Saturday, September 28, 2013

Non Sequestitur created the concept of multiple exclusive currencies and markets last year in the midst of bitter budget debates. Now our nation finds itself in the same position once again. The arguments about the sequester, the debt ceiling, and possibly shutting down the government are complex, but at heart the issues boil down to this: Shall we favor the lenders (the rich) or the borrowers (the poor)?

Our situation is not surprising, really. Half the nation wants to get more than it can pay for and the other half wants to take ever-greater advantage of the first half. Half the nation wants their debts to be forgiven if they cannot pay them and the other half wants debt to haunt debtors forever no matter what their situation. Using Europe as a metaphor, half our nation is Greek and the other half is German. Since everyone's vote counts the same, half our politicians represent the "Greek" view and the other half represent the "German" view. There is no real consensus on much of our legislation, so the legitimacy of our very laws and the level of interest in enforcing them are now open questions. That is why it is hard to get anything done. Can a house divided stand?

Let us note also that our politicians are mostly rich people. Even the solutions provided by the "liberals" have a tint of the rich to them. Take student loans, for example, which were touted as a "liberal" policy. Yet the money comes from loans, not grants, and they are meant to be paid back. They are immune to bankruptcy, so no borrower will be forgiven of them anytime soon. Yes, the easy terms help and eventually the loans will be forgiven, but there is no getting around the fact that when students borrow from the government to go to school, they are signing up for twenty years or so of economic servitude to the government. That does not seem very "liberal."

Before we became, we struggled with the issues of borrowing and lending along with the rest of the U.S. On the one hand, it seems only right that competent adults should be required to obey the terms of the contracts that they freely commit to. On the other hand, we have also seen the rich take advantage of this system, negotiating their way out of their own obligations because they are "too big to fail." At the same time that they wiggle out of their own commitments, they speak of the "moral hazard" of letting the poor out of theirs -- and their minions lay off millions. Then the rich and their minions take the homes of the poor away because they no longer have jobs and cannot make their payments.

The military now speaks of asymmetric warfare between regular armies and terrorists. Similarly we may now be able to speak of asymmetric market competition and asymmetric enforcement of contracts and the law. In the U.S. we like to think that we are free and equal with one another before the law, but that is now and has always been an illusion. (Consider the African American experience, for example, if you doubt this.) The rich are more equal than the rest of us.

Once we realized that an asymmetric, unbalanced market like ours can never truly be competitive or "capitalist," we also realized that our economic system will never really work in the sense of providing the masses with ways to work, produce, earn, save, and retire in economic safety. The rich just have too big a competitive advantage. When we realized that, we became

Therefore, on "this" side of capitalism, the capitalism of the U.S. and the Euro Zone today, there are no solutions. We are trying to patch a fundamentally broken system. Our people and our politicians are arguing about which band aid to use on the surface when under the skin, the bone is broken. That is another and more fundamental reason for our current economic and political confusion. We are arguing about the wrong things. The pieces will never fit together and consensus is impossible.

These thoughts caused to re-frame the question. The question is not really about creating jobs or government spending or debt ceilings or gold standards or even shutting down the government. The question is how to re-balance our asymmetric, unbalanced markets. Why are we letting the sharks eat up the little fish? Why are we letting the rich take advantage of the poor? Of course we should not allow it.

Once we asked ourselves the correct question, the solution was simple and obvious. Separate the sharks from the little fish. As long as both the rich and the poor "swim" in the same pool of money, they cannot be separated. The next step in the solution, therefore, is to create separate pools of money, some for the rich and some for the poor. Create barriers so that the sharks cannot get into the pools of the little fish. That is what the concept of multiple exclusive currencies and markets is all about.

Read the other posts for more. We have been developing these ideas for more than a year now, so there is plenty of material to stimulate thought.

The way capitalism should be.

Socialism for the socialists and capitalism for the capitalists.

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