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Category Archives: Politics

During the week that followed September 16 2008 billions of monies disappeared from the stock markets of the world triggered by the collapse of Lehman Brothers, the wayward investment bankers. It was the beginning of the biggest recession since the 1930’s, almost a century before.

In the panic that ensued, politicians ran around like headless chickens unsure of what to do to avoid the onset of financial collapse and the onset of a full blown recession, even depression.

It was the banker’s friend, the incumbent British Prime Minister Gordon Brown, pompously proud of his classical economics background that came up with the misguided solution that pouring more borrowed money into the coffers of the perpetrators of the crimes would solve the problem. Unfortunately London’s misguided solution [and self interested solution since the banks own London] was taken up quickly by other governments as being their panacea.

But consider this, on that fateful week in 2008 when the stock markets lost their billions, what happened to the wealth of the world? Was a car still worth a car? Was a plane still worth a plane? Was a house still worth a house? The answer is simple, the wealth of the world was unchanged, all the roads, bridges, buildings in fact every physical thing that represents the worlds wealth was worth exactly the same. No loss, well at least not yet.

The tragedy of the ‘bail out the Banks’ policy is that it just bolstered up an already seriously faulty system. The money governments used to bail out the banks was borrowed from the banks [where else would they get it from?], using the future as collateral. Which is just another example of how most the money in the financial services sector is fictional; it can have any value you want to give it, it’s just a giant money-go-round. The fact that it can be worth this much one day and less the next is a measure of its volatility, its unreality. Who in the real world cares if the total amount of money swilling around in the financial services sector is worth a dollar to the dollar or a cent to the dollar? Who in the real world cares if one financial services company makes 5 billion profit in the first quarter? It just means that someone somewhere else made an equivalent loss.

But the biggest tragedy in all this is the knock on effect of all ‘bank misdemeanor’ induced recessions, unemployment. The unemployment of just one potential wealth creator is the single most devastating factor in social economics.

But before I go any further with this, let me just say that unemployment is too broad a description for the non-employment of a person. First we have to identify in which sector of the economy the individual is employed, for it is only the loss of a ‘wealth creator’ that will affect the health of the economy, anyone employed in the financial services sector that loses their job will have little or no effect on the economy, [other than possibly the negative effect if they claim unemployment benefit]. In this respect I prefer to think of the ‘employed’ as two distinct groups:

  • Wealth creationists and,
  • Those in parasitic employment.

So, it is my contention that if the billions poured into the banks had instead been poured into wealth creation industries the world’s economy would not only have recovered very quickly but it would have been built upon a solid foundation of boosted wealth creation. Salt of the earth wealth creation companies like Chrysler Motors would not have teetered on the edge of extinction through no fault of their own. Unemployment, instead of increasing would have been dramatically reduced, almost overnight and the creation of wealth would have continued unabated. The inevitable migration of those formerly in parasitic employment towards the wealth creation sector would have further boosted the economy.

At the time of the 2008 meltdown a senior executive at of one of the large investment banks admitted during a TV interview that a cull in the financial services sector was overdue. Cull is not exactly the word most people would use these days.

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I’m sorry, but am I missing something here. Didn’t the US government bail out the banks by giving them in excess of one thousand billion dollars? So what’s all this about Barack Obama creating a tax to ‘claw-back’ ninety billion dollars? Wasn’t the intention at the time that the banks would have to pay back the full amount they were ‘lent’?

Now most people know how companies deal with tax hikes, they increase the cost of their products and services, so the actual cost of the new ‘claw-back tax’ on the banks will inevitably be passed on to the public.

As far as I can deduce, the claw-back tax is just the latest smokescreen designed to hoodwink a gullible public into thinking that some sort of banking reform is taking place. Like the amount of publicity given to the tax on bank executive bonuses, in reality the gross amount of all the bonuses paid out in the last five years is an insignificant amount compared to the amount the financial services sector has ‘creamed’ out of the system in order to fuel their gigantic money-go-round.

I think many people will agree that a reform to the fundamental working of the banking system is long overdue; world finance is too important to be left to the banks and private enterprise. By their actions over the last hundred years or so the banks have clearly shown they cannot be trusted with such an important task. [Please don’t think for an instant that the US Federal Reserve or the Bank of England or most so-called central banks are owned by any government].

A bank, as was the original intention, should be no more than a money warehouse that provides a distribution center for transferring visible funds between account holders. All other services are anti-social and should be dismantled. It’s high time banks took their rightful place in society as the lowly warehousemen the are. [No disrespect to all other warehousemen in the world]

With the inauguration of Barack Obama I had high hopes that the US would lead the way with some drastic reforms to the whole financial services sector, spearheaded by fundamental changes to curb the anti-social antics of the banks. Instead we have a president who is tap dancing on the fence, balancing the wrath of the public by feeding them with highly disguised, spin-doctored tidbits against the enormous power [and wrath] of the financial institutions.

I will say it once again just for the record; since the beginning of time there’s not a single financial services institution or bank in the world that has ever created a single cent of real wealth. [I’m not talking about money here].

That abused privilege goes to the billions of people who produce the things virtually everyone judges their wealth by and of course the billions of people who assist them in this laudable task. All the remaining millions of people who create zero wealth are simply parasites living on an already overburdened social system.

Are we all so awestruck by the enormity of the national debts of countries that we are blind to the big picture?

 

The national debt of the US has topped eleven million, million dollars, that’s a whacking $100,000 per family. How on earth is it possible for a minority sector of the very society we live in to have acquired so much money that it can afford to lend that amount of money to the US government?

 

Bear in mind that the people who lend all this money have never created a single cent of real wealth. The money they use has been acquired from the real creators of wealth by a myriad of foul means.

 

Also bear in mind that in addition to lending incredible amounts of money to governments this sector also lends all the money needed to finance every mortgage, credit card debt and company loan. Again, how on earth did they become so rich that they can afford to finance the whole world?

 

The financial services sector is so complicated that the public, as well as most politicians are oblivious to the ‘big picture’; they accept the financial status quo as being ‘normal’. Well let me say right here:

 

IT IS NOT NORMAL.

 

Forget all the detail, all the complexities of ‘financial instruments’ just be aware, the people who issue these loans create absolutely nothing that represents real wealth, they control a population of automatons who slave daily to produce all the physical artifacts that are the real source of all wealth and have set up mechanism to strip those people of most of the wealth they create. Thus setting up the system that makes it necessary for those who create the real wealth to have to borrow in order to buy back the very ‘things’ they produced in the first place.

 

One day the bubble will burst and I don’t mean yet another mega recession. Someone, somewhere, sometime will lead a revolt against the current insidious financial system. But don’t hold your breath; it’s not going to happen anytime soon.

 

See my cartoon: http://clifffraser.com/fun-stuff/various-cartoons/01-bankers-equal-misery.aspx.

 

Cliff Fraser

 

An unemployed wealth creator is a tragic temporary loss for any community, an unemployed social parasite is not. When we talk about rising unemployment in society we must also consider the job in which the unemployed person was engaged, otherwise the statistics are meaningless.

It’s a sad fact that many people employed [or now unemployed] in the financial services sector do not fully appreciate that their very existence is a blight on society. They think that because they get up in the morning and put in a full days work that they’ve been gainfully employed. Well I suppose you could say that is the case, except that it’s only them and the financial services company for whom they work that have gained. Society as a whole gains absolutely nothing, zero, in fact in an overall sense those employed in the wealth creation sector will have made a loss.

Now all this would not matter so much if the numbers involved represented only a small proportion of the whole. Unfortunately this is not the case, the numbers of people migrating to the financial services sector has over recent years risen to such a level that a significant proportion of the population of most western countries are now wholly supported by a dwindling population of wealth creators.

Sure, mechanization, industrialization and robotics in manufacturing industries have to a certain extent mitigated the negative effect, [machines incidentally invented, designed, made, advertized, marketed, sold and serviced exclusively by the wealth creationists], nevertheless the recent financial crisis [2008-9] caused by the avarice of the financial services sector has once again tipped the fine balance creating an untenable, worrying situation where wealth creators are now being restricted from, and in some cases, denied the opportunity to create wealth. This is the real disaster.

Virtually all the money ‘in play’ in the financial services sector has in one way or another been stripped from the wealth creators. The profits and losses reported by the ‘players’ in the financial services sector are merely occasional audits at moments in time in the continual movement of money between winners and losers, losers and winners. Of course the money swilling around is supplemented by a continuous flow of newly created wealth as it is stripped from its creators. So you could say then that in the financial services marketplace there are generally more winners than losers, but this is only possible because those in the realm of the wealth creators are always ‘losers’.

The purpose of this article is to highlight, not to offer a solution to the problem, it’s merely intended to offer some solace to those unfortunate wealth creators who find themselves unemployed at this time.

I would however also say this to them, and to those wealth creators still in employment, just one unemployed wealth creator is worth a hundred people employed in the financial services sector.

To those wealth creators who are unemployed, be proud of your past achievements, take satisfaction in the knowledge that your efforts have been beneficial to society, that your inherent skills remain intact and will again one day be utilized by an ungrateful society in the continuance of real wealth creation. Society really needs you, your re-employment is paramount to society’s proper functioning and more importantly your efforts are required in order to feed the financial services sector parasites whose voracious appetite for money continues to grow exponentially.

For a poster of wealth creators and financial parasites please visit: http://clifffraser.com/images/miscpics/wealth-creation-poster.jpg.

Sixty Eight Banks Fail in the USA

I read a news report today stating that the total number of bank failures in the USA during recent times [circa 2008/9 financial crisis] has reached the staggering number of fifty [and counting – 2009-07-31 – now it’s 68!!]. The report mentions this matter-of-factly, like it’s quite normal.

 

What this tells me, without going into any detail is that thousands of people, if not hundreds of thousands, may have lost some or all of their hard earned money. Reports like this tell me that it was the financial system that failed and it was government that allowed a financial system to evolve in which it was possible for fifty banks to fail, that failed.

 

When, oh, when are people going to start questioning what these less-than-desirable people are up to instead of accepting each monumental failure, financial catastrophe and the misery it causes without question or any call for accountability?

 

As for correcting the underlying flaws in the financial system, well after a brief flurry of activity by the new Obama administration it seems to have settled into the same old routine, financial reforms are still a long way away.

 

And it’s still a sad, sad world.

 

Postscript: July 2009

How in this world is it possible for a company that creates absolutely zero real wealth, a company that makes nothing, creates nothing [except money for itself and misery for many people], make 3 billion dollars profit in 3 months in the middle of a recession?

 

For any company in the financial sector to make a profit someone somewhere has to make a loss [perhaps it was some of those banks that went belly up]. The profit announcement was made with whoops of joy and merrymaking by the financial media like we should all be saying wow! well done! handshakes all round, the recession has bottomed out.

 

In my opinion it’s disgusting, I’m talking specifically of course about Goldman Sachs a candidate if ever there was one to be subpoenaed by the US Congress along with JP Morgan, who by all accounts have already received their ‘invitation’ this week to do a bit of squirming.

 At the outset I would say that I consider myself to be neither a Communist or a Capitalist but an individual that would prefer to live in a world that defines and adopts the best virtues of both social extremes and that is somewhere in between. A society where there is still incentive to succeed and is benevolent enough to support those in society that are unable to succeed.

I am sure that many citizens of the USA, the doyen of pure capitalism, felt a great sense of satisfaction when the brand of communism practiced in Russia failed. Proof positive that Capitalism is right, after all it won the day. It’s ironic that the brand of capitalism many Americans have been brought up on has now also failed.

Human beings are by their very nature social beings that live in communities. So it follows that anyone of any political persuasion who lives in and accepts the benefits of living in a social community is by definition both a socialist and a communist (in the sense of a person living in a community).

Before I go any further, let me say that the above statement was intended to be provocative, for no other reason than to make a very significant point. Social (socialism) and community (communism) are not dirty words, on the other hand capitalism as currently practiced and in the light of the current financial debacle and fraud revelations, has become a very dirty word.

A ‘quick-fix’ of the current flawed system is unfortunately necessary to avoid a complete collapse, but we must not lose sight of the fact that the system failed and needs to be fixed. It’s perhaps time to consider what sort of society we want in the future. The corrupted brands of communism and capitalism that have been ‘tried out’ over the last century have virtually all failed. Why? Well in my opinion they failed for no other reason than because they were extremes.

Communism, in the sense that it starts with the premise that everyone is equal, is doomed to fail because in fact everyone is not equal. A society needs to be structured in such a way that each individual has the freedom to achieve his or her own level in society based on their ability, appreciation and ambition. At the same time the system has to be structured in such a way that there is no way that the system can be exploited for excessive personal gain to the detriment of society as a whole.

Never forgetting that because we are communal social beings we have a responsibility to ensure that everyone, irrespective of ability, enjoys a standard of existence that the incumbent society can afford.

On the other hand capitalism in its purest form is doomed because it assumes we do not live in a socially interactive community and success is measured by greed, acquisition and a desire to gain at the expense of individuals in the community and the community itself. The current astonishing lack of control in the modern capitalistic system allows individuals and groups of individuals to exploit the ever changing elements of the system in order to acquire disproportionately large amounts of wealth from others with a complete disregard for the social consequences.

A free market is OK providing there are rules. In the same way that we have social rules that outlaw murder, rape and revenge killing so there should be rules to prevent excessive financial exploitation of the social system for personal gain at the expense of the community.

Pure Capitalism is as socially abhorrent as pure Communism.

The number of billionaires in the world now is not a measure of their success but a measure of society’s failure. For so many individuals to be allowed to accumulate so much wealth, wealth that cannot possibly be spent in any individuals lifetime, is a symptom of a society in need of a complete makeover. Their gain is always somebody elses loss, you need look no further than the hungry millions in Africa.

The level of technical expertise and real wealth producing capability the world is able of achieve NOW is more than enough to eliminate poverty, hunger and disease worldwide. The wealth just has to be managed effectively and distributed fairly.

We are social beings, so let’s start being sociable.

 There was a time when adults financed children. They went out to work, created wealth, had most of the wealth they created siphoned off by government and the parasitic banks and lived on the edge with what was left and oh yes, fed their children.

In the aftermath of the biggest financial collapse in history in monetary terms, governments around the world are in a bank bailout, stimulus package frenzy to try and save a fundamentally flawed system.

Now I may be wrong, but if there is a financial collapse it’s because there’s not enough real wealth in the system. So any half intelligent person is going to ask the question, where is all the money governments are using for the bank bailouts and stimulus packages coming from?

Well, we live in a credit society, which is essentially a system designed to borrow from the future set up by the banks during the last 100 years or so. So, because everyone now accepts that a continual requirement for credit is somehow ‘normal’, Governments on the same bandwaggon are now borrowing heavily from our children, their children and their children.

It’s nothing less than disgusting and it has to stop.

 (or somwhere in between?)

At the outset I would say that I consider myself to be neither a Communist or a Capitalist but an individual that would prefer to live in a world that defines and adopts the best virtues of both social extremes and that is somewhere in between. A society where there is still incentive to succeed and that is benevolent enough to support those in society that are unable to succeed.

I am sure that many citizens of the USA, the doyen of pure capitalism, felt a great sense of satisfaction when the brand of communism practiced in Russia failed. Proof positive that Capitalism is right, after all it won the day. It’s ironic that the brand of capitalism many Americans have been brought up on has now also failed.

Human beings are by their very nature social beings that live in communities. So it follows that anyone of any political persuasion who lives in and accepts the benefits of living in a social community is by definition both a socialist and a communist (in the sense of a person living in a community).

Before I go any further, let me say that the above statement was intended to be provocative, for no other reason than to make a very significant point. Social (socialism) and community (communism) are not dirty words, on the other hand capitalism as currently practiced and in the light of the current financial debacle and fraud revelations, has become a very dirty word.

A ‘quick-fix’ of the current flawed system is unfortunately necessary to avoid a complete collapse, but we must not lose sight of the fact that the system failed and needs to be fixed. It’s perhaps time to consider what sort of society we want in the future. The corrupted brands of communism and capitalism that have been ‘tried out’ over the last century have virtually all failed. Why? Well in my opinion they failed for no other reason than because they were extremes.

Communism, in the sense that it starts with the premise that everyone is equal, is doomed to fail because in fact everyone is not equal. A society needs to be structured in such a way that each individual has the freedom to achieve his or her own level in society based on their ability, appreciation and ambition. At the same time the system has to be structured in such a way that there is no way that the system can be exploited for excessive personal gain to the detriment of society as a whole.

Never forgetting that because we are communal social beings we have a responsibility to ensure that everyone, irrespective of ability, enjoys a standard of existence that the incumbent society can afford.

On the other hand capitalism in its purest form is doomed because it assumes we do not live in a socially interactive community and success is measured by greed, acquisition and a desire to gain at the expense of individuals in the community and the community itself. The current astonishing lack of control in the modern capitalistic system allows individuals and groups of individuals to exploit the ever changing elements of the system in order to acquire disproportionately large amounts of wealth from others with a complete disregard for the social consequences.

A free market is OK providing there are rules. In the same way that we have social rules that outlaw murder, rape and revenge killing so there should be rules to prevent excessive financial exploitation of the social system for personal gain at the expense of the community.

Pure Capitalism is as socially abhorrent as pure Communism.

The number of billionaires in the world now is not a measure of their success but a measure of society’s failure. For so many individuals to be allowed to accumulate so much wealth, wealth that cannot possibly be spent in any individuals lifetime, is a symptom of a society in need of a complete makeover.

The level of technical expertise and real wealth producing capability the world is able of achieve NOW is more than enough to eliminate poverty, hunger and disease worldwide. The wealth just has to be managed effectively and distributed fairly.

We are social beings, so let’s start being sociable.

I have followed the US election campaign with some interest, since the outcome will have worldwide implications.

Unfortunately I am not able to comment on the 30 minute Obama ad because it appears to be hosted only on YouTube. Access to YouTube is censored in Turkey.

If anyone knows of an another source for the ad, or a download, it would be much appreciated.