Kucinich and Decentralized Economics
It is fair to state that very few people in this country expected or even predicted the financial crisis that we are enveloped in. Over the years, I’ve read essays by people who claim that if we went back to the gold standard, our problems would be solved. These writers, usually influenced by Murray Rothbard or other writers from the Austrian School as presented by the Mises Institute, also preach about the evils of fractional reserve banking and how that leads to the creation of debt. Needless to say, 99.5% of the discussion of how to fix our problems sail right over the head of us ordinary Americans, who nonetheless suffer as a result of the policies executed by the “experts” who currently run the Federal Reserve System.
However, understanding this topic is vital to our future financial health. As might be obvious to those who have read this blog for any length of time, I am not one who could be called “conventional” – indeed, my father always said that I was a contrarian. Indeed. I’ve never been one to accept the received wisdom as truth and at my age, I don’t think that will change. At the same time, I’m equally suspicious of ideas that, to me, seem to have little connection to reality. Thus, I’m not one to rail against the “international Jewish financial conspiracy” touted by Henry Ford or to endorse Ron Paul when he calls for the abolition of the Federal Reserve Bank. However, that certainly doesn’t mean that I think the current paradigm is worthwhile continuing.
I found this speech, by Dennis Kucinich, to be most interesting. It was given this past November 4, when he won his re-election race, at the American Monetary Institute. In his speech, he calls for serious monetary reform.
Kucinich calls for a new look at the way we create money in our society and for us to not rely on the old Keynesian deficit-spending method that was used by FDR.
There are some very interesting links to other sites on the American Monetary Institute webpage, where a link is made between the current monetary system and the militarism that so infects American society.
One of the most common themes that runs through statements made by people opposed to the current paradigm is that the Federal Reserve Bank is a private bank, unanswerable to the people or to Congress. This belief finds tremendous support among the followers of the religious right and is not without merit. The Open Money Manifesto, published on The Transitioner website, lays out the specifics. I found this site to be intriguing, because it demonstrates how the Internet, could, by using the example of the Napster phenomenon, change the structure of the monetary systems of the world.
Another interesting site that shows what the future of monetary systems might be is Thomas Greco’s Reinventing Money site. There is a lot to digest on this site, as there is on the other sites mentioned in this post, but if we want to create a just and sustainable society for our children and grandchildren, we need to get to work. It is very clear that the current system is dysfunctional and that millions of people face financial ruin because of the current crisis. It is time for change and I, for one, am not counting on President-elect Barack Obama to deliver that change. We need to educate ourselves and demand change that will benefit us, our children, and our grandchildren, not the Wall Street fat cats who have already been bailed out.
One of the ways I educate myself is by reading this blog. Seriously.
http://www.GreenerPastures–ACityGirlGoesCountry.blogspot.com
Paotie,
You bring up some interesting points.
Regarding my first statement: I wouldn’t accuse Americans of being “lazy, stupid, overworked, or suckers for consumerism.” Rather, I would say that most Americans act the way they do because they are poorly educated. First, by the educational system (see the works of J.T. Gatto) and then, because of that foundation, a lack of knowledge of how to educate themselves on their own (watching TV is not a good way to become educated!). Contributing to this scenario, of course, is consumerism which results in working too much to pay for said consumerism, at the expense of the family, etc.
Regarding my second point: Americans can, indeed, differentiate between special interest groups. But the “good” special interest groups are those that align with the values of one group while the “bad” special interest groups are those that don’t align with those values. When you then have a vast number of groups with different values, the result is all of the polarization and finger-pointing so evident in the last election.
As to how corporations seized control of government: “Liberty means responsibility. That is why most men dread it.” – George Bernard Shaw.
And yes, quite clearly, a very substantial percentage of Americans believe that government is in the business of regulating human behavior. If they didn’t, then why do we have the culture wars?
Jeff ..
Good morning to you.
You said: “I suspect that many people don’t differentiate between the local businesses that they know well and the multi-national corporations, which they think are just the businesses they know writ large.”
The first statement suggests Americans do not differentiate because of any number of possibilities: they are lazy, stupid, overworked, or suckers for consumerism.
Which leads me to your next statement: “There are also lots of “good” special interest groups – it all depends on which side of the river you are on!”
If Americans cannot differentiate between Mom & Pop stores and Wal-Mart, then how can Americans differentiate between special interest groups? How would Americans know which groups are a priority and which are not, especially if they cannot/do not differentiate between Mom & Pop stores and Wal-Mart?
In your previous comment, you state: “corporations seizing control of government to protect and enhance their monopoly positions” — well, how did the corporations “seize” control of the government?
Special interest groups? Americans buying stuff at Wal-Mart?
Is the government in the business of regulating human behavior and motivation (greed, vanity, ignorance, etc.)?
Jeff ..
Interesting post and blog! Curious thing, though: much of the Great Depression was caused mostly AFTER governmental interventions took place. In fact, more often than not, when the government intervenes in the free market, it makes things far worse.
Have you read up on the national banking industry in India? They – for the most part – have escaped the ongoing financial collapses and essentially created a simple rule: want a loan? You better damn well be worth it.
Unlike in the United States where the credit industry had a simple policy:
No Car?
No House?
No J-O-B?
Ain’t got a damn thing to do on Friday?
Get a loan!
;o)
Interesting, too, how so many neo-conservatives talk so much about a free market that is not at all free, due to corporations seizing control of government to protect and enhance their monopoly positions (Microsoft comes to mind). I haven’t read about the Indian banking industry – I’ll have to investigate. Thanks!
Jeff ..
Well, you raise a good point about corporate oligarchies (i.e. special interest groups). I do agree they sometimes literally adopt a vested interest in preserving their own monopolization of a market (who wouldn’t want that sort of a problem?) We live in a country where 1% of the population owns a significant amount of the country’s wealth – corporate oligarchies almost seem inevitable.
Also, democracy is essentially mob rule. Oligarchies are essentially the formalization of mobs. And the SEC formalizes corporate mobs in the form of boards of directors.
I like where this tangent is going.
:o)
Paotie,
I’m not sure “oligarchy” is the right word to use here since entrepreneurship is so tightly woven into the American mythos. I suspect that many people don’t differentiate between the local businesses that they know well and the multi-national corporations, which they think are just the businesses they know writ large. There are also lots of “good” special interest groups – it all depends on which side of the river you are on! Adam Smith had a lot to say about the possibility of monopolization – he said it was something that always had to be guarded against.
We don’t have a democracy in this country – we have a republic. There is quite a difference. I don’t quite follow where you are going with the idea that the Securities and Exchange Commission “formalizes corporate mobs in the form of boards of directors”, though.
I have long thought DK a very smart guy…each time he ran for president I became more and more impressed with his intelligence and his integrity. I wouldn’t look to the end of deficit spending any time soon, but I am hopeful that there will be significant restructuring of the financial system’s MO. Hope your Christmas day was a good one…