A human solution to the economic meltdown

I've waited to make any comment on what is going on for several reasons, one is to gather facts rather than off the cuff assertions, and two because I simply don't have time.

However, after having taken in three weeks of this spectacle, I feel I won't see anything new that either isn't expected or predicted.

My first reaction to all of it, which is more of the anarchist in me than anything, is the nuclear option. Why help these idiots who ran their businesses into the ground and now expect the public to bail them out with a golden parachute? Let the whole lending system burn down. We don't need it anyway. As I said that is more the anarchist in me than anything, because in reality, a government watchful for the common good can not do that. The meltdown of economic markets as they are (predicted by Chesterton and Belloc), while enjoyable from the standpoint of the anti-capitalist spectator, will not long be enjoyable unless one is already self sufficient and well armed. If the power goes out in a major city for a few hours there is looting, rape and pillage. If there is a mass failing of business due to the meltdown of credit, the detriment to the common good is unimaginable. Apart from the fact that every criminal element of society will be unleashed, that millions of innocent people will starve and be bereft of material necessities, the result will be either constant anarchy or a police state.

Americans are overly individualistic, we do not knit together into a likeminded culture solicitous for the common good. As such, the best of us who tend toward that will be victimized by the worst who don't. Subsequently a parralell economy would form largely criminal in nature, with or without a strong central authority or martial law (perhaps in collusion with it as in the aftermath of the Soviet breakdown).

However, all of this will be the result of an overall descent which will take time to effect. Apart from random acts of crime which will break out, no doubt inspired by media hyperstimulation and hysteria (I always say TV news is a defeat for humanity), the country will not fall apart from a market crash. It will merely transform into anarchy or a police state, or a terribly unhealthy mix of both, and even then steps could be taken to avert that course.

There are of course alarmists who are running out and declaring that the sky is falling. I have heard radio hosts saying if the government doesn't do something the whole country will be destroyed. Not the least of the alarmists are Geroge W. Bush, Ben Bernanke and Henry Paulson and their banking buddies. If our society had any moral fibre they would all be drawn and quartered, and perhaps burned alive (satire). Instead we listen as they advocate that we buy up the debt, and take a huge loss in doing it, so as to re-constitute Mammon. I have read every statement by the three aforementioned characters, and essentially that is their plan. Borrow money from China or print more treasury notes or both, buy up the debt and reconstitute the money lending empire which put us in this mess. It will be, as it is now, a society built on debt. Well, debt for some and filthy profits (mammon) for CEOs who will repeat this whole fiasco down the road, if there is enough time for them to do so. In the mean time, where is the public good? You must pass this bill they say. Then the Democrats say okay, just give us some things we want. They then claim they support the middle class, but pushing for some relief for tax payers and some such things is not sufficient to solve the problem. Then come in the free market economists with their fairy tales.

It is truly incredible. They will blame the current crisis on a whole host of things. They will blame Bush as I blame him, but for different reasons. They will condemn the bailout as I do, but not because they believe there is something better, but because government shouldn't be involved in the market forces which shape the economy. This is where the fairy tales are necessary. What the hellen keller are market forces? They are rather like the tooth fairy or the easter bunny, they neither exist nor communicate any valuable message or moral in their telling. There is no such thing as a market force, or markets which rebound or markets which come into being or crash, or for that matter which are free. There are men who determine the actions other men must make by their inventments, their trades, and their blunders. There are men who initiate bad practices, and other men who react to them. But there is no hidden hand at Wall Street which comes into play and guides men safely so long as governments leave it alone. Yet that is what they will have you believe. If only George Bush didn't interfere with the market, after all, sub-prime mortgages are his fault according to one author, part of a scheme to create an "ownership society" (the horror if men owned something and didn't pay greedy bankers!) like in Argentina. Or, this is all the fault of tax policies and spending.

All of that is fiction. The situation we are in arose precisely because government followed these principles and provided no oversight and no intervention, just as Economic liberals want. The reality is that Free Market Economics (i.e. Economic Liberalism) are a failure. The current situation allows us to write economic liberalism's obituary as surely as Richard Pipes could write Communism's obituary. They will still gasp from the grave, just as the leftover communists do today, but it is clear that Free Market principles are as effective in economics as excrement is at keeping away flies. We need government regulation in the economy to make sure that greed, the sole force involved in a "free market" does not endanger the public good.

However, what kind of government intervention we need is the real question. The answer should be that which tends toward the common good. When we consider government intervention in that light, it is incumbent upon voters to reject this proposed $700 billion bale out on its face as a phony solution which will do nothing to "sure up the economy", that is make it stable. (They won't, they will take it as they have taken every step of Bush's creation of National Socialism, and this is no exception).

A stable economy is necessarily defined by real ownership. It is sad that ownership must be qualified with the adjective "real", but today people have the idea that when they are paying three or four times what something is worth that they actually own the thing rather than that they are renting it from the bank until the latter has several pounds of flesh, which as we have seen they can then invest badly or soundly, not dependent upon illusory market forces but upon the skills or lack thereof of the investor. People have the idea that an Ipod bought on a credit card is "theirs". Regardless there is no ownership in that scenario, except on the part of those who have caused the economic meltdown, which are a gross minority. The "bail-out plan" does nothing to fix the lack of equity in society's ownership. Worse than that even, is that there is no standard by which worth is to be judged in all of this worthless debt which the government is about to buy, only to sell back in the future. How do we know that the banks will not cheat the government? Will the government, staffed by individuals who used to work for the same firms which they are now bailing out, such as Mr. Paulson a former Goldman-Sachs employee, act in the people's interest or in the bank's interest? Yes, that is rhetorical. Like all political hacks and quislings, from Bush down to the lowest treasury appointee, they serve the banks, as they have for 150 years if not more.

Even worse than all of that, is the fact that this plan as it is currently proposed gives unprecedented power to government bureacrats in the treasury department. (source)They will be free from judicial overview, from congressional oversite, and answerable to no voter and no veto. And people wonder why I don't vote. You don't live in a democracy, you live in a National Socialist dictatorship, where the hands are hidden rather than seen like in Germany or Russia, where the change is gradual rather than sudden, as in Hitler's appointment or the Bolshevik Revolution. This is just the icing on the cake, and if this bill goes into effect that is exactly what it will create. But never mind that.

We were talking about stability. The plan, as old as the 1930's, is to bail out the fools who created the problem, thinking that if we re-establish the status quo, we won't end up in the same place. This is literally like saying we will put the train backward 20 miles, we will sure up the track, but don't worry, we won't end up in Chicago again. The primary problem is that what the bail out aims at creating is not a stable economy, nor a safe one. It is an attempt to stimulate business and lending. NOTHING MORE, by saddling you and I with worthless assets. This is nothing other than welfare for the rich.

If the government were to take an action that seriously aimed at helping people below a net worth of a million or so, there is one thing it could do. It is so simple as to be more or less unthinkable, principly because it is too human and religious. Amnesty.

Only a year ago amnesty was a hotly debated topic, being advocated by a majority of the government as a grand solution to the problem of illegal immigration. When opponents declared that it will only make the problem worse, proponents declared that they would re-structure the government and put laws in place to prevent an increase in illegal immigration.

Well...... no one said that such a thing couldn't work, only that the government would never live up to the committment. And one would probably have been right. Nevertheless, let us apply the same concept to this situation. The government could just declare an amnesty, particularly on mortgages. If it limited itself to this, and did not try to also bail out credit cards where more than 50% was spent on comoddities, then something unthinkable might be achieved: ownership. Some will say but this will only encourage people get into debt again. This is easily solved, place terms and conditions. The homeowner would have to agree not to sell for 7 years. That should be a fair amount of time to satisfy the governments interests and sure up some of the debt problem. Essentially what I am proposing is that debt be wiped right off of the books. Nothing for the rich, heaven knows they can afford it, afterall, they got us into the mess, there is no need to reward them.

Declaring an amnesty for home mortgages under certain conditions has more benefits: It prevents a wave of homlessness which certainly leads to crime while at the same time presents an asset with a verifiable value, as opposed to the sewage debt that the banks will foist upon the government. Concommitant with this move would be to foster the growth of small business and local community. At the present slugs like you and I are seen by Wall Street as one thing: A consumer income. We don't own anything, we can not stop and buy a house or a car, but we can by worthless commodities, and we are told this will keep the economy running. We know now that this is false. The economy will not keep running because people buy chinese made crap at Walmart.

Yet what if we not only formed small economic communities, championed by ownership, but also produced goods which people need? You mean we don't need to get it from China? No. You mean I can buy it out of my pocket? Yes. You mean I can perform a service to society or produce something for it, rather than speculate about it in New York? Damn straight.

But it won't happen. To do that means alienating the money class, the business owners, the banks, and all of their cronies in government, presuming they are not running the whole show from behind the scenes. To do that means dismantling the status quo and getting people to think differently, which the government has no interest in. Hilaire Belloc essentially said the same thing a hundred years ago in his classic "The Servile State". In that work, he predicted that the capitalist state, constituted as it was in England at the beginning of the 20th century (more or less what it is here and now, just on a smaller scale) would fall apart because credit would get so out of control some defaults would effect the whole system, and lead to an overall collapse and millions out of work, as with Capitalism's beginning. The solution? Slavery. When Belloc says we will return to slavery, he does not mean it in the sense of ancient Rome or Greece, because he recognized that we have created such an animus to slavery. So instead of "slavery", it will be reinstituted under a different name, "lifetime employment". A well to do banker, bailed out by Mr. Paulson's plan, will one day be able to go to the employment office and pick up a "lifer", someone guaranteed to work for him for life.

In the event you are shaking your head in disbelief, consider the results of my non-scientific sociological experiment. Feel free to conduct it yourself. Just in the work place, both of them in fact, I popped the question to various co-workers of different sexes and positions, through a general run down of how in the future we will lose our jobs, and then slavery will be introduced only it will be called "lifetime employment. Out of 50 people, only 2 people objected. The response from everyone else was "well, that sounds kind of nice actually. Job security", or "Well, I wouln't have to pay for food and rent, would I?" I suppose not. Freedom in exchange for food and shelter. People have lived long enough without owning or producing anything of value, that food, clothing and shelter for free for life won't be such a bad deal in exchange for work.