Thursday, November 10, 2011

Free Your Mind and Think...

 (c) 2011 by Tom King

 Saw this little gem (right) posted on the Internet. The author should take his own advice to FREE YOUR MIND AND THINK.

Mr. Lester demonstrates a profound lack of understanding as to what money really is and how it works.  Mr. Lester (I'm not sure what the "B" stands for, but here, I think I'll call him, Bob) seems to think money is like cats or old newspapers - something we collect that has little or no purpose once we've hoarded it up. If we keep control of large amounts of money, old Bob assumes we keep others from having any. Bob apparently subscribes to the idea that money and economics is a zero-sum game. Either that, or I suspect Mr. Lester's been watching "Hoarders" on TV, looked around his apartment, felt threatened and needed someone else to identify as a hoarder to take the heat off his own conscience.

Actually, wealthy people, by and large (and with the possible exception of Scrooge McDuck), do use their money - spreading it around, if you will. They buy goods and services, they build businesses that hire people, they lend their money to cities in the form of municipal bonds so our cities can spread the wealth they don't have and keep your streets clear and repaired, your sewers and water pipes working. They buy shares in companies that allow those companies to hire employees to make goods and sell them to us in places like Wal-Mart. Their money builds stores where we buy food. Their money is lent to states and counties (bonds again) so they can build bus lines, airports and rail transit. They pay virtually all of the taxes in this country. More than half of us pay no income tax at all. Bob imagines that wealthy people have these big giant buildings in their backyards, like Scrooge McDuck, where they go and swim in their cash once in a while.

It isn't so.  Bill Gates is fabulously wealth, true. His enterprises support the state of Washington's welfare programs practically all by themselves through the property and sales taxes Microsoft pays. If Microsoft and Boeing's owners gave away all their money, as Bob suggests, their companies would soon shut down. They would stop making money and employing people and pretty soon all the money they gave away would be used up and Washington would have to stop feeding the poor, running transit lines and homeless shelters.  State health care and all the state-run liquor stores would have to shut down because they would no longer be subsidized by taxpayers like Boeing and Microsoft.

Good cow, people. Money is not like cats.  If you hoard cats, you have to feed them, take them to the vet and clean up their crappy litter boxes. A cat never hired anyone, never started a company, nor built a road. They consume, producing only good feelings and a lot of soiled kitty litter for the cat owner.  Money is most useless when it is sitting in a vault. Most money is imaginary anyway - just numbers in a computer that tells you how much money you would have if there were actually that many greenbacks in their vault and not just in their computers.

If everybody tried to turn everything of value into cash so they could swim in their money, the U.S. treasury would be up printing hundred dollar bills nonstop, 24 hours a day for months and months and months to create the piles o' cash Bob imagines are sitting around awaiting redistribution. Money has value because it works. Even sitting in a savings account, your money helps me buy my house because it is used to fund my mortgage. I pay it back with interest. If you check it out of the bank so you can take a swim, you don't earn interest and that's all a savings is good for anyway. That and I don't get to build my house, the carpenters have lost their jobs and so on and so on.

There's a serious flaw in Mr. Lester's logic.

I'm just sayin'

Tom King


Jim Lockwood said...

Again Tom, you nailed it. But I want to add one more flaw in Bob's analysis. Others don't want my cats or newspapers! See, the fact is, Bob WANTS that so called hoarded money. That is why he's whining. He has no interest in the cats or the papers, he wants other people's cash.

Anonymous said...

listen guy, those people who are so called "hoarding" money have had education and worked hard to achieve CEO status. last time i checked, hoarding cats and newspapers dont feed a family, they take away from the family because now you have less space in your house and you have to pay to feed cats.. money is stored in these things called bank accounts i dont know if you have ever heard of them....stop putting non sense into peoples heads and post a quote that has some motivational value to it you hypocrite.

Mr. JTewell said...
This comment has been removed by the author.
Mr. JTewell said...

If banks only ever create the principal, where does the money to pay back the interest come from if it was never originally created in the economy in the first place ? By more debt creation... Awesome. The capitalistic solution to this problem is an infinite growth model on a planet with finite resources. Great. Our continuous growth economic paradigm leads to natural resource exacerbation and ecosystem destabilization through the requisite of cyclical consumption or the "use and throw away product philosophy" needed to keep the system afloat. Other things such as inferior product creation through the deliberate withholding of efficiency or "planned obsolescence", and the exponential loss of jobs through the implementation of advanced automation or "technological unemployment" are just a few major problems we see as a result of the cost reduction and efficiency strategies employed by businesses in order to survive in the competitive market model. The central banking, fiat currency creation schemes used around the world are perfected examples of ponzi monetary expansion and have no link to reality or natural resources and their renewability rates, and thus is unsustainable by its very design.

Money is fictional, and life has become an abusive and competitive game of Monopoly where pockets of society will always be deprived due to the inherent inadequacies of the socio-economic model itself. We are at such an advanced stage in our technical capabilities as a species, that it is negligence on our behalf not to help society evolve into a sustainable socio-economic paradigm where the needs of the entire global civilization can be met while simultaneously preserving our environments for future generations. Through the application of the scientific method for social concern, and the implementation of modern clean technologies to our infrastructure, we can drastically improve - not perfect - but vastly enhance the human condition on our planet. The choice lies with us.

"Money is only important in a society when certain resources for survival must be rationed and the people accept money as an exchange medium for the scarce resources. Money is a social convention: it is not a natural resource, nor does it represent one. It is not necessary for survival unless we have been conditioned to accept it as such.” -Jacque Fresco

"Those worlds in space are as countless as all the grains of sand on all the beaches of the earth. Each of those worlds is as real as ours and every one of them is a succession of incidents, events, occurrences which influence its future. Countless worlds, numberless moments, an immensity of space and time. And our small planet at this moment, here we face a critical branch point in history, what we do with our world, right now, will propagate down through the centuries and powerfully affect the destiny of our descendants. It is well within our power to destroy our civilization and perhaps our species as well. If we capitulate to superstition or greed or stupidity we could plunge our world into a time of darkness deeper than the time between the collapse of classical civilization and the Italian Renaissance. But we are also capable of using our compassion and our intelligence, our technology and our wealth, to make an abundant and meaningful life for every inhabitant of this planet." -Carl Sagan

Here is an introduction to how a balanced load, sustainable economic model could function in a state of dynamic equilibrium between our species and the Earth's environments, while simultaneously ensuring universal human rights:

Tom King said...

Whew, you do wax on, JT.

Let me address a couple of points before I let this rest.

The "natural" eco-systems of the Earth are mimicked by the eco-system of free market capitalism. Natural consequences serve as the regulatory agencies of the system, whether it's a forest or Wall Street.

Where things get screwed up is when someone thinks a group of smart humans are capable of controlling something as complex as an economy and successfully making everyone happy. It's the great temptation of smart people like Albert Einstein to think that somehow smart people should be able to manage it. The problem is they aren't smart enough.

Two things are necessary to create that perfect balance you speak of between nature and man's society. They are: (1) An intelligence that is omnipotent, omniscient and omnipresent - God in other words. (2) A mankind consisting only of people who trust the intelligence running things utterly and who are obedient to Him.

Unfortunately, most folk who believe in this utopian ideal, reject the idea of God, so they are left with imperfect intelligences trying to rule an unruly mob.

Why are they always so surprised when the whole mess crumbles like a house of cards? Germany fell. Russia Fell, Cambodia fell. China is on the brink of falling. All were supposed to become perfect societies. Hitler even had a plan to deal with the "imperfect" people problem.

It's just too complex. What works better is to let small communities coelesce and deal with local problems as they occur. The economy requires little twiddling so long as the rights of every person are respected and bullies are not allowed to game the system.

The trouble is, the more centralized the authority, the easier it is for thugs and bullies to game the system.

Sorry, JT. Your pretty model will self destruct because of the problem of sin.