Memo to Congress: Show Us the M-O-N-E-Y!

Part 1 of 3

Cuba Gooding Jr. became an overnight sensation when his character, pro football player Rod Tidwell, pithily directed his high-minded but needy agent Jerry Macguire, played by Tom Cruise, to “Show me the money!” Tidwell’s terse directive is as practical as it is memorable and luckily for Tidwell, Macguire delivers.

Whether out of extraordinary resolve or sheer desperation, a “show me the money” policy is exactly the course Fed Chair Ben Bernancke is pursuing at full throttle. Faced with the unenviable task of reflating a deflating and uncooperative economy, the Fed opted last fall to take the “easy money” quotient a notch higher by formally initiating a second round of quantitative easing, while tacitly acknowledging the possibility of QE3, QE4, and so on into the undefined future. With Fed Fund rates effectively at or very near zero and a trillion dollars already in reserves, the Fed is in other words doing all it can to get the “credit-as-money” spigot flowing.

While hardly a ringing endorsement of the Fed, the truth is that the Fed has few other “money spigot” tools at its disposal. ((While Fed tools may be limited, its options within that framework of tools are less so. In this video presentation prepared for the American Monetary Institute, ex-marine and long time AMI board member Dick Distelhorst explains that the Fed actually has the ability to issue “money,” based on reserves, directly to the American people instead of to the banks as it has been doing, thereby bailing out the people instead of the banks. While this interesting option would still be based on debt (that is to say, creating money at interest based on bonds held in reserves), it does nevertheless raise the important question as to why the Fed chose to support the errant banks instead of the people who are forced to pay for the bailout. Answers to that question may potentially be found in 13 Bankers by Simon Johnson and James Kwak and similar books along with articles such as this, this, and this. But particularly for the purposes of this article, the present author has charitably conjectured that the Fed unwittingly over-looked this option in favor of fractional reserve monetary (that is, credit/debt) expansion – which of course can only be done by the banks, but which could potentially get more money (as credit) into the system.)) So it was that – in an op-ed appearing in the November 4 issue of the Washington Post – the beleaguered Bernancke reminded the nation that the Fed cannot, by itself, solve all the problems rippling through the American economy. That process said Bernancke “will take time and the combined effort of many parties including the central bank, Congress, the administration, regulators and the private sector.”

Although the Fed for its part has shown unusual resolve to go the distance, the stimulative activities of the private sector – disconcertingly led as they are by a handful of big banks – are mostly focused on overseas “opportunities” in the emerging markets and not stimulative activities here at home. This combination of “cheap” dollars and cheap emerging market prices has of course enabled the financial sector to do quite well, despite increased risk. Meanwhile even those regulators not previously captured by special interests find themselves increasingly hobbled by a complex matrix of old, new and proposed regulations interlaced with a variety of deregulation schemes which together dilute the likelihood of effective action – and maintains the regulatory environment for “rogue Wall Street firms to kill small American businesses for profit.”

That leaves Congress and the administration. While both are also arguably captured by special interests, they are clearly feeling the intense pressure of a cash-strapped public. Hence the recent tax-cut bill which will add nearly a trillion dollars to the federal debt but do little to stimulate adequate money (as credit) creation where it is needed most – not in the financial economy headquartered on Wall Street but in the real economy, here on Main Street. Now caught between the proverbial rock and a hard place, the Fed, by its own admission and despite its high minded goals, appears every bit as needy as the erstwhile Jerry Macguire.

Main Street’s Woes Belie Wall Street’s Gains

For the moment, the Fed’s “easy money” goal of raising asset prices seems to be working, albeit not necessarily in sectors – such as real estate – where it would do the home economy the most good. Capitalizing on stockpiles of cash, good credit and “cheap money” secured by uber-low interest loans and back-stopped by TARP, the big banks and large corporations – together with a small army of investment funds – have been having a field day speculating in potentially lucrative but nevertheless risky ventures, inflating as they go various commodity prices such as wheat, corn, hogs and similar commoditized foods, as well as health care, precious metals and oil – and raising the possibility of igniting dangerous currency wars through revved up currency speculation.

Surging prices for necessities such as food, oil, and health care send mixed signals to ordinary Americans because inflation in the U.S. economy (after stripping out volatile food and energy prices) is actually at the lowest level it has been since 1957. Clear evidence of this phenomenon appears in the retail sector where for months retailers have been slashing prices on a seemingly endless supply of goods. While bargain hunters and incurable sentimentalists appear to have responded for the holidays at least, one has to wonder how the slimmest of profit margins can sustain not only retailers but their suppliers – and in turn, the myriad of producers and raw materials providers needed for finished goods, even if these are sourced from cheap-labor countries.

Ominously, job growth (with the exception of part-time jobs) is also going mostly nowhere, a fact which – however contra-indicative of an apparent holiday spending spree – does nothing to reverse the troublesome downward spiral in prices and wages. Consensus also has it that higher-than-normal unemployment will be with us for years to come. All of which affirms Bernancke’s preoccupation with stagflation and deflation – and bodes poorly for the Main Street economy inasmuch as “falling prices often also mean falling wages, as businesses respond to declines by cutting output and jobs.”

Wall Street gains make it clear that the banks and investor class are doing very, VERY well, thank you very much. Another portion of the population, perhaps as much as a third overall, is doing reasonably well – or at least well enough to keep up appearances. We have in other words, two Americas which, if understood, helps us make sense of conflicting economic data. The top 20% of Americans are prospering and spending handsomely despite carrying the major share of the tax burden, while the next 20% represents a fragile middle class that has become “mostly a figment of nostalgia and/or political illusion.” In real terms, the bulk of Main Street, including drop-off portions of the shrinking middle class, is bleeding profusely with one of every six Americans unemployed and countless more chronically “underemployed.”

Unfortunately for those most severely affected, the level of suffering is masked by the fact that there are “wide variations of hardship in the 50 largest metropolitan areas” – and official estimates do not always paint accurate pictures. As but one example, Detroit’s mayor and local leaders maintain that Detroit’s unemployment rate actually hovers near 50%, a figure far above official estimates of 30%.

Contributing to the probability of an increase in Main Street woes is the likelihood of a second dip in the housing recession – meaning home prices have yet to hit bottom. This translates into progressively fewer Americans who will be able to tap into home equity as a means of getting themselves through tough times – and it could bring about another tsunami of foreclosures. In turn, local real estate and other tax revenues will continue to decline even as demand for social services increases. This spells additional trouble for state and local governments, with states themselves collectively facing a $140 billion dollar operating budget shortfall next year alone.

Big Trouble Ahead for State and Local Budgets?

Indeed, state and local operational budgetary problems are becoming serious enough to threaten the inviolability of once “super safe” municipal bonds – which heretofore have been considered an attractive investment that comes with the added benefit of providing state and local government with funds for community improvements. Because bonds are essentially loans which the issuer (be it corporate or governmental entity) must pay back with interest, income streams of the issuer must be adequate enough to satisfy the terms of the loan. Unfortunately, low tax revenues and weak economic outlook are now compromising the bond issuer’s (borrower’s) ability to meet the terms of the loan – so much so that municipal bond defaults have been running triple the usual rate.

Economic forecasts that are tepid at best lead anaylsts to “fear that at some point, investors could balk at lending to the weakest states, setting off a crisis that could spread to the stronger ones.” Big name financial analysts such as Meridith Whitney and bond experts such as Marilyn Cohen go so far as to pose the possibility of widespread muni bond defaults.

While not everyone believes state and local budget problems are severe enough to create a ripple effect of bankruptcies, it is nevertheless unsettling to recall that the Great Depression actually began – and was prolonged – as various municipalities, mostly in the South and Midwest, began cutting services and defaulting on bond debt. A re-play of the Great Depression notwithstanding, the one thing most agree on is that states and communities with high levels of debt and poor revenue prospects will at the very least see the cost of borrowing head skyward, as investors head for cover.

Compounding muni market fears is the fact that, while investors of muni bonds may at one time have been lucky enough to have ended up with the equivalent of a piece of Central Park in satisfaction of debt defaults, today many such investors may not fair so well. This is in part because the states themselves are ill-prepared to help themselves much less troubled municipalities, and in part because, in the words of SEC Commissioner Elisse Walter, “investors in municipal securities [have become] in many ways ‘second-class citizens’ who [do] not receive the protections customary in many other sectors of the U.S. capital markets.”

Although states themselves cannot declare bankruptcy and typically look to other ways to satisfy their debt obligations including recasting pension contracts, increasing taxes and slashing programs, they can, at their discretion, help municipalities in trouble. States are, however, much less likely to provide such help when they themselves are in financial trouble. So what happens when a state refuses to rescue a troubled municipality? The municipality can potentially be forced into bankruptcy, leaving bond holders holding the bag.

As fiscal pressures have mounted, states seem to be turning to unorthodox methods in order to remain operational. This is verified by new evidence – emerging as a result of SEC investigations of New Jersey, Florida, California and elsewhere – which suggests that many states may be papering over their fiscal troubles by providing fraudulent information about their finances to muni bond investors. The states do this in a variety of ways, including keeping liabilities under wrap through delayed filings or by burying them in opaque documents. They also may resort to deferring payments of obligations and re-characterizing bond debt as revenues.

In the case of Illinois, for example, heavy borrowing and a history of deferring bill payments has led three major credit-rating agencies to rank Illinois as one of the two riskiest states for bond investors, California being the other. In his final quarterly report, published January 7 (2011), former Illinois Comptroller Dan Hynes warned that “the state could face $7 billion to $10 billion in unpaid bills by the end of the current fiscal year… Any use of bonds to deal with the state’s fiscal condition will continue to impact the state’s cash management practices in the future, as the state must adjust to those higher debt service obligations.”

Despite such warnings, “Illinois plans to borrow more than $3 billion to pay the bills for FY2011 and in June 2010, the legislature permitted the university systems to borrow millions more to make up for the fact that the state has not made the payments it had promised them.” In other words, Illinois is not only borrowing more to pay its own bills (by floating bonds) but it also has begun allowing other entities within its purview the new privilege of borrowing as a means of helping that entity to meet the state’s portion of obligations to it. This according to the non-profit Sunshine Review, which is a collaborative research organization dedicated to state and local government transparency.

The Sunshine Review further reports that: “As of the end of August 2010, Illinois had borrowed $9.6 billion in the prior 12 months.” For Illinois residents this means that as much as $551.3 million extra will have to be shelled out for the state’s borrowing over the last year alone. In addition, “more than half the state’s additional borrowing costs, amounting to approximately $301.2 million, will come due in the next five years.” And adding still more salt to taxpayer wounds, “the cost of insuring five-year Illinois bonds to protect $10 million of debt against default in June 2010 rose to $370,000, a record, from a low of $155,000 in January, 2010. The price fell back to $281,000 at the end of July 2010.”

In addition to the myriad problems associated with borrowing to pay obligations (about which we have only touched upon here), there is another problem connected to the budgetary process – and it lies in current accounting practices which rely on the cash basis method (also referred to as modified accrual basis). This according to the Institute for Truth in Accounting, a professional group of financial and public policy experts dedicated to reform of the GAAP accounting practices now used under the Comprehensive Annual Financial Reports (or CAFRs). For example, “the state of Illinois routinely delays Medicaid payments to healthcare providers. Each year the budget appears balanced on a cash basis even though the state does not provide sufficient funding for the Medicaid program.”

While arguing that “objectively better” accounting systems are universally employed in the private sector, the IFTA said that its research found that the current accounting system “does not give all stakeholders an accurate diagnosis of the financial health of state governments because the accounting principles recommended are biased towards the interests of government officials. The current structure and funding mechanism of the GASB make it difficult for members of this board to not be influenced by constituency groups that represent governmental officials and their staff.”

Thus, says former SEC Chairman Arthur Levitt, “At the core of the [muni] problem are questions about how governments manage pension funds, what investors know, and when they know it. The case against New Jersey revealed that the state has made unfunded pension fund promises to its employees, and compounded the problem by not being forthright with bond investors.”

In ideal circumstances, pension funds are supposed to keep up with benefit promises through a combination of employer and worker contributions, together with market returns from a fund’s investment portfolio. But, says Levitt, those revenue streams have slowed to a trickle as states have cut back on their own contributions, employees have contributed too little, and hoped-for investment gains have shriveled up. If investors discover that the muni market has instead become a way to paper over irresponsible promises, they will flee it, and that could spell disaster.

Investor anxiety has become significant enough that “some analysts have suggested that the Fed could ease muni market worries by purchasing muni debt or lending to struggling borrowers.” But on January 7, Fed Chair Ben Bernancke nixed the idea on legal, political, and practical grounds, saying “that if municipal defaults did become a problem, it would be in Congress’s hands, not his.”

But assuming that Congress will bail out any state in terminal trouble is itself a very risky gamble. Why? Because “[a]nything that the feds do for one state they’d have to do for others, which would turn into a bottomless and politicized spending pit.” With balance sheet problems of its own to contend with, the federal government is hardly in a position to bail out a string of troubled states, this fact being reinforced by growing taxpayer objections.

All of which brings us back to the unchartered waters of quantitative easing. Will QE2 and beyond be able to provide the kind of economic relief so desperately needed by Main Street? This is likely to remain an open question for some time to come because the money spigot used by the Fed can only create money as bank credit – and credit becomes far more expensive, indeed sometimes altogether unobtainable, for those in financial distress. Which of course translates to a “tight” money (as credit) supply – right where it is needed most, here on Main Street.

Should QE2 (or maybe 3 or 4) somehow ultimately work well enough to satisfy squeaky wheels, there’s still that pesky question forever lurking in the background: Can we REALLY keep borrowing our way into prosperity – or is there a better way? ((Monetary expert Will Abrams explains Canada’s experience under two types of monetary systems, one built on debt – the other on the creative and consumptive activities of the people.)), ((For an abbreviated, step-by-step explanation of our current monetary system see “Money Owed and Owned.” Or see this more technical description. ))

Stay tuned.

Geraldine Perry is the co-author of The Two Faces of Money and author of Climate Change, Land Use and Monetary Policy: The New Trifecta. Read other articles by Geraldine, or visit Geraldine's website.

14 comments on this article so far ...

Comments RSS feed

  1. Don Hawkins said on February 12th, 2011 at 7:01pm #

    Well done article now just on the off chance we wish to survive and the ability for Earth to sustain life here’s another good read and read between the lines a bit like instead of war effort change that to the fight for survival.


    From the beginning of preparedness in 1939 through the peak of war production in 1944, American leaders recognized that the stakes were too high to permit the war economy to grow in an unfettered, laissez-faire manner. American manufacturers, for instance, could not be trusted to stop producing consumer goods and to start producing materiel for the war effort. To organize the growing economy and to ensure that it produced the goods needed for war, the federal government spawned an array of mobilization agencies which not only often purchased goods (or arranged their purchase by the Army and Navy), but which in practice closely directed those goods’ manufacture and heavily influenced the operation of private companies and whole industries. EH

  2. Don Hawkins said on February 12th, 2011 at 7:34pm #

    Geraldine so far not that many people have let there mind think the unthinkable maybe for a minute or two but to face the problem’s we all face will take a total focus. This year and next should make that unthinkable part very clear. 2010 Russia the Amazon, Pakistan, China, the Arctic, Australia that’s the big event’s there are smaller one’s and they are adding up. This time we can’t wait until they bomb Pearl Harbor so to speak but act now yesterday would have been better. Here’s one that just might be hard for some zero growth. It’s the economy stupid that is a very old way of thinking and now with known knowledge still somewhat hidden from view to say that is stupid if we wish to survive. Just on the off chance now at 99 to 1 we have to think outside the box or for that matter just think reason not instinct knowledge not illusion.

  3. Don Hawkins said on February 13th, 2011 at 4:41am #

    A severe winter drought is threatening crop production in China, the world’s biggest wheat provider, the UN’s Food and Agriculture Organisation (FAO) said in an alert issued on Tuesday.

    Substantially below-normal rainfall since October in Northern China has not only put the crop at risk but has also caused shortages in drinking water affecting over 2.57 million people and their livestock, FAO said.

    “The ongoing drought is potentially a very serious problem,” the Rome-based agency’s alert said, adding that the main affected provinces — around 5.16 million hectres — represent two-thirds of national wheat production. AFP

    Capitalizing on stockpiles of cash, good credit and “cheap money” secured by uber-low interest loans and back-stopped by TARP, the big banks and large corporations – together with a small army of investment funds – have been having a field day speculating in potentially lucrative but nevertheless risky ventures, inflating as they go various commodity prices such as wheat, corn, hogs and similar commoditized foods, as well as health care, precious metals and oil – and raising the possibility of igniting dangerous currency wars through revved up currency speculation. Geraldine

    Is there a better way and stay tuned well so far stay tuned to what maybe Huckabee singing somebody is going to get the shaft. Here’s two chart’s that I have never seen on MSM never now the price of gold that the last time I checked you can’t eat or oil that to drink might not be a good ides we are showed on a daily basis.


    Growth you can believe in and yes you can measure GDP with that chart with a little lag time.


    When the jet-stream is blocked by high pressure it dips southwards and lets freezing air flood in from the Arctic regions and why the high pressure a warming Earth. Now in the summer this summer will not be boring and note that chart is from NASA that sure seem’s to be on house arrest from the wise old Owl’s. I guess I could have put the chart from NSIDC that I have never seen on MSM never the ice in the Arctic. So I guess these scientists in Colorado are also on house arrest Galileo Galileo. Go shopping well am thinking a few 2 by 4’s some deck screw’s and a sold plan to build a Pyramid with a dollar sign running through it again wouldn’t want anybody to get confused. I wonder do you need a permit heck I’ll bet Bloomberg would be more than happy to give us one. Oh that carbon chart remember Lost in Space Danger Danger Danger and I’ll bet Will Robinson could help build that Pyramid.

  4. Deadbeat said on February 13th, 2011 at 6:03am #

    These kind of articles are distractions away from providing a real analysis of the Capitalist system and how Capitalism function. The other purpose of “blaming” the monetary system is to distract people from the real sources of the crisis — the CLASS WAR.

    Money inherently creates inequalities — regardless of how its created. The adage is that “if everyone has money then no one has money” ring true. Bernake will not bail out the people because Bernake doesn’t serve people as a class. He serves the banks and the rich as a class.

    Money at this point in history is anachronistic and obsolete. Money is really a means of control — NOT an “accepted” means of exchange. There were many societies that function WITHOUT money. They were destroyed by the Europeans who turned those people into commodities. A quick study of Central American or Brazilian history provides excellent examples of this. In other words money is “accepted” by FORCE. So this idea that money is a given is bogus and part of the system of indoctrination.

    The main cause of inflation is money itself. Without money there would be NO inflation. Money also prevents access to resources. It is not the money “supply” that causes depression. It is the people inability to get what they need. The reason for the tremendous amount of personal debt was the backlash against labor starting in the 1970’s. Since wages became stagnant due to government policies that attacked unions and trade agreement that allowed businesses to export jobs means that in order to maintain living standards people borrowed — especially for homes. Why people must put themselves into debt to obtain shelter is not address here. This has nothing to due with the monetary system but everything to do with Capitalist power.

    Also businesses function for PROFIT & profit GROWTH — not the money supply. Businesses need credit to expand their operations in order to increase their profits. One way that businesses increases their profits is by attacking labor. This approach is why the banks were flush with money. This is how the wealth were extracted from workers over the past 40 years.

    Also Obama’s “stimulus” is why the “Main Street” argument is bogus. If the banks started lending to “Main Street” tomorrow, the correction would be temporary. The poor still has to spend most of its money to the small business make the petty bourgeois richer while the poor obtains temporary relief. The trend will eventually yield the same outcome especially as profits growth stagnates. The demand for profit growth is what creates concentration and concentration yields monopolies (oligopolies) which then concentrates power. These contradictions are fundamental to Capitalism. The monetary system only exacerbates these inherent contradictions.

    The government debt was caused by the huge tax cut given to the rich while increasing the war budget and the class war against workers. Neoliberalism (Reaganism/Thatherism) institutionalizes government policies that favored the rich and weakened labor. Articles that waste our time about the Fed rather than calling for the complete eradication of Capitalism (including money) is rhetoric to not raise taxes on the rich. The author here makes no call to rescind the 1981 Kemp/Roth tax cuts and to restore the then top rate of 70% income tax and 50% Capital gains rate and the graduated 15 tax brackets that captured the high end incomes. No none of that — its all the fault of piece of paper (or digits) crap that don’t need anyway to engage in the human activity needed to have a sound, compassionate and rational society.

  5. Don Hawkins said on February 13th, 2011 at 7:05am #

    All well and good DB and here in the States the older folk’s might have found my above comment shocking although many now are underwater and a few more under a bridge more living on the street’s but the 20% are doing well. You do know if we wish to survive we need to get off these computers sort of an organize and it had better be focused or the 20% run by the 3% will eat our lunch. Ok then going to call call now and get a subscription to the tea party magazine that should do the trick. How much to build a Pyramid maybe a few who got screwed by the angles on Wall Street might like to help or are they thinking I’ll double up and catch up not this time.

  6. rosemarie jackowski said on February 13th, 2011 at 10:00am #

    In a way, there is no CLASS WAR. That is exactly the problem. Too many believe the myth that the poor are poor because they are lazy, immoral, and/or stupid. Too few in the US understand the inequality of Capitalism. The “I have-mine, and-the-hell-with-you” is almost universal in the US.

    We need a real CLASS WAR. Won’t happen anytime soon. Too much propaganda has put Capitalism in a protected place in the culture. People still think we invaded Iraq to “protect our freedom”. Until people are informed enough to follow the money, there is no hope. It is hard to be informed, while living under a bridge.

  7. bozh said on February 13th, 2011 at 11:52am #

    neither a spear, nor money, gun, capitalism can function– only people function.

    torturing, enslaving, enserfing, overtaxing, throwing people in dungeons, etc., began long before money had been invented.

    a gun, tank, warship, money, capitalism cannot even pich anyone let alone divide people and turn them on one another, like one wld train dogs to kill or maim each other.

    it is done to us by humans only. and most of them believe in gods– or, at least, say so!

    it’s not god, nor wolves, nor devil, or devil-god who have turned us into behaving savagely against not only ‘aliens’ but also domestics.

    and we became savages at latest ca octomillennia ago. and if present thinking remains, we shall remain savages ?forever! tnx

  8. bozh said on February 13th, 2011 at 12:15pm #

    “In a way, there is no CLASS WAR”. i saw rosemarie’s post after i posted above comment.
    i agree with R.’s observation that in u.s. there is no class war. imo, not eve traces of it.
    the prowar and antiwar factions in u.s,. appear largely of the same class[es].

    one day, i suggest, a struggle betwn lower and higher classes for control of u.s. governance and constitution [which now appear to control u.s. governance totally] may arise, but only, imo, if the huddled-exploited serfs r lead by apolitical party.

    unfortunately, even nader –and not only high dissidenting class– spurns just that!

  9. rosemarie jackowski said on February 13th, 2011 at 12:48pm #

    bozh…Yep, political parties (all of them) and health insurance companies should be eliminated. It is hard to decide which of the 2 has done the most harm and killed the most people.

    Sadly, all it would take would be a few days of doing nothing – a boycott of everything, except essential medical and safety services… a non-violent revolution. Our culture of worshipping the ‘haves’ and victimizing the ‘have-nots’ will prevent any such boycott.

    It is amazing how many adult voters in the US cannot name the vice president or the branches of government. They should make the decision to not vote rather than cancel the vote of an informed citizen, but that is not going to happen. How did we get to the point that makes it patriotic to cast an uninformed vote ????

  10. Deadbeat said on February 13th, 2011 at 11:22pm #

    Rosemarie asks …

    How did we get to the point that makes it patriotic to cast an uninformed vote ????

    That’s a good question. I know I’ve disagreed with your stance — probably out of frustration — that I take as of blaming the voters but the question you’re asking is a good one to examine.

    Why is there such intellectual laziness?

    [1] The dumbing down of education. Cuts in education has been going on now for the past 30 years and there seems to be no end in sight.

    [2] People are working too hard and there is no time to engage in politics

    [3] The lack of community and atomization.

    [4] The inability of writers to provide real analysis, answers, and vision which essentially misinform those who are truly sincere in finding answers.

    [4a] For example, why can’t we envision a moneyless society. Why are we trying to fix the monetary system — a system of inherent inequality. Why is the Liberal/Left still promoting Keynesian solutions that have failed to solved problem and only prolonged Capitalism.

    [4b] Thus are those who think they’re “informed” truly inform?

    Anyway those are just some thoughts but you are raising a valid question.

  11. Deadbeat said on February 13th, 2011 at 11:24pm #

    bozh writes yet another contradiction …

    neither a spear, nor money, gun, capitalism can function– only people function.

    “In a way, there is no CLASS WAR”. i saw rosemarie’s post after i posted above comment. i agree with R.’s observation that in u.s. there is no class war. imo, not eve traces of it.

    Yes that’s right bozh denies that capitalism is the problem but wants a class war.

  12. Deadbeat said on February 13th, 2011 at 11:25pm #

    Let me correct the format …

    bozh writes yet another contradiction …

    neither a spear, nor money, gun, capitalism can function– only people function. …

    “In a way, there is no CLASS WAR”. i saw rosemarie’s post after i posted above comment. i agree with R.’s observation that in u.s. there is no class war. imo, not eve traces of it.

    Yes that’s right bozh denies that capitalism is the problem but wants a class war.

  13. PatrickSMcNally said on February 14th, 2011 at 3:03am #

    > It is amazing how many adult voters in the US cannot name the vice president or the branches of government.

    Throughout the 19th century it was common that many new European immigrants came across the Atlantic not with the intent of learning about the Senate or Congress but rather of going to the Western Frontier and seeking to claim new territory from the Indians which had not yet been “civilized” in the standard sense. This provided society with a kind of “disposal outlet” for the types of people you suggest, but such people were always here. After 1890 the Western Frontier was exhausted, but for three-quarters of a century afterwards the idea still persisted among white people (blacks had less cause for illusion) that something called “The American Way” still offered a route up the ladder in a way which followed the tradition of those pioneers who had settled the Western Frontier. In the last half-century it has become increasingly obvious that this option has been exhausted too. The result is reflected in widespread social disorientation somewhat akin to if the Western Frontier had just magically vanished in the early 19th century. But the phenomenon which you’re describing was always there.

  14. Don Hawkins said on February 14th, 2011 at 3:31am #

    For example, why can’t we envision a moneyless society. Why are we trying to fix the monetary system — a system of inherent inequality. Why is the Liberal/Left still promoting Keynesian solutions that have failed to solved problem and only prolonged Capitalism. DB

    The budget and now it begins the end of life on Earth as we know it amazing to see once you know.
    “Americans don’t want a spending freeze at unsustainable levels,” said Senate Republican Leader Mitch McConnell. “They want cuts, dramatic cuts.”

    Boehner said that Obama’s budget “will continue to destroy jobs by spending too much, borrowing too much and taxing too much.” ABC

    Unsustainable levels well old Mitch did get that part correct just used it in the wrong context. Then Boehner and destroy job’s again sort of on the right track destroy the Earth’s ability to sustain life. If the truth be know these wise old Owl’s more like buzzards are kind of going 180 degrees in the wrong direction and that’s a big miss old boy’s. If the truth be know and so far it’s not let’s see maybe a declaration of survival from the big cheese of the free World and the next two years should prove that to be true unless they turn off the Internet maybe use a few of the idea’s that were used in World War Two and the economy although this time a little tuffer. I would think tax carbon and return the tax back to the people so they can pay the bill. Research on a grand scale might be a good idea and high speed trains look’s good on paper maybe just new tracks so trains can bring the materials needed to build clean energy and food. What will we see from the so called leaders in the coming week’s the lawyer types well when there lip’s start moving watch the illusion spread through out the land like little bubbles tiny little bubbles. Let’s not forget the other side of the equation the private sector although it’s kind of one the STATE! I find the best place to watch the little angles from the private sector on the financial channel’s here in the STATE and such well dressed angles with every hair in place and when there lip’s start moving correct illusion tiny little bubbles spreading Worldwide remember about three years ago don’t forget. And so it goes I guess we could build our own Pyramid for a little rally here and there but maybe a wrestling match or football game heck we could watch Gaga Gaga come of her shell a much better way to go at least for a few more year’s. Galileo Galileo

    A few quotes for the wise old Owl’s or old boy’s with an IQ it seem’s of about .05 and that could be pushing it.

    It is surely harmful to souls to make it a heresy to believe what is proved.

    I do not feel obliged to believe that the same God who has endowed us with sense, reason, and intellect has intended us to forgo their use. Galileo