57 online
 
Most Popular Choices
Share on Facebook 24 Printer Friendly Page More Sharing
Exclusive to OpEd News:
OpEdNews Op Eds   

Chapter 15: The FIRE Economy and C=M+L

By       (Page 4 of 7 pages) Become a premium member to see this article and all articles as one long page.   54 comments, In Series: Alternative Economics 101: Tax Your Imagination!
Follow Me on Twitter     Message Steve Consilvio
Become a Fan
  (5 fans)

Business is difficult under capitalism, and the seduction of free money through selling stocks is strong. The second major survival response is to turn to the government for protection or revenue. Unfortunately, it was government that started the cycle of distress. Once debt became institutionalized through the issuing of a fiat currency, everyone needs perpetually more revenue. Fiat stocks are a defense mechanism to a national currency. A sharing, barter or trade economy is stable. Profit and debt, in contrast, put us out of sync with nature and with one another.

Social problems follow the mathematical challenges of capitalism. Having money to spend engenders a sense of entitlement of what can be reasonably demanded from others. Capitalism lacks grace. A transaction mentality has eclipsed the personal nature of our relationships.

Wall Street as Community

Wall Street did not arrive in a vacuum. It was built upon old banking habits that predate modern finance by thousands of years. Ancient and current generations both have the same challenges: As inequality compounds, society becomes divided between lenders and debtors, the rich and the poor. Oftentimes wealth is an illusion, since it is based on borrowing. The middle-class only exists because of our debt apparatus.

 Money proceeds can be productive, like building a factory, or consumptive, like building a palatial estate. Debt flowing through the economy allows people to buy and sell. Modern money was an accounting gimmick intended to promote productivity, but the aristocratic habit of excess privilege and consumption continued, keeping workers, like serfs, at a systemic disadvantage.

There is a structural difference between paying taxes with money and paying taxes with a share of the harvest. Any money that a nation first issues is debt, and that debt must grow. Political equality cannot be achieved when there is a structural economic contradiction, which is why democracies have failed to create societies of peace and prosperity despite widespread consensus and tolerance.

The growth of Wall Street reflects the increase in populations, the pace of industrialism, and the presence of an infinite supply of paper money. It represents the debt as wealth model as much as government does. Wall Street has been responsible for global depressions and world wars. It was attacked twice by Islamists (February 26, 1993 and September 11, 2001), and more recently was occupied by the 99% movement. Scandals, volatility and excess color its history. While powerful and influential, it has no authority. It exists because it allegedly serves a critical role to help businesses do business. Wall Street is a masquerade for a desperate gamblers paradise. People voluntarily infuse Wall Street with cash, the same as at a gaming table. Investing is loaded with betting language: winnings, loses, hedging and splitting. Only cheating is illegal, the games themselves are regulated like a professional sport.

Investing in Wall Street is not mandated by government, but government does a lot to protect and encourage its existence. Since Wall Street has caused economic depressions and recessions, one would think that government should see it as in competition with the public good, but most statesmen are fully vested in Wall Street personally and politically.  Their ties to public corporations and financial services are why most members of Congress are millionaires. They are not questioning the system that gave them success, which makes it difficult for them to analyze problems or find solutions.

More strange about Wall Street is that the same people who are bonded to it also try to benefit from it. The middle-class is bound by mortgage debts, yet they also invest through IRA's, 401K's and mutual funds. Financially, they are slaves of themselves, paying interest with one hand while trying to collect it with the other. Even the large unions, which nominally are on the side of the worker, are supporting corporate management by having pension funds invested in Wall Street.  The problems with dissonance run deep.

Crime and gambling involve a calculated risk, the same as investing. The better you calculate, the lower your risk. Not surprisingly, Wall Street is the intersection of crime and gambling. It is the financial version of sport and casinos. Anyone can rob a boxcar, but it takes special skill to accomplish theft with a pen. "Managing wealth" through financial instruments is an oxymoron. Even if the people are honest, the system itself is not.

Amazingly, many claim that everyone can win together on Wall Street, which is impossible.  Gambling, like sports, is predicated on winners and losers. Somebody must buy high for somebody to sell high. Some believe that they can beat the odds, but that is impossible, too. Nobody can keep pace. Banks cannot win every gamble, and neither can casinos, even with all their advantages. Both systems create a maximum number of losers. In the long term, the only winner is inflation. Overhead cannot be sustained within an inflationary spiral. The left hand is working against the right hand.

Housing Reform

Just as the birds in the sky must have a nest, we all need a place to lay our head every night. We cannot live without some form of real estate to call our own. The Earth is certainly big enough to accommodate everyone, but we have imposed a false scarcity upon a world of plenty. Native Americans never had the problems we have.

Capitalism and socialism have both failed, and need to move forward into a new system. Wall Street, seemingly, acts  as impartial marketplace between government and citizens, but in reality it objectifies the flow of money, and demands a nonsensical efficiency which results in feudalism. Indifference to our unhealthy housing market is destructive to the population in a myriad of ways.

Population growth and the demand for land cannot explain current financial pressures. The problem is not supply or demand, but our method of accounting. The FIRE economy exists because of one simple behavior: speculation. The FIRE economy was imported from Europe and was part of colonial times. As the natives tragically discovered, the act of speculating draws everyone alive into the game. Separate but equal is not an option. The system has an inherent hunger that cannot be checked by past agreements.

Criticism of Wall Street is nothing new, but the real enemy has always been inflation. The big winners on Wall Street were industrialists. Men like Rockefeller or Henry Ford. It is simplistic to call the rich evil, like many are prone to do. Ford was more than a tinkering engineer. He was also an idealist, and searched hard for a better plan for a better society, just as Washington and Jefferson sought a better plan for yeoman farmers a century earlier. There is plenty of compassion in the upper ranks of society, what has been missing is better analysis.

Next Page  1  |  2  |  3  |  4  |  5  |  6  |  7

(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).

Must Read 1   Interesting 1   Valuable 1  
Rate It | View Ratings

Steve Consilvio Social Media Pages: Facebook page url on login Profile not filled in       Twitter page url on login Profile not filled in       Linkedin page url on login Profile not filled in       Instagram page url on login Profile not filled in

Steve grew up in a family business, was a history major in college, and has owned a small business for 25 years. Practical experience (mistakes) have led him to recognize that political rhetoric and educated analysis often falls short of reality. (more...)
 
Go To Commenting
The views expressed herein are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.
Follow Me on Twitter     Writers Guidelines

 
Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
Support OpEdNews

OpEdNews depends upon can't survive without your help.

If you value this article and the work of OpEdNews, please either Donate or Purchase a premium membership.

STAY IN THE KNOW
If you've enjoyed this, sign up for our daily or weekly newsletter to get lots of great progressive content.
Daily Weekly     OpEd News Newsletter
Name
Email
   (Opens new browser window)
 

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

14. What is Modern Finance?

8. What is the GDP/GNP? from Alternative Economics 101 - Tax Your Imagination!

The National Debt is the inverse of the profit/inflation in the private economy.

What are Boom and Bust? Alternative Economics 101 - Chapter 5: Tax Your Imagination!

9. The National Debt is the Inverse of Inflation - from Alternative Economics 101 / TAX Your Imagination!

Alternative Economics 101 - What is the Cost of Living?

To View Comments or Join the Conversation:

Tell A Friend