interfluidity � Monetary policy for the 21st century

I appreciate your article. Almost any proposal is better than the chaos that could ensue if the downward spiral of unemployment and depressed demand isn’t contained. It’s a shame the powerful and the elite have acted so recklessly in the pursuit of gain, that the average person may be potentially left with nothing. It isn’t too far removed from feudalism, and the peasantry may well rise against the elite if things get bad enough. The history of civilization is one of conquest and man’s rising against oppression.

You stated that “central bankers understood very well the importance of wage suppression, and emphasized their willingness, their “credibility”, to push back hard against any increase in the share of income accruing to labor.” Given the three inputs of production are capital, labor, and material and assuming $1 of input from each, we can dismiss the cost of material as a form of rent. The laborer is paid their $1 of wages and told, thank you very much, but the capitalist assumes more than $1 in return. This is in effect the flaw in capitalism that can be easily corrected by profit sharing.

I was an undergraduate in Economics in the mid 80’s, the fall of the Soviet Union and the stock market crash of 1987 were the prominent events of the decade. Businesses had suffered during the 1970’s with peak oil and tight credit. The crash of 1987 was merely a hiccup during the highest period of prosperity of the 20th century. Stocks gained ten-fold in value and the tech bubble of 2000 came near the end of the period. When stocks weren’t making two digit returns, the baby boomers saw real estate as a natural avenue for their accumulated wealth, and we saw the gentrification of urban areas and vacation retreats. It was around this time that Congress, for whatever misguided reason, felt it their duty to increase housing ownership for those unable to afford it. Mortgage lenders saw an opportunity to generate commissions, passing the obligation on to the secondary mortgage market, and investment firms made commissions selling packaged mortgages to the clients. When it became apparent the investments were sour, the problem became compounded by the derivatives market, which had become unduly highly leveraged by the manipulation of a few firms and the lack of regulation and oversight by the institutions in place to prevent such practices.

If the US economy recovers within the next ten years, it will be due to the resiliency and to the credit of the man and woman on the street, the average citizen. New York has long been the financial capital of the world, but it has not been without the protection afforded by the borders of this nation, and indeed the league of nations, which aren’t ruled by the few, but by the many who have put their faith in a system of government with checks and balances. The enemy is the same enemy of old, rule by the few. Wall Street and the central bankers must be stood up to and forced to capitulate by any means necessary. Please read my article at Politics and Economics for a discussion of the spiritual nature of the conflict in which we are engaged.

interfluidity � Monetary policy for the 21st century