SOME ETHICAL LESSONS ON THE HISTORICAL ECONOMY, AND THE RISE OF BANKSTERS. Or why Obama needs to be a quick study. And why the reforms on bank bonuses pushed by France are not enough.
Abstract: After an undistinguished rant describing a situation everybody is pretty much cognizant of, the thievery known as Wall Street finance, and how the salaries of Wall Streetists are related to the increasing diversion of world capital from being to nothingness, I proceed to non trivially evoke the entanglement of ECONOMY and ETHICS.
It’s the Franks that outlawed slavery (660 CE), and why Western Europe rose in all ways (by opposition to the Orient, and its slave regimes, Constantinople and Islam). Wall Street financiers, just as the masters of Constantinople, Islam, and pretty much the rest of the planet, in the past, are diverting increasingly vast and extravagant resources to themselves, starving the rest (into submission, they hope).
Perhaps they have to do so, because otherwise, they could go to jail. Hence they have to keep on paying politicians, lest the hypnosis fails. They have to be stopped before they can terminally distract us with a war, as they did in the past (wait…).
I offer a series of explicit suggestions about the minimal reforms to make to the world financial system. Bonuses are just the tip of the iceberg. The diversion of nearly all the world capital to an imaginary casino has got to stop: no more derivatives. Leverage has to be kept under control, and bankers have to respect the basic values of our civilization, under penalty of law. That should break the mesmerization they exert on naive people such as Mr. Obama, and free the minds to address the immense problems spaceship Earth will confront in the next few decades.
WHEN THE CHIEF CLAIMS TO UNDERSTAND NAUGHT:
Here is Obama’s ethics in September 2009. Two quotes from two different places. a few days apart:
"[Health] Insurance executives don’t do this ["treat their customers badly"] because they are bad people. They do it because it’s profitable […] insurance companies are not only encouraged to find reasons to drop the seriously ill; they are rewarded for it. All of this is in service of meeting […] Wall Street’s relentless profit expectations… Why is it, that we’re going to cap executive compensation for Wall Street bankers but not Silicon Valley entrepreneurs or N.F.L. football players?"
Ethic is the word, pathetic is the feeling. In the following we will attempt an historical meditation and deconstruction of these thoughts.
Obama asks why is it that Wall Street bankers should be capped as they try to starve us all, and "drop the seriously ill" because they left no money for anybody else?
Reminder: the total losses to the taxpayers in the USA and the EU are evaluated, so far, to be 8,000 billion dollars, at least. Just in the USA, the amount of gifts, loans and guarantees to the bank holding companies is about 24,000 billion dollars (about twice GDP). Those who took the money caused the very disaster that forced the governments to give them the taxpayer money. Now they are paying themselves bonuses, with taxpayer money. And their immense properties were not expropriated: why don’t they pay for their losses, with their money?
Does that have to do with them giving money to politicians? For all the talk of small naive little silly people sending money to Obama, the greatest contributor to Obama was Goldman Sachs, and now its executives sit in the White House. (Disclaimer: my family and me sent what was for us a considerable amount of money to Obama. Still waiting for the thank you note.)
Why the huge bonuses? Did they invent something, those financiers? They claim they do: that is why they talk about “financial innovation” all the time. Indeed derivatives of derivatives of options are no doubt an innovation. So was Zyklon B of Auschwitz fame).
Another reason the bankers evoke is that they, and only they, have talent, they say. Indeed. By that token, Hitler, himself nurtured early on by the top Wall Street financiers, both directly and indirectly, also had the same sort of unique talent, of slicing the throat of the sheep, after having shorn it already. Diverting most of the world’s capital is a major moral situation, as we will see.
Obama does not ask why is it that bankers are not entrepreneurs. He knows. Obama does not ask: "why is it that bankers do not really create anything?" Obama knows the difference between a bank and an enterprise: the former has made his uneducated chief of staff very rich, instantaneously, the second probably cannot employ his uneducated chief of staff.
THE CASINO DERIVATIVE WAS SET UP TO JUSTIFY BANKERS’ INCOMES:
So why is it that bankers need to be capped? Would not that make Obama’s chief of staff less rich than he could be, in the future?
Is all the money going to bankers somehow related to unemployment going up? Obama did not ask the question directly, but let me tell him why: because the bankers took too much capital for the rest of the economy to function as much as it used to. Some of the money was taken to pay for bonuses and extravagant "compensation".
MOST OF THE MONEY STOLEN BY THE BANKS, THOUGH, WAS USED TO RUN THE OTHERWISE WORTHLESS CASINO OF "DERIVATIVES" THAT SUPPOSEDLY "JUSTIFY" THE BANKERS’ EXTRAVAGANT COMPENSATIONS AND BONUSES.
So it’s not all about how big the bonuses are. It’s about the enormity that was created to justify the bonuses.
The bankers wanted huge money, but they needed an excuse to get it. To get that excuse, they invented bell and whistles, and smoke and mirrors, enchanted castles and tall tales, a whole menagerie of innovation of insane contracts with each other, twenty times larger than the entire world economy, out of which come imaginary profits (40% of the profits of the USA, they claim), to justify their all too real bonuses.
Why is it that civilization did very well without such bankers until the last few years? Because entrepreneurs had the money, and the bankers did not. Why is civilization doing less well? Because the bankers have too much money, and they use even more gigantic amounts in a worldwide, immense casino system they set up, called the derivative system, an army of robotized gambles that has devoured the world and its economy.
Why is it that Franklin Delano Roosevelt, an aristocrat of the higher reaches of society, called bankers, "banksters"? Why is it that Franklin Delano Roosevelt, and his Congress took strong measures in the Banking Act of 1933 (so called "Glass-Stegal"), to limit the freedom of bankers to mess up with society? Why is it that American banksters supported Hitler and German fascism, even setting up the major chemical world monopoly of IG Farben, in the early 1920s? IG Farben was central to the extermination program. Why were its investors and inventors not punished?
WHAT MOTIVATES THE BEASTS AT THE TROUGH?
Why is it that Larry Summers and his accomplice, the now immensely wealthy Bill Clinton, demolished the Banking Act of 1933? OK, let’s try to explain.
Bankers create (most) money: they decide who spends what, who gets what, and how much. Thus they control everybody who takes the decisions in representative democracy.
But who controls bankers? At this point, nobody. What controls them? At this point, nothing. The market has proven to be a myth, at least as far as big bankers are concerned.
Markets do not control bankers, because, when they lose all their money, common people have to pay the bankers. The bankers are masters of their destiny, and of ours too. They are out of the law. They are out-laws. Why? Because bankers make men, markets and presidents. When the markets fail the bankers, they put a gun to the head of the world financial system, and they ask the social system for money to support their casino-markets, and themselves.
Because Obama is in theory the boss, and he does not want to cap bankers, neither men nor markets can.
Bankers have privatized profits, socialized losses, and ordered their beggars the politicians, to herd the cattle people to pasture, so they can produce more. When the markets do not bring fortunes to bankers, bankers just rise a giant tax, and their errant boy the president, and the other children in Congress, give them all they want. More than bonuses, they want to go on with the fake financial system they set up.
It was obviously not enough of a warning that Wall Street financed IG Farben in the 1920s. We are back in the same scheme. But please no more whining about Auschwitz: stop feeding, and feting the source, if you do not like the human smoke.
ECONOMY ENTAILS ETHICS, AND RECIPROCALLY; SLAVERY IS NOT THE BEST ECONOMICALLY:
Ethics matters economically. In turn, economics is central to survival. So ethics is not a luxury, but ethics is about SURVIVAL.
The question Obama asked in his naivety, is then: ‘Why is it that insurance executives and Wall Street contribute so much to survival that they should never be capped?’
An example from the past may help Obama: in the distant past, slavery was common and usual. However, it is now outlawed, worldwide. Obama should have asked:
"Why is it, that we have capped slave traders’ compensations, but not Silicon Valley entrepreneurs or N.F.L. football players?"
Well, the answer, dear Obama, is that slavery was bad, in more way than one, and that Silicon Valley, in first approximation, is good. Slavery was bad economically: the empire that outlawed slavery produced a much more performing economy, than the one which had preceded it, where slavery was ubiquitous.
THE WEST ROSE BECAUSE IT CAPPED THE SLAVE MASTERS:
In turn that better economy gave that empire a better technology, more wealth, better food and health, and finally the world’s most performing military, since it beat the Arabs, who had just defeated everybody, including Romans, Persians, Indians and Chinese. The name found for that empire was forged at Poitier, in 732 CE, when superstition was crushed by progress in what many view as the most important battle of history. The land of the Free, not to say the Frank, named itself Europe, in an allusion to free Greece, and the corpses of the enemy were left to rot in the sun by the thousands.
The Franks had outlawed slavery three generations earlier, and it was not to become slaves to God, or to the would be descendants of the mythical Sarah (hence the name “Sarasin”).
OUTLAWING SLAVERY was not just better ethics, from the modern viewpoint, but also better economics, from the absolute point of view.
That is why the Imperium Francorum (now known as "The West") rose militarily, technologically, and economically (in this order).
Outlawing slavery was pretty much what the Franks had been about from the beginning. Initially their ire was directed at the invading Romans, and then, after coming to a modus vivendi with those, Frankish ire was directed at the Catholic fanatics (that they themselves had contributed to put in power, by helping emperor Constantine). After trying to defeat Catholicism on the battlefield, the Franks changed strategy. One hundred thirty (130) years after having directly confronted the fanatical son of Constantine, the Franks opted for the craftier scheme of "joining", and then leading Catholicism (by the muzzle).
ROME, CONSTANTINOPLE AND ISLAM WENT DOWN BECAUSE OF SLAVERY:
It is not just that all the Franks rose because they were all masters, instead of many of them being slaves. Among the Franks and the Goths, men were free, and the kings elected. This was in sharp contrast with the Holy "Catholic Orthodox" Roman empire next door, where slavery was common, usual, and expected by God and its servants.
Slavery considers that some men are lower than beasts (domestic animals were not tortured to death on a regular, or legal basis). By contrast, some other men were at the opposite extreme, higher than common men, and next to, or identified with God. For example Jesus, and thus, the emperor, and his chamberlains, were above the commons, and closer to God. Christianity was used as an instrument to prop fascism. And one can prove it, because the great emperor Diocletian invented that trick when Constantine was a toddler (~ 295 CE). Diocletian hated Christianity, so he used the conventional Greco-Roman pantheon, propping Sol Invictus as main God, and Himself as His Prophet, Peace Be Upon Him (that’s where so called Christmas comes from, as Sol Invictus replaced the Saturnials at the end of the year, in an enormous celebration).
Thus, by that metaphysical trick, the Roman emperors had invented the status that the Arabs would later call a "Caliph". In Imperial Christian Catholic Rome, the hierarchy was strict. Contradicting the emperor meant, in practice, death. And there were no Roman elections: from Constantine on, for 300 years, there was no even one illegitimate succession: Christianity had solved that eternal Roman imperial problem of succession, by painting Jesus all over the emperor.
By contrast, the Germans, who did not run, as the Romans did, an imperial system administering dozens of millions of people (a quarter of humankind), had stayed democratic (most Franks were peasant owners). As Rome decayed in fascist, pro-plutocratic, superstitious, whiny, rabidly anti-intellectual Catholicism, it became obvious to the Germans that they had to get in charge.
Theodoric’s Ostrogoths did this rather well in Italy, until Theodoric made the terrible error of having the president of the Roman Senate, Anicius Manlius Severinus Boetius, a philosopher of an extremely prestigious family, executed (this was a case of the Ostrogoths having adopted too much Roman fascism). The Visigoths did less well, as they spent a lot of time fighting each other to be elected king (not enough Roman style fascism in this case).
The Franks, trained and educated by Roman generals for three centuries, found the best balance between fascism and democracy, half way between Germania and Roma. They replaced, and became, the Roman army, and reestablished a centralized rule, all over Gallia (Gaul), by ejecting the Visigoths from their capital of Toulouse, and bottle them in Hispania (the Visigoths would keep on arguing with each other, until the Islamized Berbers of Tarik would invade them, 710 CE). Soon the Franks re-conquered Germania in the name of Rome.
GOD, EMPEROR, MASTER AND SLAVE:
Christianity, the servant of Roman plutocratic fascism, was friendly to slavery: all Christians are supposed to be more or less the obsequious servants of the omnipotent, jealous God in the Sky, a heavenly parody to teach the respect for the all too real omnipotent, rabid emperor on the ground. Unsurprisingly, Jesus Christ has nothing much to say against slavery. Bishops were the largest slave owners by 420 CE. The Muslim parrots would harp further on that theme, outright proclaiming that man was a slave to God, and had to obey his superior as if he were God, or the Prophet (Quran’s fascist principle, Sura 4; verse 59, later to inspire the Guide Adolf Hitler).
SLAVERY AND THE REIGN OF PROFITS WORKED IN AMERICA:
In a stroke of genius, the immigrant, naturalized queen of the Franks, Bathilde, an ex British slave, outlawed slavery (~ 660 CE). The history of the West proceeded from there ever more gloriously.
This date, 660 CE, which should be the most important in the history of slavery, is scrupulously neglected, because American plutocrats do not want to have to explain why they reestablished slavery 1,000 years later. Let’s say it in a nutshell, nevertheless, in the hope of embarrassing them. Slavery was profitable in America, because it was not impeded by human rights.
According to Barack Obama in the quote above, profits are the most important value. In America, according to this spirit that Obama loudly celebrates, slave traders were not bad people. And so it was for 250 years. Slave traders were just trying to make a profit: not bad. And, always according to Barack Obama, those profits ought not to have been limited.
AMERICA’S NEW PHILOSOPHY: STRAIGHT BACK TO SAVAGERY.
In other words, the philosophy of Barack Obama is strictly, genuinely all American, and fundamentally adverse to the founding philosophy of the West, which holds that there are deeper and higher values than profits.
The principle that there are greater values than profits and life itself is fundamental to Ancient Greece, and Ancient Rome, or even Ancient Troy. Even fascist Sparta made the point that freedom was more important than life. Sparta threw the arrogant Persians ambassadors down a well, so they could find down there what they were asking for, earth and water.
Troy made the point that the freedom of women was more important than peace. So the Franks, who claimed (as the Romans did) to come from Troy, did not invent the principle that there are higher moral principles than making profits, or even life itself, contrarily to what the sleek talking would be leader of the West gladly insinuates nowadays. That PROFITS DO NOT FUNDAMENTALLY MATTER IS THE VERY PRINCIPLE OF WESTERN CIVILIZATION ITSELF. How tragic that it is not taught to American children enough! Obama went to the very best schools in the USA, and he has no comprehension of it.
What the Franks did was to introduce two new principles that had been refused by Ancient Greece (Crete knew them, to some extent, so it was a refusal, probably consecutive to the Dorian invasion: after all Sparta, the most uncivilized of Greek cities, with an atrocious slave system, was pure Dorian).
Both of the principles the Franks reestablished were about freedom: 1) women should be free. 2) men should be free: no slaves. Then the Franks demonstrated that not only one could restart civilization with these two principles (contrarily to what Aristotle explicitly stated), but that civilization then worked much better that way.
"PROFIT AS ULTIMATE VALUE" ALREADY FAILED IN AMERICA: IT WAS CALLED SLAVERY:
Even in America itself, with its profits uber Alles morality, ultimately, slavery did not work. Repeating the experience of the Franks on a smaller, more anecdotal example, outlawing slavery and the advantageous consequences thereof, is also why the North beat the South in the Secession war.
And of course the expectation of universal slavery in the holy books of superstitious Islam go a long way to explain why what was the cradle of the world’s most advanced civilizations for 5,000 years has become, in the last millennium, the one of Islam, the sinking ship of stagnation.
Right now the West, and in particular its mentally confused leader, the USA, is ethically challenged. Franklin D. Roosevelt’s crack down on banksters has been reversed by the very advisers Obama put back in power.
PUBLIC MONEY MAKING IS NOW THE MONOPOLY OF A FEW:
Present day banking and health care the American way are modern forms of slavery. Banksters were already behind Hitler and other fascists, but, next time, they could do worse. And next time may even be now.
In recent decades the states of the West have given up on the control of money. They now control just one fifth. It is an amazing development.
It used to be, as it ought to be, that the money used by the public in the realm was created by the sovereign, for use by the government, and the public.
The system we have now is completely different. The state has farmed out money making to a few private individuals. This weirdness, and obvious abuse of power, is called "capitalism" by the stooges of the banksters. But it is not capitalism at all, it is the confiscation of capital by an oligarchy (Stalin, who had confiscated all the USSR’s capital, in that sense, was the ultimate Wall Street style bankster, in the present sense of Wall Street).
HOW BANKING BECAME ALL POWERFUL:
Banking developed differently when the King of France, Francois Premier, became heavily dependent upon his (Italian) bankers. Funny for someone self baptized as "French First". Francois I, "emperor in his kingdom", could not tour said kingdom without the bankers picking up the bill for his immense retinue. His adversary, Charles Quint (also a native French speaker born a few miles away), elected Spanish and Holy Roman Emperor, came to depend upon the New World’s gold and silver. There was more of the latter, so Charles made Francois prisoner in Italy (1515 CE). The war went on for several generations, involving England, and resulting in the victory of the bankers (normal history concentrates on the victory of France, and secondarily of England, and the Netherlands).
The final phase of the 478 years long "100 years war", a dynastic quarrel between the provinces of England and France, involved creative (Dutch inspired) financing on the British side, and comforted the assent, not just of the "House of Rothschild", but of bankers in general.
MODERN BANKING AS CIVILIZATIONAL DEVOLUTION:
In the present fractional reserve system, one fifth of the money is created by central banks (often under the form of gifts to banks in the wee hours of the morning). The rest of the money is created and lent (given) by private individuals called bankers. Those bankers lend, or give money to whoever they like (and they like themselves first).
Thus, money creation, long the definition of the civilized state, has become the province of the privately controlled fractional reserve system.
In recent decades the states of the West have given up on the control of money. They now control just one fifth. it is an amazing development. It used to be, as it ought to be, that the money used by the public in the realm was created by the sovereign, for use by the government, and the public. This system is called "capitalism" by the stooges of the banksters. But it is not capitalism at all, it is the confiscation of capital by an oligarchy (Stalin, who had confiscated all the USSR’s capital, in that sense, was the ultimate bankster).
When one says something against bankers, the bankers and their agents, or their gullible admirers, foam at the mouth, and scream that one is against capitalism. That would be funny, were it not so tragic and outrageous a statement.
In truth, in the present system of fractional reserve private banking, capitalism is not public anymore, but the province of the few, the oligarchs. This private capitalism is not sustainable. It needs to be changed, and how to do it is pretty obvious. We are not talking about a revolution here, but just making obvious ethical modifications with a huge economic impact. But it is not in the pecuniary interest of Mr. Obama to understand this. In his books, Obama has explained that self navigation is the ultimate compass.
WHEN OBAMA IS ASTONISHING:
Let Paul Krugman tell the truth: “Why is it,” Obama asked, “that we’re going to cap executive compensation for Wall Street bankers but not Silicon Valley entrepreneurs or N.F.L. football players?”
Paul Krugman finds "that’s an astonishing remark — and not just because the National Football League does, in fact, have pay caps. Tech firms don’t crash the whole world’s operating system when they go bankrupt; quarterbacks who make too many risky passes don’t have to be rescued with hundred-billion-dollar bailouts. Banking is a special case — and the president is surely smart enough to know that.
All I can think is that this was another example of something we’ve seen before: Mr. Obama’s visceral reluctance to engage in anything that resembles populist rhetoric."
On the face of it, Krugman does not want to upset who he is condemned to socialize with. I can easily think of something else to explain Obama’s incapacity to understand civilization: while there is little evidence that the president understands the fact that the West rests on deeper values than profit, for the last 27 centuries, there is also evidence that the President does not want to see a future cap to his own compensation [In France president Chirac has been under examination for several years by federal judges about how much money he really made in politics, and from where; Obama does not want to see this happen to him anymore that it happened to the extremely rich Bill Clinton.]
CROSSING CIVILIZATION WILL NOT BE PROFITABLE:
In his joint session of Congress Obama said: "Insurance executives don’t do this ["treat their customers badly"] because they are bad people. They do it because it’s profitable." By proffering this, Obama broke the tradition of honoring the human spirit that the Athenians at Marathon, and the Spartans at Thermopylae, among other countless heroes of the West in other battles, died for. Obama says: profits make good. The great say: those who only look after themselves are bad. Successful navigation is the ultimate value only for sharks. Even crocodiles defend their young: they have higher value.
At Thermopylae, Obama, if he had followed his logic, would have joined the most profitable side, and it was not the 300 Spartans. Because Xerxes was making bigger profits, he was not a bad person, according to Obama, so why to fight him? Why so partisan? Xerxes would have loved Obama, he employed plenty of those; good looking, sleek talking, obedient.
WHAT TO DO:
1) Cancel the derivative casino. Replace it by a very regulated system with special allowances for commercial operators, and outside investors under stiff taxation, limit of leverage, etc..
2) The fractional reserve system is here to stay. But it has to be put under stiff control of leverage. As I suggested implicitly above for one currency unit created by central banks, there should be a maximum of 4 created by banks (that boils down to 10% reserves, if I remeber my own math correctly).
3) Bankers have to operate under a strict deontology, under oath, as officers of the state (as lawyers, public notaries, and various health and police or administrative professionals already are). Right now private bankers monopolize way too much of the available capital, and have made capitalism into their own private garden, starving the real economy from capital.
THE ABSOLUTE POWER OF BANKERS HAS POLLUTED THE YOUTH:
We have now an entire generation of youth, and Mr. Obama is a magnificent example of this, from his own words, for which Greed Is the Ultimate Good. One cannot operate our civilization sustainably with such ideas in command.
Obama asks why the compensation of banksters ought to be limited. So that, among other things, some money would be left for others, and other activities than splurging in luxury, debauchery and usury.
The compensation of banksters ought to be limited, so that, among other things, they do not have the clout and corruptive power, on politicians, of setting up a giant world casino, of derivatives of derivatives, with a total nominal value heading towards a thousand trillion dollars (more than ten times the world’s worth of material property, from oil to castles, to entire countries). Why is it that Goldman Sachs has officers at the White House, while distributing 20 billion of bonuses, after getting 38 billion from taxpayers? Is that what is called grand larceny? Or a conspiracy?
The compensation of banksters ought to be limited, so that, among other things, they do not have the money to buy those who teach the youth to debase civilization. Debasement, or why profits are all the base we need. Debasement and profits, or how we ended up with fascism. Debasement, or the road to hell already travelled before.
P/S: Christianity and slavery: Christianity, the servant of Roman plutocratic fascism, was friendly to slavery: all Christians are supposed to be more or less the obsequious servants of the omnipotent God in the Sky, a parody of the all too real omnipotent emperor on the ground. Unsurprisingly, Jesus Christ has nothing much to say against slavery. Bishops were the largest slave owners by 420 CE. The Muslim parrots would harp further on that theme, outright proclaiming that man was a slave to God, and had to obey his superior as if he were God, or the Prophet (Quran’s fascist principle, Sura 4; verse 59, later to inspire the Guide Adolf Hitler).