Scylla and Charybdis

The deregulation of the market in the past 30 years has enabled corporations and banks to grow to a size which has started to destabilize the fabric of not only society but of capitalism itself. This shows itself in a number of ways.

Mass Extinction through Gravity

Because of their size, certain banks and corporations have started to destroy the competition ecosystem in the sense that their gravity makes it virtually impossible for competitors to even get a footing in the market: Competition is vital for the health of any ecosystem as it creates incentives for out of the box innovation. This innovation is driven by consumer demand. If consumer demand is controlled via mainstream mass media, and any alternative messages are drowned out by massive marketing campaigns, smaller companies and/or start-ups will quickly default. Compare this to putting earth close to Jupiter: though earth has technologically reasonably advanced civilizations compared to Jupiter (according to current knowledge), it will be ripped apart by the sheer gravity of Jupiter.

If the market is to stay healthy, it is necessary to create a more level playing field in the market where smaller companies can compete with the big boys.

Government Influencing through Gravity

Corporations are now in a position to severely influence and destabilize governments through the fact that they pay well for certain services. This former lobbyist describes in detail how just mentioning ‘that his company could be interested to offer a job to a government official when he stops’ was usually enough to own this person. Some people will object that this official should ‘just say no’, and in general I would agree that if somebody wants to serve the people, he should do exactly that: serve the people. However, should it be legal (or unregulated) for the company to just waltz in and try to bribe a government official? Many people refer to such regulation as ‘big government’, I rather see it as civilized government. If the United States want to evolve to a real democracy, such interfacing with the public should be regulated to battle the 3^rd world-type corruption that is witnessed nowadays.

Corporate Welfare through Corruption

Though corporations and banks maintain that they operate on the basis of ‘real capitalism’, I have some doubts: if real capitalism had been applied, most of Wall Street, the US automotive industry and many others would have folded. Instead, these companies have been bailed out with public money without even the constraint of transparency in how this money was spent.

Now this is a situation that 99% of us would like to be in…

This is not capitalism, it is not even socialism, it is a scam. Naomi Klein has described the principle of this scam in ‘The ShockDoctrine’: move public money to private entities' accounts.

Translation: taxpayer’s (public) money, meant for e.g. infrastructure, healthcare, environment etc, is taken and given to private companies where these companies have no result obligation.

Some people would get hanged for doing so in earlier centuries. We would call them highway robbers.

These are strong statements, but so is a foreclosure notice from Bank A to someone who did not make payment to Bank A because he was fired from his job at Bank A which he bailed out. 

If anybody wants to play in a capitalist market, they should be able to deal with adverse times by themselves. As companies in general do not want to make the investment to get to this state, the government should regulate and monitor this and be empowered to sanction non-compliancy if only to protect citizens against wild west style shoot outs.

Foreclosures by Companies on Welfare

This is adding insult to injury. What we see happening is that Bank A is bailed out by the government after losing at gambling with ‘products’ consisting of doomed mortgages (mortgages sold under false pretenses, i.e. we know the people that received the mortgage had a high likelihood of defaulting). Note: I am simplifying here and make no pretense that I understand such scams. The professionals don’t even really understand the Frankenstein monster they created.

So, Bank A is saved, and CEOs, sales managers and so on at the bank continue to receive their millions in bonuses, stock options and what have you. They now have time to look at the mortgages. Because of the crisis which Bank A partly caused, people start defaulting on their mortgages, and Bank A does not hesitate: foreclosure, get those people out. Let the state take care of them…

Again, public money to cover for private mis-management.

If banks can be saved from ‘toxic assets’ and be allowed to make a profit despite just having basically defaulted to the state, shouldn't citizens be saved from those same toxins?

Or should we just kick them out and see where it ends?

This is back to Corporate Welfare through Corruption. If the public bails out banks, this should mean that the banks have no claim on such mortgages.

Quick Conclusion

Am I saying that government should regulate everything? Am I pushing for ‘big government’?

Nope, I am just saying that it is time to find that thin line between a state-controlled market (does not work, the Soviet Union collapsed because of that) and a completely free market (as per above: does not work and is collapsing). Basically, the challenge is to navigate in between Scylla and Charybdis.

And that is something that some Greek dude was good at some time ago...

[To be continued...] 

The Web, the Whole Web and nothing but the Web

Earlier, I took a short look at bankers and the (known) dependency that politicians have in the current elector process: the best funded politician wins. This then creates a situation where for instance the treasury department becomes the lair of those that should have been investigated by the treasury department.

Such constructions then pave the way for legislation that enables CEOs to handpick the board that will decide their annual bonus, and even whether they have earned it.

I do urge you to read the excellent piece by Chomsky on the history, the mechanisms, the unfettered nepotism, collateral damage (systemic errors) and even brilliant miscalculations by Adams (Mr. Capitalism: yes, he saw that what is happening now as a remote possibility but assumed that executives would make the right choice). It is a bit longer than I intend to write today, and Chomsky is a much better writer than I am so very much worth your time.

But there you have it: Recessions have become the instutionalized way of transferring public tax moneys to private corporate accounts.

It is a way of working. Corporations nowadays have the (uncapitalist) freedom of taking risk-free risks. If things go ‘TiTs up’ as they say in Britain, bought governments will bail them out. All the 1% have to do is to stay on the good side of the 0.1%.

It’s systematic. We, the people (not the US people, all people) have a vampire at our throat and it is bleeding as dry. It starts at birth, in the hospital. Pay your bills, better have health care insurance. And if you don’t, you can go into bankruptcy (where public money is used to satisfy the thirst of the claimant) or you can die (at your desk if needed). A friend of mine in Baltimore came down with appendicitis, and had no health insurance (as she could not afford it). She was 19 at the time and had to file for bankruptcy to save her life. She was lucky as she did find a hospital willing to save her first and bicker over payment later…

Then you go to school. Now the Bill of Rights proclaims that people have the right to get a good education, as does the Universal Declaration of Human Rights (and I quote, please have a think on the bold parts):

Article 26.

• (1) Everyone has the right to education. Education shall be free, at least in the elementary and fundamental stages. Elementary education shall be compulsory. Technical and professional education shall be made generally available and higher education shall be equally accessible to all on the basis of merit.
• (2) Education shall be directed to the full development of the human personality and to the strengthening of respect for human rights and fundamental freedoms. It shall promote understanding, tolerance and friendship among all nations, racial or religious groups, and shall further the activities of the United Nations for the maintenance of peace.
• (3) Parents have a prior right to choose the kind of education that shall be given to their children.

Now, I do not believe that education is free in the United States, it has become an elite – or let’s say high priced – privilege. This has the disadvantage for the economy as a whole that the needed layer of well-educated people to produce the extraordinary talents has become much smaller which impacts America’s competitive edge.

At the same time we see that students are more and more trained to comply to behavioral standards, cut-and-paste type exercises and less and less in critical observation, empirical research and so on. In fact, we see schools starting to deliver minds that can do research-based research only. The moment hat one can then control access to the research material, one can control the outcome.

1984? Brave New World? Believe me, we’re in it and it is now being implemented. Those ‘freaky hippies’ (not my words) out there in the cold have seen it and have the balls to make a stand. If only because they are in the trap too:

So you finish your studies that you had to dearly pay for: say you have an MBA and a $60,000 loan debt? Why have you been so stupid? Well, you were told that the world is a playground once you have your MBA.

But that great job isn’t there (see earlier), and the bank who agreed to the loan probably knew it. And so does the company that will hire you to administrative work (other stuff has been outsourced but the company gets tax incentives to provide you work, though no KPIs are given). As your debt information can be obtained by the company you go into your salary negotiations at a bit of a disadvantage and in the end will work for the minimum amount that the company will pay.

You may have fallen in love with somebody who also is thus employed and the two of you may produce a wonderful child. In that case go back to hospital but make sure to include the fact that by this time your debt has tripled from your original situation. Quintupled if you have bought a house.

Which by the way is worthless now. You can’t maintain it (as you are paying off debts to the bank, you cannot sell it (as you will go bankrupt and homeless; the houses in your street are all empty shells by now anyway)…

I could go on but everybody knows the stories.

“Debt, n. An ingenious substitute for the chain and whip of the slave driver.”
Ambrose Bierce

Of course some debt can be avoided, credit card debt is not necessary. Only, it is so difficult to pay without them if the system has been geared towards paying with plastic. And the debts described above are very hard to avoid. They have been made mandatory, systematic.

Meanwhile, just to make sure, we now see that Wall street and NYPD will share the same observation unit built with public money. The signal given here is ‘we don’t have to hide it any more, deal with it’.

It is all there. Right in front of you.

And for the past 30 years the Web has ensnared not just government but also schools, hospitals, and media: why do you think you think the way you think?

Little self check: how many hours per day do you watch television? How many hours are you exposed to television? Have you ever tried to go without television for a week?

TV has isolated us from one another, and it has dulled our natural inquisitiveness, our ability to ask critical questions. Ever since corporate companies have added TV to their repertoire, they have been brainwashing the public, i.e. you…

If there is one danger posed by the Occupy movements it is that these people will start thinking really critically because of TV deprivation. That’s a risk I can live with.

These (often young) people see what we see, and they question it with a passion (darn, they must have been skipping TV for a while now, or maybe grown resistant?).Eliot Spitzer has written a must read tribute to them.

Let’s make a couple of observations on how we could tear the web:

1.       Know where the dependencies are: politicians will serve campaign contributors, not you. Money (or corporate; we really need to start defining this in detail if we want to know what we’re up against) has now reached even the most mundane type of elections.
2        Stop watching TV. Follow the news, read up, get informed.

3.       Know that all the trillions that everybody is speaking about are even more undefined than ‘Money’. A lot of it is Excel type calculations on how to make money in a system where real profit based on production has left the building. How much poorer are we when Monopoly money burns? And what would stop you from getting your money from the bank (as this is the real money (= your life’s effort) that you put in)?

4.       Don’t fear. Look at the kids out there, protesting. They have every reason to be afraid, yet they go on. Fear is what ‘Money’ has given us for years, it has gotten us into wars that nobody wanted, it has brought us here: once proud nations run by servants, begging their masters for a job…

Don’t fear, shout.

Breaking up Occupy Protests and the Constitution

Gone to my good friend Wikipedia again (have a think on the bold parts):

“In the United States, inalienable rights are derived from the people themselves and are protected primarily by the enumerated articles to the US Constitution, known as the Bill of Rights. Persons may also have inalienable rights protected by the state. Since the United States Constitution is a design of limited and restricted government and has absolutely nothing to do with the private state citizen, then it stands to reason that all inalienable Rights are guaranteed either by nature or by the Creator.

The provisions providing for rights under the Bill of Rights were originally binding upon only the federal government. In time, most of these provisions became binding upon the states through selective incorporation into the due process clause of the 14th Amendment. When a provision is made binding on a state, a state can no longer restrict the rights guaranteed in that provision.

Examples of provisions made binding upon the states are the 6th Amendment's guarantee of a right to confrontation of witnesses, known as the Confrontation Clause, and the various provisions of the 1st Article, guaranteeing the freedoms of speech, the press, religion, and assembly.”

This may be a question that should be answered: reading the above, I would think that the 1^st amendment takes precedence over local law (e.g. park is closed between 11pm and 6am, in those times you’ll be trespassing). If so, then right now all arrests made in Chicago, Denver, etc etc would be illegal.

At the same time, New York’s plans to change the law to make protests illegal under local law would then also not give the result that is looked for.

By the way: I signed a petition asking Chicago’s mayor to stop arrests, and gave it the same reasoning: 1^st amendment in my view takes precedence over local law.

Again, I am looking in from the outside, and I understand that current protests do threaten the power positions of a group of people. Naturally, they will fight, as happened in Egypt (applauded by USA government), Tunesia (also applauded, they are now having free elections as we speak), as is happening in Yemen (USA govt with protesters), Syria (ditto), Libya (well…), etc etc

Only at home, the government (local, federal) seems to not appreciate protests even as the root causes are clear: USA is in many ways a 3^rd world country where the Bill of Rights is no longer guaranteed to its citizens. Though the right to bear arms (or arm bears) is vehemently defended, most citizens live in fear of their lives because of it. Rights to education, counsel, vote, privacy and assemble are no longer defended by the government, unless you have money.

And 99% of the people who are supposed to vote for a government that defends their rights don’t have the money.

More Strands of a Tangled Web: Student Loan Debt

This is a nasty one…

Fact is, not every student qualifies for a scholarship at university. That is fine, and a country needs a well-trained work force in order to compete in the market, especially in this time where knowledge comes at a premium.

The interesting deal that corporate America seems to have made with the banks and educational systems is this:

·         Educational systems charge top dollar for an education that will bring ‘the great paying job’

·         Banks lend the money to the student to pay top dollar… and charge a hefty interest from the first day after graduation. This is where the pressure cooker is slammed shut and the heat is on.

·         Corporate America hires well-trained employees at bottom dollar. This is where the descent into slavery starts.

The gamble by the student was that taking out a loan of tens of thousands of dollars would lead to a situation where the student could easily repay the loan. How different does this play out in reality…

Leaving aside the personal misery this puts people in, it also hits government finances:

·         Health: people walk around uninsured (let’s leave health insurance for a future episode). Once they get sick, what are you going to do? Let them die (well, this option is sometimes taken; yet another episode)? Or treat them, at the public expense?

·         Society: how do people deal with a society where their friends from one day to the other are say, 60,000 Dollars in debt, with a Master’s degree in engineering, and forced to work as a cash teller at the bank that holds their debt? Now, for a time, fear of going bankrupt will keep people quiet (has done so far the past decades) but that bubble (like any bubble) will burst.

·         Crime: under the strain of heavy debt people are more likely to join the dark side, if only because it pays better than McD’s. this then again increases the cost of police (which I believe were recently voted out of a job), increases society’s sense of insecurity (but then, we have all these heavily armed contractors from Iraq that will at some point be looking for a job)… Sorry, I do tend to have an overactive imagination.

·         Drugs: Nancy Reagan used to ‘just say no’ but her situation was a bit different. If there is one thing that we have learned over the past decades (internationally): if you want people to turn to drugs, make them poor, make them feel helpless, grind them down and use them.

I just named three perspectives only of what this system has done to people. What is great is that people have not turned to drugs, or crime, and are still healthy enough to march.

But the government must take action, and this delivery street of wage slaves should be closed down.