Today's all-too-true image

 

Answer to gold bugs

 I've just read a LinkedIn post saying the dollar is on the precipice of total devaluation, it's a Ponzi scheme, etc. The only solution is commodity-backed currency--gold, and in the modern world, bitcoin, whose commodity is the energy needed to calculate the complex number that is the "coin."

The peril for the economy and the dollar is real, but gold won't solve it. Here's my answer to that post:

I've hesitated to respond, but such overwhelming ignorance of money and its origins really is worse than any potential reckoning for fiat currency (which clearly will be blamed, even if it's not the culprit).

First: The assertion is that only commodity-backed money has any value. (Energy is Bitcoin's commodity). David Graeber's Debt: The First 5,000 Years says we've had gold-backed money for only 200 years in the last 5,000, or since money has been around. So the other 4,800 years of economies were all a bust? Please, tell me another.

Why aren't FDR and Lincoln taking the US off the gold standard to fight the wars mentioned? And what about "Cast Away"? Would the guy stranded on a desert island still find dollars, or gold, or bitcoin valuable? The society providing the resources for which currency is exchanged gives money its value; the rest is baloney.

Second: There has never been economic money without some authority (state, temple, king, etc.) to require it in payment for taxes. The Confederate States of America can't collect taxes, so its money is valueless.

Third: Because they are limited, commodity-backed currencies covertly favor deflation. Remember the Great Depression? Deflation! Political economist Mark Blythe says we can have either gold-backed money that leads to an oligarchy or democracy, not both.

What's shameful is how much credence this inexcusable deception receives.

Trump Evaluated by Heather Cox Richardson

Here. Excerpt:

"A Wall Street Journal–NORC poll released yesterday found that only 25% of Americans believe they have a good chance of improving their standard of living. Nearly 70% said it was no longer possible to work hard and get ahead. A majority of those polled said the generation before them had an easier time starting a business, buying a home, or staying at home to parent a child.

"A different piece in the Wall Street Journal explained that there were 927 American billionaires in 2020 and 1,135 in 2024. Together, they are worth about $5.7 trillion. The 100 richest of the set control more than half of the total at about $3.86 trillion. As the number of billionaires grew, “supply side” economic policies in the U.S., designed to concentrate wealth at the top of the economy among investors rather than on the “demand side” made up of consumers, hollowed out the middle class. From 1975 to 2018, at least $50 trillion moved from the bottom 90% to the top 1%.

"Yet another piece in the Wall Street Journal, this one by Katherine Hamilton and Alison Sider, noted that consumer confidence is sliding. While wealthier Americans seem to be doing fine, they write, rising distress about the economy is obvious among the middle class: those making about $53,000 to $161,000 a year. Chief economist at Morning Consult John Leer told the reporters: 'There was a period of time, briefly, where the middle-income consumer looked like they were being dragged up by all that was going well in the world. Then things fell off a cliff.'"

Just how credible is trickle-down economics?

 

A tool to control impulses (very good!)

 

America at War

America is terrific at attacking, and war-making. It's terrible at making peace. Trump is even thinking of changing the "Dept. of Defense" to the more accurate "Dept. of War." It's part of how us USians got control of the continent. Actually, Old World diseases are more responsible than military attacks for the defeat of the North and South American natives--a genocide that wiped out more than 90% of the New World's populations.

The imperialist impulse is why, between 1798 and 1994, the US is responsible for 41 changes of government south of its borders. 

Taking credit for that "victory" is what part of what drove US imperialism up until the Vietnam war, that is. 

And speaking of Vietnam: (from Naked Capitalism) "A vignette provides confirmation of Vietnam’s fierce retention of its identity during the period of Chinese rule. In the documentary The Fog of War, a not-exactly-satisfactory effort at atonement by former US Secretary of Defense Robert McNamara, he recounts how, many years after the Vietnam War, he was able to arrange a dinner with the leaders of North Vietnam during the conflict.

"Needless to say, it was a pretty tense affair. Finally, one of the North Vietnamese officials asked: 'Why did you go to war with our country?'

"McNamara invoked the domino theory, that if North Vietnam won, China and Chinese communism would advance across Southeast Asia.

"McNamara reported that his counterparts nearly leaped across the table: 'How could you go to war understanding so little about our country? We spent 1000 years expelling the Chinese.'"

Want to know the history of the Federal Reserve?

 You can read Greider's Secrets of the Temple, or (much simpler) read this from Matt Stoller.

Stoller unveils the political motivations behind our central bank's shenanigans... It's really fascinating to know, for one example, that Alan Greenspan was a consultant for Silverado Savings & Loan in addition to being a libertarian acolyte of Ayn Rand. 

Excerpt:

But the 2008 financial crisis blew up the Greenspan era, challenging the officials in charge of the Fed in a number of different ways. It was a crisis the Fed should have seen and prevented. The Fed was, after all, the institution that had regulatory authority over mortgages, which it never used. But its leaders were blinded by their obsession with the macro; Ben Bernanke gave a speech titled “The Great Moderation” as the crisis was brewing, in 2004. The blindness was a result of their obsession with macro-economic forces, and ignoring the actual banks and institutions in the real economy. Banks, even big ones, were still micro, left to the losers in the bank supervision department.



And yet, somehow, during the crisis, these banks had affected the real economy. In response, the Fed did what it had done since the Volcker era; it bailed out Wall Street. In this case, it did so by expanding its balance sheet by several trillion dollars, buying bad assets from banks and supplying cash in return. By 2022, its balance sheet had reached $9 trillion. The Fed now regularly loses huge amounts of money due to losses on its portfolio, and those losses are essentially the accounting for a subsidy to Wall Street.

The crisis generated a legitimacy problem for the Fed, since its wizards and oracles had failed, and yet the public had no way to vote them out. But rather than engage in real reform and introspection, like most establishment institutions, the professional managerial economists doubled down. Federal Reserve Independence, rather than a temporary historical phenomenon that should be eliminated as a failed experiment, became sacred, to the point that Joe Biden’s White House had a policy that no administration official could even comment on interest rates.

...

Fed Chair Paul Volcker used to carry around a card of union wage rates, as a reminder that his goal in achieving low inflation was to break union power. The Federal Reserve is responsible in part or fully for the legalization of derivatives, the explosion of subprime lending during

the 2000s, the great financial crisis, a trillion dollar transfer of wealth to big banks as interest rates increased, the institutionalization of crypto-currencies, the merger explosion of the early 2020s, and the failed regulation of Silicon Valley Bank, among other problems. It’s also a highly political institution, pushing free trade and defending large banks; in the 1990s, Fed officials secretly bailed out Mexico so as to protect Citibank and pass NAFTA.

...

here’s more. After the crisis Congress required the Fed to place compensation limits on bank executives. Jay Powell simply refused. The Fed fostered a giant corporate merger wave in 2021, intentionally sabotaged its own payments network, FedNow, because it might be cheaper and better than the system run by large banks, and didn’t block a single merger application of the over 3500 it received from 2006-2021. This choice, as I noted years ago, “includes Silicon Valley Bank in 2021 buying Boston Private Bank and Trust, which the Fed board unanimously justified by noting that SVB would not ‘pose significant risk to the financial system in the event of financial distress.’” Speaking of which, the Federal Reserve’s chief legal officer, Mark Van Der Weide, helped author the legislation that removed regulations on Silicon Valley Bank, and the Fed, and Jay Powell, lobbied for it.

There’s just an endless amount of bad behavior from the technocrats, so the opponents of Trump, asserting that we must protect the “independence of the Fed,” are really missing the point. And I fear that their goal, after Trump leaves office, will be to “restore the independence of the Fed.”