The End of Normal - Galbraith and a way forward

The book "The End of Normal" expresses part of James Galbraith's efforts to lay out his macroeconomic ideas clearly. He's building on the work of his father and of other Post Keynesians, to lay out a new way forward. The standard review of the book says:

"The years since the Great Crisis of 2008 have seen slow growth, high unemployment, falling home values, chronic deficits, a deepening disaster in Europe—and a stale argument between two false solutions, “austerity” on one side and “stimulus” on the other."[B&N]

Benjamin Franklin and Paper Money

Benjamin Franklin and Paper Money

Benjamin Franklin vigorously defended the right of the colonies to issue their own script but he never seems to have told Parliament, as Gary North Alleges the following may be apocryphal;

"In the Colonies, we issue our own paper money. It is called Colonial Scrip. We issue it to pay the government's approved expenses and charities. We make sure it is issued in proper proportions to make the goods pass easily from the producers to the consumers. . . . In this manner, creating ourselves our own paper money, we control its purchasing power and we have no interest to pay to no one. You see, a legitimate government can both spend and lend money into circulation, while banks can only lend significant amounts of their promissory bank notes, for they can neither give away nor spend but a tiny fraction of the money the people need. Thus, when your bankers here in England place money in circulation, there is always a debt principal to be returned and usury to be paid. The result is that you have always too little credit in circulation to give the workers full employment. You do not have too many workers, you have too little money in circulation, and that which circulates, all bears the endless burden of unpayable debt and usury. [Web of Debt, pp. 40-41]" [http://www.garynorth.com/public/6882.cfm]

A Case of Putting words in someone's mouth

North is probably right about the apocryphal nature of the quote, but what Franklin did say was about the reasons reasons for rebellion was that they owed:

"To a concurrence of causes: the restraints lately laid on their trade, by which the bringing of foreign gold and silver into the Colonies was prevented; the prohibition of making paper money among themselves, and then demanding a new and heavy tax by stamps; taking away, at the same time, trials by juries, and refusing to receive and hear their humble petitions." [bartleby]

In other words, the colonies were in rebellion because Parliament at the behest of the Bank of England and other Tory forces were seeking to starve the colonies of money. And Franklin says as much:

"The Stamp Act says we shall have no commerce, make no exchange of property with each other, neither purchase nor grant, nor recover debts; we shall neither marry nor make our wills, unless we pay such and such sums; and thus it is intended to extort our money from us or ruin us by the consequence of refusing to pay it." [bartleby]

Franklin Was Defying Parliament

Bad Banking can turn a loyal country into a disloyal one. This Gary North alleges that Franklin would never have defied Parliament's prohibition on printing money. But Franklin did exactly that:

"Q. Do you think the assemblies have a right to levy money on the subject there to grant to the Crown?"

"A. I certainly think so; they have always done it."

"Q. Are they acquainted with the Declaration of Rights? And do they know that, by that Statute, money is not to be raised on the subject but by consent of Parliament?"

"A. They are very well acquainted with it."

"Q. How, then, can they think they have a right to levy money for the Crown or for any other than local purposes?"

"A. They understand that clause to relate to subjects only within the realm; that no money can be levied on them for the Crown but by consent of Parliament. The Colonies are not supposed to be within the realm; they have assemblies of their own, which are their parliaments, and they are, in that respect, in the same situation with Ireland. When money is to be raised for the Crown upon the subject in Ireland, or in the Colonies, the consent is given in the Parliament of Ireland or in the assemblies of the Colonies. They think the Parliament of Great Britain can not properly give that consent till it has representatives from America, for the Petition of Right expressly says it is to be by common consent in Parliament, and the people of America have no representatives in Parliament to make a part of that common consent."

[bartleby]

Franklin was outraged about the efforts to restrict the currency of the colonies. He might have said what Ellen Brown puts in his mouth, maybe in private. He might have actually said this to Parliament, but it didn't get into the published version. Even so she's filling in between the lines where there is no record. This outrages Gary North because he's a staunch defender of the modern privateering banking system and so any anachronisms from before we had reserve banking and extensive use of paper money raise his hackles. What Ellen Brown does is a kind of Exegesis that is probably only appropriate with mythical and legendary figures. But the longer words in what Franklin actually said say it much more clearly than the apocryphal quotes.

Franklin returned to the colonies after the Stamp act was repealed. And when later the colonies rebelled successfully, he was reviled as the "evil genius" of the American Revolution. This is true, except for the evil part. If Parliament had listened to him the USA would have remained a loyal colony. But he also touched nearly every one of the more capable leaders of the revolution. Including ones who were children when it started.

Between Paper money and the Postal System he was Postmaster of, he birthed the two major unifying forces of this country. A common currency and a networked Post Office.

Franklin on Money

This guy Gary North, claims that the famous franklin quote is bogus [http://www.garynorth.com/public/6882.cfm]

But Franklin's speech to Parliament refutes any idea that Franklin accepted Parliament's authority to prohibit paper money:

http://www.bartleby.com/268/8/10.html

The Web Pages that have North's panties in a bunch:

http://www.webofdebt.com/articles/dollar-deception.php

https://21stcenturycicero.wordpress.com/fraud/how-benjamin-franklin-made-new-england-prosperous/

Taxation: Ability to Pay, Fee or taxing Privilege?

Review of the article "Edwin R.A. Seligman and the Beginnings of the U.S. Income Tax Ajay Mehrotra

The notion that taxation should be based on "ability to pay" is a bedrock of progressive principles. We owe our notions of "progressive taxation" to early economists like Edwin R.A. Seligman (1861-1939) who advanced the theory and popularized this notion. He pushed progressive taxation over more conservative and regressive principles:

Taxes as a duty versus solely as a payment for Benefits.

Taxes should be proportionate to the "faculty" or ability to pay of taxpayers.

Taxation as a duty of Citizenship

Progressive taxation is based on humanist, progressive, liberal and commonwealth notions. It pushes back against selfish (conservative) notions that

1. those who benefit from a thing should pay for it.

2. No one should pay for another person's benefits.

3. A person earns whatever he gains, however he gains.

4. The exception is the poor, who never deserve to keep what they earn.

5. Taxation is the government stealing from the privileged.

6. Taxation should be a "fee for service," and no more.

Sadly Progressive notions of taxation are gradually being shoved aside and replaced with the older and regressive notion that reformers like Seligman were pushing against. taxation should be like a fee for service, based on "benefits received". This notion that taxes should be paid to pay for the benefits we receive from government, as parsed by modern (anti) reformers, tends to favor the wealthy and connected over labor and what is left of the middle class. It's return provides a theoretical tool that is degrading the middle class and subjugating labor -- because "benefits" theory essentially says "if you can't pay you can't benefit." From the debit side of taxation benefits theory thus seems a justification for oppression.

Convergence of Benefits and Faculty Theory

However, when one factors in the fact that most of the "benefits" that are the basis for "benefits" theory are a common heritage and the less explicit fact that much of such benefits are based on privatized government privileges or even usurped properties, then the choice between "benefits theory and ability to pay is revealed as a false choice; The money privilege, land privilege, private ownership of nature's bounty, commodification of labor, and corporate privilege, etc... are all privileges associate with either duties to provide a public benefit or the duty to pay for those privileges. Thus the notion of taxes being on "benefits received", especially unearned benefits, is also part of progressive taxation. Privilege is a grant of temporary ownership so that property can be turned into public goods. Taxing unearned privilege thus is is not only based on "ability to pay" but is also the stick required to ensure that those given privilege do the duties associated with grants of privilege from the rest of us; that they either do a duty or pay a duty.

Tory (or Privateering) Economics

The Innocent Fraud Dogma of the Phillips Curve Versus Reality

The economics of the Federal Reserve is backwards and has been since it's creation. Probably everyone working there knows this. But they still use the rhetoric of controlling inflation to justify interest rate rises and falls. They think that raising interest rates will prevent bubble economies to this very day. The Wall Street Journal Reports:

"Janet Yellen Expects Interest Rate Increase This Year"

Somehow it is important to her to control the economy by raising the interest rates charged banks. Somehow the whole world thinks that the way to prosperity and economic survival is:

"Fed chief says ‘gradual pace of tightening’ expected to follow first rate hike." [Yellen]

But she repeats the old chestnut anyway. It's now dogma:

"Central to the argument she set out to establish is a belief that slack in the economy has diminished to a point where inflation pressures should start to gradually build in the coming years. Ms. Yellen argued those pressures aren’t asserting themselves yet, because a strong dollar and falling oil and import prices are placing temporary downward pressure on consumer prices. As those headwinds diminish, she predicted, inflation will gradually rise." [Yellen]

But raising interest rates doesn't control inflation. Interest is what drives inflation!

Guelfs and Tories, Wolves and Plunderers

I traced the term "Guelf" to the German word "Wolf". There are two moods of government. In one government needs it's citizens and serves them, paying attention to such terms as commonwealth, fairness, justice, duty, honor and virtue. But in the other you have government as Predator State1. In his article in Mother Jones Galbraith refers to the characteristics of the Predator state:

"Predation has become the dominant feature—a system wherein the rich have come to feast on decaying systems built for the middle class."...."in a predatory regime, nothing is done for public reasons. Indeed, the men in charge do not recognize that “public purposes” exist. They have friends, and enemies, and as for the rest—we’re the prey. Hurricane Katrina illustrated this perfectly, as Halliburton scooped up contracts and Bush hamstrung Kathleen Blanco, the Democratic governor of Louisiana. The population of New Orleans was, at best, an afterthought; once dispersed, it was quickly forgotten." [Mother Jones Article]

Whigs and Tories, Guelphs and Ghibellines, partisanship and war

Guelphs and Ghibellines

Before there ever were Whigs or Tories, the first political parties tore apart the misnamed Holy Roman Empire. Our founders feared "faction", and when they thought of faction they thought of Tories and Whigs, but they also were thinking of Guelphs and Ghibellines, the two parties who tore up Italy from 1075 until at least the 15th century. Our Country's founders feared such "faction".

Ghibellines

Gibelline: Definition

a member of one of the two great political factions in Italian medieval politics, traditionally supporting the Holy Roman Emperor against the Pope and his supporters, the Guelphs.

The southern Ghibellines (at least initially) loved the idea of Democracy -- but thought of it as an orderly system where ordinary folks listened to their wealthy elders and elected them to office. They watched in horror as common folks tarred and feathered tax collectors or asked them pesky questions. The Northern Elites felt much the same and that is why they were astounded when minor (only untitled because the constitution says they can't be) "gentry"; lords and masters like Jefferson, Madison and others preached democracy. Their idea of Republicanism was designed to reign in folks who might one day drive them out of office with pitchforks. Their fears were not totally unfounded. Robert Morris was attacked by a mob after he bilked thousands of investors out of their funds in real estate speculation. He wound up in Debtor Prison. One good thing came out of that. His gentry admirers passed our first bankruptcy law, in part, to get him out of debtor's prison. It probably helped his political enemy Thomas Jefferson too. Not all our founders were good at managing financial affairs.

The Federalists weren't saints

The "Federalists" were a party like the Ghibellines or Guelphs. Their enemies were "anti-Federalists. Their partisanship sounded very "Jacobin" -- about "democracy" and "freedom" but as I've noticed elsewhere those were banners and flags. Partisanship is about power and how to divide the wealth pie. The ideology is important, but it is often secondary to the real aims of the Partisans.

Factions grows out of conflicts that usually start with a genuine partisan or ideology basis. Eventually the movements tend to lose focus and it sometimes gets hard to tell what they were originally fighting about. That is because for the officers of the conflict the real issues of their followers aren't their own real issues. We should remember that as we look further.

Forgetting the Principles

Sometimes the original issues get so lost they get reduced to mindlessly chanted slogans, chanted by borderline people, whose definition of good or evil has become so corrupted it's completely tribal, partisan and dictated by authorities; as depicted in this Star Trek Episode called the "Omega Glory". In that episode, William Shatner, playing Captain Kirk had to read the Constitution back to the wild men "Yangs", who treated it as a sacred document but couldn't read it. Partisanship might start out with firm principles, but the fighting can last for years beyond the original issues.

Omega Glory URL: [https://www.youtube.com/watch?v=uGO-SldLrNA]

Evil Mother

To the Tune of "Evil Woman:"

 

E-evil Mother! E-evil mother....

He's going to hell, No matter what you do.

Spare the rod, and your fears will come true.

Hate the crime, whether he's done it or not.

Never mind that you've become a drunken sot.

 

E-evil Mother, E-evil Mother....

He's already in Hell. That Hell is you.

Your child needs your love lady, not your hate.

Spare the rod, or you'll make your fears come true.

Get yourself sober woman! It's not too late.

Get off your high horse. Stand on your feet.

Hate is a crime, love will transform you.

If you read your bible, you'll see my words are true.

 

Christopher H. Holte, 9/22/2015

Inspired by an ugly story of a Woman who sees a 4 year old as evil because he's left handed.

http://www.rawstory.com/2015/09/oklahoma-teacher-orders-evil-4-year-old-to-become-righty-devil-is-often-portrayed-as-left-handed/

& Electric Light Orchestra!

Electric Light Orchestra: [https://www.youtube.com/watch?v=R20f-TPKjzc]