The Federal Reserve just purchased  $1.24 Trillion on mortgage bonds.    That means.   The Fed has just swept $1.25 Trillion OF LAND into their pocket.   Creating money from nothing is a good enough trick, isn’t it?

Claiming land for banks from confusion created by banks is over the top.

PT Barnum said there was one born every moment.   I have been paying attention for a long time and it was only after my 60th year that I understood that the Fed was as Federal as Federal Express.  I am not being cute here, I wrote a thesis on the monetary system in 1978.  Economics does not teach about the creation of money.  Even some bank managers do not understand this.  Who holds the Bag at the Fed… are the member banks, called the ‘money center banks’, not the US government.*

Here is my alarm point:  The private creators of money have just swept 1.25 trillion of our land into that bag by “purchasing” mortgage bonds.   I understand how the public largely cannot grasp (as yet,) how money is created from nothing.  This is only understood in rarified central bank circles.

Claiming land out of nothing is another issue entirely.   I am OK with the Treasury owning land that has gone into limbo because of missteps in the old walnut shell trick.  It is some semblance of the commons.  The banks are not, they are private, and by the way, caused the crash of 2008.   It came to pass because of bad gambles with derivatives by money center banks and AIG.  (when the subprime market was $1.3Trillion which got all the press, because people could understand it , whereas the bank and hedge fund derivative trades were $60T, got little ink because they were hard to describe.)

The result of the transfer of $1.25 Trillion of mortgage paper to the Fed is a World Class land grab.

This is a violation of the commons, of house holders, of the American people.

*Understanding Central Banking is a head scratch.   It was a bone of contention between Jefferson and Hamilton and Jackson to boot.   It’s previous incarnation was with the Federal Reserve Act of 1913 and created a central banking function ( a lender of last resort) but left the ownership of that power in private hands.   What is now going on in August of 2010 is seat of the pants and brand new territory.    My recommendation on understanding this is by reading the book: Web of  Debt by Ellen Hodgson Brown.  It is clearly written, and an amazingly well told story.     If only the younger generations to get ahold of the old walnut shell trick before I did.

Inspired by the Land

It is summertime now, and most folks are on vacation. What does vacation mean? Without Work. A foregoing of commercial intention. A release from intention to engage in the discovery of the I AM that lives in this human being. And most folks in the Northwest go out into the woods, into the mountains.

What we get, if we actually get away…. from media, city rhythms, from other’s sounds, from our inner hum-drum…. is genuine inspiration. Ancient trees, moss covered fortresses that have withstood centuries of rain and wind. and that wind, which I never understood till this year, is very orderly. Yes, it makes us confused, it disturbs us with the dust it raises, but it is not confused. It is the gentle mover. It moves the dapples in the canopy of trees that shade the earth from the scorching sun. That sun that we will seek for warmth as the dry autumn falls upon us as leaves fall upon the ground, now in summer that sun burns what it touches. The earth, it misses its ancient canopy.

It is amazing to me that so few realize the profundity of the gift that old trees give. A lofty canopy of rich cool shade, with tall stems reaching deep into spongy soil netted with roots and mycorrhizal rhizomes, or as the Indians used to say: grandfathers shaking hands, beneath the ground. Big trees not only provide shade, and in their death – topsoil, oh, and the air we breath, the culture of their roots provides the nursery for soil creation, home to the flowers of rot: mushrooms.

My patriotism is nourished by the land, the respect for the land that the original people here had and still have. They are sometimes called Indians, sometimes called Native Americans, but in practice here, in the Pacific Northwest, They call themselves by the name of the river near which they were born. The Yakima, the Warm Springs, the Cowlitz, the Stillaguamish, the Tulalips all members of the Salish, or Salmon Eaters. Try googling
Salish.

So inventive we Americans. Coming back from the woods, refreshed, inspired. I wonder how many city dwellers now across the land, create the chance, to be so inspired.

Which is worse, bulldozing a graveyard, or building a cultural center?

News or Absurdity; quick, which is it?

Item One: Authorities in Jerusalem bulldozed an Arabic graveyard to make way for a Museum of Tolerance.

Item Two: There is national consternation in the USA that a New York City muslim group wants to build a mosque and cultural center two blocks from ground zero, which some are calling sacred ground.

Item Three: Six hundred retired NFL football players are suing a video game outfit because their football game players resemble them.

Item Four: Nick Merrill, and New York city ISP operator finally broke his silence after being “gagged” by an FBI gag order since 2005. In 2005 he was served with a “National Security Letter” which required him to provide FBI agents with the searches and data on his subscribers, yet with no warrant from a judge provided. What is wrong with that? you say.

It is a violation of the first, fourth and fifth amendments of the Bill of Rights, I say.

The constitution and the Bill of Right is on this site. Can you state, not with names but in simple constitutional language what rights of Nick Merrill were violated? (This is described as the practice of citizenship; and practice makes pretty good.)

I have not been able to comment on the above absurdity…… which is actual news, for the last two days. I cannot find a clown suit loud enough, or a mouth pucker round enough. Please comment and help me out of my dumbfound.

______David

A subtext to this entire site is that for a constitutional country whose document begins with We the People, the People (you) must know the law. It is my lament that The King was replaced by The People, and the People have deferred to the Lawyers. You can state your rights to anyone: lawyer, policeman or judge, and that person must obey. The constitution has replaced the king with You, citizen. The President presides over the Congress (which means ‘to walk upright together’) He presides, he is not king. He took an Oath to preserve and protect the constitution. Only if he forsakes his oath and congress does not obey the ‘king clause’ (Article I, section 8, clause 11) is he then king. I ask: where are we, relative to the king, when the president has assassination powers anywhere on the globe with drones, jackals, and a black budget?

We now have a President who is also a Constitutional scholar. Can we as a People hold him to his scholarship?

As the US acts as a crazy sick-person. Now What?

If the United States were to be a person… who would it be?

My guess is a sick crazy-person.

Crazy, because our societal nerves do not work. The Press:
the Newspapers, who do the deep reporting, are dying because opinions are free on the internet, and folks don’t seem to miss the absence of fact in our public discourse. And people will not pay for what is already free.

The press is the equivalent to a person’s nervous system. How one knows oneself.
And what sickness would the society of the United States, if it were a person, have?

Well, we act anemic, blind, schizophrenic, depressed and way out of joint. Our nerves are shot and we are addicted to some drug called blackberry, iphone, ipod, texting, tweeting, sports or TV.

What does that mean?
anemic because there is no blood surging in our veins ( call it income)

blind: because we have no vision.

schizophrenic: because half of us believe the other half is nuts and absolutely devoid of common sense.

depressed: not only because we have no vision, but the pres. and the press are telling us everything is swell when we know it is not.

out of joint: because the left hand cannot coordinate with the right. Is global warming real or not? Is it stimulus or deficit reduction? We fight two wars which are absolutely important on the other side of the globe while the war near our border in Mexico is not.

So the question is…. how do you treat a sick crazy-person?

I would say that you treat the crazy part first, or he will not accept treatment. What is that? To fix the press.

What is wrong with the press? It’s funding model has been broken and does not work. Why? It used to be funded by the display advertising model, and Google outdated that with its intentional marketing model. It works better to sell stuff. No problem there. The problem is that no funding has emerged to replace the missing display model funds, and there is no money to pay reporters to investigate unknown stories and dredge up new facts. Thus all we have today is the pander press, as old stories and trivia recirculate.

What would fix this? Simple. A free people must liberate themselves from a pun. Instead of considering the “free press” in the gratis column, the same as “free beer”, the people would hold to the same standard as colonists held themselves during Ben Franklin’s time and realize that a free press meant liberty (not gratis) and must be funded by a free people to the tune of $30 a month (That is the current value of the $1.50 a month the colonists paid.)

So simple. One half of a family’s internet bill to the Internet Service Provider (ISP) would go to pay for content…. $30/month. And recipients of pay for content would reintroduce the fairness doctrine, that requires an airing opposing views, so that we give up our current pathology of talking past one another and believing with conviction that the other half of America is dumb as a stump. Democracy will not work in the context of a mutual castigation society.

It is said the majority of Americans today believe we should receive better services and yet, are unwilling to pay for them. In our current formulation, there is no cost for being incoherent. None.

The Republicans want to fund two wars, extend the Bush tax cuts, and yet are not willing to extend unemployment insurance when roughly 20% of Americans are out of work. People must wait until the ripe old age of 18 before they vote, seeming because we do not let children make decisions of state. Yet when adults act as infants, and produce entirely incoherent positions, what are we to do?

And this is not to exonerate the Democrats who are equally incoherent in their positions, for example they too support a war in Afghanistan, apparently to give voting rights there for women in a population that is 80% illiterate and who live in a forth century goat herding culture in profoundly mountainous terrain, when we are firing teachers in our home states because we cannot afford to pay them.

But all this refers back to the press not functioning, because it is not reliably funded, and thus is pandering for eyeballs and wishes not to offend.

The truth shall set us free. Are we each, willing to pay for it?
I contend it must become the ethic of a free people to fund a free press.

That’s what I think. Do you have a better idea?

When the Economic Titans Disagree… Then What?

I have listened with attention to Paul Krugman (nobel laureate), Joe Stiglitz (nobel laureate), Nial Furgeson, historian of Empire and Simon Johnson past chief economist for the International Monetary Fund. They are all good. They all know their stuff. And; they disagree.

They disagree most vividly the need for a new stimulus, and yet agree on others items.

But before getting into the weeds of acute analysis of macro economic theory, let us look at a similar area of complexity. If you are of a certain age, you are more familiar with doctors than economics. We would never think of asking a surgeon about how to treat a rash. Nor would we ask a dermatologist as to how to treat a tummy ache. The same complexity engages the study of economics. Yet economics as most college graduates must know, are merely divided between macro, and micro economics.

Why should you listen to me: the self named carpenter economist on this subject. Aside from my university thesis, my awareness comes from working for a decade in the university textbook world over five states and I have had many, many discussions with economic professors, whom I submit, love to profess. I managed a present day anthropology of the economics profession. There are dozens and dozens of economic journals, which is to say they are as disciplined as cats. Yet in the academic world of endowed chairs, many economists have taken the bait of market fundamentalism, as George Soros has so well named. Think Tanks have called it ‘Free Markets’ and they have been impelled with tens and hundreds of millions of dollars which result in many endowed chairs. Their wind has been felt on trade policy ( laissez faire my patoot) as well as in the instruction of MBA’s and economics majors. I have seen the gears of this self generation of ‘policy’.

Back to the subject, namely that economics is as complex as medicine and to divide it into macro and micro and call it good, is as competent as to divide medicine into gastro enteritis or dermatology and consider you have mapped the territory. Knowing this, I am not at all surprised that the three luminaries named above have coherent and yet conflicting views.

These four, Krugman, Stiglitz, Ferguson and Johnson live in different timezones and scales, all of which are valid. Ferguson looks in terms of decades if not centuries, and observes the structure by which empires decline. Johnson worked with the I Stiglitz whose thesis was on the asymmetry of information, i.e. imperfect access to information, has worked internationally as chief economist at the world bank, and has a different perspective from Krugman, who is centered on US history and current macro economics.

Again I must state my bonafides in contrast to these titans, all of which I admire. I wrote my thesis in 1978 on the consequences of nature’s cost on the monetary system as advised by Gregory Bateson who had a remarkable influence on late twentieth century thought He is the one who put the Macys conference together when Weiner and Von Neuman coined the term ‘cybernetics’ which was the mother of automation, and that the mother of robots, which is the building block of what today we call: ‘production’. He was the first to apply information science (also known as system science) to living systems.

What Krugman sees as a period, a quarter, Ferguson sees as a millisecond. What Krugman sees as the way back to some pump in the economy, which is necessary to have some circulation of funds, Ferguson sees as

So I am not upset that these titans do not fit ‘global warming’ into their economic models. While in my opinion it is ignorant, their ‘science’ of economics has proven itself quite fallible of late, so from a theoretical point of view, I understand why they would prefer to keep it as simple as possible. However not attending to that variable is akin to playing cards on the tracks and not noticing the train.

YET, they have to deal with concrete political thinking, that is equally outside the science of economics to deal with all this talk of deficits, and more resembles a train than any sense of logic.

You see economics is very plastic. It is complex, and usually has enough variables to mask any shortfall. Politics is less so. The unfortunate fact is that the majority of people can be: wrong. That was proved in 1936 when FDR cut the stimulus too quickly in response to ‘common sense’ objections to deficit spending…. and re-triggered the depression. For economics works on a slow cycle, and the political topic can have changed a dozen times before economic action creates any economic result.

Thus while each of these titans covers the macro world of economics, they do it from different perspectives, and actually agree more than would a family practitioner, an acupuncturist or an ayurvedic physician, who, like our economic titans all look at the whole body of their medical field.

The debate that rages today: Cut the Deficit, or Spend more on Stimulus is an apparent conflict point among our titans. I hope a new cleavage can separate this debate into a more sensible and fruitful discussion. Stay Tuned.

Why We Must Reduce Military Spending.. a bipartisan plea

by Representatives Barney Frank and Ron Paul
Posted: July 6, 2010 09:02 AM Huffington Post

As members of opposing political parties, we disagree on a number of important issues. But we must not allow honest disagreement over some issues to interfere with our ability to work together when we do agree.

By far the single most important of these is our current initiative to include substantial reductions in the projected level of American military spending as part of future deficit reduction efforts. For decades, the subject of military expenditures has been glaringly absent from public debate. Yet the Pentagon budget for 2010 is $693 billion — more than all other discretionary spending programs combined. Even subtracting the cost of the wars in Iraq and Afghanistan, military spending still amounts to over 42% of total spending.

It is irrefutably clear to us that if we do not make substantial cuts in the projected levels of Pentagon spending, we will do substantial damage to our economy and dramatically reduce our quality of life.

We are not talking about cutting the money needed to supply American troops in the field. Once we send our men and women into battle, even in cases where we may have opposed going to war, we have an obligation to make sure that our servicemembers have everything they need. And we are not talking about cutting essential funds for combating terrorism; we must do everything possible to prevent any recurrence of the mass murder of Americans that took place on September 11, 2001.

Immediately after World War II, with much of the world devastated and the Soviet Union becoming increasingly aggressive, America took on the responsibility of protecting virtually every country that asked for it. Sixty-five years later, we continue to play that role long after there is any justification for it, and currently American military spending makes up approximately 44% of all such expenditures worldwide. The nations of Western Europe now collectively have greater resources at their command than we do, yet they continue to depend overwhelmingly on American taxpayers to provide for their defense. According to a recent article in the New York Times, “Europeans have boasted about their social model, with its generous vacations and early retirements, its national health care systems and extensive welfare benefits, contrasting it with the comparative harshness of American capitalism. Europeans have benefited from low military spending, protected by NATO and the American nuclear umbrella.”

When our democratic allies are menaced by larger, hostile powers, there is a strong argument to be made for supporting them. But the notion that American taxpayers get some benefit from extending our military might worldwide is deeply flawed. And the idea that as a superpower it is our duty to maintain stability by intervening in civil disorders virtually anywhere in the world often generates anger directed at us and may in the end do more harm than good.

We believe that the time has come for a much quicker withdrawal from Iraq than the President has proposed. We both voted against that war, but even for those who voted for it, there can be no justification for spending over $700 billion dollars of American taxpayers’ money on direct military spending in Iraq since the war began, not including the massive, estimated long-term costs of the war. We have essentially taken on a referee role in a civil war, even mediating electoral disputes.

In order to create a systematic approach to reducing military spending, we have convened a Sustainable Defense Task Force consisting of experts on military expenditures that span the ideological spectrum. The task force has produced a detailed report with specific recommendations for cutting Pentagon spending by approximately $1 trillion over a ten year period. It calls for eliminating certain Cold War weapons and scaling back our commitments overseas. Even with these changes, the United States would still be immeasurably stronger than any nation with which we might be engaged, and the plan will in fact enhance our security rather than diminish it.

We are currently working to enlist the support of other members of Congress for our initiative. Along with our colleagues Senator Ron Wyden and Congressman Walter Jones, we have addressed a letter to the President’s National Committee on Fiscal Responsibility and Reform, which he has convened to develop concrete recommendations for reducing the budget deficit. We will make it clear to leaders of both parties that substantial reductions in military spending must be included in any future deficit reduction package. We pledge to oppose any proposal that fails to do so.

In the short term, rebuilding our economy and creating jobs will remain our nation’s top priority. But it is essential that we begin to address the issue of excessive military spending in order to ensure prosperity in the future. We may not agree on what to do with the estimated $1 trillion in savings, but we do agree that nothing either of us cares deeply about will be possible if we do not begin to face this issue now.

David Adds. This is a clarion call. We either pay for bombs in Asia, or teachers in Oregon. You communication will get this wheel rolling…

Frank-Dud Finance Dance

When is a law not a law?  When it is a bag over your head.

The Financial Regulation Bill.. aka The Frank – Dodd Bill is 2,315 pages requiring 399 rule-makings and 47 studies by yet unconstituted commissions. One familiar with the ways of Washington DC would see this as a tremendous opportunity to lean on lobbyists and the “legal community” to fund the next election cycle.   But fix the financial system: no.

The good part (politically) is the consumer protection agency, although it is housed at the Federal Reserve, is a gesture toward lessening the retail end of getting screwed.   Un-addressed is getting a wholesale screwing, leaving the too big to fail crowd in control… and it is not a big group: Goldman-Sachs, Morgan-Stanley, Bank of America, and Wells-Fargo.
They call the shots, get the money at Zero to 1/4 of one percent interest and loan it out at….5% if you are annointed and the sky is the limit if you are not.  They buy up small banks one after another.

Meanwhile the “high frequency trading” world is un-scathed, with hedge funds trading in the milliseconds. Sorry about your pension being on the down-side of the next ‘flash crash’.

Some wag has mentioned that CEO’s have difficulty relating to stockholders that own their stocks for less than 60 seconds.

A question that arises from this is: What is property?   What is ownership…. when everything is transitory and momentary. It is a grave question that casts light on the shadow banking concept: Hedge Funds, derivatives and all.  When eveything is owned momentarily, as a trading chip, and the ultimate bag man is the taxpayer….. why are we still projecting ownership on the banks?  They Blew It!  We picked up the pieces.  So why do we think the banks own everything?  Perhaps it is habit.   They are the authors of the chain-letter, but neither  are they authors, nor creators of  productive activity.  They have been seen as the permission keepers,  and have been granted the power to create money, via loan creation, which is authorized Not by the Treasury, but by the Federal Reserve Act of 1913.  Arrgh.  I am entering the swamp of history.   I cannot here deeply illumine you on this simple but elusive point, namely, that beyond the gold, and silver standard as we have been since FDR and Nixon; money has been created only by the creation of loans and that had been done, not through the US Treasury which only mints coins, but the cartel of the ‘money center’ banks mentioned at the top of this article.      Oh, and the interest to pay on the loans, that is not created, thus our constant need to ‘grow’.  And when loans end (due to default or the loan gets paid off), that money  that was created: ends,  it is un-created..

I confess, I cannot explain the whole financial charade to you in one post, but can recommend a book that can, namely:  Web of Debt, by Ellen Hodgson Brown.   Interestingly written, historic, and a story well told.

Anyhow  we seem to be entranced in the projection of authority, of (phantom) ownership.

How?

It is the banks that own the houses, becaused they borrowed the money from the Federal Reserve system at less than one percent and loaned it out at 5 to 19%, while the builder built it ( at a fraction of the sale cost) and the banks then sell that monthly cash flow to some sucker in the the ‘securitized’ world, perhaps your pension.    OK,  if I say any more  all our brains will hurt.

Let is be said that the Frank-Dodd bill, is not close to law, for nothing is settled within the devils in the details 2000  plus pages, except 399 rule makings yet to make. I would suggest making contact with your senator or representative and say you want a 100 page bill that separates banking from trading, that breaks up banks that are “too big too fail” and thus too big to govern,  and to prohibit derivatives beyond the first degree. (yes, I will explain this later)

Business will not prosper, until the game is unrigged.

Tune in to a subsequent post for insight into the world of derivatives.

Music in the Family

It was on this day in 1913 that the French Academy of Fine Arts — for the first time in its history — presented its highest award, the Prix de Rome, to a woman.

That woman composer, Lili Boulanger, was just 19 years old at the time. Born in Paris in 1893, she was the younger sister of Nadia Boulanger, and far more gifted. Nevertheless, Nadia would become the most famous teacher of composition in the 20th century, numbering among her students an amazing array of famous American composers from Aaron Copland, Philip Glass and Elliot Carter who is still composing at 102.

Nadia’s sister Lili, however, suffered from poor health. Her tragically short career was interrupted by World War I, when she volunteered to nurse wounded soldiers. She died before the great conflict was over, on March 15, 1918, at the age of 24.

While Nadia, who never married composed music herself, she had played with genius as she grew up, and one would speculate, that led to her fecund nurturing of so many composers, a beacon of human cultivation for the ages.

The Bach family too, was famous for the competition among siblings and family in little musical games. This was the very play, initiating the idiom, “playing music”. Too often it is seen as work. Noted Montana composer and teacher Eric Funk played games with his gifted brothers. Why gifted? Was it because they played with music, as well as “played” music. They played together in the car, for example, the children saw music as game.  Singing second harmonies, or inverting the melody of the last line sung.    There are games where alertness breeds alertness.

Our culture seems to have not “time” for music in the play. Too concerned with matters of consequence to educate our children in music or art. Too concerned with performance, and the ‘canning’ and often sale of the creative relationship all can hear. This was certainly not the view of Thomas Jefferson, who wrote in letter on June 8, 1778, in which he was dreaming of a farmers orchestra : “I retain among my domestic servants a gardener, a weaver, a cabinet-maker, and a stone-cutter, to which I would add a vigneron.     In a country where music is cultivated and practised by every class of
men, I suppose there might be found persons of those trades who could  perform on the French horn, clarinet, or hautboy, and bassoon so that  one might have a band . . . without enlarging their domestic expenses.”

This was a farmer looking to have culture at home. Today with the internet
we can simulate culture….. but the vitality of people playing live music together for fun has been thrown into the garage with the teenagers. Oh that we could have music played together, acoustic and un-amplified, so that culture could blossom,  as it did around young Lili Boulanger’s sister, Nadia.

Update on Ted Glick of yesterday’s post.
D.C. Superior Court Judge Frederick H. Weisberg on Tuesday sentenced Ted Glick, policy director of Chesapeake Climate Action Network, to 30 days in jail but suspended the term. However, Weisberg ordered Glick to perform 40 hours of community service, pay $1,000 in fines, and serve one year of unsupervised probation. 7-7-2010. The threatened three year prison sentence in this case was the prosecutor’s shot across the bow.

Grieving ….

Fact 1.
Ted Glick will be charged in Washington DC with up to three years for displaying a banner in the US Senate building that said: ” Green Jobs Now” and “Get to Work”. He was petitioning the government for a redress of grievances, namely, its inattention to Global Warming.

Fact 2.
The US constitution states: Congress shall make no law …abridging the freedom … to petition the Government for a redress of grievances. (the full text of the First Amendment in which this is found in Exhibit A below)

Fact 3/
Most police work to enforce statutes, which are the laws that usher from the law of the land, the constitution. They are made by the legislature and in theory are in concert with it. Most lawyers argue statutes in court. Almost no one today refers to the constitution out of what some see as perverse custom, very different from the early days of our country. If you Know the constitution, and Know grammar well enough to abstract correctly what is written in Fact 2. above from the full text of the First Amendment below, and can state that to the police…. you have a very good case.

Question: Is the Constitution, which is written in clear English to be obeyed? If not, why not.

Exhibit A.
The full text of the first Amendment:

“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”

Liberty

The New Colossus

Not like the brazen giant of Greek fame
With conquering limbs astride from land to land;
Here at our sea-washed, sunset gates shall stand
A mighty woman with a torch, whose flame
Is the imprisoned lightning, and her name
Mother of Exiles. From her beacon-hand
Glows world-wide welcome; her mild eyes command
The air-bridged harbor that twin cities frame,
“Keep, ancient lands, your storied pomp!” cries she
With silent lips. “Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore,
Send these, the homeless, tempest-tossed to me,
I lift my lamp beside the golden door!”

- Emma Lazarus
New York City, 1883
(Inscribed on the Statue of Liberty)