I had no more than published the QOTW yesterday, and this one popped up. I’m of the opinion now that NYT economist and columnist Paul Krugman has gone insane, because nobody with any intact cognition would make a statement like this. Even Al Gore hasn’t gone this far, this is in nucking futz territory.
The scene is set on HBO’s Real Time Friday. Krugman is a guest, pitching his book, but at the same time pitching an idea that he’s totally serious about. It involves aliens and scientists and lies to the public on a grand scale, plus a shout out to California’s high-speed rail boondoggle. Here’s the transcript, brace yourself.
PAUL KRUGMAN, NEW YORK TIMES: This is hard to get people to do, much better, obviously, to build bridges and roads and healthcare clinics and schools. But my proposed, I actually have a serious proposal which is that we have to get a bunch of scientists to tell us that we’re facing a threatened alien invasion, and in order to be prepared for that alien invasion we have to do things like build high-speed rail. And the, once we’ve recovered, we can say, “Look, there were no aliens.”
But look, I mean, whatever it takes because right now we need somebody to spend, and that somebody has to be the U.S. government.
Watch the video here: http://newsbusters.org/blogs/noel-sheppard/2012/05/26/krugman-scientists-should-falsely-predict-alien-invasion-so-governmen#ixzz1w5zk6aAO
UPDATE: one commenter thinks he’s being sarcastic or tongue in cheek, here’s my response –
If he had left the comment at that, I’d agree with you, but he added this without saying “I’m joking” or “That’s silly but…”
But look, I mean, whatever it takes because right now we need somebody to spend, and that somebody has to be the U.S. government.
He’s a big boy, he knows the ropes of these interviews, and he didn’t insert an appropriate caveat. – Anthony
UPDATE2: This is now a theme with Krugman. Obviously he stands by his words or he would not have repeated it. See 1:01 in this Aug 14th, 2011 video.
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The signs have been there. In Feb 2011, Krugman pulled another whopper. Paul Krugman’s opinion in the NY Times blamed climate change for the unrest in Egypt.
Dr. Ryan N. Maue wrote then:
Based upon this quote from Krugman:
But the evidence tells a different, much more ominous story. While several factors have contributed to soaring food prices, what really stands out is the extent to which severe weather events have disrupted agricultural production. And these severe weather events are exactly the kind of thing we’d expect to see as rising concentrations of greenhouse gases change our climate — which means that the current food price surge may be just the beginning.
There is no other way to interpret this than “I told you so” from Krugman directly linking climate change and the disparate weather events of the past year or two to food prices and the crises in the Arab world. To various commenters who are defending Krugman religiously, do you doubt that Krugman is linking the events implicitly or explicitly? Remind you, this is the same Nobel prize winner that less than a few hours after Congresswoman Giffords was shot blamed conservatives for the so-called “Climate of Hate“. How does he have ANY credibility at all — especially with anything related to physical sciences?
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Indeed.
h/t to WUWT reader “good business”
Related articles
- Krugman: scientists should falsely predict alien invasion (motls.blogspot.com)
- Krugman: Scientists Should Falsely Predict Alien Invasion So Government Will Spend More Money (newsbusters.org)
- Krugman : Scientists Should Lie – To Force The Country Further Into Debt (stevengoddard.wordpress.com)
economynewsblog says:
“If you invested money in the broad market at the lows shortly after Obama took office your account would have been doubled (up 99%) by Feb/March of 2012.”
Buying at the bottom, eh? Why don’t you show us how that’s done? And then explain how you knew to get out in “Feb/March 2012”? Because the market is down a thousand points since then.
• • •
conradg says:
“The IRS can’t come after me for the national debt. They have no such power.”
No, but the government can tax the money away from you to pay the national debt. What’s the difference?
50% return over 4 yrs ain’t too bad either Smokey.
Dude! I wish I was a market maven. Don t we all? Mythical as it might be… even the professionals have been having a problem investing… http://www.reuters.com/article/2012/05/28/uk-hedge-funds-idUSLNE84R02420120528
How about good old common sense real world economic solutions – just simple to the manufacturing segment of our society – Klugman what about this very uncomplicated solution = GROWTH?
The energy industry will save the USA – it will finance the rebuilding of our from raw materials [natural resources] altered in value adding manufacturing which will put the people back to work. The end result will be a doubling of the GDP over ten years and the problem will be until next time. End the EPA AND ENDANGERED SPECIES ACT – DO TORT REFORM and watch the hardest working most productive society on earth be reborn as the worlds industrial GIANT.
Manufacturing matters… I agree.
Interesting article of what has been driving the market recently in the US… http://www.businessinsider.com/every-serious-person-needs-to-see-this-chart-2012-5?nr_email_referer=1&utm_source=Triggermail&utm_medium=email&utm_term=Money%20Game%20Select&utm_campaign=MoneyGame%20Select%20Mondays%202012-05-28
I’m close to 100% sure, giving energy corporations a free leash will not explode growth. Besides cleaning up after these guys is far more expensive than any positive economic impact.
On what information do you base your statements?
“I’m close to 100% sure, giving energy corporations a free leash will not explode growth. Besides cleaning up after these guys is far more expensive than any positive economic impact.”
“All generalizations are false, including this one.”
Mark Twain
Not sure what Growth you are referring to… EPA makes sure we have clean water etc. Maybe you are referring to growth in hazardous materials and bottled water industry exploding from the lack of clean water…
We do not need more wasted stimulus spending. We need 1921-style government spending CUTS.
Obama has already cut military spending by more than 12%. Now the rest of the government sector needs to be cut by more than 12% across the board. No sniveling. Just do it. The economy will come ROARING back, and employment will skyrocket.
Will Obama do the right thing? He certainly hasn’t yet.
<i<No, but the government can tax the money away from you to pay the national debt. What’s the difference?
It’s called elections and law-making. The government doesn’t exist as some independent entity out there. It can’t just arbitrarily decide to suddenly pay back the national debt and come knocking on everyone’s door demanding $138,000 from everyone. And no sane elected official would even propose such a thing, much less have any success in passing such a law. Taxes are related to spending, which includes interest on the debt, but there’s no budgetary item for debt repayment. The last time we had a surplus and some proposed using it to pay down the debt, the GOP vetoed the idea and instead used the surplus to cut taxes, which has vastly increased the deficit. Kind of the opposite of what you presume is going to happen.
We do not need more wasted stimulus spending. We need 1921-style government spending CUTS.
You mean 1937-style spending cuts, which sent the economy which had been recovering from the Great Depression into a second tailspin. Which is precisely what it would do now if enacted. As any good Keynesian would tell you , you run deficits when the economy is weak, and surpluses when it’s strong. Spending cuts would be great when the economy is fully recovered, but that’s the hardest time to make them politically. Hope you are putting pressure to cut spending during those times. It would be a good test to see whether Democrats can become genuine Keynesians, and if Republican are serious about debt reduction (which they have never ever been before).
“You mean 1937-style spending cuts…”
No, I mean 1921-type spending cuts. Do some searching and get up to speed.
conradg says:
May 28, 2012 at 2:06 pm
The creditors can’t, but the IRS can — and if you think the government isn’t going to raise your taxes to cut some of that deficit, you’re in for a rude awakening.
The IRS can’t come after me for the national debt. They have no such power. They can only tax me on my income….
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That is what you think. Never underestimate the conniving minds of thieving politicians.
And anoter:
Another take on a similar scheme.
… it appears some politicians are talking about forcing your IRAs and 401Ks into Treasuries so they can continue to fund the deficits. As I understand it, this is the same Ponzi scheme they set up with Social Security. It is actually Social Security on steroids.
I am not sure of the truth in any of this but the idea is certainly floating around.
Myrrh says:
May 28, 2012 at 3:49 am
http://www.globalresearch.ca/index.php?context=va&aid=8289
the United States holds 25% of the world’s prison population, but only 5% of the world’s people.
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The land of the free.
condrag:
Since you didn’t reply, this will help expand your knowledge base:
The Depression Of 1921
Exactly what is needed today. But will an economic illiterate community organizer like Obama do the right thing? He hasn’t yet.
conradg says:
May 28, 2012 at 7:57 pm
The government doesn’t exist as some independent entity out there. It can’t just arbitrarily decide to suddenly pay back the national debt and come knocking on everyone’s door demanding $138,000 from everyone.
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They don’t need to, nor do they want to. Does your credit card company want you to pay off the balance? No, they want you to borrow to the max.
Look at the value taken out of US pension plans over the past 5 years. A generation of savings wiped out. Goldman Sachs officials running the US treasury department and in bed with Gore on CCX. Hundreds of billions of dollars transferred to insiders.
Now there is quantitative easing. More easy money to spend on favors to friends and campaign contributors. The current administration is nothing. Wait for the next 4 years. You ain’t seen nothing yet.
Smokey says:
May 28, 2012 at 8:26 pm
But will an economic illiterate community organizer like Obama do the right thing? He hasn’t yet.
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You obviously haven’t talked to those of the gravy train. The view always looks worse when you are the one tied to the rails.
ferd,
Thanks for that. I grew up on Rocky & Bullwinke, Dudley Do-Right, Sherman & Mr. Peabody. Brings back fond memories!☺
[youtube http://www.youtube.com/watch?v=GTQnarzmTOc&version=3&hl=en_US%5D
Myrrh says:
May 28, 2012 at 1:03 pm
“Why are drugs illegal?”
I consider myself a libertarian and I think drugs (including tobacco) should be illegal because they are addictive and chemically remove a person’s right to choose. It may be a choice to start to use drugs, but it quickly becomes a chemical addiction which removes that choice. They destroy liberty on a biological level and that actually goes against freedom of the individual. The level of illegality should be directly proportional to the level of addiction they cause.
Smokey, it seems like you are pretty passionate and literate. Better than most Austerians but still… You don’t need to go too far back to see the effect of Austerity.
Look at several important factors.
Spain. Latvia. Ireland. Greece. Compare. Debt to GDP, GDP growth, employment. All worse (or comparatively worse) since Austerity measures have been enacted. If you dig a little deeper… Spain actually had a lower debt to gdp than Germany pre-economic crisis. Its not JUST debt. Growth policy matters.
I’m a little torn on some of the cuts. Budget issues need to be addressed in the US. I kinda agree with some old school GOP budget cuts… def not neo con cuts. I would just say that timing is everything. Gotta. Gotta. Gotta do the large cuts during economic booms vs busts.
The US economy is starting to pick up. 2% of GDP stimulus (moderate) seemed to help a bit. 10.9% eurozone unemployment vs 8.1% US unemployment. Unemployment in the US at 4+ yr low. Eurozone – 13 months of consecutive unemployment increase. US Housing starts up. Manufacturing up.
Its no mystery that recently Merkel’s political party suffered setbacks, Sarkozy was kicked out, and Greece’s leader is being kicked out… Europeans definitely don’t like Austerity. US won’t either… if somehow Tea Party get a majority (which they NEVER will) they will f up the economy so much worse than Obama ever did or could do!
The coming generations will never vote again for another modern day conservative again. Almost rooting for Romney and Tea Party landslide. They would kill the recovery quick. Economic chaos. Conservatives will get the “invisible market hand” they so desire. Greater Depression. Another anti immigration, fascist world leader. WWIII. Millions die!
Romney 2012!
Myrrh says: @ur momisugly May 28, 2012 at 1:03 pm
“Why are drugs illegal?”
Truthseeker says: @ur momisugly May 28, 2012 at 9:32 pm
I consider myself a libertarian and I think drugs (including tobacco) should be illegal because they are addictive and chemically remove a person’s right to choose. It may be a choice to start to use drugs, but it quickly becomes a chemical addiction which removes that choice. They destroy liberty on a biological level and that actually goes against freedom of the individual. The level of illegality should be directly proportional to the level of addiction they cause.
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Drugs are a medical problem and and should be treated as a medical problem. They should not be a reason for jailing a person.
Also of note on the skyrocketing incarceration rate in the USA, is the mental institutions tossed out many inmates supposedly because they could live in half way houses thanks to new drugs that were developed. Unfortunately once the inmates were out the support system was cut and we ended up with street people who could not be placed in homes or institutions without some one screaming about infringing upon their civil rights so they had the freedom to freeze to death on the streets or steal in an effort to support themselves.
My old computer has all my references but here is one:
In the 1950s, those who were living on the streets were taken to county homes and given a place to live and food to eat. Thoses judges severely mentally ill were placed in hospitals. The ones I knew (Mom volunteered to teach twice a week) were alcoholics, mildly retarded, old or sick. Now these people would be left on the streets to fend for themselves and many would end up in jail as a result.
Truthseeker says:
May 28, 2012 at 9:32 pm
Myrrh says:
May 28, 2012 at 1:03 pm
“Why are drugs illegal?”
I consider myself a libertarian and I think drugs (including tobacco) should be illegal because they are addictive and chemically remove a person’s right to choose. It may be a choice to start to use drugs, but it quickly becomes a chemical addiction which removes that choice. They destroy liberty on a biological level and that actually goes against freedom of the individual. The level of illegality should be directly proportional to the level of addiction they cause.
But…, before those who do become chemically addicted become so, they freely chose. Perhaps you should consider yourself something else?
The Libertarian party makes the point, and this is after all what made America so different in that it had a consciously created Constitution based on Common Law:
“The preamble outlines the party’s goal: “As Libertarians, we seek a world of liberty; a world in which all individuals are sovereign over their own lives and no one is forced to sacrifice his or her values for the benefit of others.” Its Statement of Principles begins: “We, the members of the Libertarian Party, challenge the cult of the omnipotent state and defend the rights of the individual.” The platform emphasizes individual liberty in personal and economic affairs, avoidance of “foreign entanglements”, and military and economic intervention in other nations’ affairs and free trade and migration. It calls for Constitutional limitations on government as well as the elimination of most state functions. It includes a “Self-determination” section which quotes from the Declaration of Independence and reads: “Whenever any form of government becomes destructive of individual liberty, it is the right of the people to alter or to abolish it, and to agree to such new governance as to them shall seem most likely to protect their liberty.”
That’s from wiki, and from http://www.catb.org/~esr/faqs/libertarianism.html
“A. Definitions, Principles and History:
A1. What is a libertarian?
The word means approximately “believer in liberty”. Libertarians believe in individual conscience and individual choice, and reject the use of force or fraud to compel others except in response to force or fraud. (This latter is called the “Non-Coercion Principle” and is the one thing all libertarians agree on.)
A2. What do libertarians want to do?
Help individuals take more control over their own lives. Take the state (and other self-appointed representatives of “society”) out of private decisions. Abolish both halves of the welfare/warfare bureaucracy (privatizing real services) and liberate the 7/8ths of our wealth that’s now soaked up by the costs of a bloated and ineffective government, to make us all richer and freer. Oppose tyranny everywhere, whether it’s the obvious variety driven by greed and power-lust or the subtler, well-intentioned kinds that coerce people “for their own good” but against their wills.
A3. Where does libertarianism come from?
Modern libertarianism has multiple roots. Perhaps the oldest is the minimal-government republicanism of the U.S.’s founding revolutionaries, especially Thomas Jefferson and the Anti-Federalists. Adam Smith, John Stuart Mill and the “classical liberals” of the eighteenth and nineteenth centuries were another key influence. More recently, Ayn Rand’s philosophy of “ethical egoism” and the Austrian School of free-market capitalist economics have both contributed important ideas. Libertarianism is alone among 20th-century secular radicalisms in owing virtually nothing to Marxism.”
Can’t see it, doesn’t gel, a libertarian would not make such a law, basically, because it’s nobody’s business but mine whether I choose to take drugs or not, addictive or not. Making it illegal is the use of force. There’s also fraud which comes into it, for example the demonisation of hemp by the politically powerful pharmaceutical and clothing industries…
I’m astonished that anyone can think it rational to impose such laws on others about the use of plants which exist in a world they didn’t create.. Liberty appears to be a difficult concept to grasp. I think you have to go back to the roots of Common Law – that freedom, liberty, is a natural right. No one has the right to impose his ‘head’ over another, which is what an-archy means, without another’s head ruling over you.
More on libertarianism here: http://www.theihs.org/what-libertarian
And roots of Common Law here: http://www.britsattheirbest.com/freedom/f_british_constitution.htm
Hi Anthony. I guess I am one of those who, as you formulate it, “.. are defending Krugman religiously …”
1. If I gave the impression I defended Paul Krugman religiously, something must have gone wrong with my choice of words. Probably due to English not being my native language.
2. I make a clear division between Krugman the economist, Krugman the political commentator and Krugman the opinionist on climate and everything related to the physical sciences.
Krugman the economist represents a respectable school of economists, who of course may be right or wrong given a certain situation.
Krugman the political commentator – like when he accused the conservatives of creating a “Climate of Hate” is furiously leftist and relishes in personal attacks. Very, very unpleasant – to the point of being disgusting.
Krugman, when he talks about the climate, shows himself to be almost completely ignorant – as you justly showed. I agree with you that he has zero credibility in relation to the physical sciences.
So, I read Krugman’s wish for imaginary aliens as funny.
His economic ideas I take seriously – which doesn’t mean I agree with them.
His political comments I abhor.
His scientific exclamations I completely ignore.
3. Much, much more important than Krugman is the tone and atmosphere on this blog.
I visit this blog every day. To get the science, to enjoy the smart and good people here, to get an antidote of reason against the constant prophesies of doom and administrations of guilt .
What I find so disgusting about most alarmists are their never ending attacks on the personality of the people who disagree with them. When you disagree with them, you must be a horrible person in every way.
Please, let’s not do that here.
I once was a member of GreenPeace and a believer in CAGW. An important reason I began to lose my trust GreenPeace was their tone which became nastier and nastier. Attacking opponents weakens one’s credibility with people who want to know the truth.
4. Anthony, I appreciate this blog immensely. Your work and that of all the contributors and mediators – invaluable. Thanks.
REPLY: Thank you, nicely said – Anthony
Robin Kool,
To put my opinion of Klugman as an economist would be shown in this economic theory model – Mr. Klugman is the “BROKEN GLASS in the FALLACY.”
Too an extent, global warming is responsible for increasing food prices for the poor. Or rather, the reaction to global warming is responsibile.
Converting millions of bushels of corn into auto fuel, has caused a measurable increase in the price for corn, world wide.
James Sexton says:
May 27, 2012 at 12:07 pm
THe so called austerity programs in Europe universally consist of big tax increases, with promises to talk about spending cuts some time in the future.
Smokey,
1921 style spending cuts would only do well in a 1921-style post-war economy, which we are not in. Similar spending cuts enacted now would have the effect that they did in 1937, which the economy was in a similar slow-recovery phase. Also, the government percentage of GDP was much, much lower then, and only temporarily high due to WWI, and less structurally dependent on government spending. A 65% cut in government spending at this point would instantly produce a deep Depression.
However, a long term determined commitment to slash government spending by that amount, including defense and entitlements, could be accomplished as long as the economy was given time to adjust. It’s highly unlikely to pass through congress, but it could be done, and we’d just have to see what the results would be.
Gail Combs
Nefarious plan indeed. But it would require legislation to pass both houses and be signed by the President. I would consider that highly unlikely.
“Why are drugs illegal?”
I consider myself a libertarian and I think drugs (including tobacco) should be illegal because they are addictive and chemically remove a person’s right to choose. It may be a choice to start to use drugs, but it quickly becomes a chemical addiction which removes that choice. They destroy liberty on a biological level and that actually goes against freedom of the individual. The level of illegality should be directly proportional to the level of addiction they cause.
Then television and the internet should both be illegal, as many people are clearly addicted to them, including I imagine everyone posting here.
The truth is that only a small percentage of people who use drugs are addicted to them. Most use them by choice, when and where they wish to, like everything else. Drugs do not take away our ability to choose. They just influence, because the pleasure they give is something people like to repeat. People can and do quit even the most chemically addictive drugs, like nicotine. They quit because it’s their choice. But I admit very, very few people ever quit their television and internet habits, so maybe that should be classified as a Schedule One drug and selling it should carry the maximum penalties for drug kingpins. That would be compatible with Libertarianism, wouldn’t it?
economynewsblog says:
“I kinda agree with some old school GOP budget cuts… def not neo con cuts. I would just say that timing is everything. Gotta. Gotta. Gotta do the large cuts during economic booms vs busts. The US economy is starting to pick up.”
The US economy is pathetic. There has never been such a pathetic “pick up” after a sharp correction in American history. The reasons are clear: the Administration’s mis-handling of the economy, due directly to the sheer incompetence of a President who has never held a real job, or met a payroll, or done anything productive; he has consistently failed upward, courtesy of the political system. It’s time to put the adults in charge.
I guess I should go easy on anyone who makes such absurd statements as: “I’m close to 100% sure, giving energy corporations a free leash will not explode growth. Besides cleaning up after these guys is far more expensive than any positive economic impact.”
The Deepwater Horizon spill was almost universally reported to have caused “irreparable” damage to the coast and ecosystem. But six months after it was successfully capped, no damage could be found. So how is that “far more expensive than any positive economic impact”? Those look like the words of either a lunatic, or the baseless opinion of someone who does not know the facts.
[I should add that IANAR, and the 1921 remedy falsified the notion that government cuts during recessions are counter-productive; they are not. The fact show that masive cuts in government employment and spending are more necessary for recovery during slowdowns that at any other time.]
• • •
condrag says:
“1921 style spending cuts would only do well in a 1921-style post-war economy, which we are not in.”
Flat wrong. But I suppose that even though your argument fails based on real world evidence, it is the best argument you have, so you’ve gotta run with it despite all the contrary evidence. And if you believe we are not in a post-war economy, maybe you forgot about the winding down of Afghanistan, the discharge of 12% of the military, and the end of the American war in Iraq. So your argument is simply a red herring. Further, the current US economy is much richer now than it was in the ’20’s, and thus has much more room for government cuts. Without massive cuts in federal employment and transfer payments, we are in for many more years of the equivalent of stagflation [and if you believe the government inflation numbers, then you don’t believe your lyin’ eyes when you see the double-digit rise in grocery prices, in rents, in gasoline prices, in commodity prices, etc.]
The fact is that the 1921 Depression is a true, real-world test lab of how to fix the economy in short order. It has nothing to do with the Great Depression: as I showed in my link, the two depressions were handled totally differently. Both Hoover and FDR flooded the system with easy money folowing 1929, and guess what? The Great Depression was greatly exacerbated as a direct result. The fact that QE is doing exactly the same thing as was done following 1929 means that the result will be exactly the same long, drawn out, slow recovery that we had during the Great Depression.
The 1919-1921 remedy is a crystal clear example of how to best handle a stock market crash. That real world example shows that the economy and employment can fully recover in very short order — while the 1929 crash, with its Krugman-approved nonsense, caused a decade of high unemployment and breadlines.
conradg says:
May 28, 2012 at 1:55 pm
And keep in mind, currency is itself the creation of government. Lenders don’t have their own currency they are lending us. They are lending us back our own dollars, created by our government. That means we have all the power still.
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This puzzled me, still does, do you propose that the government takes back control over lending? Instead of as now, borrowing back the money it has printed and paying the interest by your personal taxes collected by the IRS.
Not a healthy option for a president to suggest such a thing, but if the government as servants of the people was ordered to by the people, then could be achieved.
Henry Ford once said “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning”.
Quoting from the Governor’s speech McDonnell emphasised the following extract: “Banking was conceived in iniquity and born in sin. Bankers own the world. Take it away from them, but leave them the power to create money and control credit, and with a flick of the pen, they will create enough money to buy it back. But if you want to continue to be the slaves of bankers, and pay the cost of your own slavery, let them continue to create money out of nothing, and control credit.”
“But how did this situation come about” I asked. “It’s quite simple”, replied McDonnell. “People have been fooled into thinking that central banks such as the Bank of England, the Bank of Portugal and the Federal Reserve Bank of America are owned and controlled by governments. But nothing could further from the truth. They are privately owned by individuals whose forefathers wrested control of these nations´ money supply from elected national governments charged to protect the rights of its citizens.
“They did it by way of bribery, corruption and putting their own people into high powered political positions. You only need to look at how the Federal Reserve came into being in 1913 with the connivance of Woodrow Wilson’s government. If governments have control of their countries monetary supply why are they in debt to the world’s bankers for trillions of dollars? In fact, of course, it is make believe money. It’s conjured up out of nothing. But the population of the world is in hock because of it.”
Extracts from these two links:
http://www.libertyforlife.com/banking/federal_reserve_bank.html
http://www.theportugalnews.com/cgi-bin/article.pl?id=681-11
Read the first for a potted history of the American banking system, and some expansion on: http://www.petitiononline.com/fedres/petition.html
“In reality, the act created a private, for profit, central Banking Corporation owned by a cartel of private banks. Who owns the FED? The Rothschilds of London and Berlin; Lazard Brothers of Paris; Israel Moses Seif of Italy; Kuhn, Loeb and Warburg of Germany; and the Lehman Brothers, Goldman, Sachs and the Rockefeller families of New York.
Did you know that the FED is the only for-profit corporation in America that is exempt from both federal and state taxes? The FED takes in about one trillion dollars per year tax free! The banking families listed above get all that money.
Almost everyone thinks that the money they pay in taxes goes to the US Treasury to pay for the expenses of the government. Do you want to know where your tax dollars really go? If you look at the back of any check made payable to the IRS you will see that it has been endorsed as “Pay Any F.R.B. Branch or Gen. Depository for Credit U.S. Treas. This is in Payment of U.S. Oblig.” Yes, that’s right, every dime you pay in income taxes is given to those private banking families, commonly known as the FED, tax free.”
So, is this what you mean by “we have all the power still”?
“Like many of you, I had some difficulty with the concept of creating money from nothing. You may have heard the term “monetizing the debt,” which is kind of the same thing. As an example, if the US Government wants to borrow $1 million у the government does borrow every dollar it spends у they go to the FED to borrow the money. The FED calls the Treasury and says print 10,000 Federal Reserve Notes (FRN) in units of one hundred dollars.
The Treasury charges the FED 2.3 cents for each note, for a total of $230 for the 10,000 FRNs. The FED then lends the $1 million to the government at face value plus interest. To add insult to injury, the government has to create a bond for $1 million as security for the loan. And the rich get richer. The above was just an example, because in reality the FED does not even print the money; it’s just a computer entry in their accounting system. To put this on a more personal level, let’s use another example.
Today’s banks are members of the Federal Reserve Banking System. This membership makes it legal for them to create money from nothing and lend it to you. Today’s banks, like the goldsmiths of old, realize that only a small fraction of the money deposited in their banks is ever actually withdrawn in the form of cash. Only about 3 or 4 percent of all the money that exists is in the form of currency. The rest of it is simply a computer entry.
Let’s say you’re approved to borrow $10,000 to do some home improvements. You know that the bank didn’t actually take $10,000 from its pile of cash and put it into your pile? They simply went to their computer and input an entry of $10,000 into your account. They created, from thin air, a debt, which you have to secure with an asset and repay with interest. The bank is allowed to create and lend as much debt as they want as long as they do not exceed the 10:1 ratio imposed by the FED.
It sort of puts a new slant on how you view your friendly bank, doesn’t it? How about those loan committees that scrutinize you with a microscope before approving the loan they created from thin air. What a hoot! They make it complex for a reason. They don’t want you to understand what they are doing. People fear what they do not understand. You are easier to delude and control when you are ignorant and afraid.”
And now the banks too big to fail have stolen trillions from the tax payers with the connivance of governments as they created even more ways to create money out of nothing, and the blame put on the taxpayers.. Booms and busts are created by bwankers, they are extremely well organised.
“If you want to be the slaves of banks and pay the cost of your own slavery, then let the banks create money…” Josiah Stamp, Governor of the Bank of England 1920.
From a British look at the bwankers and touching on such aspects as the IMF: http://www.whale.to/m/greaves1.html
And here an interesting look at some options around if we really “have all the power still”: http://georgewashington2.blogspot.ca/2010/03/7-questions-about-public-banking.html
And for the full Josiah Stamp quote: http://quotes.liberty-tree.ca/quote_blog/Josiah.Stamp.Quote.69BB
Smokey,
Hoover cut the federal budget, tightened monetary policy, and made the Depression much worse than it should have been. FDR raised spending, and the Depression lifted so much, that in 1936-7 there was a great deal of pressure to cut spending to balance the budget, which he did, and this brought on the double-dip Depression of 1937-38. That didn’t end until the rampup to WWII which brought much more spending and huge deficits. So that’s the real world experiment supporting Keynesism. I doubt there’s an economist in the world who thinks you could suddenly cut spending by 65% without inducing a long and brutal depression. Oh, sure, humanity would survive, but a lot of people would suffer pretty badly. And the electorate just wouldn’t stand for it. And honestly, just try drastically cutting military spending or Social Security or Medicare/Medicaid. What party is going to propose that, much less carry it out?
Myrrh,
Yes, banking like sausage is something best left unobserved if one wishes to feel good about it. And bankers certainly make it as complicated as possible so as few people as possible will see what they are doing. But that is just my point. Currencies are an agreed fiction which we use to grease the wheels of capitalism. And those who lend us back our own money need that fiction to survive as much as we do. Their livelihoods depend upon it. And yes, the government that issues the currency has all the power, not those who lend it back to us. Not the people, but the government, the Fed, the bankers, the money men. It’s not democratic, but it does keep things moving. Like a shell game. But as long as it’s in everyone’s best interest to keep it moving, it will continue. That’s why the bailout was so necessary. Of course it wasn’t a democratic solution, but it sure was necessary to keep the machine from clogging up and just breaking down.
Now, there are certainly other ways of doing things. Maybe even better ways. But if the world is built upon a certain foundation, it’s very hard to change that foundation without having the world come crashing down at your feet.