Sunday, October 7, 2007

The Biggest Pyramid Scheme of it All!

What a big lie! The economy is growing. The stock market is soring to new records. The US is again heralded as the world's biggest and most competitive economy. We are assured that we are richer than ever before and getting richer by the day. According to our "elected president" George W. Bush. Yet we are also told there is no longer enough money to provide an adequate education for our children, health care (Just this week, Mr. Bush just vetoed a bill to provide kids with hearth care) and safety nets for the poor (Do you think you will see your SS check? Dream on!), protection for the environment, parks (What happened to the KYOTO Treaty?), a living wage for working people, public funding for the arts and public radio (Last year the GOP wanted to cut funding for PBS.), or adequate pensions for the elderly. According to the official wisdom, even though richer (My house is worth 750k yet I am struggling to make the monthly mortgage payment.), we can no longer afford what we once took for granted. How is this possible? What's gone wrong?

A quick hint. The problem most definitely is not a lack of money. Uncle Sam can print as many bills as he wishes. The world's 450 billionaires alone have combined financial assets greater than the combined annual incomes of half the planet.

The problem is this: a predatory global banking system, drooling and helping the billionaires to squeeze more profit without caring for the people and environment. They just want to find cheaper fastest way to make more money no matter who gets stepped on.

The most scary part is that so many of us want to emulate this modern heroes.It starts, in part, from our failure to recognize that money is not wealth. Wealth is something that has real value in providing for our families and our well beings. Modern money is only a number on a piece of paper or an electronic trace in a computer that by social convention gives its holder a claim on real wealth. But if there is not a way to keep that wealth in the local community, how are we as a country going to satisfy the claims (all the money floating around) to a piece of that wealth. In our confusion we focus on the money to the neglect of those things that actually sustain a good life.

It is striking how difficult our very language makes it to express the critical difference between money and real wealth. Picture yourself alone on a desert island with nothing to sustain yourself but a large trunk filled with bundles of hundred dollar bills. The point becomes immediately clear.

During a visit to Malaysia some years ago I met the minister responsible for forestry. In explaining Malaysia's forestry policy he observed that the country would be better off once its forests were cleared away and the money from the sale was stashed in banks earning interest. The financial returns would be greater. The image flashed through my mind of a barren and lifeless world populated only by banks with their computers faithfully and endlessly compounding the interest on the profits from timber sales.

The importance of the difference between money and wealth is not limited to people who find themselves stranded on desert islands. It is basic to understanding why the more money we have as a nation the less we can afford. It is as well a key to understanding the underlying pathology of the global economic system.

If you want to keep reading click here for the full article.


Arnold said...

There is no doubt that the U.S is going in to dark economic times. But, is there a way that a regular Joe can get ready for this difficult times?

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