| Subject: | Re: [socialcredit] Richard C. Cook: Monetary Crank | | Date: | Saturday, September 6, 2008 12:49:39 (-0600) | | From: | Martin Hattersley <jmartinh @....ca>
|
| In reply to: | Message 5514 (written by Rodney Shakespeare) |
It seems to me that, if we are to deal with this "dog's breakfast", we need
to be completely clear on what the problem is, before we propose solutions.
I think we can boil down Douglas's analysis to the fact that when business
capital is financed by new bank credit rather than by savings, the rate of
flow of purchasing power to consumers becomes out of synch with the rate of
flow of costs that need to be recovered from the sale of goods and services
on the market. We get shortages and rising prices in the period of
expansion, and products that cannot be sold and restrictions on production
with consequent unemployment when the expansion ceases.
The question of the charging of interest on loans is a different problem,
and not really relevant to the above analysis.
Similarly, Henry George's analysis of the effect of rents on the gap between
rich and poor is, I believe, valid, but deals with another situation,
although both Douglas and George are looking at the same phenomenon, that
is, of what should be public property being monopolized by special
interests.
If we are agreed on this, then it is open to us to advocate different
techniques, depending on the political situation, as means to correct what
is going on.
Martin Hattersley, 5929-189 St.,
EDMONTON AB CANADA T6M 2J1
Phone (780) 483-5442
e-mail <jmartinh@shaw.ca>
----- Original Message -----
From: "Rodney Shakespeare" <rodney.shakespeare1@btopenworld.com>
To: <socialcredit@elistas.com>
Sent: Friday, September 05, 2008 9:42 AM
Subject: Re: [socialcredit] Richard C. Cook: Monetary Crank
Dear Alan,
The situation is a complete dog's breakfast.
1. a) It would be helpful if, for once, Stephen Zarlenga and Richard
Cooke (and, yes please, other members of this list) state specifically
whether they do, or do not, agree with national bank-issued interest-free
loans (administered by the banking system which may make an administration
charge) for:--
a.. public capital projects -- bridges, sewage works, hospitals
b.. environmental capital projects (including clean electricity
generation)
c.. micro-credit
d.. student loans
e.. medium and large businesses (IF thereby wider ownership is furthered
and productive capacity spread)
f.. small business/farms
g.. homes (when banking system not able to create money and, say, 80%
loans
NB All such loans are repayable and cancellable. The issuance is for the
purposes of developing and spreading productive (and the associated
purchasing) capacity so as to achieve a Say's Theorem balance of supply and
demand and also forwarding social and economic justice.
b) They might then like to state specifically if they agree with
debt-free issuance, (roughly) to what amounts, for what purposes and in what
circumstances (e.g. restriction of banking system ability to create money).
c) They might then further wish to say specifically whether the AMI
Monetary Act does, or does not, contain a National Dividend (defined as a
reasonable basic income). Bill Ryan is right -- it doesn't.
It is about time that both Stephen and Richard clearly said where they stand
and did not hide behind general phrases like "we must spend and lend" which
phrases have no meaning until given specificity and, in any case, allow
enemies of monetary reform to claim that large-scale inflationary funny
money is being proposed.
I would like to add that I greatly admire Richard's spirited analyses of the
overall situation and his understanding of the corrosive effects of interest
but, being opposed to interest, should result in understanding of
interest-free loans yet, in his case, this does not appear to be the case
(I could be wrong).
2. Bill can quote Calvin to his heart's content but the real issue is
whether interest is necessary when the issuance is for the purposes of
developing and spreading productive (and the associated purchasing) capacity
so as to achieve a Say's Theorem balance of supply and demand and also
forwarding social and economic justice. In these circumstances, interest is
not necessary because the money comes from the national bank (and is
administered by the banking system which may make an administration charge).
There is no objection to Bill and his colleagues (and the banks) lending
their own money and charging interest -- they have the money and if you want
it you will have to pay their demand. BUT that is a completely different
matter from the supply emanating from the national bank for the
above-mentioned purposes.
Rodney Shakespeare.
----- Original Message -----
From: Adavans@aol.com
To: socialcredit@elistas.com
Sent: Wednesday, September 03, 2008 3:46 PM
Subject: Re: [socialcredit] Richard C. Cook: Monetary Crank
I ran across Zarlenga a number of months ago and was impressed with his
vehement rejection of Social Credit principles. My guess is that Richard
Cook's involvement with Zarlenga is kind of an uneasy dance that involves
compromise and reduction of principles to almost the least common
denominator.
With that in mind I can see why Richard Cook might promote something that
isn't 100 percent what he wants but comes the closest to addressing the
issues he is concerned with, even if he is only getting 50 percent of what
he really wants as an advocate of Social Credit.
Regards
Alan
In a message dated 9/3/2008 9:31:23 A.M. Central Daylight Time,
johngrawson@hotmail.com writes:
You appear to have missed a lot of Richard's material.
His policies are identical with Douglas, including the "price discount"
which I consider unworkable, but with two exceptions: One the immediate cash
payment to consumers. We could not do that here, but I think perhaps your
economy is so strong and so depressed that it might be practicable and
perhaps necesary. The other is use of the nation's credit for
infrastructure. I believe that the debt structure has grown so much since
Douglas' time that this is absolutely necessary. It certainly worked here
when our first NZ Labour govt. was applying monetary reform principles.
I believe it is no accident that deep thought over the years here by our
movement coincides almost exactly with that of a man of Cook's stature.
He appears to have a more complete grasp of the situation than Zarlenga.
Your term "crank" is very familiar here. It has invariably come from
orthodox opponents who dared not counter us with reason.
John R.
> Date: Tue, 2 Sep 2008 08:42:12 -0700
> From: william_b_ryan@yahoo.com
> To: socialcredit@elistas.com
> CC: rickycook21@hotmail.com; ami@taconic.net
> Subject: [socialcredit] Richard C. Cook: Monetary Crank
>
> Appended below is Richard Cook's recent Internet posting. It is a
great disappointment to me in many respects. Gone is even the pretense of
Social Credit theory. It is heavily influenced by Stephen Zarlenga, a
Georgist who argues that Henry George was a Greenbacker!
>
> The A + B theorem is replaced by the fallacious "debt virus" theory
that we have discussed previously. The "usury" argument is an Islamic
fundamentalist slam against modern informed Christianity, which we have also
discussed previously, so I'll just briefly outline the arguments now.
>
> In Zarlenga's "American Monetary Act" is a provision for a so-called
"citizens' dividend." Says Cook: "The Act also includes a provision for a
citizens’ dividend, similar in some respects to the Alaska Permanent Fund,
which would inject desperately needed purchasing power into the economy
without additional government debt or taxation."
>
> Lest anyone think that this "citizens' dividend" is similar to the
Social Credit proposal for a dividend, read this from the act itself, as
posted on Zarlenga's website:
>
> "SEC. 506 INITIAL MONETARY DIVIDEND TO CITIZENS Not later than 90 days
from the effective date of this section, the Secretary, in cooperation with
the Monetary Authority shall provide recommendations to Congress for payment
of a Citizens Dividend as a tax-free grant to all U.S. citizens residing in
the U.S. in order to provide liquidity to the banking system at the
commencement of this act, before governmental infrastructure expenditures
have had a chance to work into circulation."
>
> Please note that in Zarlenga's plan the dividend is not continuing, as
in Social Credit, but paid only once at the beginning of the plan's
implementation "before governmental infrastructure expenditures have had a
chance to work into circulation."
>
> As to the "debt virus" argument, Cook quotes Bob Blain:
>
> “Loans created only the principal. Interest had to be paid out of
principal. So payment of interest reduced the money supply and slowed
economic activity. Recovery could come only when new loans were taken out at
least equal to interest paid.”
>
> The second sentence is simply a false statement of fact. Banks create
customer deposits not only through the principal of loans, but when they
spend, through reciprocal economic activity, salaries, wages, dividends and
ordinary business expenses into the community, which become available to pay
interest back to the banks.
>
> As to the religious argument, I have as the authority John Calvin's
letter of 1545, as related by Norman Jones of Utah State University, that
two quite different words in the Semitic languages were inappropriately
translated as "usury" into the European languages.
> http://www.geocities.com/new_economics/Calvin-usury.txt
>
> This is supported in modern Islam.
> http://www.geocities.com/new_economics/Quran-usury.txt
> -------------------------------------------------------------
>
> FAIR_USE_CLAIMED
>
> Democrats in Denver Should Skip One of Their Parties & Read the
American Monetary Act
>
> by Richard C. Cook
> Aug. 27, 2008
>
> How are things going at the Democratic Party National Convention in
Denver this week?
>
> Are they talking about the fact that the Western world is run by an
international financial elite headquartered in London, the financial
capitals of mainland Europe (such as Frankfurt, Hamburg, Amsterdam, Paris,
and Milan), and, of course, New York City?
>
> Are they mentioning at their cocktail parties that the financial elite
exert control over the world’s population through the cartels that make up
the world’s producing economies and through the civilian and military
bureaucracies who work for the governments that kow-tow to them?
>
> Of course they know that the most important cartels are those which
control energy resources. And that of these, the commodity of central
importance is oil. But is any of this helping them draw conclusions
regarding the doubling of oil prices during the last year or about the
largest oil company profits in history?
>
> Also, they should be drawing the right conclusions from the fact that
every private and pubic enterprise operates on the basis of a money economy,
though it would be more accurate to call it a credit economy. This means
that whoever controls the issuance of money and credit controls the world.
And the world’s monetary systems function on the basis of money and credit
being introduced into circulation through loans from the banking system,
loans for which interest is charged. So what should that tell them?
>
> In fact, they should be pointing out to each other and their TV
viewers that the charging of interest for the use of money is a chain around
the neck of everyone on earth. Further, that these cumulative interest
charges are built into the price of every product that is manufactured or
consumed. And that growth of debt means price increases too.
>
> They should be honest in making it clear that the world is a
master-slave society, that the slaves are those who borrow and pay interest,
that the masters are those who collect the interest, and that this unjust
system has existed in one form or another for thousands of years.
>
> The candidates and delegates are talking about the aspirations of the
American people and how everyone should have an opportunity to achieve their
dreams. But if the United States were a free nation, they would also be
talking about a financial system that destroys people’s dreams.
>
> Unfortunately, the highest rung the candidates and delegates have been
able to reach on the ladder of modern-day slavery is the need for more
jobs—but they fail to note that jobs are not only the means by which people
live, but also the instruments for them to pay the heavy burden of interest
the masters of finance require.
>
> What they won’t say is that the world economy is based on usury,
something religions used to consider a crime (and which Islam still does).
Usury is the charging of interest for the use of money. As the religions
backed off from their prohibitions of interest, usury became just excess
interest. But that’s not what the word really means.
>
> So what have over two centuries of usury done to the United States?
>
> The best answer ever given to that question was contained in a paper
entitled “Revisiting U.S. Public and Private Debt” published in January 2005
by Dr. Bob Blain, Emeritus Professor of Sociology at Southern Illinois
University. The paper updated an earlier study by Dr. Blain published for
the United Nations Educational, Scientific, and Cultural Organization
(UNESCO) in the International Social Science Journal, November, 1987, Paris,
pages 577-591.
>
> In his paper, Dr. Blain examined the growth of total public and
private debt in the U.S. Total debt includes “the debts of governments
(federal, state, and local), corporations, farmers, home mortgages, and
consumer, commercial, and financial debts.”
>
> In his analysis, Dr. Blain began with data from the Bureau of Economic
Analyses of the United States Department of Commerce which covered the years
1916-1976. After that year the Bureau stopped publishing the data.
>
> The figures showed that from 1916-1976, total U.S. debt grew from $82
billion to $3,800 billion ($3.8 trillion). But most of that growth was
during the last 21 years, from 1955-1976, when it began to grow
exponentially. Dr. Blain wrote, “The consistency of the pattern suggests
that some imperative is at work, something that requires debt to increase.”
>
> Dr. Blain found the answer by researching American history. He wrote:
“Then I read G.R. Taylor’s 1950 book, Hamilton and the National Debt, which
described the debate over Alexander Hamilton’s plan to fund the new economy
with borrowed money.” He continued:
>
> “The most revealing account was a speech by the first congressman from
Georgia, James Jackson, on February 9, 1790, in which he predicted that
adoption of Hamilton’s funding plan would lead to the explosive growth of
debt. Jackson said, ‘Though our present debt be but a few millions, in the
course of a single century it may be multiplied to an extent we dare not
think of.’” (Annals of Congress, Vol. I, February 1790, pp. 1141-2)
>
> From the very beginning, the U.S. had a monetary system based on
borrowing and debt. First came the thousands of state chartered banks that
began operating late in the Revolutionary War period and continued in one
form or another until today. Then there were the two early central banks:
the First Bank of the United States (1791-1811) and the Second Bank of the
United States (1816-1836). Today’s national banking system began during the
Civil War with the National Banking Acts of 1863-64. Then there is the
system we are living under today, the Federal Reserve, chartered by Congress
in 1913. Even during the times when the government has sold its debt
directly to the public, as with war bonds, savings bonds, and Treasury notes
and bills, that too has been money borrowed at interest.
>
> Although there have been times in history when money entered into
circulation other than through debt, such as with coinage and the Civil War
greenbacks, those were exceptions and today are of little importance.
>
> Dr. Blain estimated that from the time Alexander Hamilton placed the
U.S. under a debt-based monetary system until today, the debt has compounded
at 5.8 percent annually. The big problem with this system, he said, was
“that no money was created to pay interest.” He continued:
>
> “Loans created only the principal. Interest had to be paid out of
principal. So payment of interest reduced the money supply and slowed
economic activity. Recovery could come only when new loans were taken out at
least equal to interest paid.”
>
> Dr. Blain concluded, “As long as the money supply of a nation is
created as debt costing interest, debt must grow by compound interest.” From
a longer-range view, it’s a system that is constantly collapsing and that
must constantly be bailed out.
>
> Dr. Blain next sought to update his figures past the 1976 data from
the Bureau of Economic Analyses. Turning to the Federal Reserve’s series on
“Total Credit Market Debt Outstanding,” he found remarkably similar
indicators.
>
> He found that adding data from the Federal Reserve from 1945 to 2003
showed the “debt explosion” continuing. In 1945 total debt was $463.4
billion. In 2003 it was $44,967.7 billion ($45.0 trillion). When he
projected the debt level for 2010, he arrived at a figure of $74.9 trillion.
By this time the debt curve was climbing so steeply there would be almost a
doubling of the amount of total debt in only nine years.
>
> It might be argued that these figures do not take into account
inflation. This is because lending at interest is the cause of inflation.
The dollars still have to be repaid with interest. The problem occurs when
economic growth, measured by GDP, does not keep up.
>
> Looking at the growth of GDP from 1945 to 2003, the increase was from
$223.1 billion to $10,987.9 billion, a factor of 49. But the debt ($463.4
billion vs. $44,967.7 billion) grew by a factor of 97, almost twice the rate
of GDP growth. Thus the total debt burden on the economy has doubled from a
ratio of 2:1 to more than 4:1 (though it was much less than that during the
early days of the nation).
>
> But with continued compound growth of debt and a slow- or no-growth
state of the economy as we head into a recession, we are starting to see
what Dr. Blain called an “acceleration to meltdown.” He wrote:
>
> “We are buying more and more in the same amount of time. Witness the
efforts of people to get rid of their excess through yard sales, storage
units, and big trash pickup days, and the massive size of what are
euphemistically called landfills. While two billion people in the world lack
basics such as clean water, food, and shelter, Americans throw away their
microwave ovens, televisions, computers, refrigerators, furniture, and cars.
Meanwhile, acceleration is applauded as increasing productivity. It’s like
arguing that cancer is good because it grows.”
>
> These are the things the Democrats in Denver should be talking about,
instead of going to so many parties. They should be making note that the
U.S., to quote economists close to the Federal Reserve, is “functionally
bankrupt.”
>
> In fact, the debt this nation owes to the banks, to foreign creditors,
and to each other can never be paid off. Further, one big reason for all of
our fruitless military endeavors overseas may simply be to escape unpleasant
economic realities at home. But this is pointless. Nothing creates more debt
than war, as the bankers have always known.
>
> The only solution is to adopt a monetary system that is not based on
debt. Dr. Blain makes a couple of specific recommendations: 1) “Stop using
percentage rates to calculate charges for the use of money”; and 2)
“Congress must supply the economy with a money base that is debt-free and
interest-free.”
>
> The second point is a call for a new monetary system, not one based
solely on lending by the banks or on government borrowing. One organization
that has developed a blueprint for such a system is the American Monetary
Institute (AMI), headquartered in Chicago. The director of the AMI is
Stephen Zarlenga, author of a massive, groundbreaking work: The Lost Science
of Money (AMI, 2002). Zarlenga’s assistant is Jamie Walton, a monetary
reformer from New Zealand.
>
> AMI will be holding its fourth annual conference in Chicago on
September 25-28. Expected as keynote speaker is Congressman Dennis Kucinich,
whose wife Elizabeth once worked as an intern at AMI. Dr. Bob Blain will be
a featured speaker.
>
> On the AMI website at www.monetary.org is a remarkable document, the
American Monetary Act [.pdf] The product of several years of work by
Zarlenga and his network, which now includes a number of local chapters
around the country, the American Monetary Act would replace today’s
debt-based monetary system with one where the government spends or loans
money directly into circulation.
>
> Under the Act, the Federal Reserve would be retained as a national
financial clearinghouse but would no longer be a bank of issue. The system
would be overseen by a Monetary Control Board within the U.S. Treasury
Department. The Act also includes a provision for a citizens’ dividend,
similar in some respects to the Alaska Permanent Fund, which would inject
desperately needed purchasing power into the economy without additional
government debt or taxation.
>
> Also promoting a citizens’ dividend, by the way, is Stephen Shafarman
in his important new book, Peaceful, Positive Revolution. (Tendril Press,
2008)
>
> It’s the American Monetary Act the candidates and delegates in Denver
should skip one of their parties to read, because it’s the only way any of
their hopes for America can ever be realized. Says AMI’s Jamie Walton:
>
> “This is a crucial time. Things are happening. We have got some key
media people talking and writing about our kind of reforms. The inertia is
starting to yield. Things are starting to roll. The worsening conditions in
2009 will give us a once-in-a-lifetime chance to be heard above the
propaganda.”
> -
>
>
>
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