And I'm hardly joking here. Nearly eight years ago when the manure was hitting the fan I couldn't help but go around asking others (with tongue firmly planted in cheek), "Hey wait a second. If the big banks are getting bailed out, why isn't Bernie Madoff getting his fair share as well? Doesn't he just need some stimulation? Could bailing out Madoff not get things rolling again and save the economy?" That obviously got people thinking I was a crack-baby or something, but that doesn't negate the fact that the Bank of Madoff hit a snag for essentially the same reason that the big banks got thrown off kilter: they're all Ponzi schemes. As Wes Jackson put it during his speech at The Land Institute's 2010 Prairie Festival, "Bernard Madoff deserves a ticker tape parade for showing a small part of a much larger Ponzi scheme."
But while Madoff's Ponzi scheme is easy enough to understand -- he required continual inputs of new money from investors so that he'd be able to make payouts to previous investors, in effect enabling his "bank" to maintain the appearance of solvency -- the greater Ponzi schemes we live amongst aren't as easy to see. As economist John Kenneth Galbraith famously stated, "The process by which money is created is so simple that the mind is repelled."
Perhaps the best way to pull back the veil on this is via explaining the "magic" that goldsmiths performed some 400 years or so ago. Back when gold was the monetary standard people often kept their "money" in the goldsmiths' vaults for safekeeping. In return they were given notes of credit, notes which many people decided to trade amongst themselves rather than worrying about the bothersome and repetitive tasks of continually withdrawing and depositing their gold. Many goldsmiths then realized that hardly any of the gold ever left their vaults -- about 90% just sat there -- and so got the unscrupulous idea to not only conjure a few extra credit notes out of thin air, but to lend out those notes with interest (otherwise known as usury, which used to be a big no-no in the Bible and the Quran until its definition [in the bible] got watered down to mean charging too much interest rather than charging any interest at all).
In effect, due to the goldsmiths' finagling there ended up being more notes in circulation than there was gold which the credit notes could be redeemed for. (This is now practiced by banks in a more modern fashion under the moniker of fractional-reserve banking, backed up by paltry Federal Deposit Insurance's and such.) On top of that, the added charge of interest meant that not only did the divide between credit notes and redeemable gold increase even further, but that people -- and the economic system as a whole -- were thus placed on a treadmill whereby they had to keep running faster and faster lest the monetary system collapse in on itself. How's that so?
Take this analogy: Imagine a blank slate where money doesn't yet exist. A bank is then started up and proceeds to create $1,000 out of thin air (which is exactly what banks do today and is how roughly 95% of our money is conjured into existence). It lends out $100 to each of 10 farmers to facilitate their trading amongst one another, tacking on top of that an annual interest rate of 10%. The bank therefore expects back a total of $1,100 at the end of the year, but it only created $1,000. In other words, there is an inherent shortfall of money in the system -- by $100 -- from the get-go. While at the end of the stipulated year some of the ten farmers may have earned enough from their peers to pay back their loans plus interest, there will not only be inevitable losers due to the inherent $100 shortfall in the system, but any farmer who not only made enough money to pay back the $110 but also earned some extra cash which they stuck under their mattress for safekeeping effectively took money out of the system and left even less for the "losers" at the other end -- "losers" who effectively have even less possibility for securing the needed money to pay back their loans, never mind the added interest.
So while the charging of interest means that a perpetual widening of the gap between the rich and the poor is baked into the system, it also means that the system is inherently bankrupt and would implode in on itself were it not for the banks continually conjuring more and more money into existence in order to try and pay off (more like cover up) the inherent shortfall. New and increasing supplies of conjured money are therefore continually lent out (all with added charges of interest of course) so that said "suckers" can service at least the interest on their previous loans by going into even more debt, in the process bestowing upon the bankers' Ponzi scheme(s) the appearance of solvency.
If you're starting to scratch your head and say to yourself, "Hold on a second, this kinda sounds like what's going on with Greece," then congratulations! You now understand how the monetary system works! (You can read my two posts on the Greece story here and here.) That being said, unscrupulous goldsmiths/bankers/Ponzi schemers weren't always given the free pass as they are today.
For starters, it wasn't as if people never caught on to what the goldsmiths were doing way back when. The first people to catch on to the goldsmith's fraudulent creation of extra notes unsurprisingly rushed to the goldsmith's to exchange their credit notes for gold before supplies ran out and their notes were thus deemed worthless. This was (and still is) called a "run on the bank". Initially it was the goldsmiths who pointed the finger at the person/people who started the bank run(s) and got them strung up on the gallows. This eventually got straightened out and the pitchfork wielding masses made sure that it was not them but the goldsmiths who got hung by their necks.
We're currently stuck back in stage one where "the losers" get blamed for the bankers' bamboozling. It isn't the bankers' or the monetary system's fault -- it's those damn Greeks who are too lazy to work, those damn Greeks who are so corrupt that they don't pay their taxes, those damn Greeks who spend all their time Greeking one another.
So while Obama has done nothing but play along with the bankers' scam(s), not only did he not even slap the bankers' wrists, but he instead slapped the bankers' salamis while watching them get bigger and bigger. And the only mistake that Madoff made that rendered his salami not worthy of being slapped was that rather than being too-big-to-fail he was too-impotent-to-bail. Sure, Madoff is said to have run the largest Ponzi scheme in history with his Bernard L. Madoff Securities LLC, but this is categorically untrue since the banks' Ponzi schemes are infinitely larger than Madoff's bush league-worthy $64 billion scheme.
That all being said, and although I'm definitely on side with Snowden rather than those who would see him jailed (or worse), I sometimes fail to see the point behind his leaks, and not just because his exposure of the privacy violations partaken by the United States government should be taken as common sense in the first place. No; why I sometimes fail to see the point behind Snowden's leaks parallels something else that Martin Luther King Jr. stated, paraphrased and expanded upon by Morris Berman:
Martin Luther King... apparently said to Harry Belafonte, just before he (i.e., King) was assassinated, that he thought he might have been making a big mistake; that he sometimes felt like he was herding people into a burning church. This is a very different insight, quite obviously, than the notion that black people should be getting a larger share of the pie. After all, who wants a larger share of a rotten pie, or to live in a church that is burning down?
Fact is, while Snowden has a lot of worthwhile things to say about digital rights, he doesn't seem to have anything to say about the bigger picture in which those digital rights exist amongst. That, namely, would be the burning church of fossil-fueled industrial civilization, a civilization whose best-before-date has now been reached due to the emergence of peak oil. The reason for the aforementioned statement is that the Ponzi scheme(s) we live amongst require perpetual growth in order that an increasing amount of loans are progressively taken out so that the system is able to keep from imploding in on itself, and since peak oil means there will no longer be an increasing amount of fossil fuels to power growing growth, well... well awww sh*t!
While economies will inevitably collapse within collapsing industrial civilization, and since even benevolent governments have been doing little to nothing to address the quandary of peak oil, it's not hard to imagine our peril(s) being blamed on scapegoat after scapegoat, paralleled with reactionary governments clamping down on dissent, leakers of classified information being no exception of course.
With that in mind, Snowden recently pointed out that
Perhaps the best-known case in recent history here is Gen Petraeus -- who shared information that was far more highly classified than I ever did with journalists. And he shared this information not with the public for their benefit, but with his biographer and lover for personal benefit -- conversations that had information, detailed information, about military special-access programs, that's classified above top secret, conversations with the president and so on.