Monday, June 18, 2012

The Euro - Smoke and Mirrors!

As a result of peoples’ blatant, pervasive ignorance of the enormous difference between money and wealth, their profligacy, cupidity, foolishness, lack of understanding of the laws of economics, and their reckless refusal to set limits on their borrowing and spending, the Greeks have sold themselves into bondage to the money lenders. As a result of blatant, pervasive, reckless disregard of the enormous difference between money and wealth, their cupidity, foolishness and refusal to set limits on their lending, the money lenders have been forced to impose the limits on further borrowing they should have imposed long ago — at the very beginning of the lending.

It is easy to say, “a pox on both their houses,” but that doesn’t solve the real problem that has led both sides to this pass. The problem is the lack of understanding that MONEY IS NOT WEALTH. This stems from the double function of money as both the instrument of commerce and as the measure of value. These are not synonymous terms. Real wealth, of course, consists in what is produced and consumed. One way to express the difference between money and wealth is: wealth is what money can buy or, conversely, wealth is what you can exchange for money. In any case, one shouldn’t spend money before it is earned through the creation of wealth!

The basic lack of understanding results in excessive Public Sector borrowing to support excessive Public Sector spending: the equivalent of people wanting to get something for nothing. The illusion is that it can always be at someone else’s expense. This can never work, except for those who are among the early exploiters of the situation. Those who follow will “reap the whirlwind.” As in Hosea, 8:7, for they have sown the wind, and they shall reap the whirlwind: it has no stalk; the bud shall yield no meal: and if it yield, the strangers shall swallow it up.

People need to get it straight: NO wealth can be created in the Public Sector; ALL wealth is created in the Private Sector. And, if the Private Sector exists to create wealth; it must follow then, that the Public Sector exists only to make sure there is a Private Sector.

It is important to remember that there is reflexivity present. Each segment enables the other. I indict both sides; the people and the money lenders who, of all people, should know the effects of what they are doing.

All money lenders (banks) are “regulated” by the government. The subsumed essence of my argument is that it is to the advantage of the government (politicians) and the cronies of the politicians to hold the populace in ignorance of the laws of economics. This allows the former to commit legalized thuggery on the latter. Thus, the politicians can, through sweetheart deals with their cronies in the private sector, plunder the treasure created by the people and get away with it.

Stops are needed on both sides. The citizenry needs to become educated enough to be able to realize what kind of monster they are creating when they insist on eating the pabulum provided "in the government trough." They need to realize that when they do that, they are just screwing themselves. They need to stop electing politicians that promise them money and money substitutes.

Fix the permeability of the ethical and moral barriers that should exist between the politicians and their cronies and most of that problem will go away. To be sure, it is not a perfect solution, but there is no perfect solution where human beings are involved. After all, Suntne angeli?

A Father's Day Musing

My father, a powerfully built man, was born in Belfast, Ireland, immigrating to the U.S. when he was 12 years old. His father, also powerfully built, was a Blacksmith.

I, having been born and raised during "The Great Depression," can still remember and compare my experiences of those days to those of today. How he was able to do it, I don't know, but my "Da," a Journeyman Pattern Maker and Model Maker, working in wood, plaster and metal, at one time held three different jobs simultaneously (my mother worked simultaneously in two jobs but still was able to find the time and energy to volunteer at a local hospital as a Nurse's Aide.) Neither of my parents complained about the workload and, in fact, went out of their way to conceal from me and my two sisters the extent of the family's financial difficulties and what I subsequently came to realize were their labors of truly herculean magnitude.

The closest I came to realizing there was a problem was during one period in which neither parent was working. Every day, my Da went farther and farther from home in search of work. We had to "go on the dole," forced to go to a government facility to pick up powdered milk, flour, beans, rice and other basics. This was a time when to be "on the dole" was, most definitely, not a desirable position to be in. My mother told me not to worry, that this was only a temporary thing, and we would stop going there as soon as we were able. How hard those days were, I did not realize at the time.

I remember how central to our diet were teapots full of hot, black tea accompanied by "Saltine" crackers. Of course, we drank our tea Irish Style, with sugar and cream. Sometimes, this was three times a day. At other times, my mother would make a "mock apple pie" (with not a trace of an apple.) The saltines, to which were added some sugar and cinnamon powder, substituted for the apples. When we were out of flour, we reverted to just the tea and saltines. Still, I never got the idea that we were "poor." Oh, those were the days!