© 2006 , 2007 Greg Kaiser

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Exposé: The Chicago School Delusion

It’s the rich who are the weak. They give in to envy and desire for the produce of others. When they’ve misled the community and have hoarded our common wealth, they claim it was produced by their authority and hard work. We all know how many poor fools believe that sorry propaganda. We shall overcome the resistance. We shall vanquish this evil.

February 1, 2007
      Beginning in the Great Depression, we followed Keynes and Galbraith for thirty-five years, with progressive taxation, that ended in the greatest, most widely distributed prosperity this country has ever known. Then came Milton Friedman and the Chicago boys. In 1970, before Friedman was influential, a new Ford or Chevy cost less than $3000. T-bone steak was 89 cents per pound. A starter home cost $25000 and the standard mortgage rate was 4%. A union construction worker earned $10 to $12 per hour. One worker could support a family, own a home, have two cars and send his children to a local state university on that income. After more than 35 years of the corporatist’s perverse notion, (they believe the rich must be free to reap the profits of our work - ala Friedman1) it takes two incomes to have 75% of the buying power of one in 1970. Instead of more than 50% of the population with a shot at the American Dream, less than 20% can be said to be successful. Increasingly greater debt makes the success of the dwindling number of sellouts, sycophants and wannabees more illusory than real. The freedom of the rich to coerce our service by forcing US to work for them to make them richer, or the choice to starve instead, is a pretense to reason that a perverts the concept of liberty. [Ed. Note: It’s interesting that the same conservatives of the freedom of the rich and their corporations to own most of the property, the government and the rest of the community, especially including US, are the first to want to abridge our civil liberties in order to protect US from the morally depraved, criminals, tyrants and terrorists . . . excluding themselves, of course.]

1 “Freedom requires individuals to be free to use their own resources in their own way, and modern society requires cooperation among a large number of people. The question is, how can you have cooperation without coercion? If you have a central direction you inevitably have coercion. The only way that has ever been discovered to have a lot of people cooperate together voluntarily is through the free market. And that's why it's so essential to preserving individual freedom.” - Milton Friedman, interviewed in PBS’s “Commanding Heights” Interview conducted 10/01/00 [A Friedman biography, “The Power of Choice” aired on PBS on January 29, 2006 ]

      “. . . you have a central direction you inevitably have coercion. . . .” When there’s only one corporation [or even a hundred Giga monsters] central control by an oligarchy of capitalistic plutocrats will be accomplished. While conservatives rail against what they see as the inevitable central control that they infer from any attempt to create a socially just economy, they don’t see that the corporations emulating one another’s rapacity are creating the feared reality. They don’t see the conformity and lack of individuality imposed on consumers by corporate control and propaganda but only consider the worst case that may be inferred from an economy that works for all of US. They do see a fantastic vision of prosperity but don’t understand that it’s built on the backs of workers and cannot support the well being of more than a small percentage of the population and the CEOs and politicians they buy to manage their dominion. They project their own desire to dominate by economic tyranny onto any potential cure [or rival] for the parasitic disease that afflicts the Human Race. That disease is the conservative neo-aristocracy and the corporate clones, who oversee the workers who create the wealth, which 1% of the population steals from the community for their personal hoard. From the early 1970s until November 16, 2006, Milton Friedman was the champion/apologist for the corporate suzerains who are destroying America with their greed.
      One of the first corporatists, Mussolini, would be proud. The general decline, in the service of the advancement of the few, was inevitable, but Friedman and the neo-cons (the latter even got Milton’s specious message wrong due to their Keynesian borrowing to enrich their contractor peers and subsidies such as those to Giga Oil) could never see beyond their own short term gain to the damage their shortsighted greed, in the name of their perverse notion of freedom, has done to the community, which they depend on to make them rich. Friedman and the neo-cons, whom he’s perversely spawned, are really neo-aristocratic idiots. They are so consumed by their own inner workings of avarice that they can’t see the oppressive reality that their greed for the produce of the community has wrought for most of US. The rest of US, who suffer by their profit, are merely morons for supporting them or even tolerating the existence of their class.
      The neo-con’s abomination, by hybridization with Keynes, through looting of the treasury and community by debt accrual, money creation and capital infrastructure outsourcing of America, for the benefit of a few neo-aristocratic peers, was the afterthought. It was built in Rube Goldberg fashion on Friedman’s delusion that free markets and competition could produce the best of all possible worlds. No one has noticed yet that Friedman’s Pangloss vision had been debunked by the reality of the late 1970s. That’s when the Friedman-esque fantasy was beginning to take hold. Nixon’s Taft Hartley revisions had slapped down the unions. Employers were free (in the tragic Chicago School ironic way) to increase profits by raising prices and reducing real wages. That’s when we started down hill. The Reagan administration added momentum with trickle down crap and service economy insanity. The only thing that worked was concentration of the wealth in fewer hands. That process continues to this day.
      And Tony Snow speaks confidently of our strong economy. I’ve heard him acknowledge recently that not everyone thinks that everyone has benefitted from the pyramid scheme of finance. Duh-uh! Well it’s something though it’s only words that won’t lead to any significant act of contrition. The Bush gang doesn’t really want to see the damage their greed is doing to America. They don’t want to see the poverty their excess makes inevitable. They like Friedman for making them feel good about their evil. They won’t see it. Their blind trusts and the stocks of friends and family, the peers of the realm, are doing fine.
      For most of US, Friedman’s free market delusion is only slightly less mad than his faith that competition produces the greatest good for the greatest number. The loss of pensions and medical coverage, the reduction of incomes and loss of good jobs due to outsourced production, and the low quality products from China, which are all that we can afford, are all credited to competition and profit for the rich investors. That last is all that Friedman and his spawn can see. Their economic theories work for the few, victimize the many and dissipate the ability to produce wealth for all of America. I sometimes wonder if they really believe their own lies or if, in the throws of their pretensions to royal aristocracy, they simply don’t care about the consequences of their greed to the rest of US, the common people. In the final analysis, it’s irrelevant to me whether they’re the idiots they appear to be or are evil charlatans who wish to or don’t care that they cause pain and suffering in the community, so long as they may have more than their share of our common produce. One way or another - they’ve got to go!
      Until that happy day, we have no choice but to fight among ourselves for the scraps they throw to US, while they compete with one another to see who can squeeze the most profit out of our work or by reducing the quality of goods and quantity of packages. They increase the price of the products we consume, with the money they loan US from previous profits. The theory of capitalism has it the profit will be reinvested in producing bigger and better products but, like the delusion that competition creates lower prices, it’s never worked and never will. Compare 1970's living standard to today’s. Extrapolate that line to see where we’re headed. The investors will not put the profit they’ve extracted from US back into the community it came from. They want the big bucks. That means financing our purchases or someone else’s production. So those with the most end up making nothing but owning everything. They dissipate the economy by taking from the pool of goods but inputting nothing but marks on paper to balance the output. For those who have yet to see why pyramid schemes must fail in the end, I’ll again explain equilibrium. For those who embrace the Chicago school, because you’ve got your’s, I promise to work towards the cure of your pretentious hubris, until the day I die . In the mean time, the fools who mislead US will continue to lie, by telling US that the system works. In reality, it works only for them. Right now we may at least, and sadly, in too many cases, at most struggle to see the dysfunctional reality that scoundrels like Friedman, Nixon, Greenspan, Reagan, Bush, Clinton, [he wanted to do better and was somewhat better than the rest] Bush and Bernanke have created or, more accurately, prolonged . Facing the reality of their evil is the first step towards bringing down the ancient tyranny of the rich.
      I think there’s hope for most people, even those who loyally believe every lie they’ve been taught since they were ten years old. Try to get your head around equilibrium. It’s really quite simple. Imagine that there is a pot of produce in the center of town. If we want something from the pot, we must make a product to put in there. If we remove something but put nothing in to take its place, the equation of exchange, or economic equilibrium, is unbalanced. If everyone takes and no one works to make products and put them in the pot, the system of exchange quickly breaks down. The foreign trade imbalance and the devaluation of the dollar it’s causing are the perfect example of disequilibrium in the macro economy. If we don’t make anything that anyone wants to buy with the money we’ve spent in their country, our medium of exchange, our legal tender has no value to our trading partners. Can you see where this service economy lunacy must lead? We must put real goods into the pot, or paper that represents real goods [money that has real value] that we ourselves have made, in order to have access to the goods in the pot that other nations have put there.
      If we complicate the system by using money to represent the goods, nothing changes. If you acquire money without making a product to exchange for it, you dissipate the economic system as surely as if you made counterfeit currency. Interest on debt, profit from investment, insurance, banking or any other form of usury are as destructive to the economy that supports our lives as any counterfeiter, con man or thief. The illegal activities take from the common pot but put nothing back in exchange. The usuries of finance also upset the economic equilibrium by taking uncompensated goods from the system. The profit from interest that they make also inflates the money supply or at least concentrates it with a few elites. There it can only do more harm by being loaned out again or stagnate the economy by being hoarded.
      Milton Friedman wanted the elite to be free to continue to upset the economic equilibrium, so they might continue to hoard the common produce of the Human Race, as they have chosen to do for thousands of years. He said we will create the best of all possible worlds if we compete to rob the pot in the center of town. And it works! . . . for a few. His notions about choice, and coming together in the market place to cooperate, seduce many into allowing the elite few to continue to dominate the economy and take the common produce of the community for themselves. That corruption of social instinct for the benefit of the few is an abomination of Human Nature which dissipates economic equilibrium and threatens our survival. The Chicago School and the neo-cons don’t want to see what’s happening to the middle and working classes and the majority of Americans. If its in their face, they’ll tell US to look around the neighborhood and the world until we see someone worse off than ourselves. They want to distract US, by any and all means, from the biggest threat we face. They are that threat and their greed endangers our livelihoods and our lives. If cornered though, some of them will look you right in the eye and say, “I got mine. Screw you!”
      Friedman died on November 16, 2006. I wonder if his denial of the economic coercion of the many of US, who are forced to work for the enrichment of the few or starve, was made known to him in a final vision? If so, I wish he’d had it before he’d done so much damage to America with his specious notions of freedom, competition and the marketplace. Most of US have no real choice. We work for the rich bastards and their corporations [paper people to oversee the slaves] or starve. In the view from his narrow ivory tower, it must have looked like freedom and choice really are for everyone. Well, they probably did apply to everyone he knew. And why should those in the upper strata concern themselves with the mundane hardships imposed by them on those of US whom God made to serve them? That’s the kind of highbrow oversight that convinces them that the economy is booming. After all, the last time they looked, they had more than they’ve ever had before - of what ordinary people slave to produce.

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