; he's got a pump-priming Fed to back him up.
Where are the Rockefellers, Carnegies, Edisons, Fords, Morgans and Watsons of our era? For that matter, where is the Gates, or Jobs, of the next generation?

In Congressional hearings today... Solyndra? Hey, I don’t care about the rhetorical politicized blameshifting and fault-finding. Solyndra was attempting to do the work that needs to be done, before wily Chinese competition cut them out of the emerging solar collector market. Where’s the company that will, Henry Ford-like, put a solar collector on every roof by capitalizing mass-produced affordability in that sector? Where’s the UAW that’s willing to cut a deal so that every half-prosperous American can afford to put an electric vehicle in their garage? Where's the bold corporation that will take a chance on new-tech American bullet trains?
It almost appears that American business, labor and industry has outlived its usefulness. How can that great trail-blazing entrepreneurial thrust of ages gone by be recovered, and recycled?
Don’t get me started; I’m a Republocrat, and dam proud of it.

Glass Chimera

The Working Principle of Jubilee

In ancient Israel, the land was understood to be a posession of God, with its owners being stewards, or caretakers. When a parcel was sold by one Israelite to another, its transferrence was considered a lease of the land's use--that is to say, a sale of future crops therein--not an absolute ownership, since that domain was reserved to the Creator alone.

In order that the people of God might establish a manageable economy, their Creator mandated a fifty year cycle--a system of seven revolving seven-year periods, plus one extra year, later called the (50th) year of "jubilee." By this revolving arrangement the natural inclination of human productivity toward inflation would be neutralized with a built-in systematic deflation. A sale of land in year 1 of the cycle would obstensibly be worth 49 times its value in year 49, since 49 prospective crops were understood to be the virtual substance of the transaction.

Furthermore, the working out of this economy also required that existing debts among Israelites be cancelled every seven years, and also that indentured servants or slaves be freed in that same seventh (sabbath) year. In the 50th year, at the end of the cycle, the land itself was returned to its original family of ownership of fifty years ago.

By this means, incentives for upward mobility of productive people were woven into the economy, and periodic debt forgiveness eliminated accruals of huge, unsurmountable debt among the working people. Accumulations of vast landed estates and monopolistic entities were also prevented, if the system was working as the Creator had designed it.

In this way, the followers of God were set up to prosper, both individually, familially, and collectively, according to the respective levels of their own chosen productivity and stewardship. And a constant deliverance of the poverty-stricken (unemployed) persons from a poorhouse fate would preclude a permanant underclass.

In real time, it didn't exactly work out that way, but the theoretical principles of Sabbaths, Jubilee, systematic deflation (not as bad as it sounds), and debt forgiveness might be worth considering in light of our presently hyper-leveraged circumstances.

The principle of regular sabbath renewals goes back to God's original creative work as it is figuratively documented in Genesis. God revealed himself to humans as a Creator. A definitive part of that creative process included rest and introspective recovery for the sake of developmentally corrective alignment.

If you care to learn more about this divine economy, and perhaps to consider its applications to modern existence, read Leviticus 25 and Deutoronomy 15, in the Bible.

Glass half-Full

There's funny money in them thar hills

What's funny is that, every now and then in history, gold re-establishes itself as the de facto invisiblo reserve currency, in spite of what the central bankers and talking-head journalists of the world try to do otherwise.

We know that democrats, socialists and populists do not like this trend, but the sequestered "rich", who lurk acquisitively in the holds of their yachts and in the shadows of their McMansions, do like it. The rich get richer and the poor get poorer. So what else is new.

All this talk about dividing folk into classes and then setting them against each other is Marxian boilerplate hot air to inflate riotous passions and fiat currencies. And although there is certainly some truth to it, all this class-identity disruptive rhetoric is no excuse for rabble ruffians to be running roughshod over small mainstreet business establishments in Wisconsin or Philadelphia or London or wherever the discontented are roused from their couches. Nor is it defensible moral fodder for severing privately-owned, publicly-utilized fiberoptic communication lines.

Back in 1896, William Jennings Bryan pointed out to his grassroot-gathered supporters that there are two types of government:

There is the (paraphrasing) Republican trickle-down type, who legislate to make the well-to-do prosperous. Then the wealth ostensibly drips down to everybody else. You've heard of this; the analogy became widespread during the Reagan years. I would point out that Marie Antoinette had, back in 18th-century France, infamously embodied the upper end caricature of this economic arrangement when she had heartlessly uttered the slogan of the Bourbonites, Let them eat cake.

But here in America, a hundred or more years later, William Jennings Bryan described his second category of government as the (paraphrasing) Democratic percolate-up type. They legislate to make the masses prosperous. The wealth then percolates up from the laboring, resource-driven productivity of the people, and thus nourishes the upper social regions as it passes through industrially.

And the esteemed Mr. Bryan said, famously, at the Democratic convention in Chicago in 1896, that the rich Republican crowd were trying to nail the working folks to a cross of gold by insisting on the rigid gold standard instead of the more malleable, accessible silver standard.

Though he was an fiery orator and a charismatic leader without parallel, William Jennings Bryan lost that 1896 Presidential election to the Republican, William McKinley. And then they had, amazingly, an uninstant replay four years later when McKinley was re-elected in 1900.

That 1900 election was a kind of sitcom pilot for the cyclical reruns that would characterize much of 20th century American politics, especially the Bush-Gore contention that came exactly a hundred years later in 2000.

Dems and Repubs are always at each other throats, some times more than others. Just now though, the fireworks, rhetoric and bluster seem to be intensifying. The Dems see their liquidity-easing policies as justified, beginning a third of the way through the 20th century, by their anointed prophet, Maynard G. Keynes--or excuse me, that's John Maynard Keynes. Now Krugman and Reich and that stimulus-addicted crowd want to liquify the rigid constraints of the bogeyman Corporate "rich" so that the greenbacks will percolate, William Jennings Bryan style, up through the fissures of job-generating governmental largesse. Those fissures should be facilitated and regulated by community organizers and unionbosses and government employees instead of, say, corporate directors, "rich" investors, and Texans.

While everybody is arguing about politics and money, as if there were a difference between them, the smartest guys in the room (or so they think themselves to be and they may be correct in their assessment) are buying gold like crazy.

Those gold-acquirers are looking for some incorruptible way to consolidate their wealth into a specie that escapes devaluation. They are buying the precious metal now because, well...

Who you gonna call when you need some reál value?, amidst debt crisis in America, sovereign debt precipice in Euroland, and the Chinese, who are bellyaching because all their meticulously-gathered dollars are being devalued, and their renminbi is still yuaning like an adolescent who just got up at noon and stumbles onto the world monetary stage. Who you gonna call? Ben Bernanke? Ron Paul? Angela Merkel? Who's the grownup in the room? Harry Reid? Pat Toomey?

So I think it inevitable that the gold standard in some form or another is probably going to re-emerge, as has happened cyclically in the histories of human commerce, in spite of all the special drawing rights and myriad currencies that float flotsam-like upon the oceans of global liquidity. And I suppose that all those day-trading smartest guys, riding high on their speculative see-saws of keyboard frenzy, in bubblesome combo with the methish high-freq hedgehogs, will emerge as the new kings of the western-hemisphere hill when th detritus of international wealth settles into a pile, two or ten years from now.

Or maybe all of commerce, accounting, and wealth will go electronic, and those elusive gold reserves will be soldered as conductors into smart circuitboards that will determine every person's caste, class and purchasing power when they're standing in the checkout at World Mart.

... while Horatio Alger hides in an ally somewhere near MainStreet. Or, if you're a Brit, HighStreet.

I'm not saying we should get back to the gold standard as a means to establish predictable value in the world marketplace. God knows I don't have any of the stuff, except for the little ring that's been on my finger for thirty-one years (which is the true wealth in this life.) But I do know that numerous entities and persons with assets are buying gold like its goin out of style, as it has done numerous unsustainable times before. This feverish demand for the precious yellow stuff is driving up the price up to boot, in anticipation of fiat paper descending to its authentic, incendiary value.

Somewhere, somehow, when you least expect it, the battle between real wealth and perceived wealth will be settled in a showdown, maybe at high noon in the OK corral, or maybe in your own backyard.

Got heirloom seeds?

Glass Chimera

Do you know where wealth comes from?

Where does wealth come from? Is it doled out from the government? Does it begin with entrepeneurs? Does it originate in the hearts and minds of enterprising people? Does it grow up from the ground, to be harvested by farmers? Does it lie inside the earth, to be uncovered by miners? Is it flowing in the rivers and tides, to be captured by engineers? Is wealth residing in the gray matter between your ears? Is it somewhere between your legs? Does it arrive as a monthly check in your mailbox? Does wealth await you in a golden bowl at the end of a rainbow?

This wintry morning, I ponder these questions while caught up in the current philosophical conundrum that seeks to discover the key to a productive life. Glimpsing into the lives of a few different people whom I know or have known, I find:
Person #1: "Jan" has had some bad luck. Jan is single, but was once married. Jan has kids, but sees them only occasionally. Jan has a disability, and collects money from monthly checks that come in the mailbox. Jan enjoys smoking cigarettes and watching TV.
Person #2: "Pat" has made some constructive choices. Pat has had a faithful spouse for many years, and a few children who are now grown. Pat has operated a small business for many years, employing an average of five or so people for most of those years, although the business is now quite slow. Pat also has a home-based craft/hobby which may contain some income-generating potential.
Person #3: "Michel" works as a dishwasher at a restaurant, and has done so for many years. Michel was married for a long time, and helped to raise spouse's kids from a previous union. In the spare time, Michel enjoys smoking cigarettes and watching TV.
Person #4: "Yves" is a professor, teaching business courses at a large university. Yves has tenure, and is generally well-regarded by students and faculty. Yves is divorced, has no children. But Yves always has some hot prospects. Yves enjoys skiing in winter and boating in summer, and appreciates wines.
Person #6: "Jo" has been a shift supervisor for many years with a large apparel-manufacturing company, but Jo was laid-off about a year ago. Being on extended unemployment benefits has been an ordeal for Jo because Jo's identity was all tied up in the position at work. Jo has never married, but enjoys fooling around and likes beer.

Which one of these individuals has the best chances of producing wealth and enjoying it? Why?
I'm wondering about this as I prepare to go and dig the car out of the snow.
Perhaps wealth is like a loaf of bread that you can break or slice and pass among friends. It may be a fine wine that is savored from the brim to the dregs. Wealth could be like, you know, dessert--you can have your cake and eat it too.
Who knows, wealth may be just a state of mind. If you have any thoughts to share about this situation, please let me know.