Isn’t It Ironic

 

It’s like rain on your wedding day

It’s a free ride, when you’ve already paid

It’s the good advice that you just didn’t take

Who would’ve thought . . . it figures

        —Alanis Morissette, Ironic

 

WARNING: THIS PIECE HAS STRONG LANGUAGE; PARENTAL DISCRETION IS ADVISED

i∙ron∙ic  (ī ränˊik) adj.  1 meaning the contrary of what is expressed  2 using irony 3 opposite to what is or might be expected  Also i∙ronˊi∙cal—i∙ronˊi∙cal∙ly adv.

Just some quick observations today (in no particular order) for your consideration about the often curious positions the Federal government and the Progressive Left that runs it take these days.  I’m sorry, I haven’t linked to everything . . . time’s a bit short, I’m not getting along with my new laptop, and most of this is relatively undisputed common knowledge, even if not loudly reported in the media.

The Obama administration gave up five Taliban generals to spring an alleged Army deserter imprisoned in Afghanistan (actually Pakistan, but who’s counting?).  And so dire was Sergeant Bowe Bergdahl’s medical condition, there was no time to consult with Congress as required by federal law (thus justifying Obama’s unilateral enactment of an “urgent need” exception to the legislation passed by Congress).  Somehow just six weeks later he’s healthy enough to return to active duty.  Yet that same administration hasn’t lifted a finger to free a Marine rotting in a Mexican jail for making a wrong turn.

A photo I.D. is required to see the U.S. Treasury building, a facility each of us owns.   But the Left in Congress screams RACISM and the Department of Justice files a lawsuit any time a State has the audacity to require that same I.D. simply to ensure that people showing up to vote are in fact who they say they are . . .

. . . Yet it drops charges against New Black Panthers caught on tape intimidating voters at a polling place.

I’m just sayin’ . . .

That same Department of Justice—which reports to the President—also sues States to prevent them from enforcing existing federal border laws.  They say that’s an exclusive job for the federal government, and none of the states’ business.  But then when the feds fail to discharge that responsibility—and indeed the administration adopts a policy of almost total tolerance—the President comes asking the States for their help to house the all-too-predictable flood of illegals.

Speaking of the border crisis, the Progressive Left sees in it a grand and indeed holy humanitarian opportunity to serve God’s children.  Yes, that does tug at the heartstrings, doesn’t it?  Until you remember that these same people crying over Guatemalan and Salvadoran 19 year old “children” who are very much alive, have said absolutely nothing about the 50 million American babies lawfully killed in the U.S. since 1972 by conspiracies between their mothers, their mothers’ doctors, and the Progressive Left other than to complain that State statutes restricting the practice to the first six months of pregnancy are somehow a “war on women.”

While we’re at it, um, Your Holiness, I’ll wait here while you have a chat with Archbishop Cordileone (Archdiocese of San Francisco, Nancy Pelosi’s (D-CA) home diocese) about the ramifications of a parishioner publicly advocating a position so emphatically not consistent with the Church’s most fundamental moral tenet, because I know the Church is concerned about the sanctity of human life and wants those taking the sacraments to be “in communion” with the Church . . .

. . . I’m still waiting . . .

Yeah, still waiting . . . I mean, I think they still teach about Henry VIII being excommunicated over a divorce,don’t they, and he hadn’t even killed anybody, at least not at that point . . .

Shall I just move on, since the Church has no credibility any more on this issue when the second most public and powerful female on the planet consistently claims to be Catholic yet consistently declares herself  against human life and there is exactly zero reaction from the Church of which she laughably claims to be a part? . . .

OK

The Obama administration’s spy and security apparatus is tapping your phones, watching your email and internet traffic, and sending drones to shove GPS tracer chips up your backside while you sleep (okay, I mostly made the last one up—I hope).  Yet it has spent the last six years avoiding any substantive engagement with the press, and has fought tooth and nail to provide any information to Congress or to the American people about what it’s doing.

While it was shielding—or destroying—documents and stonewalling Congress, the administration also put up a fence to keep veterans and everyone else from accessing monuments on the National Mall.  And it maintains a fence patrolled by armed K-9 units to keep U.S. citizens away from the White House.  By the way, both facilities are owned by the American people, the very people being kept out.  Yet the Obama administration specially opened the National Mall for a pro-illegal-immigration rally, and steadfastly refuses to fully deploy a fence to help secure the Southern border. This, despite the 95% decrease in illegal border crossings in San Diego (recognized even by NPR) once the fence there was complete.

Obama and the Left crammed through Congress a sweeping takeover of some 1/6 of the economy with the passage of FUBARCare.  They passed that monstrosity over the loud objections of a significant majority of Americans in part on the promise that its requirement that people purchase a product whether they like it or not was not a tax.  Then having jammed it down the American peoples’ throats, they then defended the supposed constitutionality of that legislation before the Supreme Court on the basis that it was in fact . . . a tax.

The Obama administration funneled billions of dollars of taxpayer money to campaign donors via bad “loans” to dubious “green energy” startups like Solyndra, yielding little except sophomorish “aw shucks” jokes that “shovel-ready” wasn’t as shovel-ready as they thought.  Meanwhile it used the IRS—you know, the agency that collects that tax money in the first place—as a political weapon against Conservative groups.

And then lied about it.  And then covered it up.

The administration screams bloody murder that law-abiding citizens—presumably that’s you—need to be deprived of their Constitutionally-guaranteed right to keep and bear arms.  But that same administration shipped huge numbers of military grade guns—guns you are in fact already prohibited from owning in the U.S.—to the chronically homicidal Mexican drug cartels, resulting in hundreds of dead Mexicans and at least two dead Americans.

And then lied about it.  And then covered it up.

While it was busy arming Mexican drug lords with one hand, the administration with the other was deploying armed federal agents to “monitor” peaceful Tea Party rallies.   Yet when the “occupy” demonstrations spent weeks disrupting commerce, vandalizing private property, crapping on police cars, trafficking in illegal and dangerous drugs, and committing rapes, the administration and Progressive Left did, well, nothing—except cheer them on. 

Speaking of rape and cheering them on, the Progressive-controlled Democrat Party has been pushing the mantra of the Right’s “war on women” for several years.  Yet the keynote speaker at their 2012 national convention was serial cheater and sexual abuser Bill Clinton.

Are you kidding me? You’re going to accuse me of waging a war on women just because I don’t want to pay for your abortion, and you’re going to invite Bill-I-seduced-a-20-year-old-intern-to-blow-me-in-the-oval-office-and-then-I-ruin-her-life-on-national-TV-Clinton to headline your convention?

I don’t normally use this language in this space—In my private life, those who know me know better, so sue me—but there’s really no other way to put it: your government-of-the-people-by-the-people’s reaction to you is: fuck you.

That’s your federal government these days in the hands of the Progressive Left, where everything is doublespeak, and who wins and who loses has everything to do with who you are.  And have you noticed who’s always on the losing end, even if it means flipping prior logic on its head?

Isn’t it ironic? Yeah, I really do think.

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The Root of Money

Money, it’s a gas

Grab that cash with both hands and make a stash

         —Pink Floyd, Money

 

Have you ever asked yourself what money is?  I mean, what is it, really?

It’s not what you think, and you’re not going to like the truth.

As children (at least those of us who grew up before the ubiquitous use of credit and debit cards), we at some point gain an awareness of money as the metal coins and green paper rectangles our grandparents sometimes gave us to stick in our piggy banks.  But that’s not really “money”; that’s “cash,” or “currency,” which are only symbols or representations of money, but are not money in themselves.

In Ayn Rand’s Atlas Shrugged, copper baron Francisco d’Anconia gives an extended lecture on the nature of money as a means of exchange:

Money is a tool of exchange, which can’t exist unless there are goods produced and men able to produce them.  Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value. 

Conceptually, this is an excellent theoretical description of what money was supposed to be.  And in a system in which money is in fact a representation of value, Miss Rand’s instruction above would be accurate.  Unfortunately, that’s not the world in which we live.

If we were ever in a world where money represented actual value, I long ago accepted the fact that that was lost in 1933 when the U.S. government effectively severed the dollar from, and criminalized private ownership of, gold.  At that point, money ceased to be tied to any intrinsic value, and instead derived its worth merely from the say-so of the government. In other words, money no longer represented value, but represented nothing.

I’ve come to learn that it’s even worse than that. To understand this, you have to understand where money really comes from.

If you’re like me, you’ve believed that the problem with “fiat” money—money with no backing commodity—is that the government can and will devalue it by printing more cash.  While it’s true that the government does that, and it’s bad, that’s only a small fraction of the amount of money that “exists.”  The vast majority—95% or more—of money isn’t created by Treasury printing presses, or even by the government at all.

OK, Rusty, where does money come from?

Almost all money in existence is actually created by private banks, and “exists” only in the form of accounting entries of bank credit.  Here’s how it works.

Most of us are under the impression that what banks do is collect money from their depositors, and loan that money out to borrowers.  But because of the practice called “fractional reserve banking,” that’s not in fact how banks operate.  Under fractional reserve banking, banks need only actually hold a small portion of real assets—say, 10%—relative to the amount of loans they can grant.  So a bank with assets of $1 million in assets can make $9 million in loans, thus creating $9 million in “money” in the process.

Consider this example.  Barry goes to BankAmerica for a loan of $10,000.  Barry signs the loan contract, thus indebting himself to BankAmerica. BankAmerica does not then reach into a depositor’s safe deposit box and hand Barry $10,000 in cash.  Instead, it simply types $10,000 into a computer showing the data for Barry’s account.  Voila! $10,000 in money is created based on nothing but Barry’s debt to a bank.

But it doesn’t stop there.

Barry uses the $10,000 to buy a car from Bill, who deposits the money into his account at Citibank.  Under a 10% fractional reserve requirement, Citibank then sets aside $1,000, and now has $9,000 to give a home loan to Hillary, if she can qualify.  Citibank makes a computer entry of $9,000 in Hillary’s account, thus creating an additional $9,000 of money—remember, Bill still has the original $10,000—and she then writes a $9,000 check to Joe.  Joe deposits the $9,000 with Chase, which sets aside a reserve of $900, and then has $8,100 to loan to Paul, just because he likes debt.  Chase makes a computer entry of $8,100 in Paul’s account, thus creating an additional $8,100 of money; Bill still has the original $10,000, and Joe still has the secondary $9,000.

Thus far in our example, the banks have created $27,100 in money.  This process will repeat itself over and over, each time the bank retaining 10% and creating new money by loaning the remaining 90%. Ultimately, from Barry’s original debt of $10,000, the banks will create $100,000 in new money.  And every dime of it based on nothing but debt.

Some 95% of all money is created in this fashion: by private banks from debt.  Worse, what do you suppose the banks do with the 10% of assets they have to hold as reserves?  Most of it they invest in government bonds—debt.  Those bonds count as assets for purposes of the reserve requirement, thus enabling the bank to make even more loans, creating even more money out of debt.

So what the bankers have done is cleverly fashioned an industry where collect interest by loaning money they . . . do . . . not . . . have.

The ugly truth is, the money in your bank account isn’t based on value.  It’s not even based on nothing.  It’s based on debt—less than nothing.

But here’s the real punch line.  When BankAmerica makes its loan to Barry, it only creates the $10,000 it typed into his account.  It does not create the additional interest Barry has to pay back on top of the principal.  And that’s true on down the line as successive banks made subsequent loans and created additional debt-money.   This leaves us with a sobering mathematical reality:

There isn’t, and can never be, enough money in existence for everyone to be able to pay back everything owed to the banks. 

Necessarily, inherently, inevitably, some people will not be able to obtain enough money to repay all they owe the bank in both principal and interest.  At that point, the bank forecloses—the bank gets that person’s stuff.  Some will say that’s a bad deal for the bank, because the bank will then have to sell it at a loss, but at a loss of what?  All the bank is out is the remaining unpaid amount of principal, which was money the bank never had in the first place.  The bank makes less than it would had the borrower repaid the loan, but the bank still ends up with more money than it had before it made the loan.  And because essentially all money is based on debt owed to the banks with interest, over a long enough time horizon all the money and all the stuff ends up in the hands of the banks.

Even those who can manage to repay their debt are on the losing end of this proposition.  As the banks create more and more debt-money, the purchasing power of all money diminishes.  Since the creation of the Federal Reserve in 1913 the U.S. dollar has lost over 90% of its purchasing power.  Your ability to acquire goods and services is diminishing just as surely as if someone were physically taking dollars from you.  All by this fractional reserve system managed by the Federal Reserve, which—contrary to deliberately-deceived common belief—is in fact not a branch of the government, but an organization made up of private banks.

This doesn’t happen in a system where money is based on a value—like gold—and can only be created by the sovereign—as the Constitution requires.  But that’s not where we are.  Money is no longer based on value, and the sovereign has ceded the power of creating money to the private banks, which then create money based on debt owed to themselves through a system created and governed by themselves.

Give you one guess as to who, at the end of the day, gets to pass “Go” and collect $200, and who doesn’t.