Gosh I hate to do this. It’s Friday and if you’ve got a lick of sense, go read something else. Heck it’s Friday night and even I should be out doing something else other than writing this. But this has been on my mind for days and days and I’ve got to get it down on “paper”.
I’ve been watching the Ron Paul candidacy from afar here, across the ocean. And it’s been very appealing to me. It’s been very appealing to a lot of people I respect as well and I’ve been watching a lot of his videos of debates and town hall meetings to try and figure out why.
Before I get into all that, let me say that I’d never vote for Ron Paul for president even if his abortion and immigration policies and others WERE more in line with my own. Simply put, the guy is a terrible leader. His popularity isn’t actually HIS popularity, but the popularity of his ideas.
One last distraction in that vein – the fact that his ideas are more popular than his personality is in itself quite inspirational and seductive (in the good sense). Every other candidate at just about every other level for political office always seem like they’re creating ideas out of what’s currently popular in an effort to please and then shape their personalities to most effectively BE pleasing.
But as for Ron Paul’s plank, on the “con” side of course I disagree with his abortion policies, any idea of simply abandoning the UN and his current immigration platform is not to my liking although it seems a lot less racist than is portrayed.
On the “plus” side of course is the obvious unequivocal push to get the hell out of Iraq and quit being the policeman of the world. MLK said it when he was alive and I agreed with him then just as much as I do with Ron Paul today.
But is it ONLY the anti-war and anti-interventionist plank that’s causing all the enthusiasm, especially from people like me and those whom I respect and admire? Well I can’t speak for them but I’ve been watching his town hall meetings like a hawk and I can tell you I had a pretty big surprise.
A couple years ago when I was blogging full-time I was casting around for some new subjects to write about when someone mentioned to me the concept of money. As in what is it, beyond some pieces of paper or coins with designs on them? And I got the shock of my life. I considered myself a fairly educated person but there was this glaring hole in my awareness – I had no idea what money was.
I’d say easily a third of the citizen’s questions of Ron Paul deal with this issue alone – money. Not necessarily as in taxes (higher or lower) or the price of oil but the fundamental concept of money itself.
There’s a very worn-out cliche of “re-arranging the deck chairs on the Titanic”, meaning a lot of fuss over something that is about to become completely irrelevant. And quite simply put, all the various ideas and policies and campaign pledges of all the Democratic candidates, even the ones I really DO like, seem to be a lot of promises about deck chair re-arrangement.
Or let me say it in even cruder terms. Whether or not Clinton OR Obama OR Edwards were to win and the troops in Iraq be withdrawn today, next month or in a year, whether health care was to become single payer or some kind of patchwork thing of being affordable/available to everyone, whether or not oil costs 100 dollars a barrel or 50, whether Osama bin Laden is captured or not, whether unions get stronger or not, whether taxes on the middle class go up or go down, none of that matters.
Oh sure of course it matters in the short term. Some people might get some much-needed health care and some young men and women might get shipped home before they would have otherwise been slain, etc. But if the ship is still about to sink, we’re all going down one way or another.
Ron Paul represents a current school of economic thought generally called the “Austrian” school which is usually boiled down to “less government regulation, more free markets.” The current mainstream economic thought is “Keynesian” and even more simply put says that central banks combine with the government to either inject or withdraw funds to stabilize the economy.
There are certainly pros and cons to each of these “sides” and what’s above is a gross generalization and there are hundreds of economists on either side with their own refinements. I’ve even read Ron Paul’s “position papers” on this subject and it’s clear he is no economist – he has a rough understanding of some basic concepts and that’s a heck of a lot more than most. But he isn’t the one churning out the original thoughts on the subject.
But what I was shocked to see was that all these OTHER people, not just I, were deeply worried about this concept of our economy – not just “the economy” as in it’s moving up or down, recession or growth, but the fundamental nature of it. These people aren’t economists (and neither am I) so what’s going on?
As Bob Dylan said it much better than I – you don’t need a weatherman to know which way the wind blows. People do not need PhD’s in economics to know there’s something fundamentally wrong with the system itself. Not the current state of the system, whether a little better in Clinton’s presidency or a little worse now but the system itself.
Once upon a time, in ancient Rome and Egypt and Israel and even the democratic Greeks, in the Caliphate, in Babylonia, Assyria, Sumer and the land of the Chaldeans, there were slaves. Every ancient civilization had them. The oldest surviving legal code (Hammurabi of the Babylonians) has extensive rules about them.
Roughly speaking, a slave is a person forced to work against his/her will. And wherever there are slaves there is always a group of “rulers” or high-status people who live lives of luxury which would be impossible without the slaves.
Later the world changed and slavery changed its name and form and became “feudalism” and “serfdom”. Again a large percentage of people forced to work against their will while a small class of “nobles” or high-status people lived lives of luxury which would be impossible without the peasants and serfs.
But in many parts of the world, most notably Europe (not America sadly) the feudalism died and the serfs were freed. Definitely something to celebrate. But this coincided with a strange new form of servitude – debt. And when I say debt I mean something very specific – credit debt.
The entire money system that 99% of the world relies on today, excepting a few natives tucked away in inaccessible jungles and deserts, is based on credit debt. And whether a person is forced to work against their will because of a whip or because of debt is a mighty thin distinction.
Again for brevity’s sakes, this is a gross simplification. But in the “old days” money was just a portable form of value. I could take 10 sheep and sell it for a piece of gold (or a cowry shell, etc) and use the piece of gold to buy two horses and vice versa.
This later expanded to the early forms of modern banking, where I could make a deposit of gold in one location (thanks, Templars!) and carry a piece of paper that could be redeemed at a far away location (say in Jerusalem). Then I would only have to transport the paper and not all the sacks of gold around.
But eventually the bankers decided to write more paper than what actually corresponded to what they held in their vaults. I don’t blame them and it was a smart way to make an income. But this was the beginning of what’s called fractional reserve banking.
Say a bank has 100 “dollars” of gold in their actual vaults. Logic says they can only write paper notes up to the total sum of 100 dollars. But if a bank feels like all their depositors are not going to come in on the same day and withdraw all their deposits, it’s safe to write paper notes say in the value of 300 dollars. And assuming those paper notes later get paid back by the people who were given them as loans, the banker just profited by 200 dollars.
Now we have global banks and even the small regional banks are tied into the global network. So if global banks have a total of 100 trillion (a made-up number) on deposit and lend out 300 trillion, where is the additional 200 trillion to come from?
Well in the United States, as in all the modern, advanced countries, the central banks just “print” or create the 200 trillion out of thin air. The Federal Reserve has that job in the US and the Bank of England in the UK, etc.
What this means is that at ALL times, the total world debt is always higher than the total supply of money. Every single dollar, euro, yen and Swiss franc that is printed (or created) comes into creation the moment it is LENT to someone, whether the government, a bank, a corporation or to you when you want to buy a car.
And like every loan since the beginning of time, the amount paid back must be higher than the amount lent. So if every dollar (euro, yen, etc) starts out as a loan, the only way to pay it back is with yet another loan.
To put it even more simply, imagine the entire world is just you. You want to buy a nice new computer so you can read this blog. Well you don’t have the money so you use a credit card. The price of the laptop is 1000 dollars and to pay it off on time you need 1200 (I’m being generous here).
Well the problem is that before your desire to buy a computer, there was no money at all. The Federal Reserve had to create 1000 dollars (out of thin air) which was then LOANED to the United States government which in turn lent it to a central bank, which then lent it to yet another bank, which loaned it to the credit card company which in turn loaned it to you. The company, the banks and yes the U.S. government all have to PAY BACK that loan with interest, as do you.
So if only 1000 dollars of total money exists, how can all of you pay back the loan? With yet another loan, that’s how. And that second loan is paid back with yet another loan and on and on into infinity.
That’d be fine if the planet Earth was the size of the universe with infinite resources. But what ends up happening is the total sum of all the resources on the planet (including the valuable ones like food, water and oil not to mention human labor, including yours) get turned into money which then goes to pay off debts, which would be fine except the original loan was created literally out of thin air.
A lot of people think of their own debt payments (or “debt service” in financial speak) as just their credit card bills or something. But every penny of debt of the U.S. government is yours/ours too. And every single dollar you’ve ever borrowed, held, stashed under your mattress or paid was in itself a loan as well.
Can you live without money? Can you own a house, drive a car, acquire food, clothing or live for a day without money? It’d be pretty damned hard. And so every single use of that money actually is a debt transaction. We’re all born OWING.
If that is not a modern definition of slavery, I don’t know what is. And people FEEL it in their gut, I know they do. Without even being able to read simple sentences much less a degree in economics, people KNOW something is wrong. And whether it’s a “classic” form of slavery where people owe their labor to the overlords or a “modern” form of slavery, where people are forced to work to service a debt they were born with, the results are the same: a vast majority of people toiling away so a very few can live a life of luxury on the sweat of the many.
I haven’t seen Ron Paul go into any depth on this but there ARE solutions to this. I can go into some of them if you like but essentially so long as ALL money is debt, then the vast majority of people are going to be born OWING and thus modern slavery.
So that’s why I say it’d be great if Democratic X was elected and yes we might get policies A, B and C implemented. But as good as it will truly be for a soldier not to die in the sands of Iraq or a child not to be denied an operation, if the entire ship sinks then we’re all sunk in the long run. And I’m afraid the “long run” is not all that much farther down the road.
Pax
