Recently we saw a video in which a retired British major general kept insisting that we must appease Putin and allow him to keep Crimea and everything else he had managed to grab. He was then honest enough to admit that if Putin were appeased in this fashion, it would probably be necessary to fight him or his successor again in five or ten years, but that was the price that had to be paid for peace. Over a year ago people were saying Putin could not be stopped from taking all of Ukraine and so must be allowed to have it, now they are saying Russia will never surrender Crimea and must be allowed to have it. Apparently, nothing succeeds best for a tyrant than people afraid to stand up to him.
News from the Network, Vol. 16, No. 09
News from the Network, Vol. 16, No. 09
• Don’t Create Money to Lend. Conventional wisdom has it — meaning that Keynesian economics mandates — that first you must have money before you can finance new capital formation. This means that if a government wants to pour money into some program or other, whether for consumption or investment, it must have the money to be able to pour. This creates a paradox, for Keynesian economics assumes as a given that existing money must be used for both production and consumption, creating an automatic imbalance in supply and demand. It also creates an almost irresistible opportunities for abuse, as became evident with the COVID-19 loan program. Massive amounts of money were created, and massive amounts of money appear to have misappropriated. Is there an answer? Yes. It is possible, even preferable to create money only when there is an actual investment ready and waiting for financing, instead of creating money and desperately searching for a way to spend it. This is one of the principles behind the monetary reforms presented in the Economic Democracy Act, and would greatly reduce, possibly even eliminate that particular form of corruption (although, of course, human ingenuity can always come up with more).
• Experts Predict Economic Disaster. So, what else is new? This time it’s Ukraine that is the villain. With military spending for Ukraine was up, experts are terrified that this is using up all the funds that will be needed for investment in new capital . . . that will be siphoned off to the stock market. They don’t realize, one, that most of what is being sent to Ukraine is sunk cost — it’s already been spent. Two, past savings are not used for new capital formation. Comercial banks create money to loan to business, and with the repeal of Glass-Steagall, use their “excess reserves” to pour money into the stock market. Adopting the Economic Democracy Act. would help set a lot of people straight on this, but they’re not doing it.
|Fakeout on the field
• Backfield Shift and Hike. Having no real idea how money and credit really operate or even what they are, the financial powers-that-be at the Federal Reserve are still trying to figure out the magic formula to use to make an economy work without actually making people productive and allowing full participation in economic life. Instead, they keep fiddling with interest rates, assuming, like the Cargo Cultists of the South Pacific, that if they make it look like a strong economy, then it will be a strong economy: the magical law of similarity. They haven’t figured out that a strong economy comes from people fully participating as both producers and consumers in economic life, and that consumption demand cannot be created by government by creating money, the symbol of wealth, any more than Spam, Coca Cola, airplanes and metal tools come from God’s Cargo Workshops hidden in the clouds above Sidney, Australia (we didn’t make that up). Of course, they wouldn’t need a magic formula if they adopted the Economic Democracy Act, but then prosperity would come from hard work and productive activity, not magical formulae.
• Have Homeowners Lost Trillions of Dollars? It baffles many people and causes them to reel in shock, but unrealized gains are called “unrealized” for a reason: they haven’t been realized. They don’t really exist; it’s all on paper or in the imagination. For example, if you buy something for $1, then a year later the market value goes up to $100. Have you gained $99? Not unless you actually sell the item. If you hold on to the item you may gratify your dreams of greed by thinking that “you” are now “worth” $100 instead of $1, but it’s all imaginary until it is turned into reality by disposing of the item for $100. If it goes back down to $1, and you still don’t sell, have you lost $99? Of course not. Similarly the claim that homeowners in the United States have “lost” $23 trillion since last June are ludicrous. Until and unless they realize less than they paid for something, they haven’t lost one cent. Of course, the Economic Democracy Actwould help people get away from the idea that a house is an investment instead of a consumption item, but maybe we need to take baby steps and start educating people about the truth about money, banking, credit, and finance before they’re willing to adopt it.
• The Economy is “Doing Too Well”? For Whom? Word on “the Street” — Wall Street, of course — is that the economy is doing “too well.” This, of course, raises the question, for whom? And how can an economy be doing “too well”? These are concepts that boggle the mind of ordinary people concerned with having sufficient food, clothing, and shelter for themselves and their dependents. In the Krazy Keynesian Universe, of course, nothing has to make sense as long as the politicians can get reelected by manipulating the system so that they and the increasingly super-rich (who are sometimes indistinguishable from the politicians) can stay in power. Perhaps that is why the Economic Democracy Actmight not be considered a viable option by those currently in power, who fail to realize that the basis of their power is the very thing that they are busily undermining. After all, what good is it to produce things that nobody can buy, or control people who are no longer alive?
• The Unfair Tax. Once again politicians who can’t see beyond the end of their noses which are buried in their wallets are pushing for a national sales tax as the sole tax, which they claim will solve all problems. Of course, it doesn’t matter to them that the so-called fair tax is really grossly unfair, as it falls heaviest on people least able to pay, and also would cut demand to the point of kicking off the greatest depression in history. How is this possible? In 1935, Dr Harold G. Moulton of the Brookings Institution posited that a savings rate of 10% in order to finance new capital formation would induce a depression of gigantic proportions due to the drop in demand. Now suppose that a 23% sales tax was instituted, which would cut consumption by more than twice the amount that Moulton claimed would trigger economic meltdown. Then there is the fact that a sales or other consumption tax is extraordinarily regressive. A poor family spends 100% of its income. The superrich spend so little that the percentage is immaterial effectively zero. That means that the effective tax rate for the poor would be 23%, while that of the super-rich would be zero. How is that “fair”? Frankly, the only truly just tax is an income tax with a sufficient exemption for people to live on, as it meets all the principles Adam Smith laid out for just taxation. That is why it is recommended in the Economic Democracy Act.
• Social Security in Trouble! So, what else is new? Almost from the system’s beginning prophets have foretold disaster, and it may finally be catching up with us. Still, no one has figured out that you can’t spend what you don’t produce, but people insist upon living in a Keynesian fantasyland. They don’t realize that if Social Security was made need-based, and people could rely on the Economic Democracy Act, they wouldn’t be in the situation they are today.
• Buy Now, Pay Never? Believing that they can attain the good life without necessarily doing anything to warrant it, millennials are assuming massive amounts of debt in order to enjoy the lifestyle to which they think they are entitled. We hate to keep sounding the same note, but the Economic Democracy Act. would get them virtually everything they could reasonably want and without assuming unrepayable debt that will inevitably become the responsibility of somebody else.
• Softening Support for Ukraine. Many historical analysts agree that if Hitler had been stopped when he took over the Sudetenland and then the whole of Czechoslovakia, World War II — at least in Europe — would probably never have happened. German generals interviewed after the war stated repeatedly that if England and the rest of the Allies had stood up to Hitler and forced him to back down and give back the territory he had seized, they were ready to get rid of him, even if it took a military coup. Instead, under the tacit leadership of British Prime Minister Neville Chamberlain, the Allies determined on a policy of appeasement, and letting Hitler keep his ill-gotten gains. The world is still paying for that mistake . . . and it hasn’t learned. Although President Biden insists that the United States will continue to support Ukraine, taxpayers are getting nervous about the cost. Somehow, they think it will be better to let Russia embark on a campaign of world conquest than to stop Putin now. Of course with the Economic Democracy Act, the money would not be a problem, but no one appears to be consideringthat.
• Greater Reset “Book Trailers”. We have produced two ninety-second “Book Trailers” for distribution (by whoever wants to distribute them), essentially a minute and a half commercials for The Greater Reset. There are two versions of the videos, one for “general audiences” and the other for “Catholic audiences”. Take your pick.
• The Greater Reset. CESJ’s new book by members of CESJ’s core group, The Greater Reset: Reclaiming Personal Sovereignty Under Natural Law is, of course, available from the publisher, TAN Books, an imprint of Saint Benedict Press, and has already gotten a top review on that website. It can also be obtained from Barnes and Noble, as well as Amazon, or by special order from your local “bricks and mortar” bookstore. The Greater Reset is the only book of which we’re aware on “the Great Reset” that presents an alternative instead of simply warning of the dangers inherent in a proposal that is contrary to natural law. It describes reality, rather than a Keynesian fantasy world. Please note that The Greater Reset is NOT a CESJ publication as such, and enquiries about quantity discounts and wholesale orders for resale must be sent to the publisher, Saint Benedict Press, NOT to CESJ.
• Economic Personalism Landing Page. A landing page for CESJ’s latest publication, Economic Personalism: Property, Power and Justice for Every Person, has been created and can be accessed by clicking on this link. Everyone is encouraged to visit the page and send the link out to their networks.
• Economic Personalism. When you purchase a copy of Economic Personalism: Property, Power and Justice for Every Person, be sure you post a review after you’ve read it. It is available on both Amazon and Barnes and Noble at the cover price of $10 per copy. You can also download the free copy in .pdf available from the CESJ website. If you’d like to order in bulk (i.e., ten or more copies) at the wholesale price, send an email to firstname.lastname@example.org for details. CESJ members get a $2 rebate per copy on submission of proof of purchase. Wholesale case lots of 52 copies are available at $350, plus shipping (whole case lots ONLY). Prices are in U.S. dollars.
• Sensus Fidelium Videos, Update. CESJ’s series of videos for Sensus Fidelium are doing very well, with over 155,000 total views. The latest Sensus Fidelium video is “The Five Levers of Change.” The video is part of the series on the book, Economic Personalism. The latest completed series on “the Great Reset” can be found on the “Playlist” for the series. The previous series of sixteen videos on socialism is available by clicking on the link: “Socialism, Modernism, and the New Age,” along with some book reviews and other selected topics. For “interfaith” presentations to a Catholic audience they’ve proved to be popular, edging up to 150,000 views to date. They aren’t really “Just Third Way videos,” but they do incorporate a Just Third Way perspective. You can access the playlist for the entire series. The point of the videos is to explain how socialism and socialist assumptions got such a stranglehold on the understanding of the role of the State and thus the interpretation of Catholic social teaching, and even the way non-Catholics and even non-Christians understand the roles of Church, State, and Family, and the human persons place in society.
• Blog Readership. We have had visitors from 25 different countries and 25 states, provinces, and territories in the United States and Canada to this blog over the past week. Most visitors are from the United States, Brazil, Canada, the United Kingdom, and Indonesia. The most popular postings this past week in descending order were “News from the Network, Vol. 16, No. 08,” “What is ‘The Banking Principle’?” “Social Justice, IV: The Characteristics of Social Justice,” “Activism v. Leadership,” and “JTW Podcast: Fusion Power and Kilowatt Hour.”
Those are the happenings for this week, at least those that we know about. If you have an accomplishment that you think should be listed, send us a note about it at mgreaney [at] cesj [dot] org, and well see that it gets into the next “issue.” Due to imprudent and intemperate language on the part of some commentators, we removed temptation and disabled comments.