We Live In Extraordinary Times

We live in extraordinary times. In fact what is happening right now has never occurred in all of human history. Yes the history of humanity is a biography about peoples, about great civilizations, about great and tragic wars, even epic tales of great heroes; in other words about great empires come and gone. We can read about the rise and fall of Rome. We can study Greek philosophy. We can even attempt to master their Pythagorean theory. We can measure the Egyptian pyramids, only three quarters of an inch out of square. They are marvels which boggle the mind as is true of all ancient architecture. Everyone, every generation seems to ask how did they do it without the tools or technologies of our modern world? And now, right now in our very midst, there is occurring an ongoing crisis the likes of which has never occurred in all of recorded history. For the first time ever there is a global economic crisis. This worldwide crisis is an insurmountable and ever growing debt compounded by the unrecoverable loss of untold wealth and no one really-honestly knows how to stop it.

In a special issue of the Forbes magazine, there were two special reports; one on The World’s Billionaires and another on Country Reports. The first report (The Forbes Special Report: The World’s Billionaires) describes how much money billionaires have lost: and how once there were 1,125 billionaires, there are now 793 billionaires, which is to say 332 fewer billionaires. Consider for example how Bill Gates lost $18 billion dollars or how Warren Buffett lost $25 billion dollars. In the second report (Forbes Special Issue Country Report 2009 March 30^th) the total number of billionaires 2008 changes in net worth of 2009 totaled an accumulated loss of some $2¼ trillion dollars.

Right now almost every form of American government be it federal, state, local or municipal have large deficits, layoffs, cutbacks, or furloughs in all aspects of society. California for example has the 8^th largest economy in the world and is in a crisis situation with rural hospitals closing, colleges and universities cutting back both on curriculum and faulty, the dumbing down of schools by forced bilingual classes, the financial burden of illegal immigrants, a cumulative state wide unemployment rate of 12. 2% with counties ranging anywhere from a low of 8.9% to a high of 29.2% with only 5 of the 58 counties below 10 percent as reported by the U. S. Bureau of Labor Statistics: see link.

(http://data.bls.gov/map/servlet/map.servlet.MapToolServlet?survey=la&map=state&seasonal=u_).

With a reported 12.2% unemployment rate and rising California alone has an estimated $20.7 billion dollar deficit. Forget not that California is just 1 of the 50 United States of America. As of January 11, 2010 no one seems to know what the United State’s national debt is. While some calculate and place National debt at $11.4 trillion (not including the bailouts at $14.4 trillion) others calculate that the total federal budget is as high as $42.2 trillion dollars.

In order to manage a failing economy the United States Federal government, under the direction of President Barack, has recently embarked upon an economic policy/theory known as Keynesian economics. Numerous banks (Bank of America, Chase, and Wells Fargo) along with other Corporations to big to fail (GM or AIG and more) are receiving government bailouts (tax payer monies) with no real strategy on how to pay off the debt. In light of the present economy there are many voices espousing the virtues of Keynesian economics as a way to thwart and end a deepening economic recession much like those put forth by President Franklin D Roosevelt in his New Deal. What most people fail to realize is that even though the new deal did help, it was not sufficient in itself to neither stimulate the failing economy (like that happening today) nor end what is now known as the Great Depression. In fact an attack upon Pearl Harbor ordered by Emperor Hirohito and carried out by Naval Marshal General Isoroku Yamamoto on December 7 1941 actually served as the stimulus for Unites States economic recovery. Once the United States entered into the war (World War II) factories were retooled, raw materials were purchased by entrepreneurs, and peoples-men and women from all parts of the economy public and private were put to work. With the end of the war the United States of American consequentially found itself to be both a powerful and prospering world power. By the end of World War II the United States of America essentially transformed itself from an agrarian/industrializing society based economy suffering from a deepening depression into a prospering modernizing capitalist industrial society based economy.

Simply put, according to those that espouse a Keynesian approach to modern day economics, they support activist stabilization policies with regards to wildly fluctuating markets. One such approach employed by the U.S. Federal government was to remove what is referred to as toxic debt from the free market place and put it under the auspices of the U. S. Federal Government (acting as a holding bank) while at the same time providing a variety of “Stimulus Monies printed by the Federal Treasury” with the hope that in time the economy will improve. Theoretically at such a time, when the economy is up and running, businesses can buy back their once toxic assets (at current market value – a profit or loss?), and therefore commence anew upon the enterprise of business and the making of money and profits.

Unfortunately what the Federal Government is doing is nothing more than taking monies from the American peoples (more taxes and more higher taxes) and giving those monies to those businesses who are according to the present administration to big to collapse-the redistribution of wealth-the taking of money from one group of people and giving the money to another group of people-best known as Keynesian economics which does not generate nor create wealth, like that as described by Adams Smith in his book “The Wealth of Nations.” As yet no one from the government has given a detailed analysis of what they are doing and why readily understandable to the American people (who will in the end pay for it). Nor has the government told the American people how long the United States government can act as a holding tank for toxic debt, for how much toxic debt, and in so doing what are its possible consequences for the economy both short and long term. Finally what happens if the stimulus monies don’t stimulate the economy consequentially increasing toxic debt load upon the economy not to mentions all the additional dollars lost? Who in the end is going to pay the bill? The American Taxpayer!

Recall the part about all the lost monies? Perhaps an even more disturbing is the loss of so much wealth represented by the dollar bill which was at one time backed by the world wide use of a gold standard. Some people are even asking about the Gold Standard: What of the Gold Standard? At one time in American history the value of the U.S. Dollar was based upon a Gold Standard-the value of gold. At that time the gold standard was an economic policy under which currency was backed by a reserve supply of gold. However in 1971 as government spending increased (spending on government programs and the rising cost of the Vietnam War) along with ever rising deficits thereby decreasing the nation's gold supply (sound familiar), President Richard Nixon directed the United States Government to abandon the gold standard effectively ending the worldwide use of the gold standard.

Now take a long hard look at a dollar bill and ask yourself what does that dollar symbolize and what makes it so different than the Russian Ruble? What then guarantees the value of the dollar if not so by neither a universally accepted gold standard nor the intrinsic value of human labor but a governing entity in whatever form it takes e.g. a monarchy, a democracy, a socialist state, a communist state, a dictator tyrannical or benign? Moreover if the dollar does not represent human labor and recalling how much money has disappeared what then becomes of human labor? If trillions of dollars have vanished from the world economic market place what then of the human labor?

Recall once again the lost trillion dollars. Now reflect for a moment upon this example. You enter into a contractual arrangement where your employer will pay you $20.00 for one hour’s work. You work for one hour and you receive a recompense of $20.00. Look long and hard at that twenty dollar bill because the twenty dollars bill represents your 1 hour’s labor. In your labor you alone are the one who in effect guarantees that $20.00. Now think once more about what was mentioned previously: $14.4 trillion dollars that have consequentially vanished. What happened to all the labor represented by that $14.4 trillion dollars? And by the time that this economic crisis ends…what will there be?

What happens next? One thing is though certain: once the national debt passes the point of no return there is only but to collapse. And this we have recently witnessed with the collapse of the USSR. On December 25^th 1991 Prime Minister Gorbachev resigned and the next day the Soviet Union was formally dissolved. With the stroke of a pen, a nation state ceased to exist and thereupon entered into the history books.

Say It Aint So!