The Financial System

The financial system. Wow, now there’s a catchy title. I doubt there could be a subject less interesting than that, yet have more impact on our daily lives.

To most of us a financial system would be working for a paycheck and then spending it. But in this complex and unethical world, where the money goes and why, is a mystery and too much trouble to try to understand.

In the caveman days (or cavewoman), all the necessities of life were produced by the user of those necessities. Life became easier as people discovered they were all different and specialization allowed them to do what they were good at and that took less effort. For example, a hunter might have an eye for spotting game and a seamstress is better at making a hide into a pair of pants.

In order for this division of labor to work, one person’s products and needs being different from another’s, money was invented. The guy with the dead bear had difficulty trading for the pair of pants because each required different skills, time, and inputs. How the trade was made was entirely up to the hunter and the seamstress and an increasingly complex network.

The bear might have taken more time and energy to produce than a pair of pants so the seamstress threw in a hat to make it a fair trade. But she was lousy at making hats and had to get the hat from a hat-maker. See, it’s already getting difficult to keep our interest.

The division of labor still exists today but it is polluted by complexities introduced by people who couldn’t get what they wanted with mutual agreement of all the parties involved.

Pollution makes us all poorer as we have to find more complicated ways to achieve our goals. For example, water close by that is not drinkable causes us to dig another well or ship water from a longer distance.

It is little glitches like these that add up to poverty and income inequality. They don’t occur naturally. They are forced on us. The only way this can happen is through misapplied or abused government power or fraud. But when all the parties involved in a financial system perform their transactions with mutual agreement and with all the facts being transparent, the most efficient use of resources is utilized.

History is written by a series of crises. The crises are addressed with bailouts of various kinds. The bailouts are deemed necessary because of the job losses or even losses of life that look imminent.

The folks who describe the bailouts as necessary undeniably have motives to interfere in our usual peaceful exchange. They turn to the government because it is easy to convince the masses that there is no other choice.

In recent years bailouts have proliferated at an increasing rate. From money printing and actual debt purchases by The Fed to tariffs, mandates, forgivable loans, and outright handouts; the perfectly logical system of free choice is polluted to benefit special interests.

Large companies can easily afford lobbyists and lawyers to deal with complicated tax and subsidy pollution. Since 1980, startup rates have gone from 14% to 7% as new companies see all the bureaucratic headaches are not worth the effort. Bailouts of established companies have stifled productivity.

The percentage of “zombie” firms (companies that can’t even pay interest, much less principle on their debt) has increased to 18% because so-called essential companies are kept alive by various bailouts.

When we see things are less affordable, we instinctively blame low wages and higher prices. A look at our polluted financial system indicates that we can’t blame vendors and employers so much as the favors divvied out by politicians as essential. Actually, an honest financial system with none of that is what is essential.

Laurie Rubel

Laurie Rubel formerly taught mathematics at Haifa University, Tel Aviv.

It’s always funny hearing the people that claim to be “chosen” calling other people “supremacists.”

This person claims math is subjective:  https://www.breitbart.com/tech/2020/08/09/brooklyn-college-education-prof-claims-math-is-white-supremacist-patriarchy/

 

About a billion dollars each of your money…

has been handed to these companies to develop a vaccine that the free market has determined to be not worth the trouble:

  • Sanofi SA
  • Glaxo Smith-Kline PLC
  • Pfizer Inc.
  • BioNTech SE
  • AstraZeneca PLC
  • Novavax Inc.

Regeneron Pharmaceuticals has received $618 million for an antibody drug.

Trump’s Operation Warp Speed is distorting the economy and draining your pockets at warp speed.

Donald Trump - Wikipedia

No Alternative

Having taken a break from writing The Alternative and feeling a bit irresponsible because of it… I’m back.

Here are some headlines from one day’s (Friday, July 31) Wall Street Journal:

Ford Posts $1.9 Billion Loss

Google Ad Revenue Declines For First Time (ever)

U.S. Economy Sees Record Downturn

Germany’s Economy is Hit Hard

Struggling Chileans Dip Into Their Pensions

Mexico Reports Sharp Slowdown

U.S. Sends $2.7 Billion Rover to Mars

Facts to consider: Daily death rate from Covid-19 (reported as such and in light of massive subsidies to facilities if a death is reported as such… well, you think about it) is down 43% since April.

GDP (gross domestic product) fell 30.5% from 1929 to the Great Depression’s bottom in 1933. Dr. Fauci and the other superior beings in DC have delivered a drop of 32.9% in 4 months. It only took 4 months to beat the downturn of the Great Depression.

These facts should weigh heavily as we go to the polls in November to decide which nincompoop will wield all that power that the Constitution specifically and futilely forbids.

Due to the obvious slant of all the media, including my WSJ, I offer this:

https://www.lewrockwell.com/2020/08/david-stockman/lockdown-lunacy-your-government-ordered-depression-has-arrived/