Economist Robert Murphy and business consultant L. Carlos Lara reached out to me a few weeks ago interested in a quick interview for their newsletter, the Lara – Murphy Report (LMR). Bob said “try to keep it under five pages” so I, of course, blathered on and on right to the edge of page 5. Amazingly, they decided to publish the whole thing with the lovely title “The Heart of Messynomics” (complete with trippy fractal imagery!). I’ve embedded the entire report below. My interview starts on page 22. I think you might enjoy it…
…but what the hell do I know?
I know I’m crazy, but all the reasons and some of the answers you seek are here.
Read the lyrics.
Turn up the volume and enjoy.
http://www.youtube.com/watch?v=embimweuYU4
SCARE
20.12.2012
(Stop Corruption And Repression Effective
20.12.2012)
Banks were given a very important privilege to
create money in the form of extending credit. This function requires diligence
and careful consideration in regard to individual credit risks as well as to
overall credit levels in the system. The financial crisis revealed that the
banks were operating at too high a leverage and with too much risk. They were
used to be saved by the Central Banks and certain that in times of difficulties
the Central Banks were there to save them. They were like trained dogs and their
master Greenspan or Bernanke would always be there to rescue them when
unforeseen difficulties arose.
That may be true but that does not absolve them
from their obligation to monitor overall debt levels in the system as well as
being diligent in evaluating the debtors ability to not only service a debt but
to be able to repay it over time. The banks clearly failed in this function that
is the core function of banking but focused mainly on their compensation
packages. The way these bankers enriched themselves in the process of driving
the financial system into a wall was appalling and the average income earner was
never able to comprehend their schemes but preferred to simply ignore them. Of
course, the bankers explained their outrages income levels with free market
principles of supply and demand, where the best simply could be hired with those
kinds of benefits only. In hindsight those superior managers seem to have missed
their mark considerably. The most interesting aspect of all of this is the fact
that, after we have been more than 3 years in this financial crisis, the bankers
continue to loot the system as if nothing ever happened.
True to form the Central Banks “saved” the
financial system by saving those great financial institutions without whom the
system would have collapsed, as was argued. Hardly were we out of the danger of
collapse, the banks immediately went back to their old ways and were certain
that this was a problem that would occur just once in a lifetime and now all was
clear again. The real problem, however, had not been addressed but had simply
been muddied.
In actuality, the losses produced of extending
unsustainable levels of credit by the banks have been transferred to the public.
Different ways were chosen to achieve this task in the form of free money for
the banks, injection of government funds into some institutions, increase of
basic money supply and so on.
The threat of system collapse would have been
labelled blackmail if it would have occurred in another setting. However the
bankers were able to influence the media, the legislators and regulators in
their favour with all the financial resources available to them. Nobody was made
to take any responsibility and no one was taken to account.
This represents a serious violation of the spirit
of the Rule of Law that is the basis of western society. It seems that now the
new rule is Might is Right. This changes many parameters in the compass of the
social system within the western world. No one can be sure on what level and
when one will be subjected to the financial abuse of those elites. Presently,
the people in charge are trying to enhance financial repression of which one
form is to keep interest rates below the level of inflation which affects mainly
those that lived within their means over the past many years; another clear
violation of the spirit of the Rule of Law as it transfers losses from bad
investments to the innocent and decent part of the population. In addition, the
increased level of government debt puts in doubt all those benefits promised by
governments the world over.
It is interesting how the banks were able to
confuse the public who was/is unable to grasp the actual situation. But
considering the banker’s great financial resources, it seems not that much of a
miracle to influence the media and the legislator and having politicians do
their bidding. The question is what the heck can WE, THE PEOPLE do about
it.
Usually, we could address such things on a
political level as we are a democracy, right? But it seems that the system has
been corrupted by all the money sloshing around and it is extremely difficult to
find any electable person that will act against those powerful interests. In
addition, it will take many years until sufficient numbers of persons with the
new thinking and with integrity not to be corrupted by those lobbying efforts
will be elected to office that will implement the changes needed. So, what
should we do? Start a revolution?
Well, the blackmail used by the banks may be the
only way to address the injustices that have occurred over the past few years.
They showed us how to leverage one’s limited resources to achieve one’s goal.
Therefore the following proposal to start the movement “SCARE 20.12.2012” should
be seen in this context. The idea is that if by that time (20.12.2012) some
serious injustices have not been removed from the system, people will start to
withdraw their money from all financial institutions driving them into default.
And it might work, because those who hesitate to support this threat may be left
with no money as the banks will have to close down before all has been paid
out.
Now, what demands are made if that scenario is to
be avoided.
1.
Bankers and past Bankers
(all those working in the financial industry that earned in excess of $500k plus
annually for more than 2 years during the past 15 years and this without any
downside risk i.e. risk of financial losses, except the possibility of losing
their job) have to be made personally accountable for their past activities and
be removed from any such position that might directly or indirectly have
influence on the money creation and lending aspects of the economy (this
includes regulating agencies and politics) before 20.12.2012.
2.
Present and past
regulators have to be made personally accountable for their past activities and
be removed from any such position that might directly or indirectly have
influence on the money creation and lending aspects of the economy (this
includes financial institutions and politics) before
20.12.2012.
3.
Politicians that accept
any financial support from institutions that are involved in the money creation
and lending aspects of the economy will have to face a jail term of no less than
2 years without the possibility of parole.
When these 3 points are implemented before
20.12.2012, we the public will not destroy the financial system but support the
way to find back to the RULE OF LAW and away from the idea of MIGHT IS
RIGHT.