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Lately I’ve been ignoring the news, which has been way too full of reports about the “recovering” economy and Wall Street rebounding, while jobs continue to be lost. Here I was, hoping this economy might end up being murdered with an axe. But it appears an unrepentant U.S. capitalism remains here to stay, thanks to Bernanke, Geithner, and the same old privileged male players. So now I’m thinking, if you can’t beat’em, then maybe we’d best join them. America, we need to further commodify our children! This idea may be the secret to families at last gaining a little ground in a capitalist nation.
Our current economic system maintains an old 19th century myth. It continues to separate the private realm from the public realm, as if there should be a wall between them. What do I mean? This economy faithfully separates our sacred families from the profanity of commerce, the better to avoid sullying the one thing remaining holy: our families and homes. (You know, the same American homes that were sold around the world in derivatives because our financial system was betting against them.)
Victorians of the 19th century held that men were a better fit for the profane and “public sphere” of politics and commerce. Only the fittest could survive there. Regardless of what Darwin had said about what the “fittest” actually meant, Victorian businessmen interpreted it as only “natural” to dominate by whatever ruthless measures were needed. Economic victories went to the strongest and the meanest.
Women, on the other hand, were the weaker sex and needed to be kept out of danger in the “domestic sphere.” Too much thought in her pretty little head, and all her blood would go to her brain, instead of her womb, leading to hysteria. Doctors diagnosed any woman’s nervous condition the result of a starved uterus. Created by God to be mothers and home-makers, women might be oft-pregnant nurturers (birth control would land you in jail), yet she must remain morally impregnable. Far removed from the vile economy, women provided a safe haven for the harried worker whenever he came home. Here the children could receive proper moral guidance and social enrichment.
Thus the Victorian woman, though officially “dependent” and penniless, was persuaded, despite all appearances, that it was really her hand, not his, that rocked the world by rocking the cradle. And if you believe that, I have a big nuclear warhead I’d like to sell you—and by the way, honey, what’s for dinner?
Women’s liberation has meant so far that women have made some inroads into the male commercial sphere. Yet the domestic sphere of the USA remains stolidly separate from the commercial realm, operated by pure-hearted volunteerism. So today many middle-class homes sit largely unoccupied–except as a place to go after work or school to microwave and watch television.
Ever since the 1970s, Mom has been slaving away on the job market, same as hubby. Was it we feminists who accomplished this hideous undermining of American family life? Some claim so, but statistics clarify a larger reality. Most women went to work to keep the family nose above water. Katha Pollitt reports from A Woman’s Nation Changes Everything (the Shriver report from the Center for American Progress):
For the first time in our history, women are now 50% of the paid workforce…Four in ten moms are primary breadwinners… 80% of moms contribute a major chunk of family income.”
That’s because, since the 1970s, men and women workers as a whole have barely remained afloat in a leaky boat. Wages have not kept up with cost-of-living expenses and two workers and 80 hours of labor are now needed to cover a single mortgage payment. Elizabeth Warren reported this week in The Huffington Post what is now common knowledge. Yet what to do? 
Since 1970, male wages have been static, and the working class has lost ground. About this, says Warren:
But core expenses kept going up. By the early 2000s, families were spending twice as much (adjusted for inflation) on mortgages than they did a generation ago — for a house that was, on average, only ten percent bigger and 25 years older. They also had to pay twice as much to hang on to their health insurance.
To cope, millions of families put a second parent into the workforce. But higher housing and medical costs combined with new expenses for child care, the costs of a second car to get to work and higher taxes combined to squeeze families even harder. Even with two incomes, they tightened their belts. Families today spend less than they did a generation ago on food, clothing, furniture, appliances, and other flexible purchases — but it hasn’t been enough to save them. Today’s families have spent all their income, have spent all their savings, and have gone into debt to pay for college, to cover serious medical problems, and just to stay afloat a little while longer. http://www.huffingtonpost.com/elizabeth-warren/america-without-a-middle_b_377829.html
Meanwhile, a sensible 32-hour work week standard, passed by the Senate in 1939 when unions had some say, died and was deeply buried, along with big unions. To many economists, including John Maynard Keynes, shorter work weeks had seemed a logical way to address technology’s elimination of man-hours needed to produce what we need. In fact, a glut of material goods on the market had helped deepen the Depression.
Instead, technology’s dividend went to the wealthy, not to the working class. Instead, workers traded in wages for consuming, sold on technology’s wonders at home (the before-mentioned television and microwave). With wages going lower and jobs going overseas, families had to find a third service job or get a college education or increase their work hours, and that still didn’t help with disappearing health insurance benefits. Sometimes people got sick, and in the USA, we like to pretend we never were children in need of care, and will never get old. The best-managed American health insurance celebrates its “low utilization rates.”
Health maintenance became increasingly unaffordable for the middle and working class, both in time and money. Exercise, physical labor and home-cooked meals get sacrificed to fast-food and big-box consuming. http://healthyamericans.org/reports/obesity2009/ Long commutes to centralized shopping and work required maintaining not one car, but two. http://financialplan.about.com/cs/cars/a/101Car.htm
The mythical wall between private and public has contributed to our families’ impoverishment in time, health and money. “Separate spheres,” maintaining that wall betwen public and private, was a sexist idea that was never true and today seems only truly ridiculous. Radio and TV beam into our homes with commercial messages around the clock. Everyone is already twittering and blogging and being our friend on facebook, 24/7. If we ended the old prudish division between that old commercial sphere and the even older family sphere, women (and children) might at last become more visible players in the world economy.
So let’s face it like capitalists: Without our economically impoverished private family sphere, none of the public economic sphere could happen. The hand that rocks the cradle does rock the world—it just doesn’t follow that such a high mission should never sully itself with financial reward. By that reasoning, doctors, nuclear physicists and CEOs should also eschew high salaries.
Therefore, I propose that when anyone comes of age to get a job—or signs up in the armed services to put their lives on the line for our economic freedom and more global consuming—the parents who invested their time and their money into that individual’s healthy and socialized upbringing should get a dividend. The worker should get wages for his or her time, yes, but the worker’s family ALSO should get a dividend as a return on their long-term investment in the economy.
I didn’t come up with this idea all on my own. Marilyn Waring first noticed the skewed accounting of nations as a minister of Parliament in New Zealand and wrote about time and money in If Women Counted. http://www.amazon.com/If-Women-Counted-Feminist-Economics/dp/0062509403
An economics professor at Florida A&M University, Shirley Burggraf, proposed a social security dividend for parents. You can still get her book. http://search.barnesandnoble.com/The-Feminine-Economy-and-Economic-Man/Shirley-P-Burggraf/e/9780201479614
Other countries have a much more public discussion about public/private home issues. The Brits have openly exposed this false division between “spheres,? though I haven’t seen them connect it to 19th century dualism. James Robertson says we need a “SHE” economy (A Sane & Healthy Economy) http://www.jamesrobertson.com/neweconomics.htm and All Work and No Pay; Women, Housework, and the Wages Due, edited by Wendy Edmond and Suzie Fleming, makes a similar case. Check out Nora Castaneda and the Women’s Development Bank of Venezuela, too. http://www.inmotionmagazine.com/global/nc_wdb_int.html
Who would pay for this Family Investment dividend? All of us Americans should. We all benefit from every healthy worker’s contributions of time and attention to the economy. Family time invested in future workers could be figured as a percentage of the GDP. Likewise, that time’s returned dividend could be calculated as a 20-year bond investment in the future GDP. It goes like this: Whenever a family member raises kids to adulthood, they loan the country their time, money and hope in the future economy.
Whenever they loan time and comfort to retired or ill workers past their prime and on their way out, they’re also investing in the economy. In a capitalist country, hospitals and funerals contribute significant economic activity—and none of it would be possible without old, sick and dying workers.
Now, if your kid winds up in a crack house, naturally, the cost of curing him or sending him to prison would have to offset your parental dividend, but as soon as he was up and working on the job again, your dividend could come back, along with his wages. Your dividend could also be used to set aside against your future aging and eventual demise. Traditionally this has always been the arrangement between generations: you invest in me, your kid, and I’ll take care of you when you’re old. This was an economic activity long before there were dollars..
If your kid arrives on the job market with an MBA or a law degree, so much the better. A bigger dividend should reflect your larger investment in the American economy’s future well-being. Women and/or men who decide to invest time in families and America’s little future workers might also get tax breaks, same as they do now—only more on the level that companies do who come into town and provide a community with jobs. Yes, that kind of tax-break: property tax relief, assistance with operative set-up, abeyance of municipal charges.
What are jobs anyway? Only places where a worker’s time is invested in making products—consumed and used by whom? More of us workers! The economy is one huge sphere of workers and worker production, not two separate walled-off ones—not two at all!
If our government “of the people” had a mind to do it, Americans collectively might even match the expected parental time and financial investment, while the kid is growing up. We do this to some extent now with property tax investments in our public schools. The U.S. is the only major industrialized country not to provide some public funds for maternity leave. Other countries even invest in public health care, public childcare or flexible hours for working parents.
Misnamed, “socialism,” these capitalist investment policies recognize the financial importance of healthy youngsters, who grow up into healthy workers and managers and entrepreneurs tomorrow. Taxes on corporations and the owners of production could help pay for our collective investments in family, since they’re the ones who will benefit most financially from utilizing tomorrow’s responsible and healthy employees.
But if this doesn’t appeal to you, then consider the Tobin Tax, an idea put forward by Nobel-prize winning Yale economist, James Tobin, in the 1970s. His idea was buried and discredited by “free-market” bullies. But as nation after nation went bust, the dangers of currency game-playing kept resurfacing. If global speculators, gaming national currency systems and markets like a casino, endangered national livelihoods—why not discourage recklessness by taxing international transactions? Paul Krugman just reiterated the idea again in The New York Times (Nov. 27, 09). http://www.nytimes.com/2009/11/27/opinion/27krugman.html
According to South African economist, Margaret Legum, in her book, It Doesn’t have to be Like This, the Tobin tax would be impossible to evade and at a modest 0.25% would generate $250 billion on the now current $2 trillion in transactions. That’s $250 billion every year. That might fund our investing in our families—at least so long as we don’t allow yet another open-ended war to be declared. (War, it turns out, is profitable for everyone but the people involved.)
Yes, okay, the result of all this parental and shared community investment in our families would mean literally selling our kids’ into eventual wage-slavery. But we capitalists live with that reality already. Parents just don’t get a return on their investment. The Tobin tax could mean more public investment in this parental dividend; it could mean working class kids could get an education without putting their life on the line. Wars could not be waged without boys and girls desperate for money and meaning for their lives. Monetized caring could gain enough respect that more could decide to afford it more often.
Only because we’ve mentally kept the family sphere separate from the commercial sphere, do parents, especially moms, get little but blame and expenses for their parental time, or for caring for their own parents when they’re past their prime. So tear down the last fragments of that old 19th century wall dividing private and public spheres! Freedom! More capitalism for all!
Not separate at all, two spheres separated by a man-made wall has always been a convenient lie. For the families who continue to make this economy work, it’s been an expensive lie. We live as wage-slaves on the job and come home to a second shift of unpaid slavery. And for what? Capitalism! Our families need more of it!
I can’t get excited anymore by the bizarre mixture of bad news and Wall Street’s opportunism, up and down. I noted the dog-and-pony show Ben Bernanke put on The News Hour, defending the Federal Reserve’s right to call itself Federal, while refusing to end its secrecy. This secrecy, the Fed says, is necessary. We cannot name names. Any woman sexually abused or threatened will recognize this line.
A group of international, private bankers got Congress to put the U.S. Treasury and us taxpayers in bed with the Fed, but if you’re like me, you’ve begun to suspect it’s an abusive relationship. It’s all beginning to sound like blah, blah, blah, when I know damned well women citizens and taxpayers had better not trust them.
Gloria Steinem, in a talk to about 500 Vermont Woman readers, there for the newspaper’s 5th anniversary, http://www.vermontwoman.com/articles/0609/pubmessage.shtml added a short note of caution to a celebration of what women have wrought in a generation’s time. She asked us to remember what we’d learned from the domestic violence movement. The most dangerous time for any woman in a violent relationship comes when she’s ready to leave.
Take a look at women’s “economic” relationship with the U.S. We continue to be the majority of the poor. Our pay in the job market continues to lag behind men’s, particularly if we are mothers. Clustered in the lower income rates, we get fewer tax advantages, and see half our tax money spent for guns and weapons at the Pentagon. When viewed closely, this economy seems essentially rooted in violence, not only buying and selling weapons to wage war—a very profitable business—but with public policies that arm the rich all over the world—and rob and exploit women and our planet.
Worldwide, whether the war is economic or literal war, women get overrun, disregarded, or when hurt or killed, counted as “collateral” damage, if at all. Victims, women get blamed and discounted, whether for giving birth, or giving birth to the wrong gender—or as, here, for not demanding higher salaries, or for being hurt and misshapen by a multi-million dollar advertising industry that “targets” us.
Try drawing a few parallels between physical violence and economic violence, as you look at the Wheel. Male Privilege prevails on Wall Street. Using Coercion and Threats—that was Paulson’s method for getting TARP money, and now Bernanke is trying to Isolate us, refusing us information we have a right to know. You could say Blue Dog Democrats (almost exclusively white males) are Using the Children, calling a public healthcare plan “unaffordable.” These are methods many men will recognize, too. It’s not how healthy relationships or healthy economies function. It is anything but a democracy.
As women grow more economically and politically “independent,” watch out for danger and backlash. Women are much more than victims. We’re survivors and remarkably resilient, in a better position than ever to begin to make a difference in how our economy shapes up in future. Obama has put together a more diverse team in Washington than usual, but we women who aren’t economic wonks also need to put our heads together and do some safety-planning. We may need to build some economic shelters of our own.
For some bad but honest news about the economic perps, see Max Keiser’s July 28, 2009 article
http://www.huffingtonpost.com/max-keiser/the-shadow-banking-pyrami_b_245988.html
For hopeful policing, see Rep. Bernie Sanders’ letter to the Fed’s Ben Bernanke and his bedfellow, Timothy Geithner. The Fed has made 2.2 TRILLION available to international financial firms since Bears & Stern and Bernie wants to know—to whom did it go? He suspects Goldman & Sachs paid back its TARP funds so it could give out outlandish bonuses—in other words, The Fed may have made money available to them under the Fed table, to pay bonuses to the guys who hit us with the latest crash.
I love Obama, yet it’s disappointing to hear about his new economic plan—namely putting some regulation back in place to protect the status quo for the biggies. Okay, he is creating a new agency for protecting financial “consumers,” which I suppose is a nicer term than “debtors.” Still, why not call it a Citizen Protection Agency?
http://www.npr.org/templates/story/story.php?storyId=105718039
Worse, he now seeks more responsibility be given to the Federal Reserve. Hey, wasn’t the Fed and its board busy meeting behind closed doors the whole time our economy “approached the brink?” For years?
For those millions of Americans losing their jobs, the economy has already gone over the brink and down a dark hole. Economist Paul Krugman, who seems controversial because he’s at least aware of this, told PBS NewsHour June 17 he wanted a stronger plan, especially on financial compensation schemes. He was countered, in the ping-pong style that often poses as “objectivity,” by a banking lobbyist. Yet as writer Cynthia Kouril at FireDogLake points out, they agreed on one item, something I noticed, too:
Ms. Casey-Landry [the lobbyist] repeatedly made the point that major features of the financial crisis were not caused by regular banks or savings and loans, but rather by unregulated mortgage companies, or what she called “shadow banks,” and by the role of players like AIG, and by what she called “systemically significant institutions” (which I took to mean anybody deemed “too big to fail”).
See Cynthia Kouril’s article and links at http://firedoglake.com/2009/06/18/financial-re-regulation-grades-are-in-and-obamas-plan-gets-a-d/
It’s “systemically significant institutions” closely tied to the Fed to worry about. This system weighs most of us and the nation with debt impossible to pay. Who will regulate the biggest boys, who still bet on and play volatile games with currency values in international hedge funds? They “systemically” bring nations to their knees, only “normally” it’s been other nations. (If those are any example, hyperinflation will come next.)
Kouril thinks millionaire Democrat and Speaker of the House, Nancy Pelosi, is right. We need a big investigation. Now that S.386 has passed, write to your elected representatives and help make them do it right. http://www.speaker.gov/newsroom/legislation?id=0306
While you’re at it, check out bill H.R. 1207, The Federal Reserve Transparency Act, first proposed by Ron Paul, a Republican millionaire on the far right. http://www.govtrack.us/congress/bill.xpd?bill=h111-1207
I’ve yet to see how Paul’s retro ideas about re-establishing a gold standard for money-creation would help women “consumer” citizens, who are now being urged in TV ads to cash in their gold jewelry to pay bills. But holding the Fed accountable is a first step toward a financial housecleaning we badly need to have.
The Fed board now needn’t report out to the public what they decide at their board meetings or even who they loan billions to—given they are not really a government agency, but a system of private banks, posing as one. They create money as debt notes out of thin air. Paul wants audits at least.
On that note, William Grieder, a courageous writer, one who makes economics readable, has been critiquing a financial aristocracy for decades. He says he’s felt like “a bag lady out on the street corner, waving a placard to passing crowds.” So, hey, he relates. But now he has a new book—out from Rodale, not a NY publishing house. He believes this may be the crisis to wake us up from our slumber. If you find yourself feeling cynical and hopeless, William Grieder feels your pain, but says, Get up off your butt!
We’d better, before the thieves go on to the next robbery. Read an excerpt here and then go get Come Home, America. http://williamgreider.com/comehomeamerica
Thanks to my daughter, Kris, for this Mother’s Day article for investors in The Wall Street Journal. In it, columnist Jason Zweig advises men to share the reins to their investment portfolios with their wives. He opens with:
“Fess up, fellows: The masters of the universe have turned out to be masters of disaster. No matter which aspect of the financial crisis you consider, there is a man behind it.”
His article shows women investors tend to take fewer risks, trade less often and stick with their investments, leveraging less. He quotes psychologists who claim men are more likely to react to crises like our current one with anger, while women react with fear. That’s one way to put it, I guess.
http://online.wsj.com/article_email/SB124181915279001967-lMyQjAxMDI5NDExMTgxMTE5Wj.html
I think it more likely women understand their investments are only part of the universe. They’re well aware of how little trust should be put in arrogant men more interested in using money for self-aggrandizing sport, than in an honest return for smart investments in a future worth living. Acting with caution should only be called sensible—exactly Zweig’s point.
Warren Buffett, our country’s most famous investor, 
called last fall’s bank meltdown “an economic Pearl Harbor.” CNBC’s Becky Quick reminded him of this and asked him where we were, May 1st. Buffett looks like the Good-Humor Man with bodyguards, here, rattling his sword for stockholders, stating:
At that point, you could have lost the war. And there was a strike at the heart of the American system, the financial system…We got past that. Some of the right decisions were made then, so I give people great credit for doing that. The war isn’t over, though.”
Metaphors help explain what’s going on—but who exactly is the invader? Who is warring with whom? The last 30 years have seen a shameless increase in billionaires with hedge-funds, most of them “true-blue” American white males who employ CEOs. Meanwhile American wages and jobs have gone down or out of the country.
Game-players on Wall Street may love war. Winners get rich and become king of the mountain. But why should anyone fight for any king’s mountains of paper and electronic blips? Americans gave up kings when the Constitution was signed. I thought “the heart of the American system” was democracy, not “the financial system” Buffett here cites.
I am underpaid and overworked, aware of the growth in poverty around the world and among kids here at home. My adult children need 80 hours of labor to support their households, not the 40 hours my parents’ needed. Give me growing, living metaphors for any system you expect me to swallow.
Warren, make love, not war! Grow us money on trees! Dig out the cut-worms of debt. Weed out Wall Street’s witch-grass, choking out the flowering of our buzzing, living lives. I won’t rally round the flag for bogus war-mongering. I prefer what Pogo would have said about the economy last September and now: “We have met the enemy and he is us.”
This is one of the posters being distributed by A New Way Forward, an organization calling for a national day of protest against CEO and Bank Bailouts on April 11th. Their website will help you discover what is happening in your area. Go out into the streets with your pitchforks and rolling pins!
http://anewwayforward.org/demonstrations/
I chose this poster, designed by Eva Chrysanthe, because it’s so rare to see a female figure in the Investment Banking Bailout scandal. Her No and Section 382 refers to a tax law that was illegally overthrown last year by then-Treasurer Paulson, in a memo providing a tax windfall for his banking buddies who were already getting $700 billion from TARP.
I love the poster’s aside, commenting on women’s disadvantage: “Paulson played Defensive Lineman at Dartmouth, 1967. You: Did not.” Women aren’t at the top of the insider-clubhouse of the nation’s nine biggest banks, or at AIG and their ranks on Wall Street are shrinking. http://www.nytimes.com/2007/12/01/business/01wall.html
It’s easy to decide the crisis has little to do with us. So why then do women always get the short end of the financial stick? (or is that dick?)
If women educated themselves about the Wall Street Meltdown and the finance culture of male one-up-manship, we might get the structural reform on Wall Street and in Washington we so badly need. Without women’s voices pressing for big change, Obama won’t have what he needs to accomplish it.
A recent Bill Moyer interview, which I very much recommend, presented a lawyer-banking regulator who worked on the Savings and Loan debacle back in the 80s, William K. Black. Black said the nation needs a high-profile Congressional Investigation, as happened after the Great Depression–ideally one headed by an elected woman, he added.
http://www.pbs.org/moyers/journal/04032009/profile.html
Another recent radio interview of the author of House of Cards: A Tale of Hubris and Wretched Excess on Wall Street, William Cohan, asked this former Bears and Stearn investment banker, Did he think this would have happened if some intelligent women had been part of their management team? (I missed the male interviewer’s name, but loved his asking.) Cohan laughed and 
answered the culture was definitely one of Alpha males gone wild.
What if a million women asked the Fed and the Treasury and all their Wall Street game-playing line-men–what on earth were you thinking? Get real!
My son Keith sent me a link to a great video by Jonathan Jarvis. It helps explain in plain English why many of our mortgages are now called toxic, worldwide. He naturally has an interest, living in Las Vegas, where the real-estate market has bottomed out-or maybe it hasn’t yet.
As you’ll see, the whole credit system needs an antidote, as some international investment bankers’ “packaging” of risk (actually an exploitation of our nation’s housing) is poisoning the economic system with an overload of debt, the dark side of credit. Who are the “investors” this video talks about, who bank at international investment banks? To whom do they answer?
Crisis of Credit
Not to us. Our nation’s leaders are quick to rescue the “big players” by our nation’s enslavement to still more debt, just as they are now moving to rescue the American dream in our car industry. Yet GM’s Rick Wagoner leaves the company with $20 million in retirement (according to ABC) after having doled out more American jobs to robots or to countries where labor is not organized to defend itself. GM now plans to cut 49,000 employees by the end of 2009. Who does Wagoner and GM’s board answer to? The same international investors Obama and Geithner answer to at The Treasury and the Federal Reserve.
The film Roger and Me explains what has long been big autos’ direction for American workers, driven by the same international investors. Some are rightly asking, who exactly will buy autos if workers, even here in the U.S., cannot afford cars? Others ask, what will happen to earth’s climate if our world fills up with more cars?
See a funny short history, Annie Leonard’s The Story of Stuff, for a clear picture of why the same economic system that doesn’t work for mortgages or us, doesn’t work for the commonwealth of our nation, or for any nation really. It undermines Eros, the energy that charges human hearts, and it surely hurts Gaia, a healthy planet. This economy has worked, up to now, for “international investors” to whom everyone, from international corporations to nations worldwide, owes yet more borrowed and bogus paper money.
The Story of Stuff
My good friend, Paul Baicich, sent me this link to a great episode on This American Life on National Public Radio. The piece explains what’s happening to Citibank and other giants our government is bailing out with billions. It will make the hair on your arms stand on end, because you’ll UNDERSTAND it. Yikes. Thanks to TAL and writers Alex Blumberg and Adam Davidson for this – and other articles at this link.
Listening to this for 59 minutes is very much worthwhile. Just click “full episode.”
http://www.thisamericanlife.org/Radio_Episode.aspx?episode=375
I will share this link with my seminar on Money in Literature – the same day I show the film of Shakespeare’s Merchant of Venice. Maybe I’ll throw in a little Jimmy Stewart, as George Bailey doing battle with Mr. Potter in It’s a Wonderful Life-a lovable piece of propaganda.
Ain't it wonderful?
But NPR’s brave reporters didn’t touch the most blatant lie – that our network of insolvent banks borrow money from the Federal Reserve routinely – and that the Federal Reserve is itself a private network that poses as a government entity, while creating money out of thin air. Banks’ “assets,” which most assume are our deposits used to loan out, represent “liabilities” to the bank, while mortgages that create “credit” on the books (debt to YOU) are kept in motion by more air moola from the Fed. This bogus money creates debt systemically impossible to pay off. It represents 95% of the money in our economy-with only 5% issued by our government at the U.S. Mint.
The Fed also brokers our national deficit by selling t-bills that supposedly can’t go wrong, since we taxpayers will be left holding the interest-bag. The bag grew exponentially under Republicans Reagan and Bush. But even Clinton’s “balanced budget” never paid down a nickel of the principal owed-it only managed to pay the interest. So who benefits from keeping nations in debt? What are their names? That’s the sort of thing I’d like to see at Blumberg and Davidson’s blog, Planet Money. http://www.npr.org/blogs/money/
I won’t hold my breath, not with Charles Schwab advertising on the front page. Still Planet Money is another valuable link for understanding what’s going on. Just remember what side their bread is buttered on.
Bankers like calling debt the “credit” industry and, like going through Alice’s Looking glass, it gets curiouser and curiouser in their balance sheets. But even investment banks with big players who finance nations aren’t where the real action is anymore: it’s in currency trading, where nations get regularly busted and citizens lose the value even of their currency savings-which to the banks, remember, are liabilities anyway. With a currency devalued, a whole nation can be had for a bargain.
I am a subscriber to British green-economist James Robertson’s newsletter. His clear writing about the cross-purposes of “national” financing, namely the creation of money, not by governments (only 5% in Britain and the U.S.), but by private, commercial banks as “credit,” or rather debt, clarified for me the pickle we’re continually in.
Robertson’s work in Creating New Money: Monetary Reform for the Information Age http://www.jamesrobertson.com/book/creatingnewmoney.pdf led me to American writers Tom Greco (Money), http://www.reinventingmoney.com/ Global Research http://www.globalresearch.ca/, one of their writers, Richard Cook, http://www.richardccook.com/articles.php and Ellen Brown (Web of Debt), http://www.webofdebt.com/
All of them make it clear that the Federal Reserve System is not the governmental one we all assume. Its privately owned banks are in close alliance with private firms like Citibank and Goldman Sachs, who manipulate the market to suit the purposes of those who own most of our wealth. Any doubts I had about this were removed when the first “bailout” happened, the good old boys of banking in intimate contact, helping themselves to the Treasury-with no one accountable for where the money went.
Belgian ex-banker, Bernard Lietaer, http://www.transaction.net/money/bio/lietaer.html who helped create the Euro, says roughly this about the present means of money creation: if banks create “credit” out of thin air, as they do with Federal Reserve exchanges, mortgages and business loans, where then do we the people come up with the additional money always due for their interest? Where does that additional money come from? Systemically, such a scheme must lead to ruthless competition and what Riane Eisler (The Real Wealth of Nations) http://www.rianeeisler.com/rwon.htm calls the “dominator” paradigm. Who will be king of the mountain? Who must be pushed off to win?
Now Robertson, called the grandfather of “Green Economics,” is taking some hope from the enlarging of the usual G7 or G8 meeting of nations (for the top kings) to a G20 meeting, involving more nations than any time since Bretton Woods. He has put forward monetary reform as the first order of business-nationally first, and internationally second. His ideas may still seem radical-but only because most remain ignorant of how money currently gets created. For insights into new directions we might take for a more democratic future, check out Robertson’s clearly written recommendations.
If you haven’t read about monetary reform before this, stand by to say, huh? You mean this isn’t how money gets made now? Write to your congressional delegation. Write to Obama’s economic team!
http://www.jamesrobertson.com/article/nationalandinternationalfinancialarchitecture.pdf
President-Elect Obama’s “Remarks on American Recovery and Reinvestment” on Jan. 8, 2009, emphasized refitting America with job creation in the private sector ( public jobs like teachers, cops and firefighters mentioned briefly), along with investments in three areas: clean energy, high-tech upgrading of schools, labs and libraries, and the rebuilding of schools, roads and broadband networks. He also calls for $1000 in tax cuts for middle-class “working families.”
http://www.usatoday.com/money/economy/2009-01-08-obama-economy_N.htm
I’m most closely connected to education and so noticed his leaving out Pell grants for college students and ignoring data that shows education and testing improves when teacher: student ratios are kept low. Instead, he proposes technology will “upgrade schools.” Yet technology, to be effective, requires more education–but education of a particular kind. We need to teach students how to think and solve problems, not merely to purchase and test out the newest money-making tools for corporations, or to entrench our dependence on finding more money to buy more technology-the same old rat trap.
We need the “vision thing,” missing since JFK and his brother Bobby-unless you want to count Reagan’s “It’s Morning in America” wishful thinking. Are Obama’s “high-tech, high-wage jobs” and competing against kids in Beijing really the best our future generation can hope for? The wind and solar power he mentions may be smarter technologies, but we have larger human questions to face about what we do with our inventions and how we measure their impacts.
As the foundation of this megalithic global economy crumbles around us, so do its unsustainable assumptions of inducing debt as the only way to grow capital. It is debt repaid by an overproduction of goods and exhaustion of our natural resources, which is also unsustainable. We need new paradigms for reframing economic thinking and addressing our overload of debt, both our nation’s and our private ones, on a planet clearly in trouble. Monetary reform and revamping our relationship with the private Federal Reserve bank should be on the table, along with a concrete food-basket standard for stabilizing global currencies. Education for women, daycare support, and changing international birth control policy, might also help “competition.”
Most importantly, we need to make visible the economy of EROS, our human exchanges with each other and the earth. Competition can be dramatic, even fun in the short-term, but cooperation, collaboration and “paying” sustained attention is more economical in the long-term. These activities tend not to “count” in competition. Labor continues to be discounted in Obama’s economic thinking-and the “free labor” of maintaining life, including yours and your kids at home, remains invisible. Maybe Obama has a staff and Michelle to watch over such details-but most of us don’t and his $1000 tax cut splurge on the nation’s credit card won’t purchase much help.
