|Austrian Austerity: The Force Be Against You.|
Creditism, the new, well, relatively new, phenomenon where no major entity, even a bank, issues debt without it being guaranteed by the federal government, even as said purveyors of such guaranteed instruments remain the staunchest and loudest defenders of the Free markets, and Free Enterprise, the enterprise most assiduously defended being the cornucopia of graft and fraud perpetrated by government-protected swindlers, has much more in common with the Communism they supposedly reviled, than with any definition of Capitalism.
The reason for this is that the main reason that Capitalism has any claims to superior viability as an economic system is its feedback mechanism. If you build a Levittown, say, and nobody comes, the economic result is a big oops, mea culpa, "Won't try that again", response, becasue the losses are borne by those who invested of their own dollars. But if, as is the case lately, you build it, and they will come, because the Fed buys up the bad paper used to put up those dwellings, with buyers driving themselves there in cars they can't afford, which the car companies don't care, because they've lent them money with loans bundled and bought up by the Federal Reserve, to houses whose mortgages were issued by banks that don't care if those who took them out ever pay them back, as they were all bought up by the three Farcemen of the "Who cares what it Costs": Fanny, Freddy and the FHA, forcing all the risk down the collective (the one-time banks, now TBTF quasi-government Institutions, ie the new GSE's people have been just as easily fooled into thinking are private enterprises, just as they'd been fooled into believing that Fanny and Freddy and Sally and Ginnie were, eagerly embrace Collectivism) throat of taxpayers, while raking in huge bonuses for their so-called labor, the proceeds of which they then pay tax accountants more than they'd ever pay in taxes to hide offshore in tax havens.
This dynamic much more resembles the internal, supposedly infernal, functioning of the Communistic state of Russia, where "We pretend to work and they pretend to pay us" prevailed for decades before Ronald Reagan and Margaret Thatcher decided the world needed Soviet oil more than the Russians did.
But what happens under both Communism and Creditism, is that since all the decisions are made by elites and power brokers, and the results of those decisions then have to be lived with by the populace to whom they're inflicted upon, is that more and more of the productive capital of labor goes into buoying up destructive mechanisms that would otherwise collapse under the heavy weight of their unworkable dogma. Because, without feedback, that's all it is, dogma: "This is how it works, and so we will do everything extra-legal to see that it does, even though, in an otherwise honest world, it would fail." See the resemblance to Soviet era Communism? Every human "right" that was decided upon because it would make the Soviets look bad, such as the right to privacy, or to be free from unwarranted search and seizures, or torture, has been abrogated since their fall, indicating that they were simply useful as a bludgeoning tool, not from any real belief in their intrinsic value.
As a metaphor, perhaps, to the veracity of the claim that feedback is what drives natural processes, and in fact is vital for stability, it has come to Light in an article about the Arctic, depicting the true state of affairs in regard to climate changing anthropogenic global warming, suitably called,
"Global Warming and the Gulf Stream - Our Atmospheric Pollution Roadway to Subsea Arctic Methane-Induced Climatic Hell".
But the strange thing is is that he (Light) ends the article on a hopeful note, stating that, " In conjunction with the massive cut back in pollution emissions by the United States and Canada, the United States must set up a project through the Woods Hole and Rutgers universities to continuously monitor the Gulf Stream flow rate offshore the industrialized United States south of New Foundland at 55° the critical transport rate of 142 Sverdrups."
But to think that anything like this has the slightest possibility of happening is to display a subsea depth of naivete. For, being a scientist, Mr. Light deals in facts, such as the one he describes as he relates the feedback mechanism by which the clathrates on the floor of the Arctic have started to be released in an ever increasing quantities since 2007. This he understands very well, documents, and explains to his readers in highly readable, enlightening prose accompanied by colorful, animated charts.
What he doesn't seem to understand is that, just as most of the world, including the IPCC, underestimates the rate at which these feedback mechanisms have brought forward the date of catastrophic climate change to within our children's lifetime, so has the loss of feedback mechanism in all Capitalistic societies, by becoming non-capitalist, but instead, Creditalist, thereby dissolving the efficacy of Democratic institutions around the globe, leaving them bereft of any hope of stopping the US and Canada as they accelerate their mad spree of digging up and burning as quickly and completely as possible the last vestige of fossil fuel of whatever kind, in whatever form, no matter what the cost, and to hell with the consequences. This is the stated purpose and highly successful strategy of the Fossil fuel complex and their shills, such as Yergin's Cera, that center of fossil fools, and this runaway train has no hope of being derailed by anything as quixotic as saving the human race from extinction. God will, after all, send another Ark, loading the Noahs and their families on board, ie the Rich, who are obviously superior to us mere mortals, and saving them to start all over again, once the rest of us, who are really the problem, are out of the way.
It is easy to see how completely this paradigm has been accepted, especially by those who consider themselves to be extremely intelligent, by the way in which the glib theory of space colonization is constantly being bandied about by them. For at its core, such a fantasy is the same as the Noah's Ark fable. And every bit as reliant on blind faith. How on earth, (well, on Mars, more accurately) do scientifically-inclined minds convince themselves that we can create a livable atmosphere on Mars when all we can do to the quite hospitable one on earth is to poison it to such a point that a mass extinction event on a scale of prehistoric proportions is all but inevitable?
As Michael Greer points out, and is emphasized by Tom Murphy's "Do the Math" blog, with a wonderful analogy depicting the driver of a car who's attention is so fixed on keeping his eye on his destination on the far off horizon that he ignores the hazards on the road right in front of him, we have substituted the feedback mechanisms of Capitalism for the planned-society of Creditism whereby we decide what we need, (as we did with Fanny Mae and Freddy Mac), and continue supporting the structures we build to get us there regardless of whether or not they destroy the country in the process, simply because we believe in the goal (like health care for all, which has already collapsed into health INSURANCE for all, basically a green light to pillage, Hah!, like insurance companies needed one).
So by building these structures, and then, as George Bush did, not Obama as many in the Republican party claim, virtually Nationalizing them, and then deceptively calling it something else, we have taken the largest part of our economic system, home-building and the myriad industries it supports, under the umbrella of Creditism, which I'm trying to say, is nothing more than, like insurance, a form of Collectivism with the difference being that, whereas all the burdens are shared by the so-called collective, or commonwealth, as it was once referred to as, all the benefits of it flow to a smaller and smaller group of elites, The Supra-Class, even as its rigidity makes it unresponsive to tinkering, since, far from the resiliency of the economy of which both George Bush and Ben Bernanke had boasted in August of 2008 before it collapsed around our ears, it becomes more and more calcified, because real resources are thrown away to accomplish goals that have become, like the space shuttle program, untenable.
Not surprisingly, I suppose, is the resemblance of this phenomenon to the growth of credit for all from credit to those who earn it through past behavior. For every obstacle in existence which we try to build ways around, and successfully do so, we always have ot make some kind of a Faustian bargain, the dark side of which we hide from view. In the case of credit, it is the fact that everyone using the monetary system must pay for the credit deadbeats in a way that they didn't before the credit free-for-all.
In days of yore, such as the early days of the Reagan administration, if you wanted a credit card, you had to first establish credit. The way to do this, for many people, was via store credit cards, such as Macy's, or, the gold standard of the day: a Sears credit Card. After that it was easier to get a bank credit card, one that was tied back to the bank at which you received it, such as the BancAmericard from BofA. What Visa and MasterCard accomplished was the separation of the card from any specific financial institution, such that now the merchant merely had to check to see if the card was OK to relieve themselves of the onus of having extended credit to a deadbeat, the credit losses, and the responsibility to cover them, now being the purview of the credit card companies, as long as the merchant followed their rules when accepting their card from someone as payment for merchandise. So now, it has morphed into the situation where, in order to extend credit to less and less creditworthy individuals, the interest rate on purchases not paid in full the month in which the expense was incurred have climbed to nosebleed levels, even though you may have a credit score in the 800's.
What this does, by formulizing the process, is it takes the decision-making out of the hands of middle managers, making the CEO and other executives able to claim all the glory, power, and money, if the firm does well, but, as we've seen, still able to, by purchasing Credit Default Swaps against the very firm they work for (because of course, they're above the very concept of "working for" someone, they Own it, until, of course, they run it into the ground, at which point, they had no idea, a la Corzine, or Schilling, or Kenneth Lay, or any CEO once they're caught, of what was going on right under their noses), still grab their last bonus and golden parachute on the way out the door, even as it falls off its hinges as it's slammed behind them. Then the new CEO will come in and fire workers by the thousands, while castigating them for staying loyal to one company for thirty years. I wish more workers would remember this: your loyalty is not repaid in kind.
But whatever you call it Capitalism Communism Collectivism Creditism the economic system was created to serve us not subjugate us, wasn't it? All of a sudden I'm not so sure it was, and that perspective sure explains a lot, but, what it doesn't do, is suggest a way forward, because the glib "Revolution Now!" I hear from people who have accepted the fact that the economic system, of course, was designed to subjugate, is not the path of wisdom, or so it seems to me. Instead, we need to consider methods of reconstituting an economic system that answers our real needs without stoking stupid unnecessary, self-defeating ones. THAT we can do quite well enough on our own, thank you very much. And I think the answer lies in taking control of the currency, each Federal note is a vote, so where is the ballot box and who's doing the counting?