(September 24, 2012)
Central banks could be helping communities instead of enriching
predatory, parasitic "too big to fail" banks and financial feudalism.
In a system that depends on lies and the credulity of the citizenry, the greatest lie is
that the Federal Reserve's "quantitative easing" bailouts of the banks somehow
help our citizens and communities.
To clarify this, ask yourself this question:
what else could we have bought with the $29 trillion the Fed loaned or backstopped to
If you enjoy quibbling about the total sum of Fed support, be my guest; the
came up with $29 trillion after poring over all the data, while the Government
Accountability Office’s (GAO) tally topped $16 trillion. That's 100% of the nation's GDP
and roughly 100% of the $16 trillion national debt.
While we're asking about opportunity costs, let's ask what else we could have bought with
the $10 trillion that the Federal government has borrowed and blown in the past 11.7 years.
The national debt was $5.727 trillion when G.W. Bush was sworn into office
on January 20, 2001. It had risen to $10.626 trillion when President Obama was sworn
into office in January, 2009. It is now $16.016 trillion, an increase of $5 trillion
in less than four years in "debt held by the public" (i.e. the Chinese central bank,
the Japanese central bank, the Federal Reserve, etc.)
You can check the totals for any recent date on
From time to time I have suggested alternatives to "wars of choice" and bailing out the
financial Plutocracy, for example
Cost of Iraq War: $3 Trillion;
Cost of Solar Plants to Power all 105 million U.S Households: $500 Billion
(April 10, 2008) and
We’re Dropping the Ball on Renewable Energy (June 25, 2011).
$500 billion is roughly 3% of $16 trillion. That is rather astounding, isn't
it? We could have switched to a (largely) solar-powered electrical grid for a mere
3% of what the Fed squandered to save the "too big to fail" banks. Yes, yes, I know
we need a massive energy storage system for any solar-powered grid; shall we throw
$1.1 trillion at the problem? That would total a mere 10% of what the Fed has
provided to "save" crony-capitalist financial feudalism.
Correspondent S.H. (U.K.) has provided a community-centric, forward-looking
alternative use of central-bank QE.
Here are some excerpts from his essay Making Quantitative Easing Useful. I encourage you to read
the entire essay, as it speaks to much more than what we could buy with the QE squandered
on protecting financial feudalism. Though S.H. references QE in Britain (U.K.),
the dynamics and opportunity costs are identical in the U.S. and every other nation
burdened with the malinvestment of preserving a corrupt, exploitive, predatory
neofeudalist financial system.
Looking at the state of the country and the economy, then one has to say that we seemed to
have gotten precious little out of such a massive mal-investment. In fact, the majority
are actually worse off on account of the inflationary effects of QE and its negative impact
on pensions, savers and working salaries.
So now we have institutions that talk about investment, that talk about growth, that talk
about rebalancing economies, that talk about big societies, but then do absolutely nothing
in order to engineer or bring the changes they propose about - as frankly - it-s just too
difficult for their limited understandings.
Let us be optimistic and not turn a drama into a crisis, but rather turn a dramatic
crisis into a rather amazing transformational opportunity. Instead of being fearful
and not engaging with the problems we face, we need to confront them and start thinking
in new ways and generate some form of political, social and economic excitement.
This is not socialism. Socialism is the mis-guided concept of a government centrally
determining and engineering its population in their most narrowly conceived 'productive'
form. Socialism sees humanity as something to engineer as a human resource or raw material
for the dominating demands of industrial mass 'productivity'.
Socialism tries to
mass-produce its people on an industrial scale as just so many productive clones.
I would reject this notion on the grounds that it is totalitarian and too restrictive.
Instead of socialism I would rather pursue a politics that engenders and fosters sociability,
co-operation and affability and a 'productivity' or even non-productivity conceived
in all sorts of new ways.
A big society needs big communities with great amenities. Instead of massive dubious crony
capitalist infrastructure projects determined by national governments for the limited
benefits of those few corporations large enough to take them on, each community could
study their communities and democratically decide what amenities needed building and how
they could be generally improved.
If we decide we are interested in becoming fit and
healthy then every community obviously needs excellent sporting facilities, so should
have a gymnasium, all weather soccer pitches, basketball, tennis and squash courts,
running tracks, cricket pitches etc. We need many more swimming pools.
Each community also needs an infrastructure of useful buildings. An auditorium that can
be used for community decision making, for theatre and for local musicians to perform in.
Such buildings could also be used to hold wedding receptions and host other social
occasions. They should be freely made available as temporary market places, or for
martial arts instruction, music tuition, dance instruction, keep-fit and a host of other uses.
Public recording studios, video studios, woodworking centres, and art facilities could
all be put in place.
We all have different skills and knowledge, yet we lack the
sufficient community infrastructure to share our skills and teach one and other how
to do things. How to grow your own fruit and vegetables and how to cook healthy and
well balanced meals, how to draw and paint or make pottery, how to make films and
documentaries, how to design electrical circuits or program chips, how to design,
program, maintain and host web sites. The greater parts of our educations and knowledge
is acquired outside of education systems and stem from researching and following our
own particular interests.
To be sure there a great many excellent videos published on
the internet that can show you a lot, but its not the same as being shown in person
when in addition to a social aspect of meeting people with similar interests, it is
also possible to have points of difficulty clarified or allow for skills feedback
If we're going to print money then local authorities or even communities themselves
can issue 30 year bonds which the central bank purchases, eventually to retire.
Communities then start building their improved amenities using exclusively local
companies labour and local firms buying all supplies locally. We have an opportunity
to build ourselves a prettier, healthier, more co-operative and socially cohesive world
and create many construction jobs that will make a real difference in the economics and
quality of life within each community directly.
Such an approach will also help
recapitalize the banking system as all the money will eventually end up on deposit
with banks as assets.
In economic terms we need at least 100 public state of the art CAM (computer aided
manufacturing) centres. As we all have computers and CAD (computer aided design)
software is readily available, so in principle there is nothing to stop us from designing
chairs, guitars, hose fittings, tables....the list is endless. With laser cutting machines,
CNC routers, Object or 3D printers the technology is available for everyone to design
and produce prototypes, objects for sale or for themselves. It's easy to design something,
what is incredibly difficult in getting it into production.
The potential for self-design and the realization of creative potentials is stunning.
The technologies are
all currently available to put this in place, we merely have to establish the
infrastructure and means of transmission between systems.
With 100 or more CAM centres to which the public could simply upload their CAD design
s for one off or limited productions runs, we could release the amazing amount of
national talent the we have always had by making it impossible for anyone not to
be able to produce something.
Whether their productions be commercial or for personal consumption or produced as
gifts would not matter because a lot a great products will be designed and realized
for larger scale production, based simply upon the law of averages. Such centres
would also be available for schools where serious educational investments need to be
made in the areas of engineering and design and technology. The more one is allowed to
design the objects of one's own consumption, the more one is inclined to build more
quality into the object and take much more pride and care of ownership of it as it is
such a personal process that involves deep personal investments.
At the same time, by making such investments then there are great rewards to be made
in terms of the acquisition of new skills and knowledge and also in terms of creative
self-achievements. This is productivity as a form of the consumption of the objects
one produces and the self achievement and self determination that arises from being
part of the whole productive process. We are all prototypes, waiting to construct
ourselves and our worlds according to our own best desires, interests and wishes.
In our current societies, as much as the objects that surround us also define us,
then they are not of our own designs and making. Inevitably we live as kind of
mass-produced consumer clones. As new technologies continue to develop and emerge that
suggest that there is no reason for this to remain to be the case.
With this new model, governments could set up centres for manufacturing and the people
own the means of production, but one would be engaged within it freely on a democratic
and completely ad hoc basis where one always becomes engaged and involved precisely
around one's own particular aims and interests. This is to maximize satisfaction from
the entire process of production from design and inception to its physical realization.
Communities need facilities in order to grow and develop the kind of cohesive social bonds
needed to move forward together. It is the task of governments at local and national
levels to be the facilitators of such movements.
Thank you, S.H., for a thoughtful and thought-provoking exploration of
central bank-supported loans for actual community development. Yes, it can be
argued that some of these projects may be a "waste of money." Once again I ask:
what did we get for $16 trillion? Did we get anything that actually aided citizens
That the "too big to fail" banks have maintained their chokehold on the nation--how did
that aid citizens and communities?
If the TBTF banks had been liquidated instead of "saved," the nation could have 500
regional banks that were liquid and well-regulated instead of a feudal "blob" that
sets the agenda for the Fed and the machinery of governance.
If you have any doubts about this, please read the new book
The Payoff: Why Wall Street Always Wins (print)
The parasitic financial sector has looted the nation, and the Federal Reserve
is the enabler of
this predation. There are alternatives to crony-capitalist neofeudalism,
if only we're brave enough and thoughtful enough to stop supporting our financial
and political Aristocracies.
Resistance, Revolution, Liberation: A Model for Positive Change
(Kindle eBook $9.95)
Read the Introduction
(2,600 words) and Chapter One (7,600 words) for free.
We are like passengers on the Titanic ten minutes after its fatal encounter with the iceberg: though our financial system seems unsinkable, its reliance on debt and financialization has already doomed it.
We cannot know when the Central State and financial system will destabilize, we only know they will destabilize. We cannot know which of the State’s fast-rising debts and obligations will be renounced; we only know they will be renounced in one fashion or another.
The process of the unsustainable collapsing and a new, more sustainable model emerging is
Rather than being powerless, we hold the fundamental building blocks of power. We need neither
permission nor political change to liberate ourselves. A powerless individual becomes
powerful when he renounces the lies and complicity that enable the doomed Status Quo’s
If this recession strikes you as different from previous downturns, you might
be interested in my book
An Unconventional Guide to Investing in Troubled Times (print edition)
Kindle ebook format. You can read the ebook on any
computer, smart phone, iPad, etc. Click here for links to Kindle apps and Chapter One.
The solution in one word: Localism.
Order Survival+: Structuring Prosperity for Yourself and the Nation
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