What makes a corporate entity too big to fail? Corporate money and influence over legislators is the single variable that allows some businesses to be allowed to be bailed out with tax payer dollars! This is a violation of the premise of capitalism.
Capitalism must have winners and losers determined not by investment, but by production. Investment speculation, interjects into the market false value in actual good produced.
If the general population understood how the market works, they wouldn’t do it! The market is social deceit at its grandest level and will result in it economic destruction eventually.
Once the investment cycle begins, it can’t be stopped until it crumbles under its own weight. This is the law of economic physics. Granted, you can create the faÃ§ade for a period of time but you cannot maintain it forever.
The market must have losers in order for the winners to make money. The safest place that the investment manipulators get their money is from those who do not understand how the market works.
While the corporate manipulators scrape real money off of the top, those unsuspecting, reap very little to nothing as their investments are eaten up by inflation.
Those who invest in the market are not investing in a real product, they think they are but they are not. You’re not investing in Apple or Goldman Sachs, you’re betting against others who are betting with you while the dealer is paid real money for their services.
Real money is money paid for a service; however, investment money does not represent a real product. While real money can be invested to make real products, investment money is used for marketing which results when the cost of currency is inflated by the artificial cost of manufacturing due to investment. The market is a scam, a Ponzi scheme.
When the market collapsed in 2008, this occurred because the market price of goods manufactured, such as housing, became so inflated that the market could no longer afford to buy them. However, this didn’t stop the manipulators from continuing to sell the high cost of manufacturing. Why did this occur? The market manipulators knew this was going to happen and they also knew that “they” were going to get bailed out. Those who control the market also control our legislators. Too big to fail, too big to jail! They can do whatever they want and escape prosecution.
Any economy needs new investors. Ask any mayor of any city… the key to prosperity is the ability to bring new money into their town. The reason for this can be found in the game monopoly. When you play monopoly, the object of the game is to wind up with all of the money. However, in real life when one person has all of the money, everyone gets poor and the city becomes a wasteland or the winner has got to give all of their winnings back to the public from which it came. However, this second scenario is the least likely course of action. The manipulators must bring new money in. This keeps economy on an even keel, up to a point.
This need for new investors has taken those who manipulate the market on a worldwide quest for new money. We now have an international market. It’s no longer just foreign investors at the highest level. It is the guy with a computer betting on the market via his pc in his living room. What happens when there is no new money to invest?
The market is so inflated, that the only thing holding it all together is “promissory inflation”. This is a term of my own creation which defines an economy which is held together by the ability or promise of a government to collect money and repay debt. Now, our economic situation has gotten so out of hand, that the U.S. government must underwrite corporate debt. This is what the corporate bailout is all about. It is the government saying to the world, “the economy is going to collapse but hopefully it won’t happen on my shift”! If the leaders in congress and the president can forestall the inevitable until they can leave office then they won’t be blamed for it. All in all it is a political game of musical chairs. What president is not going to be able to sit down when the music stops?
The sad thing about all of this, concerns the level of damage control necessary when the market can no longer be synthetically sustained and economic collapse actually does happen. A good analogy is this; if the submarine is damaged on the surface of the ocean, maybe you can swim out and save yourself but if your captain continues to put off abandoning ship until it begins to sink, then all will be lost.
Our leaders, from George Bush to Barrack Obama have allowed this ship to sink below the surface because they didn’t have the courage to abandon ship when they could have saved the innocent. Now the economic situation has gotten worse. In the not too distant future, our economy will come to the point of critical mass, and there will no longer be a way for the president to stop the ship from sinking. The sooner our leadership stops this practice, the less damage control will be necessary.
One rationalization for these bailouts concerns the real people who work for real corporations that actually produce real goods being left without a job. However, consider that goods are produced for real reasons and as long as there is a market for goods produced, the vacuum left by those who are too big to fail, will be quickly filled by others. Too big to fail is a myth!
These bailouts didn’t patch any holes, they never actually fixed anything and they just postponed the inevitable. They’ve just made things worse for those who are going to have to go through this in the future as soon they must!
Much of the corporate bailout money, which is real money paid for by tax payers who produce real goods, went to line the pockets of those who control the president and the legislators in congress. This only benefits those who make the laws and those who control them, there is no benefit for the taxpayer. This bail out money never really bailed us out at all. The true bailout is the promise of the U.S. government to underwrite corporate debt with tax payer dollars!
We must allow these corporations to fail! We must stop allowing our government to use money that represents real goods, real production, to pay for debt which does not! When our government starts seeing these manipulators as not only too big to fail but also not too big to jail, this practice will stop and when it does, we will be able to build an economy on the concept of a day’s pay for a day’s work. There is no easy road, there is no free money. Money represents labor and goods produced. Investment speculation results in inflation and a false foundation of our national economy.
We need to care for our poor but government should not be in the business of creating poverty. This is what happens when the fuel that drives the economy begins to thin and the machine that drives it begins to slow.
When Obama talks about taxing the rich, I can assure you, he is not talking about taxing the rich, those who manipulate him, he is talking about taxing those who present no threat to him or his opportunity for reelection. When Obama talks about taxing the rich he is referring to those who own small businesses. Those who do produce goods and services are barely making it now! The small business person is the only safe place left for our controlled and corrupt leadership to squeeze!
We the people are the only hope. If we understand the machinery of economy, then we will not allow ourselves to be manipulated. We will have the knowledge to elect leaders who will take us in the right direction. We need leaders who have real courage and are willing to sacrifice!
As we go into the 2012 election year, just follow the big money. Wherever the big money is, lurk the manipulators who are willing to take your hard earned real dollars to line their own pockets and returning to you in its place… the false hope of “promissory inflation”.
Invitation to read some of my other articles, as follows:
Wall Street, the Greatest Ponzi Scheme
THE MECHANICS OF SACRIFICE
AUTHOR: J.S. THOMPSON
About the Author…
J.S. Thompson is a retired senior government official with a graduate degree from the University of Texas.