The trillion dollar coin actually represents one of the most important principles of popular prosperity ever conceived: the creation of money by sovereign governments, debt-free.
Last week on “The Daily Show,” Jon Stewart characterized the proposal that the White House circumvent the debt ceiling by minting a trillion dollar coin as an attempt to “just make shit up.”
Economist and NY Times columnist Paul Krugman responded with a critical blog post accusing Stuart of a “lack of professionalism” for not taking the trillion dollar coin seriously. However, Krugman himself had called the idea “silly.” He thought it was just less silly — and less dangerous — than playing with the debt ceiling, which was itself an unconstitutional shackle on the Treasury’s ability to pay debts already incurred by Congress.
Stewart responded on January 15 that he stood by his “ignorant conclusion that a trillion dollar coin minted to allow the president to circumvent the debt ceiling, however arbitrary that may be, is a stupid f*cking idea.”
It’s all good fun – or is it? Most commentators have missed the real significance of the trillion dollar coin. It is not just about political gamesmanship. For centuries, a secret battle has raged over who should create the nation’s money supply – governments or banks. Today, all that is left of the US Treasury’s money-creating power is the ability to mint coins. If we the people want to reclaim that power so that we can pay our obligations when due, the Treasury will need to mint more than nickels and dimes. It will need to create some coins with very large numbers on them.
To bail out the banks, the Federal Reserve, as head of the private banking system, issued over $2 trillion as “quantitative easing,” simply by creating the money on a computer screen. Congress, the White House, and the Treasury all rolled over and acquiesced. When it was proposed that the government bail itself out of its budget woes by minting a $1 trillion coin, the Federal Reserve said it would not accept the Treasury’s legal tender. And the White House again acquiesced, evidently embarrassed to have entertained this “ludicrous” alternative.
Somehow we have come to accept that it is less silly for the central bank to create money out of thin air and lend it at near zero interest to private commercial banks, to be re-lent to the public and the government at market interest rates, than for the government to simply create the money itself, debt- and interest-free.
The banks obviously have the upper hand in this game; and they’ve had it for the last 2-1/2 centuries, making us forget that any other option exists. We have forgotten our historical roots. The American colonists did not think it was silly when they escaped a grinding debt to British bankers and a chronically short money supply by printing their own paper scrip, an innovative solution that allowed the colonies to thrive.
In fact, the trillion dollar coin represents one of the most important principles of popular prosperity ever conceived: national debt-free money creation. Some of our greatest leaders, including Benjamin Franklin, Thomas Jefferson, and Abraham Lincoln, promoted the essential strategy behind it: that debt-free money offers a way to break the shackles of debt and free the nation to realize its full potential.
We have lost not only the power to create our own money but the memory that we once had that power. With the help of such campaigns as Occupy Wall Street, Strike Debt, and the Free University, however, we are starting to re-learn the great secret of money: that how it gets created determines who has the power in society — we the people, or they the bankers.
It is no secret who has that power today. In the great bailout of 2008, banks were rewarded for making irresponsible and fraudulent gambles in the subprime mortgage scandal, with no one serving time in jail. Then there was the robosigning scandal, in which banks committed criminal fraud and came away with a slap on the wrist. Now we are seeing the LIBOR scandal unfold. While a commoner might get 10-20 years for robbing a bank, bank executives get huge bonuses for robbing us.
We may rail against the banks and demand change, but nothing will change until we grasp their fundamental secret, the foundation of their power: that those who create the nation’s money control the nation. By mechanisms explained elsewhere, nearly the entire money supply today is created by banks.
Remembering Our Roots: A Refresher Course
Benjamin Franklin was called called “the Father of Paper Money.” He argued before the British Parliament that government-issued money had allowed the colonies to escape the yoke of debt, to thrive and grow. The king, urged by the Bank of England, responded by forbidding all new issues of paper scrip. The colonial economy then sank into a depression, and the colonists rebelled. They won the revolution, but the power to create money was lost to a private banking oligarchy modeled on the one dominated by the Bank of England.
Fourscore and six years later, President Abraham Lincoln boldly took back the money power during the Civil War. To avoid exorbitant interest rates of 24% to 36%, he decided to print money directly from the US Treasury as US Notes or “greenbacks.” The issuance of $450 million in greenbacks was key to funding not only the North’s victory in the war but an array of pivotal infrastructure projects, including a transcontinental railway system.
Lincoln was assassinated, however and,the greenback program was quickly discontinued. Repeated popular attempts to revive it failed. In 1872, according to Lynn Wheeler in Triumphant Plutocracy: The Story of American Public Life from 1870 to 1920, New York bankers sent a letter to every bank in the United States, urging them to fund newspapers that opposed government-issued money. The letter read in part:
Dear Sir: It is advisable to do all in your power to sustain such prominent daily and weekly newspapers . . . as will oppose the issuing of greenback paper money, and that you also withhold patronage or favors from all applicants who are not willing to oppose the Government issue of money. Let the Government issue the coin and the banks issue the paper money of the country. . . . [T]o restore to circulation the Government issue of money, will be to provide the people with money, and will therefore seriously affect your individual profit as bankers and lenders.
Bank-created money (which now includes electronic money) could be rented at a profit to the people. The “people’s money” was limited to coin, which today composes less than one ten-thousandth of M3, the broadest measure of the money supply.
Lincoln’s assassination and the abandonment of debt-free greenbacks effectively marked the exchange of one type of slavery (race-based) for another (wage- and debt-based). As a result, the American government and American people are so heavily mired in debt today that only a radical overhaul of the monetary system can free us.
Gimmick or Game-Changer?
That is the real context and backstory of the trillion dollar coin. The stakes are much higher today than just fending off the debt ceiling. We the people need to take back the power to issue our own money, and coins are the only means left to us to do it.
The idea of minting large denomination coins to solve economic problems was evidently first suggested by a chairman of the Coinage Subcommittee of the U.S. House of Representatives in the early 1980s. He pointed out that the government could pay off its entire debt with some billion-dollar coins. The Constitution gives Congress the power to coin money and regulate its value, and no limit is put on the value of the coins it creates. In Web of Debt (2007), I suggested that to solve the government’s debt problems today these would need to be trillion dollar coins.
In legislation initiated in 1982, however, Congress chose to impose limits on the amounts and denominations of most coins. The one exception was the platinum coin, which a special provision allowed to be minted in any amount for commemorative purposes.
An attorney named Carlos Mucha, blogging under the pseudonym Beowulf, proposed issuing a platinum coin to capitalize on this loophole, after hearing me mention the trillion dollar coin in a Thom Hartmann interview. At first it was just an amusing exercise. But with the endless gridlock in Congress over the debt ceiling, it got picked up by serious economists as a way to checkmate the deficit hawks.
Philip Diehl, former head of the US Mint and co-author of the platinum coin law, confirmed that the coin would be legal tender:
In minting the $1 trillion platinum coin, the Treasury Secretary would be exercising authority which Congress has granted routinely for more than 220 years . . . under power expressly granted to Congress in the Constitution (Article 1, Section 8).
Warren Mosler, one of the founders of Modern Monetary Theory, reviewed the idea and concluded it would work operationally. The funds would simply be new reserve balances at the Fed rather than new Treasury securities.
Joe Firestone pointed out that the trillion dollar coin could solve the government’s debt problems once and for all, putting was in its grasp the power to replace austerity with the abundance enjoyed by our forefathers.
The trillion dollar coin can raise cries of “hyperinflation!” It evokes images of million-mark notes filling wheelbarrows. But as economist Michael Hudson observes:
Every hyperinflation in history has been caused by foreign debt service collapsing the exchange rate. The problem almost always has resulted from wartime foreign currency strains, not domestic spending.
Prof. Randall Wray explains that the coin would not circulate but would be deposited in the government’s account at the Fed, so it could not inflate the circulating money supply. The budget would still need Congressional approval. To keep a lid on spending, Congress would just need to abide by some basic rules of economics. It could spend on goods and services up to full employment without creating price inflation (since supply an d demand would rise together). After that, it would need to tax — not to fund the budget, but to shrink the circulating money supply and avoid driving up prices with excess demand.
Time to Take Back the Money Power
The current economic crisis cannot be solved with the thinking that created it. There is simply not enough money in the system to fund the services we desperately need, pay down the debt, and keep taxes affordable. The money supply has shrunk by $4 trillion since 2008, according to the Fed’s own website. The only solution is to add more money to the real, producing economy; And that means some congressionally-mandated entity needs to create it, either the Fed or the Treasury.
The Fed has declined. In flatly rejecting the Treasury’s legal tender, the Fed as representative of the banks is asserting itself as outranking the elected representatives of the people. If the Fed won’t acknowledge the coins created by the government, perhaps the government needs to charter a publicly-owned bank that will.
We have a chance today to end the charade of big money gridlock politics, as well as the reign of the big banks. We have the power to choose prosperity over austerity. But to do it, we must first restore the power to create money to the people.
________________
Ellen Brown is an attorney and president of the Public Banking Institute. In Web of Debt, her latest of eleven books, she shows how a private banking oligarchy has usurped the power to create money from the people themselves, and how we the people can get it back. Her book The Buck Starts Here: Restoring Prosperity with Publicly-owned Banks will be released this spring. Her websites are http://WebofDebt.com, http://EllenBrown.com, and http://PublicBankingInstitute.org.
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I very wise person once observed that people learning what money is would be as significant in society as learning to read and write. Let us all hope people will learn what money is and not be lulled into only knowing what can be done with it.
The Trillion dollar coin debate symbolises just how the USA today deals with it’s problems. Financial duplicity, accounting fraud, a neutered legal system and a lack of moral leadership from the top down.
I “like” the way The FED said they would refuse to accept the Treasury’s legal tender, while their printing presses churn out counterfeit $100 dollar bills by the millions.
I’ve stated here previously that a cage full of monkeys could do a better job than the Congress. Well I looked up the collective noun for a group of Baboons, and guess what, it’s a CONGRESS of Baboons.
That is such excellent and hilarious research Brian, that the English language uses the word “congress” as a collective term for a group of baboons, a collective like a “school of fish”, or a “pride of lions”.
As found in the “Urban Dictionary,” baboons are… “the loudest, most dangerous, most obnoxious, most viciously aggressive and least intelligent of all primates.” This definition describes the “primates” in our congress very well, and in addition, congress is the place where lobbyists (another group of primates more akin to bonobos) go to buy their laws. We are most profoundly getting screwed.
Hi Calliope. I recently responded to an article in the WSJ Market Watch, to the fact that the 1st Regents Bank of Minnesota had gone ‘bust’.
Apparently there have been many, many small banks go under in recent times. This confirms my theory that what is happening, is a deliberate move to concentrate Banking in America into “the hands of a few”
I enquired as to how much QE3 had the FED pumped into the Bank before it failed. It seems that smaller regional banks in America do not receive QE funds, and apparently QE funds only go to the big Wall St Banks.(Someone correct me if this is wrong please)
The Bank bailout just keeps getting uglier every time I look further into it. You are absolutely right “we (the USA people) are most profoundly getting screwed”
The “neutered legal system” I referred to above “The Attorney General” and the “Dept of Justice” need to answer a lot of questions about their failure to uphold justice in the USA.
Checkout the Wall St – Zionist connection.
You will discover WHY America is being bankrupted & by WHOM.
Barry, of course you are correct, except you seem to think it is just the USA, it is not. Going forward from here, what does it mean when there is a concerted effort to centralise control in the hands of people who appear to be working against the interest of the population at large?
Richard, you are right of course, but the worst criminality seems to be occurring in the USA (and London), but the problem is worldwide to a greater or lesser degree.
Richard, I agree. The worst criminality is in the USA and London, but to a lesser extent in other countries as well.
When people get pushed too far, and lose their jobs and their homes (and their dignity), as well as their faith in the system, things could turn really nasty.
Brian – Keep a close eye on Greece for a glimpse into the future. It is an example of a government clinging on to as much power as possible regardless of the collateral damage. I don’t think Greek government beliefs are so far removed from other so called “capitalist” countries. Greece is the canary in the coal mine for all people whose government is over indebted and whose politicians are closely connected to large multinational banks.
The reforms we seek in banking will depend on The People having sovereign authority over banks’ charters. That will require a firewall between corporation and state similar to the separation of church and state. The following amendment will restore that sovereignty and requires only lip service until you’re asked to sign a petition and vote *Yes* to ratify:
28th Amendment
“Corporations are not persons in any sense of the word and shall be granted only those rights and privileges that Congress deems necessary for the well-being of the People. Congress shall provide legislation defining the terms and conditions of corporate charters according to their purpose; which shall include, but are not limited to: 1, prohibitions against any corporation becoming so large its failure would pose a threat to national security or harm the general economy; 2, prohibitions against any form of interference in the affairs of government, education, and news media; and 3, provisions for civil and criminal penalties to be paid by corporate executives for violation of the terms of a corporate charter.”
Corporations are not recognized under the constitution. That is why a corporation cannot be organized under federal law; they can be created only under state law. That is why it was silly for the USSC to declare them people when a corporation is not even recognized as existing in the constitution.
Under this, corporations would come under federal jurisdiction. Mom & Pop, main street, local and regional corporations would probably remain under state administration, but that would depend on how it was delegated by Congress (The People).
Add: corporate directors to executives as those individuals to be personally liable for corporate malfeasance & criminal acts. In most cases, it is the the board of directors who control the company and its CEO.
Good point: definition of “executive”. Would substituting “managers” then include boards of directors along with executives?
A simple admendment. The 28th Amendment “Corporation are persons as such they are subject to The Rule Of Law. They are to be held liable for any violations of civil or criminal law without exception.”
“I will believe corporations are people when Texas executes one.”
Corporations are not persons. Corporations are considered “fictious persons” as a matter of legal convenience. While it may be convenient for lawyers to treat them as such, it is not convenient for the People to suffer the consequences of corporate hedgemony thus created.
Nominally, corporations can be prosecuted, but a minimal investigation into “regulatory capture” will expose the folly behind trying to hold an abstract responsible (for anything).
If we can’t convict a fictitious person we must abolish its personhood and define its legal attributes for purposes of assigning responsibility and culpability. Their legal definition and status should be subject to Congressional approval under the Constitutional provision granting it sole authority to issue Letters of Marque.
What we have now is pirates granting themselves those Letters of Marque and using that sovereign authority to build an economic Empire totally independent from the sovereign nation whose military it co-opts for personal gain.
Get the picture?
The $trillion coin could just as easily be cyber digits from Treasury to the NY Fed, but, to the wise, it again illustrates the massive monetary fraud by the banking crime syndicates and their government employee accomplices. This is, and always has been, a law enforcement matter, not an economic one.
[…] This article first appeared at Web of Debt. […]
Excellent! I like the idea of using trillion dollar coins to pay off the debt illegally owed to the Fed and then telling them to go pound sand!
Money power(seignorage) should belong to the public, not to the private banksters!. Absolutely!
Money supply to the economy as debt means the creditor has control over the whole nation. Now is the time for the nation to refuse to get money supply as debt.
Debt free money supply without causing hyper-inflation is possible if we stand firm on basic principles:
A sovereign nation should have the power(authority) to tax its people, to issue its own money, or to borrow money from others.
Of course it has the power to charter banks.
Its central bank must be nationalized.
Accounting rule for cash(legal tender) must be same to every player in the ecconomy – individuals, corporates, governemnts, and banks too. No more fractional reserve!
Only the central bank can create credit.
Recent announcement from UK governemnt that BoE will buy up to 25% of national debt from the market with newly created money gives a good example.
This concept should be revised however: Interest rate for national debt must be same as that of central bank fund. Central bank should be able to buy unlimited portion of outstanding national debt untill its yield is pulled down to the target rate of inflation.
A very valuable work, Ellen; thank you!
We suffer under fundamental fraud in having a “debt supply” that our leaders lie to us is “money.” Debt-free money can pay the national debt, and government can become employer of last resort for infrastructure investment. With government-created money and/or credit, we nearly instantly have no debt, full-employment, and the best infrastructure we can imagine.
An area of leverage for economic reform is arrest and removal of our “leaders” in more public-obvious areas of War Crimes in torture and unlawful Wars of Aggression. When “leaders” in the “Big 6” corporate media are also removed for lying to the world about War Crimes in literally and figuratively “covering” them, public education on accurate economic data for the creation of what we use for money can quickly give us options of value that Ellen documents.
Then we can all join Jon Stewart in laughter when our tragic-comic debt-present becomes history in a future of creative abundance.
There’s some great ideas there Carl. The “Leaders” in the “Big 6” corporate media have failed completely in their duty to investigate, and report what is really going on in govt and corporate America. They are a disgrace, and should be looking at charges of Treason, for aiding and abetting America’s decline.
With enough study a citizen can learn what a bank is and when it was invented and by whom. They will then understand what money is and who invented it.
If they are fearless, they will then learn what government is and who invented it.
Ladies and gentlemen, banks, money and governments were specifically created with intent. A bank, a government or coin didn’t just pop out of human history. They were all specifically designed to achieve an end.
The scary thing about it all is people in Greece are suffering horribly for no reason other than a “shortage of money” has created a need for “austerity measures”…what?! Don’t you just hit a computer button and loan it out like the last 150 years? The Greek government is a welfare state that supposedly has run out of money to give to it’s citizens. Wow, they should read this blog. I’d laugh out loud if i didn’t personally know people who are getting screwed simply because the Greek bankers decided to stop creating fake money for a year or two.
A trillion dollar coin? Doesn’t it just maintain the charade? Each country has a privately owned central bank, won’t the whole thing just go kablooey if the US debt goes away?
What will CNN have to talk about every new years? This year it was a “fiscal cliff..”.worse than the drive in movies when I was a kid. “It is coming to get you and then throw you off a fiscal cliff…” The blob that ate Chicago” was way better.
John Stewart, a television comedian, has shot down the trillion dollar coin…Horrors! Johnny Carson’s replacement is now responsible for economic policy. TV is in charge now.
I think the grand debate and the war on the fed needs to stay in place to keep everyone occupied while the system of money, government and banking remains comfortably in place.
Get a group together in your own state. Go to your state treasurer. Have him/her show you their treasury operations. Go home read a book on banking. That’s right! Each state already has it’s own bank and it is fully operational…they just call it their state treasurer’s office and unlike the banks that service your state treasury are not allowed to make loans/create money.
Now, form a movement to get the state treasurer’s office chartered as a bank and eliminate all state debt and permanently stabilize credit facilities in your state. Then do a documentary and send it to the poor Greek people so they can do it to….those people are being hurt very badly for NO reason.
Good Lord, do you know who invented central banks in the first place? Do you know who owns them …all? Ask Ellen, she knows.That’s right the same bunch owns them all. Way scarier than a drive in movie.
Now go get your own state bank….way less frightening that a TV host telling us our business.
Thanks for this article.
I recommend everybody to watch the video Money Master (http://www.youtube.com/watch?v=r_j_-uJCIU4) where this essential topic is discussed at length.
[…] Brown – The Trillion Dollar Coin…Joke Or Game-changer? […]
[…] Brown – The Trillion Dollar Coin…Joke Or Game-changer? […]
Well, isn’t this one reason why we, the U.S. has a military? Problem also is the fact that our once honest government is complicit with the heist of the people and our freedom. The solution is simple as it is doable, however it will involve the use of military force by means of an insurrection. Our police force will need to wake up as well. Additionally, a peoples militia will need to be rapidly organized. Treason has been committed and it’s time to DEMAND accountability! Blood shed must be averted! But, it’s a question of ” First Blood.” For this, the word of Jesus Christ must be enforced. “Give back what you’ve taken from the poor honorably and humbly. Then seek mercy. Here, Jesus is not enforcing judgement by the people. The Judgement is HIS and HIS alone. That is by far the better alternative. Everybody wins. However, if instead, opposition with violence is employed by the offenders then bloodshed is imminent. Remember the very word government is Satanic. Govern=control and Mente=mind therefore Government is mind control. Fact! Regardless, what the Apostle Paul wrote the translation is wrong. And that is governments of the world do not sit on God’s shoulders. Quite the opposite. Authority does, and there’s a difference. Au meaning [golden] is the golden word of God! Those who rule according to the infallible word of God. Governments on the other hand will be trampled by God’s foot. See Professor Michael Hoffman’s lecture on youtube about usury. I don’t see what’s so complicated here if one does one’s research. To borrow a phrase from the important film ” Willy Wonka and the Chocolate Factory” and as Gene Wilder said regarding breaking solemn rules. Key word. SOLEMN…” It’s all there crystal clear black and white. YOU STOLE!”
Now have a look at the 10 Commandments.
Cute idea about “government” meaning “mind control,” but not true: the “ment” here is just a suffix forming a noun, like in “movement.”
Far from government being necessarily evil as you imply, government is necessary and is ordinarily a tool for good, human cooperation institutionalized, the protector of rights and promoter of the commonweal, tho, as you say, when it has been captured it must be overthrown.
Uh, hey Ernie, Can anything move sentiently unless willed upon?
Can a brain dead person move? No! And the latin phrase is mente
not ment as you’ve indicated.
Andrew–not according to Websters New World Dictionary or Online Etymology Dictionary.
Alright. You’ve forced me to look into this more. Thank you.
http://decryptedmatrix.com/live/government-latin-for-to-control-the-mind/
Thanks, Andrew. I see where you got it. My guess is the dictionary’s right though.
the word ‘movement’ could mean ‘the mind that moves’. That’s how we perceive things in this reality.
Right, I suppose it could, but it doesn’t — just like the “ment” in “government” doesn’t mean “mind”.
One of the best articles I have read in 4 years!
The trillion dollar coin is an admission of insolvency; just another delusional and foolish government idea.
Who can declare insolvency against a sovereign nation?
Is the U.S. recolonized? If you think that your country is facing bankrupt, your nation is not independent.
National debt itself is another type of currency of the country. It’s already approved and accepted by the market!
Let’ go back to the time when these outstanding national debt was originated at the first hand.
If then, 20 years ago, 20 year national bond was issued with 5% coupon rate, actual price for 1 million dollar bond must have been determined by the big brothers assuming that dollar value to be depreciated by that rate. They already approved it.
So, any nation can issue new money to pay back its national debt at its maturity. No reason to issue new bond to pay back old bond!.
sure, make the coin, who gets the money? the spending power?
This money can be used as payment for the treasury securities if the creditors, like Chinese government whoever, want so.
If they don’t lke it, symply re-issue a new security with same face value, same maturity(zero percent interest!)
Kim – “This money can be used as payment for the treasury securities if the creditors, like Chinese government whoever, want so.” – If they refused to accept dollars the US economy would collapse, the currency would rapidly lose its value.
“If they don’t lke it, symply re-issue a new security with same face value, same maturity(zero percent interest!)” – That wont make any difference if nobody accepts it as payment, see above point
“Nobody accepts it as payment?” – No way!. It’s legal tender! If you refuse to accept the legal tender as payment you loose your right.
Kim – “. It’s legal tender! If you refuse to accept the legal tender as payment you loose your right.” – Im sure that will cut a lot of ice with the Chinese government.
Cool article. So the reason the Fed doesn’t want the T dollar coin is that it would be a step in the direction of what money should be, issued by the treasury, a good thing? One thing I’ve learned in the 17 years I’ve written about and tried to understand the Fed and other conspiracies is that sometimes I make mistakes. This may be one of those times. But, Why not let every dime issued by and bonds issued by the Fed default and for US citizens stand firm that the bond holders’ recourse is with the privately owned banks and Fed who issued the bonds and money, not the US? Or maybe the silver lining will be that when big banks and Fed go broke the US sheds all ties with big banks and the Fed. Step 2 would be the treasury issuing debt free money as it is supposed to.
The US should force the Fed to accept the big denomination coins in settlement of the fiat fictitious debt. What is curious to me is what the Fed would do to in turn spend or use such coins themselves? Maybe they could pass it off to the likes of Soros, AIG or Blankfein. Maybe a Saudie oil sheik. I doubt the Chinese would accept it. The two-step dancing by these crooks would be hilarious to watch!
[…] Ellen Brown Web of Debt […]
Actually the creation of Trillion dollar platinum coins to be used for the redemption of treasury debt is a good idea as it gets the government out of debt and as long as they don’t borrow again it is all good.
The big losers are those that benefit from the government being in debt and spending too much.
I agree that the Treasury issuing a $trillion coin is no less absurd than the Fed’s QE, but this is not the road to economic revival. It is effectively just monetization of more debt. It allows the government to continue spending more than it takes in. I agree that the monetary system should be reformed so that the government mints its own money and therefore it cannot possibly “spend more than it takes in” because it would be creating the money.
However, creating debt-free money implies that foreign entities who hold it will not receive interest. Therefore, this raises the question of why any foreign entity would continue to hold US dollars as a reserve when the US is funding its excessive spending and consumption by open monetization (either by the Fed of by the Treasury). In the end, the monetization is the same.
If the government started issuing its own debt-free money then this implies that the value and purchasing power backing that money will once again return to the underlying fundamentals of the economy “producing” goods and services. Today, that is many times less than the number of dollars out there and their collective purchasing power. Therefore, government minting its own debt-free money would imply a drastic devaluation of the dollar.
“the coin would not circulate but would be deposited in the government’s account at the Fed, so it could not inflate the circulating money supply.”
This is just too simplistic a justification to warrant such a casual dismissal of hyperinflation. What the monetization of debt aims for is to continue to enable the purchase and consumption of real-world resources and goods using money that does not exist. The Treasury issuing $trillion dollars out of thin air is no different than me doing it — the money does not exist. To inject that kind of money into the system will inevitably result in dilution of the money supply and therefore inflation.
This is the next stage along the road to hyperinflation. What people don’t seem to understand is that the rest of the world will not be willing to supply the US with extremely valuable and scarce real-world resources in exchange for openly monetized dollars, receiving nothing of value in return. The US imports over half of its oil (13% of global oil production) via the staggering US trade deficit. The only reason countries have been willing to provide this historically is because of the US military presence around the world imposing the dollar’s role in international transactions, most notably oil.
This will soon end, in part because of all the open monetization happening, and because China and India are now accumulating all the US’s historical gold at fire sale prices thanks to the Fed’s gold price suppression scheme. When they have sucked it all up they will dump Treasuries and back the Yuan with gold. No one will buy dollars anymore. Then the US trade deficit will end and prices in the US will rise very high, very fast. The Treasury can then print all the debt-free money it wants but it will not make any difference; all it will do is further fan the flames of hyperinflation.
Therefore, the $trillion dollar coin will not work.
The ONLY things that will work are 1) restore the power of money creation to government with debt-free and interest-free money, 2) transition to a non-fossil fuel based economy, and 3) abandon all hopes of returning to economic growth. Growth is finished, for good. Forever. And I mean that with a capital F — Forever. It will be millions of years before there are enough resources available to power historical levels of economic activity, unless we transition to solar energy, which seems unlikely. We instead need to focus on hunkering down for a long period of dramatic economic contraction (this means that unemployment will rise, and that must somehow be dealt with) and likely civil / world war, once the US dollar ends its reign as the global reserve currency and the US empire finishes collapsing, just like the Roman Empire did centuries ago.
I agree with everything you said up until “3) Growth is finished, for good. Forever.”
Eliminate waste, fraud, malinvestment, and abuse of those resources; let free-market efficiencies do their magic; and equilibrium would find alternative energy sources in tune with the real needs of society to build a *better* economy, if not a *bigger* economy. I think the current parameters of GDP are derived from false premises. The very existence of fiat currency distorts the relative value of assets.
3) depends on how you define “growth”. Growth of what?
Thanks Ellen, this is the best summary of the TDC issue I have read. It’s hard for the public to grasp the mechanics of our money system and the inner workings of our treasury and the Federal Reserve. All we hear in the popular media is debt, debt, debt–leaving the population with the mistaken idea that the only options to solve our debt problems are to decrease spending or raise taxes.
One thing puzzles me, though. If the US Mint has this power to create money without debt, short of a TDC, why not coin more small denominations? Does it have the same effect in reduced amounts? The mint has already stockpiled the $1 Presidential coins. I read that the US GAO has estimated the federal government would save $5.5 billion over 30 years if the dollar bill would be discontinued in favor of a dollar coin. So what is stopping them? Perhaps the public opposes the change but if the federal reserve were to stop printing $1 notes, they really have no choice. Is this just a political issue or is there a greater conspiracy at hand?
For that matter, does it make any difference if the public purchases $1 coins in volume? The mint sells boxes of 250 or 500 on its web site. If I buy a large quantity does the money go into the treasury? I would happily swap some of my federal reserve notes this way if I thought it made a difference, since the only cost to me is a shipping/handling fee.
The TDC notion is an assertion of the government’s right, under the constitution, to coin money. The dollar coin does not circulate because of a well known law, called Gresham’s Law, which says people always use the money they see as least valuable in an exchange. The coin obviously has more value than a paper dollar so people keep the coin and spend the paper bill.
Most money today is not in bills or coins, but in electronic recorded accounts in computers and transferred electronically by wire transfers. Money is more ephemeral now than ever before. That doesn’t mean it is worthless. It just makes it more vivid that money is not a physical thing, but a recording of the quantity of money units of debt obligations between parties. The prices of things are based on many things taken into account when people negotiate prices they will pay for things and for their wages they will receive or pay.
Indeed, the ‘Trillion Dollar Coin’ = ‘Digital Hyper-inflation with-in Krony Capitalism as they are unable to pay the debt, even in the form of digital fantasy digits.
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Please tell me where I’m going wrong with this. I’ve been trying to study macro-economics under the idea that sovereign monetary systems are best. To me it seems that Jon Stewart does not get this, and perhaps having his brother Larry Leibowitz work as a Chief Operating Officer for the NYSE has something to do with this (touché!). Nonetheless, here is my condensed argument)
The difference is really between getting money into circulation that the public and those at the bottom greatly need. Minting coins is a gimmick just as much as is the government buying money from the Federal Reserve, except that minting means no debt to the Fed. That is one issue. Also the whole idea that government deficits equal private savings because that loaned money goes out into the private sector is largely overlooked. The government once used to print its own money in the form of colonial scrip so that they didn’t have to borrow from banks at exorbitant interest rates, kind of a problem with the deficit today, and the minting of coins is a way around this debt to corporate banks. Why again does Jon Stewart think it is wise to not print more money? America is producing way under capacity of its factories and resources available as well as an under employment issue that is devastating the economy. Printing more money without incurring debt is really the key to fixing America’s problems, unless having people live well below their means is acceptable to Jon Stewart (a man with an exorbitant salary himself). This goes deeper than Keynesianism, and has roots in America’s civil war with Lincoln’s greenbacks, which were their own gimmicky mechanisms around strangulation of the money supply of America by rich bankers.
Big stuff to say the least.
Your arguments sound like MMT. I have a lot of sympathy for the MMTers, since their model works well to explain what’s happening today in economies around the world.
It’s time to completely rethink macroeconomics and reevaluate our priorities. Stop obsessing over money, and understand our economy in terms of our resources, consumption and balance of foreign trade, with the role of money as a means to facilitate trade. I hold out faint hope that Americans will wake up and recognize what’s happening in our economy at some point during my lifetime, yet today we clearly aren’t ready. We harbor a deep mistrust of government (the mantra “private investment is good, public spending is bad” sounds vaguely Orwellian), yet maintain a blind faith in a “free market” without realizing that no such thing really exists at all.
Quite simply, the banks have taken firm control of our economy with implicit consent of a majority of the population.
Jeff – “Quite simply, the banks have taken firm control of our economy with implicit consent of a majority of the population.” – This is only possible because the government is in their corner with a gun.
Jeff – “Your arguments sound like MMT. I have a lot of sympathy for the MMTers, since their model works well to explain what’s happening today in economies around the world.” This is exactly wrong, The Bernank is an MMTer and to state the obvious, he is totally clueless, you must have realised that by now?
You’ve got that wrong too, Richard. MMT says the govt. should use fiat money for the benefit of the people. Bernanke’s Fed is not government– not democratically controlled, but privately owned and controlled — and his trillions of fiat money flow only to the banks, not to the people or the real economy. Nope, Bernanke is not an MMTer. He’s a whacko monetarist, a Friedmanite, an obedient Goldman Sachs servant.
Ernie – I think your splitting hairs. Do you really believe MMT is anything other than a tool/creation of central bankers?
MMT has been mostly in the realm of academics, guys like Warren Mosler and Bill Mitchell. Those guys are certainly not bankers. Read their blog sites for yourself if you want to understand their views.
If MMT were a creation of bankers, our politicians would be talking about it, and/or it would already be in use. I’m not aware of any real-life examples of MMT today, but some of the bloggers have been applying the MMT framework to real-world economies to help understand e.g. why the EU economy has contracted the way it has.
Jeff – The reasons for the contraction of European economies like Greece is obvious. The governments have increased taxes massively (on the scale an American can not comprehend, no offence to Americans) and reduced the amount of money they put back into the economy while increasing the amount of money they export hence why the Greek government is spending roughly the same as it did before its crisis started.
When you are extracting this amount of money out of the economy there is only one result.
I wouldn’t describe Bernanke as a MMTer. The MMT articles I have read describe most monetary policy as ineffective. For example, Bill Mitchell explains why quantitative easing does not work here: http://bilbo.economicoutlook.net/blog/?p=661
What we need is fiscal (budget) policy, not monetary policy, and Bernanke can’t help with that. Even if monetary policy helped with private lending, that doesn’t seem to me like a good way to stimulate the economy, unless we want to repeat the cycle that led up to the 2007 implosion.
Jeff – Forgive me but the foundations of MMT are the same as the foundations of central banking ie “In MMT, money enters circulation through government spending; Taxation is employed to establish the fiat money as currency, giving it value by creating demand for it in the form of a private tax obligation that can only be met using the government’s currency.” This is the fundamental basis on which central banks operate. Central banks are the “franchise” holder.
Richard, I’m not sure I follow your argument–central banks are clearly not responsible for public spending, nor taxation–but that is beside the point. QE fails as a stimulus because it does not drive consumption. That’s also why it hasn’t resulted in inflation–the money from QE is sitting in bank reserves and is not in circulation. (Realizing there are multiple definitions of inflation in use out there, I’m referring to consumer prices, not the money supply.)
QE feels to me more like old-fashioned supply-side economics–i.e. put a lot of money in the hands of the elite and see what will trickle down. On the other hand, I think MMT would advocate a direct stimulus that would boost consumption. Public spending puts new money directly into circulation that results in increased private income, and hence private consumption. (And if that doesn’t work to create jobs, the government could directly employ unemployed workers too, via a job guarantee or similar program.)
Jeff – “central banks are clearly not responsible for public spending, nor taxation ” – Jeff, let me be Frank. You do not have a handle on the central banking business model. The sole mission is to enable governments to borrow money. Some sources for you to digest
“The bank was given exclusive possession of the government’s balances, and was the only limited-liability corporation allowed to issue bank-notes.[13] The lenders would give the government cash (bullion) and also issue notes against the government bonds, which can be lent again. The £1.2m was raised in 12 days; half of this was used to rebuild the Navy.” https://en.wikipedia.org/wiki/Bank_of_England
“Hamilton believed a central bank was necessary to stabilize and improve the nation’s credit, and to improve handling of the financial business of the United States government under the newly enacted Constitution.” – https://en.wikipedia.org/wiki/First_Bank_of_the_United_States
Please, are you serious? There is inflation everywhere
“Public spending puts new money directly into circulation that results in increased private income, and hence private consumption.” – I agree the problem is is that this money has interest tied to it and if the government’s spending does not lead to increased tax revenues (without raising taxes) which can service the debt and repay the principle Joe Public is worse off than he was before the spending.
I think the Fed under Bernanke recognizes that we have fiat money. Their publications frequently say as much. Bernanke has said in reply to questions of where the money comes from when it buys securities from the banks, that it comes from nowhere but is just a few digital strokes on a computer keyboard into a spreadsheet. But MMT is much more than that. However a lot of its practices originated when the dollar was on the gold standard, and I do not think they have been reviewed to take into account that since 1971 we have been on a fiat money basis. The main thing like this is our continuing to believe there is a national debt at the Fed in the pile of securities it has bought from the banks. Paying back the Fed for the securities it paid for with gold-backed dollars meant reimbursing the Fed its gold. But since there is now no gold behind the dollar, the Fed is just paying pure fiat dollars, for which there is nothing preexisting to replace. Furthermore the Fed is by its own admission a government agency, and buying with money it creates for its purposes is government money, since
only a government agency can create money (as authorized by Congress). So the Fed is just the agent for the United States when it buys securities from banks for the United States.
Since several of you have mentioned MMT, I thought the following summary of its basic ideas would be helpful:
Modern Monetary Theory (MMT) is the description and theory of fiat money systems and their management by a central government sovereign in its control of the money supply. The central government justifies its existence by establishing justice, insuring domestic tranquility, providing for the common defense, promoting the general welfare and securing liberty for all. In the economic realm it seeks to maintain stable prices and full employment as required by the general welfare. Money is representations (tokens) issued by the government in units of account of debt obligations between parties in the economy. Money is not a commodity as such. It is a measure of obligation. Money concerns a social contract. The government has exclusive power to decree what money is in its realm and to regulate its value and its value with respect to foreign money. By requiring that all taxes, fees, and fines be paid in the government’s money, it establishes a need for the citizenry to acquire and use that money, which they do in exchanges in the economy. The government will vigorously oppose and punish counterfeiting to prevent fraud and maintain its monopoly on the money supply.
To maintain the general welfare of stable prices and full employment the government must insure that there is sufficient money in circulation to sustain the vast number of debt obligations occurring in the economy, be prepared to take steps to remove excess money from circulation to prevent inflation and to create and spend new money into the economy to overcome deflation in the economy.
MMT sees the central government’s budget making process as requiring attention to more than taxes and spending. All sources of the nation’s inflow and outflow of money to and from circulation must be considered with the aim to seek balances among all these sources to the advantage of the people.
Among sources of inflow are deficit spending (which leads to money creation and expenditure), tax-based government spending, buying of bonds by the central bank, exports or sales of goods and services to foreign nations, investments which draw out savings to grow and expand productive capacity, and loans of banks .
Sources of outflow of money from circulation are taxes paid to the government, sales of bonds by the central bank to banks, imports (which send money out of the country to pay for foreign made goods and services), savings which take and retain money out of circulation, and redemption (payback) of bank loans.
The primary limitations to the money supply when considered in terms of the government’s general aims are the availability of material and productive resources and workers to do the work at stable prices and wages. Several consequences follow from the above.
(1) Government does not absolutely need taxes to spend.
(2) Government uses taxes to withdraw money from circulation.
and to make citizens acquire and use the government money.
(3) Deficit spending leads to new money creation and spending.
(4) In recessions government must cut taxes, increase deficit spending to retain and introduce new money in circulation, since recessions occur when not enough money is circulating to sustain the full production and purchase of goods and services, leading to unemployment. Government must invest in education, build up and modernize defensive forces, renew and expand the nation’s infrastructure and public security forces.
(5) In inflations–when excess money in circulation is pursuing available goods and services–government must do some combination of the following: spend less, reduce deficit spending, raise taxes to withdraw money from circulation, sell (through the central bank) bonds and securities to banks to drain money from the reserves of the banking system, encourage imports by eliminating or lowering tariffs, encourage private savings, raise interest rates on loans.
(6) The central government cannot go into bankruptcy, be insolvent, unless through ignorance the government constrains its powers to create and spend money. In a proper fiat money system, the government routinely pays off its debts by use of newly created money. (7) The following equality holds:
(T – G) + (S – I) + (X – M) + (L- R) = 0
T – taxes
G – Government expenditure
S – private savings
I – investments
X – exports
M – imports
L – bank loans
R – loan redemptions
When anyone thinks they have described reality with mathematics you can be sure that they have over-simplified. Humans have great difficulty handling the complexity of the real world.
VoxPop – “When anyone thinks they have described reality with mathematics you can be sure that they have over-simplified. Humans have great difficulty handling the complexity of the real world.” – Not to sound like your cheerleader but again you hit the nail on the end. Economics is psychology not maths. And the last time I looked psychiatrists were not using mathematical formulas in their research or in their treatment.
Good point, Richard. Largely culture too tho. Culture trumps economics. Japan and Germany have such strong, energetic cultures, they would do well no matter what the economic system. The “elite” who own and run the banks have a culture of theft, of anti-moral arrogance.
The monetary reform theory is correct, BUT, the practical problems something else again, since money is actually backed by murder. The supreme organized criminals, the biggest gangsters, were the banksters. They were able to assassinate politicians that got in their way, However, the politicians were not on an equal footing to be able to assassinate those banksters first.
One nice episode in American history was when President Andrew Jackson miraculously survived the assassination attempts made by the banksters, and therefore, was able to “kill the bank.” However, the longer term developments of the application of the principles of organized crime have now resulted in a runaway fascist plutocracy juggernaut that has no realistic ways to stop it anymore. The application of the principles of organized crime, through bribery, intimidation, and assassination, as the last resort against those who could not be bribed or intimidated, has gone on for far too long already. The economic hit men and/or jackals have taken over the USA the same as almost all other countries in the world.
The history that made War King then made Fraud King. Those who gained the power to make money out of nothing, as debts, as a legalized counterfeiting, enforced by the governments that they corrupted, have already captured and control practically everything through the corporations that grew up around those banks. Thus, the mass media brainwashing the muppets, to vote for puppet politicians, which has been too successful, for so long, … so that no good theories regarding monetary “reform” have any practical political means to be implemented …
Although I rather like Ellen Brown’s theories, and think they are brilliant, from a practical politics point of view I think they grossly underestimate how the banksters would discredit or destroy any group, or its leader, that actually became a serious threat to the banksters’ power to make money out of nothing. As long as the monetary reform advocates are fringe factors, that can not change things, then they may be safe enough. However, IF any groups were to actually get close to really implementing Brown’s ideas, then they would have to count on the high probability that their leaders could be assassinated.
The current system exists as the result of the historical triumph of applying the principles and methods of organized crime to take control over governments. No theory of monetary revolution that does not face that fact is sufficient. IN FACT, things will get way worse, much faster, until, PERHAPS, monetary revolution becomes possible. Meanwhile, we can debate the notions about monetary reforms, BUT those are not realistic until they become monetary revolution, which somehow manages to survive the banksters going way outside the law, as is necessary or possible, to prevent anything changing to prevent them from continuing to make the money supply out of nothing, as debts, while forcing everyone else to continue to accept that.
The real reasons WHY the banksters can credibly create money out of nothing, while others could not, is that money is backed by murder, and the banksters have been the most ruthless mass murderers, in order to back up their political power. The most important feature of the evolution of the current American, and global, monetary system has been the assassination of those politicians who otherwise refused to be the banksters’ puppets. The banksters are more credible because they WERE able to dominate the murder system, which backed up the money system. The banksters are the “authorities” making money out of nothing BECAUSE THEY ARE THE BIGGEST GANGSTERS.
Have you seen that Goldman Sachs is nominated as the worst company of the year. They are second right now, but the race is close and you can help them “win” the award by voting “for” them!
http://www.publiceye.ch/en/vote/goldman-sachs
“We may rail against the banks and demand change, but nothing will change until we grasp their fundamental secret, the foundation of their power: that those who create the nation’s money control the nation. By mechanisms explained elsewhere, nearly the entire money supply today is created by banks.”
To that end you should specify, and emphasize, *decentralized* in either case, public or private. Centralized *federal* banking runs the same risk to citizen sovereignty as centralized *corporate* banking.
Since there are no political mechanisms to democratize corporate banking policy, the citizen sovereignty envisioned in our Constitution can only be preserved by restricting the creation of money to State and regional banks; like Ellen says. Don’t argue with Ellen; she knows how to make it work. She just needs an Art. Five amendment to restore that sovereignty to the People on Main Street.
I feel a movement taking shape here. My toes are tingling.
William – ” until we grasp their fundamental secret, the foundation of their power: that those who create the nation’s money control the nation.” This is not the problem.
The problem is the governments “legitimate” use of the violence against the population. Take this away and you take away the coercive powers of the central bank and the banks that lend to governments.
Its very simple but to too many people the concept is unimaginable.
The ironic thing is that these same people are the ones calling for more fairness in politics.
I disagree. It is certainly ONE of the main problems and it is true: they create the money, therefore they rule; and there is next to no democracy or justice. The Randian, libertarian idea that governments have no right to enforce things (use violence) and are therefore basically illegitimate is completely wrong-headed in my view.
Ernie – So you believe you have the right to take my money (my labour/property) and if I don’t like it you would put me in jail and if I resist you would kill me. Thanks, I love you to.
Or maybe you mean if a thousand people want to take one persons money (labour/property) that makes it okay.
There is a reason the USA is supposed to be republic.
Yes, that’s right Richard. I DON’T believe in absolute property rights. Taxing is justifiable. And not only would I kill you, I would torture you first! Just kidding. But, again, we disagree. No sense arguing.
Ernie – I agree no sense arguing, no sense complaining either! We just need the people with the monopoly on violence to be good people! We just need to show these people how stupid they are, they just need educating! The basic system is sound!
Richard: You have chosen to live in a society. That means you agree to abide by the society’s rules. One of these rules is that citizens MUST pay taxes (if they can) to pay for all the services that your fellow citizens have agreed to (actually, our bureaucrats make most of these choices).
You seem to have some naive Libertarian views (Ayn Rand?).
Go read Leviathan by Thomas Hobbes – he figured this out many years ago.
ha ha! 100% of income tax goes to pay the interest on the illegal Federal Reserve fiat money system. Fiat money always fails and you have been suckered into the myth of gov’t money and gov’t protection.
VoxPop – Its very simple. You are happy to imprison or kill your neighbour if they do not do what you they think you should. You acknowledge that right?
Hey, Richard, “You are happy to imprison or kill your neighbour if they do not do what you they think you should” does not happen to make any sense. If you are denying the propriety of using the democratic process to establish laws that involve criminal penalties if broken, which is what I’m guessing your intention is, it’s such a far-out extremist position that few and far between will be the people willing to waste their time arguing with you about it, and fewer still will be the people who agree with you.
Ernie – I’m not sure why your bringing democracy into the conversation? The question was very simple like I said. Does the commenter acknowledge that is his position. About the extremist position, sorry are you saying that an aversion to physical violence is an “extremist” position? Or did I misunderstand?
UK, huh? My word, Richard, you do remind me of the Monty Python’s black knight: https://www.youtube.com/watch?v=mjEcj8KpuJw
Ernie – The aggressor was the black knight it case you hadn’t noticed.
I don’t really understand what you’re trying to say here; but when legitimate governments use force, it is legitimate. The problem is that central banks have coercive power; that is not legitimate (but it exists – to our collective shame).
The biggest problem I see in talking about all this is that we constantly stumble over the various manifestations of “government” : nominal gov (the way it’s supposed to work); real gov (the Wall Street corpocracy ); and a bunch of fancy-sounding theories that fit neither (or some so ambiguous they fit ALL).
To get around that ambiguity I often use the term “sovereign”; but it causes problems too, so I guess we’re stuck defining the “form” in every context. TPTB works pretty well too.
I still think we make it harder than it needs to be.
William – “but when legitimate governments use force” – Define legitimate!
Legitimate: as in duly elected and acting in accordance with the words and intent of a written constitution, free from corporate influence; and free from intellectual shitheads that don’t understand the difference and ask what the definition of “is” is.
The shitheads probably wouldn’t get elected anyway, but the corporate influence can be “firewalled” with a bare-knuckled amendment restricting corporate legal privileges to those of a limited sanction. In case you missed it above:
28th Amendment
“Corporations are not persons in any sense of the word and shall be granted only those rights and privileges that Congress deems necessary for the well-being of the People. Congress shall provide legislation defining the terms and conditions of corporate charters according to their purpose; which shall include, but are not limited to: 1, prohibitions against any corporation becoming so large its failure would pose a threat to national security or harm the general economy; 2, prohibitions against any form of interference in the affairs of government, education, and news media; and 3, provisions for civil and criminal penalties to be paid by corporate executives for violation of the terms of a corporate charter.”
William – Re 28th Amendment. Sorry, what is that supposed to do? You know the government ignores the constitution right?
Exactly !!! And that’s why we need to pass it before corporatists like you wake up.
Under the statue of “Lady Freedom” President Barack Obama was inaugurated for the second time as the 44th President of the United States today. He invoked the mantra of WE THE PEOPLE several times. The last two minutes of his inauguration address was a call to citizenship. You can watch it here.
http://www.c-spanvideo.org/clip/4322643&newclip
The phrases were enough to warm the hearts of progressives, especially baby boomers, everywhere. I enjoyed watching the process by C-Span from my warm living room while keeping an eye out for my daughter, spouse and sister-in-law in the crowd. At least they had great seats. Both you and the President talked about restoring power to the people.
Both of you were short on HOW to restore power to the people OR how to exercise citizenship effectively. I’m not necessarily scolding because the “how to” is a national gap in our thinking. Candidate Obama called it our “empathy deficit” (http://bit.ly/11MBnJA) on more than one occasion during his first campaign.
The Empathy Surplus Project is focused on FRAMING citizenship around compassion, because the idea of “citizenship” itself is a contested idea. Our consultant, Joe Brewer, recently wrote a white paper for us focused how to do it – http://bit.ly/Tc2sDt
Suffice it to say that ever since 1971 and Lewis Powell’s Manifesto to American CEOs, Madison Avenue has been framing the idea of citizenship as entrepreneurial loners. George Lakoff calls them “privateers” – http://wp.me/P1MQNU-av
Caring citizens – not just citizens – are the solution. These are the citizens Abraham Lincoln was thinking about. These kind of citizens belong to all parties. We value empathy and responsibility for self and others in public works, which we define as effective government for ALL Americans.
Our extremely effective opponents, i.e. extreme conservatives, are citizens, too, privateering citizens. The enabling insiders of our current government on both sides of the aisles that work with privateers to undermine democracy are citizens, too – privateering citizens.
Because the President has simply called for citizenship and not DEFINED that citizenship opens him to criticism. Progressives who want to believe in him, also wonder if he is participating with intention in “covert privateering,” i.e. enabling insiders working with privateers to further our corporate servitude. We hope that he just doesn’t know any better, but we suspect otherwise – http://bit.ly/VgBRpD
We have got to find ways to empower caring citizens across the broad amber waves of grain before our corporate servitude caused by our web of intentional debt comes to an end.
It’s a matter of life liberty and the pursuit of happiness.
Chuck – “citizenship as entrepreneurial loners. ” If there was ever a phrase that exactly misunderstands entrepreneurship this is it.
To state the obvious, you cant start or do business without interacting with large numbers of people regardless of the size of business.
The Privateer-of-the-House makes the point well that privateers avoid empathy and responsibility for self and others in the Public’s work. Privateers weaken the American Union through corporate servitude of most of us.
America has created a culture that identifies & rewards sociopaths (people exhibiting extreme selfishness) & called it “individualism”. The rest of the world watches as the USA self-destructs.
Right on, VoxPop! I think “individualism” is a meme promoted by the powers that be–a divide-and-conquer device, designed to keep the populace tractable and keep any uppity groups from forming that might challenge their tyranny. This anti-collectivism is a sick, dysfunctional doctrine. This is evident in how much better societies do that believe in the priority of the interests of the whole society, like those with a Confucian tradition such as Japan and China, but also in Europe, despite ongoing attempts to eradicate it there and secure Europe for the hereditary feudal overlords–the “upper class.”
VoxPop – “a culture that identifies & rewards sociopaths ” – this is not unique to the USA, it is human nature. if anything is going to change people must acknowledge this.
No, most countries have a long tradition of looking after everyone in their society but the USA is a country of immigrants, attracted to the opportunity “to make it on your own”. Yes, most people are selfish to some degree but corporations exalt this behaviour as it increases profits for the elite that run & own these huge organizations. It is this attitude that must be regulated before it destroys us.
“most countries have a long tradition of looking after everyone in their society but the USA” – Sorry, whatever you want to call it Americans were/are the richest and most generous people on the planet. I do not know what you get the idea that Americans do not look out for each other. Their “society” generally is much better off than anywhere else in the world.
“corporations exalt this behaviour as it increases profits” – Yes, they want to put the competition out of business, I don’t think anyone disagrees with this.
“It is this attitude that must be regulated before it destroys us.” – I know of no company that is trying to “destroy” its customers.
Richard, you sound like a libertarian ideologue. I suspect you are a teenager and have just finished reading your first Ayn Rand book. Realize that this woman was deeply distressed & her life ended lonely and miserable. Do not be taken in by these powerful words, like freedom, liberty, individualism but seek out true friends and create your own loving family before it is too late.
Hello Chuck – It is obvious that you have never run a business. “privateers avoid empathy and responsibility for self and others in the Public’s work. ” – It is impossible to run a business without being extremely and constantly empathetic and without being responsible for yourself and those around you. What you say is the exact opposite of reality. The exact opposite. Let me repeat. You cannot run a business, (a business that does not deal with the government) if you are not constantly empathizing with the world around you and without taking responsibility for your actions. For example, I know for sure you will not buy from a company that does not emphasize or a business that does not take responsibility for its actions. And you are in the 99%. In short, your comment does not reflect the real world.
richard–tell that to the drug companies, porno industry, payday loan industry, tobacco industry, insurance industry, and especially the banks. Capitalism is run on the basis of maximizing the bottom line for yourself and all else is collateral damage. Them that has gets more, and suckers be damned. As James Galbraith says in his book The Predator State, the unregulated “free market” is intrinsically criminogenic: a race to the bottom in terms of ethics and empathy.
Indeed. Just look at the treatment of homeowners by mortgage bankers throughout the financial crisis. In theory the free market forces companies to compete on standards such as customer service. However it turns out homeowners were not the bank’s real customers, investors were. The only intervention came eventually from the public sector, and it was too little too late for many.
Here’s what I can’t figure out. I thought the global financial crisis would be a nail in the coffin of neoliberalism once the public figured out that unregulated free markets don’t serve the public interest and that wealth would inevitably flow to the few at the expense of the middle class with more deregulation and privatization of our economy. Yet, it seems like the neoliberals are stronger than ever (or at least more vocal than ever). Maybe we need an even bigger crisis to restore some sanity.
Yes, Jeff, it may take a bigger crisis,like the Great Depression. Living as we do in age of science-and-technology-produced superabundance,a true crisis in physical terms as in the past seems less likely. But that doesn’t change the facts of injustice and oppression, and where there is defiance and counter-struggle there is hope.
Jeff – You talk about “mortgages” as if they were/are a “free market”. Fannie Mae & Freddie Mac are government entities. They were back stopping the loans made by the private sector which is what put the US taxpayer on the hook for the bank bailouts. It was fascism not free markets. Government giving money to private businesses is what caused the crisis and what is prolonging the crisis
Ernie – “tell that to the drug companies (most highly regulated industry?), porno industry (there is something that you think is not available to see?), payday loan industry (I am not going to tell someone else what the best decision is for them), tobacco industry (I think everyone is aware of the danger), insurance industry (huge government regulation on the investment side of their businesses, low interest rates have meant rising premiums worldwide), and especially the banks (banks are essential to daily life, the problem is when they receive help from the government/taxpayer whether directly through cash or through inflation)
“Capitalism is run on the basis of maximizing the bottom line for yourself and all else is collateral damage.” All else being the competition not the customer.
“a race to the bottom in terms of ethics and empathy.” – he is implying the route to success with consumers is to treat them unethically and to have no empathy towards them? The business would not last 2 seconds.
Whoever James Galbraith is talking about, it is not the customers.
Sorry, Richard but you are describing small companies that must compete for customers, one at a time, in the real world. We now have mega corporations, like banks, that don’t operate this way. They grow by taking over other companies. They promote sociopaths to the executive suite, especially as CEO & expect total loyalty from their employees (including lying to customers) in exchange for high salaries. No country can survive with this type of culture.
Voxpop – The video Chuck was refereeing to was talking about small businesses.
About the rest of your comment. You could say the exact same things about government.
Computer models here at the Falberg Institute reveal that a single coin minted with a trillion dollars worth of platinum and dropped from 38,000 feet on the FRBNY would create a siesmic thud that could be felt as far away as Main Street.
Cool, Falberg! What kind of drugs are you taking? I want some!
William – Thats awesome!