"Real E" Blog by Quantum

October 27, 2008

"Money Politics”

Apparently, there are seemingly few moments in the span of a twenty-four hour period when my brain isn’t engaged. Ennui is rarely present. I point this out in a more or less tongue and cheek sort of comment as I’m not necessarily proud of this characterization nor am I completely at ease with confessing it! However, the level of depravity one witnesses in our present day world makes, as a source of commentary, for an extremely target rich environment. There seems so much to be concerned about yet there is so little time spent by the purveyors of social conscious (Media) devising a coherent and constructive query that has any discernable poignancy or prescience!

Point at issue, Money Politics. I could have easily mused as “Money Chasing Influence”, “The Politics of Money” or “The Peddlers of Change”. I’m fascinated by the images these titles animate in my mind particularly the last of the three. Particularly if you consider the use of the word “change” in two distinctly different forms. One being change as to “transform” or, change as to “currency” (coin)! Amusing!

There is so much going on around us and to be relevant, in this writing, I’m electing to provoke you with a series of brief commentaries which I may, for future discussion, reserve as many deserve greater inquiry than space and time permit in this forum. Try these on and see how they fit!

Election: We are nearing the end of the 2008 Presidential Election Cycle and let me just put the speculation to an end. Mr. Obama will be this County’s next President. Sadly, as has been in past Presidential Elections, he will be elected not for his qualifications, not for his vision, nor, for that matter, simply because he is so right! He will, however, be elected because the alternatives are so inadequate or dare I say, loathsome. Some might say that he will be elected to prove we can elect a “Black” for President as if to say, “…see how far we’ve come.” My response of course will be that if this (reason) is in deed the case then, in fact, it shows how much a part of the social equation the issue of race continues to be. Like many aspects of “Money Politics”, Race makes money and until Race can not be sold to the buying Public, it will continue to be that way. Just remember you heard it here first! At the conclusion of Mr. McCain’s concession speech, the fawning and/or “slobbering” love fest will commence. Don’t be concerned with the form it will take, just be sure it will all be about the form and NOT the substance. There will be gold embossed coins and dinner plates for sale and record breaking amounts of money will be spent for the coronation! Yes, most definitely, I am being sarcastic but for reasons you may never understand and if you do, then I’ll have no need to explain them!

Lastly, on this point, Mr. Obama will be my next President and I will offer him, his family and his Administration my constant prayers. I want, as we all should, that he be successful in terms that serve and benefit the People of the Country. He will be the President for Americans not for the World or World Interests and I pray we all, somehow, grasp the significance of this statement.

Economy: This is a tough one! Trying to fit it in so narrow a medium. I’ve got, and as you would expect – knowing my back ground, a great deal to say on this one. It is not that this issue is complex, strangely it is rather straight forward. It is, more so, that to correct the mass of mistakes the solutions are fairly pervasive/invasive and a successful resolution will have to be a series of strategic actions in concert with one another. For now, let us confine this present discourse to the following comments for your consideration and introspection.

The Economy is in its present condition for two primary reasons: Government meddling/micromanaging in the Private Sector (non-Governmental), that is to say, Governments dismal failure at engaging in its lawful and legitimate function. And, the Legal Systems unwillingness to sanction, punitively, predatory practices regardless of what segment of the Economy they may occur. I would target, as an example, the mercenaries of what we’ll simply coral, or otherwise broadly define, as the Financial Markets. The Government, as was clearly understood by our Founders, should NEVER be permitted to engage in Commerce, or better said, the Government should never cross the boundary between its stewardship of the Public Trust and Economic Gain! It’s important to call in to memory one of my favorite Thomas Jefferson’s warnings : “…a Government large enough to give you what you want is large enough to take what you’ve got!”

The Government will attempt to manipulate the Economy, once again, by doing what it only knows how to do which is throw money (Public Money) at the problem and to legislate increasingly insidious measures that further inculcate mediocre policy. It is the final and most pervasive image of sclerotic Government Policy and historically proven to be the equivalent of throwing money on a drowning man. There is not one single piece of Government legislation since 1913 that I can think of that has proven itself worthy of being hailed as a success. Yes, there have been noble ambitions, however I’ll simply refer you back to my Thomas Jefferson quote above.

I’ll offer a real world example of this failure. Monetary Policy in this Country operates from the premise that Debt = Growth (Economic Expansion). The Banking system thrives not on currency as a medium of exchange but the creation of debt and the machinations that this System engages in for this to occur. All along the way, the players in this System take their piece of the pie as it progresses through the food chain. For this System, as it is, to thrive, there must be ever increasing Debt whose companion is also an ever increasing Money Supply (Inflation) whose use you pay for. To grasp this concept one must simultaneously understand that the Debt, in this Systems language, is synonymous with Spending whether it be Government or Private. For various reasons, the details of which we’ll save for another time, as this Country’s Economy no longer creates the Wealth to feed this system (Manufacturing, Technological Innovation etc sustained by sound Monetary Policy/System) the only remaining vehicle (then) is Spending and lots of it! It is worth noting that Government spending, regardless of what you may think or have been told, is not Economically Viable. In other words, it is purely consumption spending, it neither creates wealth nor does it fan the flames of wealth creating practices. It is only and completely wealth consumption! It takes wealth away from (You) or out of the System and simply consumes it by redistribution practices and that’s all it does. That leaves the Country, sadly, with only Consumer Spending. The more prosaic example of this in action is the Housing Industry. The Government has manufactured the “one man one house” ideology. Why, well, because as is in the case with “Race”, Housing sells ( creates Political Equity) and quite handsomely. It looks something like this: Government mandates housing as an entitlement and Banks step up to fund (Debt) the development and construction of housing. State and Local Governments join in the fun by mandating absurd and punishing (expensive) requirements which neither truly serve the public but more importantly, actually are divisive and further exacerbate the nascent problem. Creating an explosion in Housing feeds all sorts of industries from timber right on down to your local Home Depot!

The System feeds itself by mandating ever increasing fields from which the harvest of would-be Buyers can be sourced and the stage is set., in effect, allowing them to strategically place their nets in the frenzy. With the increase in demand for housing the cycle of price inflation begins, prices rise funded by increased Debt and as we know, because this is how the System functions, Debt = Economic Expansion all of which is funded by the illusion of Wealth created by the Inflationary Spiral! Introduce, as an added component to Demand the ever present appetite for speculation and you’ve got “yerself” quite a barbeque! I shuttered to think what Consumer Spending, for the last 10 years, would truly have looked like for the most inconspicuous component of all and that is the portion of Consumer Spending that was funded by the Homeowners using home equity that was simply created by this inflationary spiral. You know them, you’ve seen them and wondered! How the dickens are they paying for the swimming pool, that Suburban, that Hummer, etc? Now you know, Debt = Economic Expansion.

There are several problems with this scenario as you can clearly see from looking at the number of foreclosures as well as other systemic financial hardships. What may not (also) be so obvious is the hidden poison and that is, more and more, the components used in the construction of the typical home are no longer (even) sourced from this Country! Timber is increasingly coming in to this Country from Canada, nails from China or Mexico not to mention the effects on the labor pool which is increasingly “undocumented” and the flow of their wages back to their “home” Country. The tragic comedy of this is that the U.S. Economy actually benefits very little from the process but reaps the severest of consequences. The Financial Burden!

What are equation now becomes is Debt = Economic Expansion, then Collapse!

My last comment on this “Economy” discussion and this one my simply cause your brain to turn to Cheetos! This “Cycle” of Debt creation, Inflation and Collapse, I theorize, may actually be deliberate, planned and/or crafted purposefully. The reasoning is vague and may seem wholly inconceivable which I readily acknowledge but for one simple reason and it goes like this: Let’s imagine for the time being that you are a Bank but, NOT just any Bank! You are a Central Bank and being a Central Bank you and you alone are privileged with being able to print all the Currency you want. Your Currency is the very life-blood of the Economy/Nation you serve. Nothing and I mean nothing moves from the extraction of raw material to finished product, from the oil reserve to the local gas station, from the Government to the Citizenry, from the timber stand to the eventual home, from the reservoir of water to the tap in any sink without using YOUR Central Bank’s Currency. It’s important that you master this understanding to this point as nothing I will say further will make sense if you don’t! Read this preamble of this illustration again and again until you do! You are not only the life-blood of the Economy/Nation but you also create the Blood! Now, for all your printing efforts you are entitled with the ability to charge (Interest) your friendly distributor, your local Banks, for the their distribution of YOUR Currency about the Economy/Nation for which they also charge their Patrons for its use all of which is evidenced by some form of Debt Instrument (e.g., Mortgage, Secured/Unsecured Loans etc.). Wait, it gets even better. One of your best Clients is the Government because this entity wants to spend as much as it wants and because Debt = Economic expansion YOUR Bank is only to happy to oblige. So, for your Best Client, you give them all the Currency necessary to suit their delight after all, all you have to do is print it. Right? Yes, but it all has to look legitimate so what you do is create pieces of Paper evidencing the Governments promise to pay YOU back and then turn around and sell them to unsuspecting Investors who actually think, one day, these Instruments will be settled. Now, here’s were it really gets interesting. At some point the Economy/Nation’s ability to advance this cycle of debt creation, for various reasons some of which we illustrated above in the “Housing Industry” discussion, simply becomes unsustainable. What do YOU do, what do YOU do? Well YOU do what every self-respecting Central Banker would do which is you simply allow the system to collapse. The financial markets where Debt is traded (along with other Securities) implode, the Real Estate that you secured by your Debt Instrument submerges and the Economy that is stimulated by it all founders. The Government is, to some degree, off the hook too. How, because the Debt you sold the unsuspecting Investor that funds the Government now becomes nearly worthless. This statement, I know, needs further explanation, but I’ll not bore you further. Just, for now, accept that it does. Lastly, and this is really, really, good news, the stage is now set, once the dust settles, for YOUR Central Bank to start the cycle all over again because you’ll come to the rescue with more Currency! You don’t mind though, all you have to do is load up the printer with paper and ink and start it all over again!

Just know, YOUR Central Bank, in this illustration, is (point of fact) the Federal Reserve Bank of these United States of America.

[Note: I’ve truncated this piece from its original version as formally published. The Balance of the piece had additional commentaries regarding “personal finance” and the “media”. If a reader of the “Blog” would like the Article in its entirety, email me and I will send it to you. For now, I’ll bank your interests for future entries and conclude this entry with the closing summary as original presented.]

To some, it may seem that I’ve unnecessarily traveled a great distance to simply arrive at my ultimate point. Frankly, it wasn’t my intension yet I must confess it seemed an incomplete attempt without doing so. As always, I leave it for you to decide. With this in mind I will close with the following:

For what ever the reason or purpose, our Political System has become the Servant of Interests that neither serve this Republic nor the People whose Interests said Republic is charged with protecting and advancing. It (the Government) has been conscripted to a form of servitude which anesthetizes the Public, selectively, with pabulum as a token gesture and entraps those which it does not..

Money, or should I say, Finance has been driving Politics in this Country for decades while our true Prosperity, whether it be Social, Economic or Spiritual, suffers the consequences of neglect! As I engage in the practice of my Profession as a Realtor, as a Counselor to my Clients, my various business interest and as a Speaker/Comentator in the public forum on various issues many of which you visit whilst reading my various writings, more and more I sense a solemn desperation the likes of which I’ve never witnessed. The essence of what I observe is not so much about what is wrong or even who is responsible, no, it is far worse. It is more a combination of the following: there is not critical thought, there is no moral compass and there is a growing belief that there is no vehicle capable of defining a course to recapture what has been lost! Recently, I was a quest speaker at a small gathering of industry leaders and at the conclusion of the event I was visiting with several who, I got the sense, simply wanted their opinions and concerns heard and I was struck by the imagery illustrated by the words of one of these folks. The comment, as best I can recall, was this: “…it’s as though I’m a passenger on a train traveling through the desert on a moonless night.. The lead locomotive has derailed and I’m one of several passengers who made there way to the front of the train and upon arriving discover the Engineer standing along side the wayward locomotive. We asked him for a status report! The Engineers response is idiotic ‘…well we’ve derailed!!’ The most vocal of the passengers responded with ‘ I can see that for my self, but my question is what are you doing about it?’ The Engineer quipped, “…nothing, I’m an Engineer, I drive ‘em, I don’t fix em!’” I should have kept my mouth shut however I’ve an occasional malady that intermittently surfaces, Tourette syndrome, and as best I can recall I think I said: I wonder if we should appoint a Government Committee to poll suggestions on whether or not someone should appoint an Investigative Committee on the possible uses for the remaining Locomotive? Or, I said, maybe one of you could simply get in and drive on leaving the observers to do just that! Observe!

All aboard!!!!!

Curtis C. Greco, Realtor/Broker

www.QuantumRealtyServices.com

“Money Politics” Copyright © by Curtis C. Greco 2008 All Rights Reserved