BAILOUT 5: PEOPLE, NOT BANKS, CREATE MONEY

OK, thought about it some more and have come to this conclusion: People, not banks, create money. The Fed site I quoted from below has it exactly backward, stating that "banks create money." That's what they want us to believe. However, that is false.

We know it's false because they go on to tell us that money is created through lending. Well, all right, but as I've pointed out, banks don't actually have the money to lend. The money is "created" by our "promise to pay" and our monthly installments, as in the car loan example I wrote about below. When the "loan" is paid in full, we have then created the amount of money we "borrowed," along with interest that wasn't created by any bank.

How to look at it

All money is created through our labor. In fact, labor is money. Banks don't do labor, people do. That's the ultimate reason why the bailout and the system it is trying to prop up are utter fraud. They want us to bail out banks because they tell us that it's banks that create money. That is completely false.

And that's why there is no need for a bailout. That's why there's no need, quite frankly, for banks. And that's why there's no need, ultimately, for money. Because our labor is money.

BAILOUT 4: QUESTIONING KASHKARI AND HIS "SYSTEM"

The questioning of Kashkari on Friday was a start, but it was only that. Kucinich and Issa didn't go far enough--even they appear to assume that the system is good for the most part and needs rescuing.

Fake money

However, as I've shown below, our system is based on fake money that creates only profit for banks and only debt for the public. Indeed, as we've seen, even the Federal Reserve admits that for a profit, banks lend money that they do not have on hand. You and I can't do that. And that's why we stay perpetually behind and they stay perpetually ahead.

But even if one accepts that this actual fake money is real, there was one burning question that none of the Congressmen asked, at least not that I saw. And that burning question is this: Why should taxpayers be forced to give a gift of money to banks that banks will then use to create only profit for themselves and only debt for the people who gave them the money to begin with?

This may seem like a silly question, but only if one accepts that Kashkari's precious system helps the public. However, we have seen quite clearly that the system does no such thing. Kashkari is pleading for the system to be maintained--that banks be given money by the taxpayers to issue credit in order to make a profit off of those taxpayers.

Kashkari makes the faulty assumption that helping needy people and businesses "directly" won't work. But that begs another unasked question that is related to the first unasked burning question mentioned above: Why not just give the taxpayer money to the taxpayers directly instead of giving it to a middleman (i.e., the banks) to dole out to us in order to make a profit for the middleman? In other words, instead of giving banks $750 billion (and really much more than that), why don't we just give it to ourselves?

The only answer to those questions is that the system must be preserved, which appears to be the assumption of all the Congressmen I saw questioning Kashkari. But as we've seen, the best way to really help the people instead of the banks is to dismantle the fraudulent, predatory system.

And dismantling the system would not be hard to do. It would be very, very easy, except for the fact that the public has been brainwashed a million times over into thinking that bankers have the divine right of money creation and that credit is necessary for life and the country to continue. Kashkari's comments indicate that credit is the answer to our problems when in fact credit is the problem.

Credit is the problem, not the solution

I'll say it again--credit is the problem, not the solution. If people had good jobs at good wages, they wouldn't need credit. If inflation wasn't through the roof, people wouldn't need credit. BUT, if no one needed credit, then the bankers would be out of work.

And the bankers don't want to be out of work. That's completely understandable because as we've seen, banks are allowed to create money without producing anything but debt, while the rest of us have to perform labor to have access to money. And in fact, it is only our labor that gives bankers their money. We are quite literally "working for the bank."

So the banks have an excellent scam going--they do and produce nothing while getting rich off of those of us who are performing labor.

Labor vs. capital

So that brings up the age-old fight between labor and capital. As we've seen, labor is the only thing that makes capital possible, yet in our system, labor is subservient to capital. This in inexplicably called "free market capitalism" and is extolled a billion times a day by presidents and pundits alike.

But if we were to put capital in its rightful place, i.e., subservient to labor, that would be and is called "godless communism" and is disparaged a billion times a day by presidents and pundits alike.

So we've been conditioned, brainwashed, taught--pick your term--to think that capital, i.e., the financiers/bankers/middlemen are what allow us to exist when in fact THE COMPLETE OPPOSITE IS TRUE. It was Abraham Lincoln who said

"Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration."

So call it communism, socialism, redistribution of wealth--again, pick your term--but the fact remains that labor is and therefore should be treated as the master of capital, not the other way around as is currently the case.

And that's why the questions posed to Kashkari and Paulson and Bernanke about the bailout and "the system" should proceed from a different assumption than they currently do. The questions should proceed from the assumption that the current system is rapacious, fraudulent, predatory, and contrary to common sense, not from the assumption that the current system should be preserved at all costs.

DVD PLAYERS AND CHINESE LABORS

Went to my parents' house for Christmas today and one of the first things we talked about was their seemingly malfunctioning Apex DVD player. My mother said she had gotten it 3 or so months ago for $35.

I took a look at it, power cycled it, tried to get it to read DVDs, etc.--all to no avail. My father asked whether one takes something like that to get fixed or just gets another one--knowing the answer, of course, is to simply get another player. He lamented that simply throwing out a machine like that to replace it just seemed like an "ugly American" thing to do.

China

I mentioned something about the lasers inside the players, and my dad marvelled at the fact that the advanced technology in such a machine could be sold for such a cheap price. I suggested that such a situation was possible because of cheap overseas labor, with words to this effect: "Well, they're so cheap because they're made by Chinese workers who get 2 cents a day or something like that."

My father found that highly unlikely. He said that with all the capitalistic reforms that are being made in China, and the footage one sees in the news with Chinese cities being overrun with cars, Chinese workers are surely not being ripped off. He said that China will eventually go the way of Japan--start off making cheap crap and then become the world leader in manufactured goods at which time Chinese workers will be paid like kings.

How I handled it--not very well

I didn't vocalize my disagreement with everything he said for a couple reasons. One, I was full of food from my imperialistic, ugly American, completely commercialized and commodified holiday celebration and therefore somewhat addled and not looking for much of an intellectual give-and-take. Two, his citation of video footage of lots of cars on Chinese streets threw me off.

I mean, I know that Chinese workers work cheap. That's why everything comes from China--that's why Wal-Mart's biggest supplier is China, as it says in this article:

Nevertheless,...China is Wal-Mart's most important supplier in the world. The overseas procurement home office in Shenzhen, a city of South China's Guangdong Province, has played a key role in the firm's global purchasing business.

Wal-Mart shifted its overseas procurement centre from Hong Kong to Shenzhen in February 2002 to better serve the purchasing and exporting business.

"If Wal-Mart were an individual economy, it would rank as China's eighth-biggest trading partner, ahead of Russia, Australia and Canada," Xu said.

So I just kinda let it go, disappointed in myself that I didn't speak up more because of a lack of confidence in my grasp of the facts. But I came home and Googled some stuff and found stories like the following about the state of Chinese labor:

China Labor Watch said the workers are forced to labor 11 hours a day, six days a week, with "total overtime of up to 70 hours a month." Chinese "law" says employees work a 40-hour week, with overtime limited to 36 hours a month. Workers at the plant, irrespective of reality, get 574 yuan or $72 a month.

Subsistence wages have fueled a staggering increase in Chinese toy imports, along with China's continued tricks to undervalue its currency.
Buffalo News 12/18/06 by William Turner

Here's another, from the AP:

MGA Entertainment Inc.'s Bratz dolls are made at a factory in southern China where workers are obliged to toil as many as 94 hours a week, labor rights advocates alleged in a report.

The report by U.S.-based China Labor Watch and the National Labor Committee details allegations of harsh working conditions, especially during peak delivery months, and of violations of Chinese laws that give workers the right to work-injury and health insurance.

And here's more on the Bratz and profit-over-people situation:

Workers are paid the equivalent of 17 US cents for each doll, the report said, while the dolls retail for $16 apiece or more in the US.

The report contains allegations similar to those aimed at many Chinese factories producing big brand products for export. They include forcing workers to stay on the job to meet quotas, required overtime exceeding the legal maximum of 36 hours a month, and the denial of paid sick leave and other benefits...

Last year the CLW reported on conditions inside the Huangwu No 2 Toy Factory in Dongguan City. The factory makes toys for Wal-Mart and, according to the CLW, there were few safety precautions for any of the workers, who are working up to 15 hours a day in peak season.

Some passed out from exhaustion after spraying 1,115 small toys per hour. That’s one toy every 3.23 seconds.

And then, in the same article, the CEO of Timberland shoes spells out the horrible, ultimately self-defeating situation:

Recently I interviewed Jeff Swartz, chief executive of Timberland, who has done more than most to ensure his Chinese contractors do not abuse their workers. Timberland strictly monitors its factories and will not allow workers to put in more than 60 hours a week.

In an ideal world, he said, he would not manufacture in China at all, but the low prices he can get there mean he can’t afford not to. The most he could hope for at the moment was to be “the good plantation owner,” he said.

I know better than to keep my mouth shut, but it's my dad--I don't want to fight with him. But I fear that most people feel like he does--that Wal-Mart is good for Americans and that the cheap laborers abroad are happy to have the work and the pittance they earn. He even said that he and my mother are a "Wal-Mart family."

Not blameless

I guess another reason I didn't speak up is that I'm not blameless. I shop at Wal-Mart. I like to get quality products for the least money possible. I don't know the way to rectify this lopsided situation that hurts the wages of both overseas and domestic workers. There has to be some sort of either legal or moral (or both) turning away from the "profit uber alles" mentality of both the corporation and the public. But I don't know how to make that happen.

But I do know that Chinese labor is cheap and not afforded the same (eroding) protections we supposedly have here. And saying so with confidence, even to my family which I love, is one infinitesimally tiny way to start changing perceptions. I guess...