Last week's payroll number -- 69,000 -- was one of the worst since the depths of the economic crisis in late 2008-early 2009. The official unemployment rate ticked up to 8.2 percent, but the rate, as measured the way it was before all the gimmicks of the 1990s and 2000s undercounted or excluded the long-term un/underemployed, is at least twice that. Nationally, the inflation-adjusted wages of the bottom 80 percent of the country haven't seen a rise in nearly 2 generations. Inflation figures too, have been purposely rigged to undercount inflation. Says economist John Williams of Shadowstats.com:
No. 438 -- PUBLIC COMMENT ON INFLATION MEASUREMENT
May 15, 2012
Consumer Price Index Has Been Reconfigured Since Early-1980s
So As to Understate Inflation versus Common Experience
• CPI no longer measures the cost of maintaining a constant standard of living.
• CPI no longer measures full inflation for out-of-pocket expenditure.
• With the misused cover of academic theory, politicians forced significant underreporting of official inflation, so as to cut annual cost-of-living adjustments to Social Security, etc.
• Use of the CPI to adjust retirement benefits, private income or to set investment goals impairs the ability of retirees, income earners and investors to stay ahead of inflation.
• Understated inflation used in estimating inflation-adjusted growth has created the illusion of recovery in reported GDP.
Meanwhile, according to Professor L. Randall Wray Professor of Economics and Research Director of the Center for Full Employment and Price Stability, University of Missouri-Kansas City, in a widely published series of articles, including one in The Huffington Post, the Fed has loaned, guaranteed or otherwise made available, cumulatively, some $29 trillion! Has this largesse towards the financial sector made us better off? At best, the Fed rescued the banks that were directly instrumental in causing the crisis, and boosted stock prices... for now. At best, the government stimulus stalled the economic slide into oblivion... for now.
We are so used to hearing "there are no easy solutions" that many people think there are no solutions at all. This is Big Lie #1. Big Lie #2 is that we are broke and There Is No Alternative (TINA -- thanks, Margaret Thatcher, for that false belief) to Austerity. We can throw Austerity as a cure for the economic crisis on the dust heap of failed theories, says Paul Krugman and, increasingly, other economists, mainstream and not. I have been lambasting the new Austerians (a term I coined even before Krugman) for months. Greece will probably throw the Austerians out of office later this month as well. German Chancellor Angela Merkel is rapidly losing support, even in her homeland, as recent regional elections have turned against her. She is becoming increasingly isolated internationally, with her ally in France, Sarkozy, now booted out by socialist(!) Francois Hollande who wants more stimulus (good), but has no idea how to pay for it (bad).
Meanwhile, Europe's up-and-coming basket case, Spain, has an unemployment rate of just under 25 percent and a youth unemployment rate double that -- perfect "stimulus" for protests on a daily basis. How long until the police -- the last line of the 1 percent's defense, simply switch sides, as they did in Egypt and much of the Middle East, and support those who they beat up previously? This is how revolutions succeed, a fact that has been overlooked by both the Right and the Left, who just assume that mass protests will eventually get them what they want. No, all successful revolutions end with the police or military coming out in support of those who want change -- though that does not necessarily, or usually, mean success in the long run.
So, how does successful change that gives enhanced rights and opportunities to the People, is sustainable and durable, happen?
Getting back to the Big Lies. The world economies are held hostage by the financial terrorists. They are withholding credit-money -- the only kind of money most people think there is -- starving economies everywhere of the grease that enables commerce and provides working opportunities. But, the question must now be asked, forcefully and urgently: Should banks be allowed exclusive rights to produce the world's money supply?
Recently, 12-year old Victoria Grant gave a speech at the Public Banking Institute's (PBI) first annual conference in which the answer was a resounding "No!" Her combined video totals for her 7-minute speech now top 1.3 million views and will probably hit 2 million before the summer is over. Her seniors at the conference, though perhaps less inspiring, nevertheless flesh out her points that a truly sovereign nation need not rely on a private central bank to produce its money supply. They need not borrow money at all, either from a central bank, or from creditors abroad; a form of subsidy to those governments who enable the taking of our jobs for lower wages. For example, we need not pay interest on treasuries to China, so their elites can push up a property bubble (now bursting), making shaky loans to Chinese businesses (now defaulting) to sell America stuff it cannot afford (without raising debt still further), in large part due to rent collection by the elites on this side of the world, who then pay too little in taxes to keep America from crumbling away!
Two deeper First Principles questions of the world's political leaders must be asked even before this one.
1. Are there jobs to be done? If the answer is no, immediately book a plane to whatever country that leader represents, because obviously they are living in Paradise, where no one lives in poverty, no one grows old or sick, the roads are perfectly paved and ridden over by driverless non-polluting cars dropping the kids off at schools where learning is so fun and efficient it only needs to be held 3 days a week -- a good thing, since that's all their parents have to work, though they are doing such interesting jobs they typically take a second job just for the pure enjoyment of it, since they no longer need money!
2. Are there people who want to do the jobs? Don't let the leaders weasel out of this by saying "oh, yes, but there is no money." That is not the question! The question is, "Are there people who want to do the jobs?" Education too, comes with work experience; no one walks into a new job perfectly trained. That ought to go without saying.
So, what is stopping people from doing jobs they want to do, that must be done? Money. That's all. Little green pieces of paper. Who controls the money supply? Banks. They create money whenever they issue loans. And please, none of this false argument about lack of demand. Are slaves denied freedom because they don't have enough demand for it? Are poverty-stricken children denied food in their bellies because they haven't asked hard enough? Are small businesses unable to get off the ground because they lack the products and services that people want? Really? What about an electric car that goes 300 miles and charges in 5 minutes? What about better, healthier food and new exercise facilities for today's increasingly obese children and adults? Here are some others. I'm sure you could come up with a dozen or so things we need in five minutes, that we would have if the money was there.
Well, why should the banks decide where money should go? Have they done a good job so far? Have we not just had the mother-of-all-housing busts, caused by speculation and short-sighted greed? Are we really "short of money" when the world derivatives market is estimated to be worth up to $1.2 quadrillion, some 20 times the world GDP? What does money even mean in that context? Shouldn't money have some relation to actual wealth? Isn't wealth not just numbers on a screen, but something like those things and services that meet human desires, produced by labor and using the fruits of the Earth? Don't we all have a human right to fruits of the Earth, equally, just because we are human? More on that in a moment.
One of the themes of the recent PBI conference was the question of returning production of money back to a public source, like government, or a public bank accountable to government. This "Public Option for Money" as Max Keiser called it when he interviewed me three years ago, would be a counterweight to the private creation of it now. Any money produced by government would be, by definition, debt-free. It would be an immediate credit to the government account. By retaking this seigniorage right, governments could say to the banksters "We don't need your money. We have the sovereign right to create our own!" This is a historical right of governments throughout history. It has, is, and can, be done in America from the very beginning. The coins you carry in your pocket were produced debt-free, as are the stamps you paste on your envelopes. You can no more run out of coins and stamps due to a debt than you can run out of points in a football game. The same was true of a special kind of paper money -- United States Notes -- first produced by Lincoln in 1862 to fight the Civil War, and again for 14 total series through 1972, until the Treasury, in false complicity with the banking establishment, said there was no functional difference. In fact, money issued by the Federal Reserve cannot perform the same seigniorage function as government-issued money, and anyone who says it can either doesn't understand the difference or even profits from it.
Now, simply producing debt-free money and putting people to work with it will only get you so far. Yes, it will bring down unemployment and create millions of jobs in public works, as it did in Franklin D. Roosevelt's time, only this time, without debt (taxes are not a debt, they are an obligation of citizenry for supposed public benefits that have no real connection to the creation of money. Government could, in theory, simply fund itself through Greenbacking -- the act of creating debt-free money, without taxes at all). If all you do is feed money into society from a government source, it will continue to "trickle up" (more like a gusher, lately) to the top 1 percent in the form of economic rent. To really end the monopolies and speculation that lead to such vast wealth inequity, one must tax the land (in classical economics, land means all of nature's resources). Otherwise, the hoarders and speculators will eventually get all the surplus from production, making money while they sleep. The ideal form of tax should be one that does not discourage production but encourages efficient use of the finite resources of the Earth. Only the Land Value Tax, a.k.a. Single Tax, a.k.a. Land Value Collection, does that. This leads to the uncovering of Big Lie #3 -- that the Earth is insufficient to provide for our needs. No, the best locations and natural resources are hoarded by a very few, until they find a price they want to sell it at, under-taxed on their holdings, and allowed to impoverish billions.
End the monopoly on land and on money and we will be living in a very different world. Maybe one that truly would be Paradise.
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