© 2008 Greg Kaiser

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Basis of Economy

“Agriculture, mining and manufacturing are the basis of economy and 'civilized' Human culture. There is no market without agriculture, mining and manufacturing. The market is the trailer. Real production and consumption are the tractor.“ - source: the obvious

September 22, 2008
      If you Google “basis of economy,” most of the responses will revolve about finance, consumers, corporations, investors, government and debt. The rest will try to coax you to buy something, probably on Ebay. Anyway you look for them you'll find few, if any, who consider the obvious. The economy is what we do to provide ourselves with the things we need to live. Until very recently, most interest centered about how to manipulate economic relationships for personal gain. That's the business of business. Now many of US have begun to see that profit and stocks are less substantial and fundamental, and less important to most of US, than the basic necessities of life. Those who have power, influence and lots of money are not yet so grounded in reality. They can still afford to buy what they need to live. That ability reinforces their naive belief that banking and finance are the economy. Duh-uh It works for them. They've got theirs.
      On Friday, 9/19/08, Secretary of the Treasury Paulson spoke at a press conference that was shown live on C-SPAN. It may be viewed in it's entirety at c-span.org. The treasurer assured US that he, FED chairman Bernanke and SEC head Chris Cox had a “productive session” with congressional leaders the night before. “We began a substantive discussion on the need for a comprehensive approach to relieving the stresses on our financial institutions and markets.” Beyond the airing of buzzwords, he noted that they'd been working “on a case by case basis in recent weeks addressing problems of Fannie Mae and Freddie Mac, working with market participants to prepare for the failure of Lehman Brothers and lending to AIG, so it can sell some of its assets in an orderly manner.” - Secretary Paulson - 9/19/08

      “The implicit belief that investment, banking and insurance are the fundamentals of economy is the fatal flaw of incompetent politicians and economists.” My alter ego also asserts that, “they dominate and threaten our existence with their self serving theories of greed, which elevate the few at the expense of repression of the many.” Unlike most economists, a real scientist understands a zero sum equation. A competent student of economy knows that all of finance is a super structure, like a pyramid scam built to fleece the ignorant, that serves to skim and concentrate money that represents wealth. The goods that give value to currency are produced by the real economy of agriculture, mining and manufacturing.
      The other says that “finance is the parasitic disease that afflicts the Human Race. Until we throw down our false god, economy will continue to deteriorate until the complex system we’ve grown dependent upon, and which is dysfunctional for most of US already, fails altogether and we are thrown back on individual and independent means of survival. Are you ready for a new stone age?” An incompetent, like most economists for instance, tries to treat the problem of a played out pyramid scam as a crisis of confidence. “. . . taking tactical steps to increase confidence in the system. . . .” - Paulson, 9/19/08. That's what any good con man would say when the mark begins to get edgy. We must “take further and decisive action, to fundamentally and comprehensively address the root cause of our financial system stresses. The underlying weaknesses in our financial system today is the ill-liquid mortgage assets that have lost value as the housing correction has proceeded.” - ibid “Note the glaring failure to understand the differences between price and value or money and wealth. This is typical of the elites who care only for the well being of their class and act only in its interest. He has also offended by the disagreement between the plural subject and the singular verb.” - the other.
      Commented the other: “Each infusion of cash, liquidity, support for banks, finance and investors, like that given to JP Morgan-Chase to buy Bear Stearns or the asset purchase for Fannie, Freddie and AIG by Paulson with money printed in our names, exacerbates the problem. They’re adding fuel to the engine that drives our common decent into debt slavery. But the rich investors, whose greed caused this fiasco, are being protected. They’re being given a market for their worthless derivatives and other junk they called securities. The concentration of wealth with the rich and the debt [slavery] for the rest of US are the problem.1 The bundled mortgages [MBS] sold as bonds and securities are being redeemed with taxpayer debt dollars, while our homes remain under the shadow of foreclosure.”
See January 31, 2008: Stimulate

1The Distribution of Wealth in America

      “The knowledge that free market capitalism could only have led to today’s economic disaster is growing among the victims of the minion politicians and economists, who obey the rich elites.” - the other. That is to say that many of the 90% are catching on. If rich investors take the money that was profit on last years consumption and loan it to consumers at a profit, while outsourcing our jobs to increase profits even more on what we buy with the borrowed money, what can be the result? It can only cause the growth of the money supply that economic elites have all to themselves. Now the game is played out. But our leaders are attempting to keep it going a while longer. The attempt to save it is the attempt to save less than ten percent of the population (who have most of the wealth even by their own measurements2) at the expense of the rest of US. The economy is the production of real substances and the trade among the consumers who produce them. “Finance, insurance and banking have always been the parasites that afflict US by the unnecessary load of profit they place on the real economic system. They are a threat to Human existence. We must confiscate their ill gotten gains if we are to live.” - the other

2The Levy Economics Institute

“Until we recognize the real fundamentals of economy and throw off the chains of debt by confiscating the money stolen from our community by the fraud of finance, our livelihoods and lives will remain at risk.” - the other. With most of manufacturing, mining and even agriculture outsourced [or cheap labor brought in and American workers downsized] FDR style stimulation can not work. We have no real economy to get moving. The greed of CEOs and the rich investors they serve has destroyed the economy to serve the profit of the few. And your pension fund? If they haven’t already looted it with fraudulent bankruptcies, the collapse of their pyramid scam will get it now. The conservative politicians are moving to protect the rich investors and the financial scam they call the fundamental economy. We’re being hung out to dry for the benefit of the rich parasites who rule US. They won’t tell US what they’re doing. There is no sincerity or honesty in them. They just want what they want and they want it all. However, they don’t have the courage to tell you that. They’ll hide behind sneaky lies and beg you to be fair to them. The only principle they really adhere to is the principle of greed. What follows is a partial list of their perennial and current lies:

- The sub-prime mortgages had the noble goal of providing homes for the consumers who took on the debt. If they couldn’t afford it that’s their own fault. Bullshit! Such frauds perpetrated on the less sophisticated are yet another greedy and even more evil tactic to reach the goal of the rich to have all of the community’s produce for themselves. They get more people into the base of their pyramid scam. If they have enough brains to understand the destruction of the real economy that their outsourcing and finance have accomplished, which few of the elite morons do, still they don’t care so long as they have theirs.

- They say it’s consumers 401ks that are being protected. Bullshit! Those aren’t the investors getting the bulk of this money. The greatest part of investment is owned by the 5% or less of the population who own everything else, including the mortgage on your home and therefore your home. That may be why the Levy Institute doesn’t count home prices in net worth. (download the pdf Working Paper No. 502 It’s also referenced at fairfield.edu) You’re really renting from the bank. Ironically, the stocks and securities that they do think are wealth have no real substance in most cases. They’re trying to hide the truth, as usual. The consumers investments are a small percentage of all investment. I’ll bet 90% of the population, if they ever had 401ks, have been forced to cash them by now. More are on the edge, teetering and about to fall into the abyss of debt to rich investors, whose wholly owned subsidiary government wants to bail them out, as they claim to want to protect the non existent 401ks. 401k hardship withdrawals up - 9/2/08

- They want to protect small businesses. All businesses, no matter how small or large, that provide services but produce no real products of their own, are part of the problem. Their cost is reflected in the real goods we buy to sustain our lives. That cost must be minimized to minimize the damage done by even the most necessary services. The maximization of the profits/costs of these services is anti-community and anti-Human. Private enterprise threatens US all for the well being of a few.

- Paulson, Bush and McCain, say that the economy is fundamentally strong or that they act “decisively” to save it? What the hell are they talking about? The fundamental economy that’s strong and vibrant is in China, India and the rest. We have little real economy left. The finance that the idiots think is the center of the world, and which they wish to save, is the parasitic disease that afflicts US. The economy must provide the things we need to live. The abstraction of finance, upon which we’ve grown dependent, profits the rich but must ultimately fail to provide for the rest of US.

- We live in a meritocracy. Everyone gets what they deserve. That’s easy to believe if your rich. Most of US must be pretty stupid to buy it. The term meritocracy was invented for a dystopian novel of the 1950s, which ridiculed the hubris, pretentiousness and greed of the elite and the middle class sellouts who work for them. It posited an educated class taking whatever they could for themselves without regard for country, economy or the rest of US. They create rationalizations for their greed that rely on their perceived intellectual, moral, spiritual and evolutionary superiority. Thus they merit their excess ownership. Reality mimics art in the way all Republicans and most Democrats espouse the “meritocracy” they faithfully believe exists today.

      Repeat! Agriculture, mining and manufacturing are the fundamental economy and basis of our culture. They’re what support our lives. The services and industries that support them, whether necessary or purely fraudulent like banking, insurance and finance, are costs that must be minimized or eliminated. We must do what we need to live: of, by and for the people, on a non profit basis, to guarantee our survival. Our leaders have done the opposite of what’s necessary to reduce costs to US. They’ve worked only to increase profits to themselves and their rich masters, who’re often one and the same. The costs of banking and finance, energy, medicine, transportation and communications must be minimized, for the well being of US all. These common endeavors can not be entrusted to the private enterprise that has betrayed US. What we need in common we must do in common - of, by and for the people/consumers. Community first! Rid our culture of parasites!


      There is no market without agriculture, mining and manufacturing. The market is the trailer. Real production and consumption are the tractor.
September 23, 2008

The Show Goes On

C-SPAN3 today starting at 10A to about 2:30P EDT:
      This morning they’re talking about [Senate Banking Committee Hearing with testimony by Paulson, Bernanke and Cox] saving the free market [tradition]. [Editorial Note: The free market and capitalism are a parasitic superstructure built by rich [neo] aristocrats to siphon money from the real economy of agriculture, mining and manufacturing. All of finance and trade abstract profit from the real activities we engage in to acquire the things we need to live. Unlike the profit of necessary services - like energy, transportation, communications and medicine that have some justification - the usuries of finance are purely destructive to the real economy.]

      The market is in distress. In particular the financial market is troubled. The real economy is vanishing in America. No trade or market of any kind can exist in the absence of the real economic activities of agriculture, mining and manufacturing. Yet the perpetual motion of money in financial markets is being touted as the heart of the economy. This morning Paulson is urging forcefully for “quick” action. Hurry! Don’t think about it there’s no time. Act now! [Editorial Note: He’s switching frauds, from con of confidence to the hustle of haste in giving him what he wants for his fraternity brothers in CEO and investor crime.] When he left as CEO of Goldman Sachs [May ‘99- May, ‘06] to become Secretary of the Treasury, he’d accumulated many millions1 in salary and bonuses. Last March the FED gave Goldman 29G [billion] to buy Bear Stearns. Now the Treasurer and Central Banker want to fill the pocket of the rest, who, because they’re in the know, will queer the game if they don’t get a big cut. So the bunko must be expanded to accommodate the rest of the players. Finance is about the abstraction of wealth from the real economy of production, trade and consumption of goods.

1Paulson made more $38 million in 2005, according to Goldman's proxy statement, with most of that, $30.1 million, coming from restricted stock awards, and stock options valued at $7.3 million. He got $29.2 million in stock grants in 2004 and $20.8 million in 2003, on top of his base pay of $600,000 each of the last three years. - CNN

      As the hearing progressed, Paulson chanted “quickly” as persistently as he'd emphasized confidence and decisiveness in the past few days. He thinks the hustle will work but even the Republicans are openly skeptical.

      The celebrities [testifying today] told openly disbelieving Senators that they want to save the institutions in order to save the people/taxpayers. Do they really believe that or do they simply have no respect for the rest of US?

      Bernanke compared the crisis to clogged arteries. He warned of a [financial] heart attack. [Editorial Note: He’s betraying his ignorance in the belief that Wall Street and the banks are heart of the economy. The elites, the clowns running this circus, even the good guys, don’t know what an economy is.]

      No one mentioned the possibility of not saving the investors, whose greed exercised through their corporate servants created the problem. A few paid lip service to free market possibilities of loss but none offered real alternatives. [Editorial Note: Let the institutions fall. Let the people, through our servant, the government, confiscate the ill gotten gains and the assets/capital, take over these services and perform them on a non profit basis of, by and for the people taxpayers that they have fraudulently claimed to serve and in whose interest they claim the bailout is contemplated. The investors and their accumulated capital, which is the wealth that the real economy and community produced, are the criminals and ill gotten gains that afflict US. It’s time we stripped them of the money and power they use to destroy our economy and country for their individual gain.]

      As the committee hearing continued Paulson backed away from the need for a blank check: a free and independent hand. He said, “I’ve read that I didn’t want oversight. I welcome oversight. . . .” He and Bernanke then repeated the need for urgency.
      At the end Chairman Dodd questioned the language in the [Treasury’s] proposed bill that denied the possibility of court oversight. Paulson repeated, without retraction of the request, that he expected oversight and needed to act quickly. Sen. Dodd said they’d need to work on that paragraph. Ranking member Shelby [R - Alabama] said he supported Dodd's and others' concerns and further questioned the pricing of the toxic assets.

      As to foreclosures, help for the homeowner would send the wrong message to lenders. “We’re trying to get the banks to make loans.” With respect to Executive compensation, especially for the fallen, Paulson thinks we have to stick with what works.
      Bunning [R-KY] asks if China will buy the bonds. Paulson says central bankers around the world first and foremost concern is to stabilize our globally intertwined economy.

      Paulson says these set of circumstances are unprecedented. No one immediately asked if his knowledge of history extended to 1929, though several Senators had alluded to it in their opening statements.

      P&B agreed that to protect taxpayers by paying less than face value for the toxic assets would discourage participation. Reading intelligent minds the savant suggests that if they won’t cooperate, the investors’ corporate servants have all their assets and money confiscated along with that of their rich owners.

“The People, United, Will Never Be Defeated!”

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