Today was an excuse to do nothing, and I indulged myself in the new Star Trek movie. How lovely to imagine a future where the world hasn't collapsed in on itself. Where super mutants aren't catching rogue humans to consume them. Where men with mo-hawks and male love slaves don't shout, "We kill, we go in, we kill" while a hulk of a man with scarred skin holds him tight, whispering, "Soon my dog of war, but we do it my way". Where John Cusask isn't being chased by fireballs, walls of water, and escaped elephants. Where child toys aren't the last remnants of man trying to do God knows what. Where ... well, you get the idea. So Star Trek is a nice change of pace, and the only sci-fiction series I can think that pictures a better world in the future. Why is that? Do humans have some sort of pathological desire to "watch the world burn"? Some men just like watching the world burn. Fiction, movies, and video games seem to imply yes. However, I don't think this is a bad thing. I would call this the "God-conflict problem". The first thing God did when he put man and woman in the Garden of Eden was provide them conflict, via the Tree of Knowledge. One of the many rules of story telling is never introduce something and not have a pay-off. God knew Adam and Eve would eat from the tree. It was inevitable. But the real question is: Why does God do this? Why does he want Adam and Eve to have conflict? Because God is a story teller, and conflict leads to story. Humans have a similar dilemma when we create stories: there needs to be struggles, dilemmas, and all sorts of suffering. So when we envision the future, we often paint a bleak one, with death, nuclear missiles, plagues, skulls, blah, blah, blah, because to have it nice would be plain boring. So is the problem with man. Utopia is a vision that will never be fulfilled. Man needs conflict. Man needs stories. Or else there will be boredom and depression.
I will continue along these lines in future blogs, but today I would like to expand on yesterday's post. As I said yesterday, I finished John Perkins' Confessions of an Economic Hitman. What Perkins wrote disturbed me. I knew our system was deeply corrupt, that there was much reason for other countries to hate us, and that it was worse than I could possibly imagine. So when I crawled into bed last night to read Ron Paul's End the Fed, I was exhausted. I didn't want to hear anymore about our twisted form of capitalism. A system which is being attacked as a great evil, as a wash of a system that has done nothing but line the wallets of rich men. But where once I was blind, now I see. The problem lies in the Central Banking method. Like many Americans, I had my doubts about the Fed. I heard it needed to end. I heard about the protests, the marches, the anger, but I didn't understand it. No, quite conversely, I learned in my Macroeconomics class inflating the money supply was an essential tool. That banks could trick Americans into believing they had more money; that we needed more in circulation to prevent another Great Depression, where people held onto their cash and caused Deflation. But these are lies.
The truth is much worse. The Fed provides banks with low interest rates to borrow money, which in turn, pumps the system with easy credit. The money supply increases, lowering the purchasing power of the dollar. In other words, all the easy credit promotes spending, but not saving, because money stored in a bank will lose its value over time. By providing easy credit and low interest rates, the indicators in the economy also become skewed, and borrowers believe that the economy is doing better than it is. They, in response, go out and spend in a market that is different than the low interest rates would imply. In a free market, high interest rates would indicate the bank needs to buckle down and save more, while low interest rates show the bank is doing well and the market is good.
The Fed also serves in other ways. It allows a government to run amuck with spending. Wars, health care, expansions in government of any sort are because of the easy, "no-consequence" fiat money supplied by the Fed. (Ron Paul tells us that many modern and ancient wars would be stopped earlier without easy money.) The Fed also provides a safety net for banks that fail, allowing them to do riskier things than they normally would (including lending money to high-risk people). We can blame much of our current situation on the Fed's easy credit. I return again to the evils of Socialism, not Capitalism. The Central Banking is essentially a Socialist System, protecting banks against failure, letting government expand to a huge level, and allowing wars to happen where many wouldn't. It is a system dependent on man's innate "goodness", that man is simply a creature seeking "pleasure" and avoiding "pain" and nothing else. Everyone knows that trusting man to be "good" is insane, and I would like anyone try to justify that his only goal is "pleasure". Central banking is a wash. Easy money is a wash, and the only reason why this system can continue is because of the dollar's status as reserve currency.
Ron Paul also shed light on something I feared greatly. In Perkins' book, he describes how he tricked third world countries into spending projects which would leave them with huge debts they could never repay. These countries would then essentially became slave states, banana republics, to the United States. My fear was this system had been imported inside America itself, and to my dismay but not shock, this is most definitely the case. By providing easy credit to the banks, the Fed allowed Americans to become enslaved by a system that encouraged spending. The average citizen was convinced that living beyond their means would make them happy, that a new car, house, boat would finally appease their wandering minds. The Corporatocracy tricked us, put us in debt, and made us their slaves. Ron Paul writes on the newest crisis in housing: "Mortgage brokers, banks, insurance companies, 'flippers,' landowners, and developers all enjoyed the ride, and many were able to protect themselves. The poor were not so lucky. With the collapse of the imbalances created by the dream of easy wealth, the poor, deceived into believing politicians could deliver the moon, are now unemployed and without a home" (Paul 137).
The government, bolstered by the Fed, has become parasitic over a society (for the most part) that would do fine without it. (Again, I worried in an earlier blog about government, religious institutions, and bureaucracies eventual purpose was to perpetuate themselves.) This is now the world we are living in. A world created by the governments and multinational corporations, but only capable with the power of central banks. You see, a sound non-fiat money is a good thing. It allows limitations, accountability, and the danger of failure. With non-fiat money, men could see the cost of war, government and its programs on the place where it hurts most, their wallets. Easy inflated currency creates bizarre incentives. It creates the illusion of endless money (who cares about that supply and demand stuff?). And people become incredibly short-sighted. Men will do things that will make them wealthy now and not consider the future, because the future is guaranteed by bailouts and easy money. The beauty of free markets is that it allows rational men and women to act and profit in away that benefits the whole of society. The negative of socialism, corporatism, and communism is that allows rational men and women to act, but not profit, in a way that benefits the whole of society. Paul writes, "The Fed, short of being abolished, should have been prohibited from creating money and credit out of thin air and exerting monopoly control of the system with authority to set interest rates. These powers, unregulated, have nothing to do with freedom and sound economic policies" (Paul 138). Ron Paul is right. The Fed is the machine that allows the diseased system to keep on functioning. By putting a wrench in the the gears, we could stop the Corporatocracy in its tracks.
Paul also wrote on another topic that greatly interests me. In my blog, Jeremy Bentham: father of Socialism, I describe the great evils of Utilitarian Socialism--the belief, like Spock said, that "The needs of the many outweigh the needs of the few". This is extremely dangerous, not because it is a bad notion, but because how easily men can seize on it and do bad things. Paul writes, "The problem is not only a lust for power; ironically, benevolence and humanitarianism drive many to seek power over others. They believe for humanitarian reasons that the strong and wise have an obligation to subject the weak and ignorant to the whims of government control. As they gain more influence and power, they become more convinced that they are saviors of mankind, and if any resistance or obstacles appear that limit their power, they believe that brute force must be used to impose their 'goodwill' on the stubborn few. The purpose of freedom vanishes from their minds" (Paul 116). He then mentions the French Jacobins who beheaded people because they were so convinced they were right, and the Iraq war which was justified by humanitarian means. I agree completely. No one has the right to force others to comply to their whim, not even if they have an army of "experts" behind them. Like I mentioned in my blog about Bentham, it denies man his rationality and allows the ones in control to then seize more power. Again, human nature should be harvested through markets, not denied through bureaucracies and socialism.
I recently watched Food, Inc. Every single day seems to bring another unveiling--a revelation if you will--about our corrupt form of government/corporation/banking empire. Today, I will explore another terrifying aspect: our food supply. Most of us don't know from where are food comes. This is shocking in itself. How have we--how have I--become so complacent that we don't know? It's not that I don't care, it's that I have no idea how to find out. And this is the way the giant multinational corporations--like the top four companies in the beef market (they own 80% of the market; I'm afraid to name them for legal reasons), Smithfield, Kellogg, General Mills, Kraft, and Pepsi--want it. They want the public ignorant, because often, the way in which the food is produced could be considered questionable. And like every multinational corporation worth its salt, the large food companies have wormed their way into top positions of the government. Clarence Thomas, a Supreme court Justice, was a Monsanto attorney, Donald Rumsfeld was a CEO at Searle Pharmaceuticals (bought by Monsanto), John Ashcroft received donations from Monsanto, Mickey Kantor was on the board of directors for Monsanto, Robert Shapiro was a CEO of Monsanto, Wendell Murphy (Senator from North Carolina) was on the Smithfield board of directors, Margaret Miller (the FDA branch chief) was a chemical lab supervisor at Monsanto, Linda Fisher (EPA deputy Administrator from 2001-2003) was the vice president of government and public affairs at Monsanto, and Michael Taylor (the deputy commissioner for policy for the FDA from 1991-1994) was an attorney hired by Monsanto and advised Monsanto on genetically modified food labeling. The big meat companies have huge power in Washington. Many top government positions are held by people who have been employed by the food industry during their career.
This is simply unacceptable and borderline fascism. Because these companies have bought so much power in Washington (corn, rice, wheat, soy, meat, and dairy are highly subsidized), these industries receive many advantages and large amounts of money. However, there are some highly negative externalities involved. One of the most pressing has to be America's obesity epidemic. Have you ever wondered why a salad is more expensive than a Big Mac? It's because the industries involved with the creation of a Big Mac are heavily subsidized. It's the same with soda pop (a regional neutral word), candy, and many other products that are simply bad for us. Imagine if the government instead subsidized fruits and green vegetables (not that I am condoning this action). Another negative externality would be illegal immigration. When we sell our subsidized food to places like Mexico, it drives out production in their countries (somewhat reverse of the normal effect of globalization), forcing them to look for work else where, even the US. In fact, many of the large food companies actively seek illegal employment. Why are the illegals punished and not the men and women who own the plants?
Another typical case would be that of multinational corporation, Monsanto, which has huge power in Washington and owns a patent over a GMO soy seed--now compromising 90% of the American market. How did they accomplish this? By a law passed by government making patently owned seeds illegal to reuse. Every year, farmers have to buy new seeds from Monsanto, and if they use collected seeds from the year before they are sued for millions of dollars. Monsanto essentially owns the soy industry, and they do this by threatening the farmers.
I am constantly shocked by the extent of the problem. Almost every major industry is now owned by the corporatocracy. When will America wake up? When will we realize we have been living in a dream world held together by nothing? Our system has a vested interest in this not happening. The men and women at the top don't want Americans to know that corporations have bought out the government. This might cause the general population to have a revelation. They might wake up and see the way the world was all along. They might want to do something about the highly corrupt system standing on top of their shoulders. Ron Paul has convinced me that the best way to attack this head on is to abolish the Fed. The Fed is the device that allows these corruptions, bubbles, industries, government, and corporations to work by providing "free" credit. It's time to end the Fed once and for all.
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