Trump, the Rent-Seeker in Chief

by Serban V.C. Enache

Donald Trump never misses an opportunity to prove his loyalty and commitment to the vested interests [the forces of usury, rent-seeking, and war profiteering]. In the recent past, Trump sold war-gear to Saudi Arabia, and plans to double down this year too. He implemented corporate tax cuts, which pushed stock-buybacks to record highs, not investment. This time, his American Patients First plan, designed to reduce the price of pharmaceuticals, promote biosimilars, redirect rebates from insurers to consumers, and requiring drug ads to reveal the price has been dropped from the Executive’s agenda.

Modern medicine’s been a boon to mankind. Diseases like chicken pox, diphtheria, measles, malaria, HIV, and polio – all but eradicated in the past century by pharmaceuticals. So what went wrong? The USA’s drug industry is the product of the country’s culture. As the cultural outlook changed, so did the industry. Consumers are addicted to quick fixes, and Big Pharma is addicted to major quick profits.

In the past, drug companies were often led by medical scientists. Expected profit margins were around 10 percent, with a singular brand new drug rolled out each year. But then the culture shifted. Businessmen took the place of scientists, and marketing and advertising took the place of actual medical research. Profit became one-dimensional, seen only as money costs vs. money gains. The most important ratio of all, human costs vs. human gains was ignored or, in some cases, intentionally trampled. More to the point, Big Pharma’s products bear heinous negative externalities. An externality is the cost or benefit that affects a party who did not choose to incur that cost or benefit. For examples of negative externalities, think coal, secondhand smoking, opioids etc.

I’ll cite two examples to show just how powerful and callous Big Pharma was decades ago, and why it’s only gotten stronger and worse today. The case of Pfizer, in 2009, comes to mind. The company paid $2.3 billion, the largest health care fraud settlement in the Justice Department’s history. That sounds punitive, but not when you factor in a company profit of over $8 billion for that same year. It’s a slap on the wrist, one that comes with no jail time. Bayer in the early 1980s is another example. When Bayer’s Cutter Laboratories realized some of their blood products were contaminated with HIV, the money investment was considered too great to destroy the inventory. Cutter misrepresented the results of its own research and sold the inventory to overseas markets in Asia and Latin America. Consequently, hemophiliacs who infused the HIV-contaminated Factor VIII and IX tested positive for HIV and developed AIDS.

Unfortunately, the FDA didn’t have an explicit policy regarding direct-to-consumer-advertising (DTCA), because in 1969 there had been no mass media advertisements for prescription drugs. They supported the concept of DTCA, confident the existing regulations for promotion to physicians would prevent any misleading ads aimed at consumers. In 1983, the FDA began to voice serious concerns. Commissioner Arthur Hull Hayes asked the pharmaceutical industry to stop advertising drugs to the public. The fears were many: patients will pressure physicians to prescribe unnecessary drugs; ads will confuse patients by leading them to believe some minor difference in products represents a major therapeutic advantage; DTCA will increase the price of drugs – encourage the use of brand name products over cheaper, equivalent generic drugs, and exacerbate the problem of an already narcotized population.

Nowadays, to get a drug approved by the FDA, a company has to submit just two tests, showing that the product works better than a placebo. The legislation is so lax that the government allows drug companies to submit whatever tests they want. For example, a company may commission 20 clinical trials for its drug. Eighteen may prove the drug is harmful or inefficient, but as long as two positive studies are produced, the drug gets FDA approval. The real business magic of the industry no longer lies with the pursuit of science, but in hiding the bad studies.

Research in the effectiveness of drugs is left to the corporate sector. The federal government doesn’t fund this activity, despite it falling under the public purpose and general welfare. Going back to the shrewd practice of hiding bad data, how many negative studies are published in scientific journals? Publication bias doesn’t contain itself solely to the realm of usual politics [democrat vs republican].

What are the results of the so-called war on drugs? A system based on greed, corruption, and addiction. A propitious environment for legal drug pushers. A frightening incarceration rate, the highest of any country in the world. Huge numbers of addicts and addiction-related illnesses. A culture obsessed with quick and temporary fixes, in which normality is deemed insufficient. And a booming drug industry with vast leverage over the political process.

1992 is a testament to Big Pharma’s powers of persuasion. That year Congress passed the Drug User Fee Act, which allows Pharma companies to pay a fast-track fee to the FDA of up to $350,000 per drug in order to speed up the approval process. This is called “pay to win.” It’s not democratic, and has nothing to do with efficient or fair market practices. It’s political rent-seeking.

The legal drug pushers aren’t only at the top, waiting for the end of fiscal years to tally up net profits. Crooked physicians are in on it too. They handle patients directly and keep them coming by prescribing street-legal dope when it’s not really needed, except they don’t call it heroin or meth, but Codeine and Adderall. Take drug A to manage condition 1. Then take drug B to manage condition 2, induced by drug A. Then take drug C to manage drug B. In the words of former Pharma rep. Gwen Olsen, “The pharmaceutical industry is no longer in the business of health and healing, it’s in the business of disease management and symptoms maintenance.”

But this perverse, systemic cancer has a name, it’s called Shareholder Capitalism! The philosophy is completely narrow-minded: maximize shareholder value, everything else be damned. One solution to the Shareholder Capitalist cancer is Stakeholder Capitalism – which means that the shareholder MUST have a stake in the company and the community or communities that company serves. Some call it ‘cooperative capitalism,’ others call it socialism, in the 19th century during the actual progressive economics era, they called it cooperative individualism – the Christian Socialists being the most notable group of proponents back then.

So when you hear the filthy rich and their market analyst mouth pieces and politicians, whether they pretend to be God-fearing people or not, excusing their huge markups [often on products that cost peanuts to manufacture] and their huge profit margins on ‘the rules of the market,’ claiming that ‘we live in a capitalism system, and that’s the way it is,’ they are LYING to you!

The whole concept behind capitalism, indeed its very purpose, is to offer the best price for consumers – in the logic that a cartel or a monopoly will always offer a higher price compared to a free market, in which multiple producers compete for market share. They claim they’re working fully under capitalist rules, yet in foreign markets [where state regulations meant to protect consumers and patients exist] drug prices are dramatically lower than in the USA. There isn’t free market capitalism in the US, there’s rentier market capitalism, and it means a neo-feudal society.

By scrapping the American Patients First plan, Trump has proven once again that he’s a Wall-Street stooge! Those who blame “socialism” for what’s essentially feudal economic policy and who demand full deregulation and defunding of State institutions suffer from mental illness, are incurable, and are part of the problem.

In the late 1800s, Henry George wrote, “The patent […] prohibits any one from doing a similar thing, and involves, usually for a specified time, an interference with the equal liberty on which the right of ownership rests. […] The patent is in defiance of this natural right. It prohibits others from doing what has been already attempted. […] Discovery can give no right of ownership, for whatever is discovered must have been already here to be discovered. If a man make a wheelbarrow, or a book, or a picture, he has a moral right to that particular wheelbarrow, or book, or picture, but no right to ask that others be prevented from making similar things. Such a prohibition, though given for the purpose of stimulating discovery and invention, really in the long run operates as a check upon them [a drag on discovery and invention].”

How prescient George was. A working paper written in 2012, from the St Louis FED, authored by Michele Boldrin and David Levine, professors at Washington University in St Louis, concludes that any patent system, no matter how well conceived, inevitably devolves into a quagmire.

A closer look at the historical and international evidence suggests that while weak patent systems may mildly increase innovation with limited side-effects, strong patent systems retard innovation with many negative side-effects. Both theoretically and empirically, the political economy of government operated patent systems indicates that weak legislation will generally evolve into a strong protection and that the political demand for stronger patent protection comes from old and stagnant industries and firms, not from new and innovative ones. Hence the best solution is to abolish patents entirely through strong constitutional measures and to find other legislative instruments, less open to lobbying and rent-seeking, to foster innovation whenever there is clear evidence that laissez-faire under-supplies it.

If Trump really wanted to drain the swamp, his economic and foreign policies would look dramatically different. Instead, he just wants to change the Democrat swamp with a Republican swamp. Ironically, both [corrupt] parties profit from Trump’s economic agenda. If you hate the rich, smug liberal elites, remember that under Trump’s term, their bank accounts swelled and swelled big.

The 2nd Zimbabwean Hyperinflation

by Serban V.C. Enache

Zimbabwe is once again facing rampant inflation, a rate of almost 100 percent recorded in the month of May.

I felt the need to investigate its macros. As usual, the graphs are based on info from tradingeconomcis. An important development is that last month, the Government removed the legal tender status of foreign currencies and made the new Zimbabwean Dollar [RTGS] the sole legal tender.

The country dropped its national currency back in 2009, and replaced it with a multi [foreign] currency system in efforts to combat hyperinflation at the time. The recent reverse measure, taken by Emmerson Mnangagwa’s administration, comes in response to dire commodity shortages across the country. Mnangagwa replaced Robert Mugabe as president two years ago in a coup. However, without sufficient US dollars to pay for imports, the country’s fuel stations have frequently run out and gasoline prices more than doubled between the months of January and April.

Fuel going up, coupled with the currency’s depreciation, made the cost of food, transportation, and housing utilities to soar. Due to the lack of confidence, as expected, more and more vendors set prices in US dollars.

In a milestone deal with the IMF last month, the Government agreed to cease net money creation [deficit spending] in order to pay its bills, which was a root cause of the sudden hyperinflation. The IMF is monitoring economic reforms for a year under a mutually agreed program. Debt relief was promised at the end of this year, provided the Government respects the deal. Companies are meant to trade RTGS dollars on an official market, but there were few takers. Analysts said that the Government’s gamble to force greater adoption of the RTGS might very well backfire, pushing transactions in foreign currencies underground.

With all these developments in mind, let’s see Zimbabwe’s flow of funds, and later on we’ll look at other indicators. The country has been a net exporter of Aggregate Demand and a net importer of goods for ten years straight. The Domestic Private sector [composed of domestic firms and households] has been going severely into debt for those same ten years. Only in the last two years was it able to net save financial assets, when the Government seriously expanded fiscal deficit spending.

We also see how the country’s money supply shot up, especially in 2018 and 2019. The M2 measurement [which includes cash and checking deposits + savings deposits, money market securities, mutual funds, and other time deposits] reached an all time high of 10.55 billion US dollars last March.

The unemployment figure has remained stable throughout years, but I don’t put much faith in the accuracy of this data, simply because of how the State defines being unemployed. For example, people like subsistence farmers, who consume all of their own output, are categorized as employed. And more to the point, the graph below is based on the “strict unemployed” definition [one who has been without work, is available for work and is actively seeking work]. The broader definition doesn’t require the latter condition.

Those working in the grey [informal] economy include people who do unpaid labor for a family business or paid employees who are not entitled to sick leave or paid holidays. In Zimbabwe, there are a great many who work in these circumstances. If we count as employed those workers on a payroll with taxes deducted at source and pension coverage, then the unemployment estimate is huge.

On to trade. South Africa owns the largest share of Zimbabwe’s exports. In my opinion, the country is far too dependent on its southern neighbor for commerce, and South Africa’s socio-political stability looks bleak these days. It would be better to seek out markets in different countries, in order to minimize risk and better handle potential negative demand shocks [for Zimbabwean exports] and negative supply shocks [for Zimbabwean imports].

The graph below shows Zimbabwe’s exports by countries of destination.

The graph below shows Zimbabwe’s imports by countries of source.

According to the World Bank, Zimbabwe’s exports sector as percentage of GDP last year was 22.9 percent and its imports sector 25.5 percent.

It’s safe to say that strategic bilateral relations cannot be formed, so long as Zimbabwe’s political class doesn’t compromise on a certain vector the country needs to maintain long term. Foreign investors [state and private agents] won’t be willing to come in, if they believe their investments will be at risk at the next election cycle, or if the chances for political instability and social upheaval are high. In recent years, Russia has been paying more attention to Africa, the northern states in particular, investing mostly in oil rigs and nuclear power plant deals. That’s one potential partner state with which the Mnangagwa administration should seek to do business.

Going back to Zimbabwe’s main trade partner, South Africa… that country is experiencing serious problems in rising criminality, and Ramaphosa’s land reform [confiscation without compensation] is bound to fail. In South Africa, since 1994, 21 percent of farms were put into Black African ownership. But more than 80 percent of those farms failed to remain economically active. If you ask Black farmers the reason for that miserable success rate, they blame the Government, and that’s absolutely true. That’s how you know it was a simulation of reform and not a legit effort behind it; because a singular reform, in and of itself, can’t be successful when everything else remains the same. In order to be a commercial success, an agribusiness requires access to infrastructure, to financial and physical capital, crop insurance, skilled labor, competent management, and access to markets capable of absorbing its output at a price which covers operation costs plus the markup.

South Africa [and Zimbabwe] needs a holistic approach to its national problems, and that means a combination of measures. Changing ownership doesn’t fix anything. The goal should be to decommodify land, which can be done via nationalization or [my personal preference] through site value taxation. Complementary measures should include: community land trusts, community banking, a national infrastructure investment plan, a national health care and education service, a national trade strategy, and last but not least, asset-side reform of the financial sector.

Reducing bureaucracy should be a priority as well. Currently, Zimbabwe is ranked 155th in 190 countries in the category of ‘ease of doing business.’ The more complex the laws and regulations are, the more wasteful and corrupt the system is. The State-dirigist method and Single Tax philosophy don’t require more time spent between citizen and bureaucrat, quite the opposite!

After Mugabe’s land reform, Zimbabwe isn’t out of the woods, and its population is growing too.

Using the printing press without any regard to budgetary rules, without any clear goal in mind, will only make the situation worse. The Zimbabwean Dollar [RTGS], in order to appreciate in value, requires a combination of tighter supply and higher demand for it. The Government’s specialists need to determine the country’s potential output vis-a-vis actual output and adjust fiscal policy in consequence. A negative output gap occurs when actual output is less than what the economy can produce at full capacity – while a positive output gap is the reverse and is inflationary.

The Government should aim for a near zero fiscal deficit; should temporarily ban the importation of luxury items, at least for a few years if not several years; should prioritize the importation of vital commodities – fuel, water, pharmaceuticals, grain, milk, and the like. The Central Bank should be ordered to run permanent zero interest rate policy. Reduced interest payments into the economy means a smaller supply of Zimbabwean currency. And the Government should only accept RTGS in payment of its exports, and it should only guarantee bank deposits denominated in RTGS. This combo would be sufficient to halt inflation, bring price stability and political confidence in state institutions and fuel hope for a better tomorrow.

Jeffrey Epstein & the Mossad

In this article by Philip Giraldi [former CIA counter-terrorism specialist and military intelligence officer], some interesting connections are made between Epstein’s network and Israel’s secret service. But I wanted to touch on a particular person from Epstein’s black book. This document contains 14 personal phone numbers belonging to Donald Trump, including ex-wife Ivana, daughter Ivanka and current wife Melania. It also included Prince Bandar of Saudi Arabia, Tony Blair, Jon Huntsman, Senator Ted Kennedy, Henry Kissinger, David Koch, Ehud Barak, Alan Dershowitz, John Kerry, George Mitchell, David Rockefeller, Richard Branson, Michael Bloomfield, Dustin Hoffman, Queen Elizabeth, Saudi King Salman and Edward de Rothschild.

In April this year, I wrote a critical piece on an old article from ’97 by Alan Dershowitz, the person from Epstein’s list of contacts. The ethno-centric agenda of Jewish Zionists in the US can no longer be ignored or dismissed out of hand as a “right wing / racist conspiracy theory.” It’s been going on for decades. The top echelons of US society, public and private institutions, are infiltrated and dominated by Zionist agents who steer the hegemon’s domestic and foreign policy without being accountable for it. The same goes for the UK. But you’ll never hear about Israel’s clear hold over US politics from the likes of Alex Jones and his associates. They’re too busy propagating the Muslim-scare, as if [tanned or black] Muslims are and have been in control of key US institutions and policies for more than 50 years. If you ignore Israel’s role in all this, then you’re either too stupid to think critically or a shill.

Dangerous Libertarianism

When one hears the word ‘diversity’, it is at the expense of unity? Then there is inclusion, but only inclusion when you agree with a certain political thought and worldview. And of course we can’t forget about identity politics. If you disagree, then you are called a dog whistle. How did we get here? Peter Lavelle talks with Joe Concha, David Swanson, and Arvin Vohra.

My comment: While I agree with the perverse effects caused by political correctness, such as censorship, echo chambers, and tribalism… I staunchly disagree with the aim of “destroying the welfare state.” Ironically, the libertarian guest suggested it first, and unsurprisingly, the same libertarian guest expressed his support for open borders. That’s what market libertarians are all about in the US, they want an ever growing pool of labor and no social safety net, no full employment policy, in order to promote the race to the bottom among workers. From this race to the bottom, in which workers compete for the smallest wages, only the ‘vested interests‘ profit [a term coined by Thorstein Veblen to describe the forces of rentierism, high finance, and cartels].

After WW1, a perverse blight was introduced to the economics profession. The Neo-classical movement came about, funded by these ‘vested interests.’ Instead of funding real economic growth, Wall Street was entrenching itself as the protector of privilege, plotted and executed scams of all types, distorting economies away from passing on the fruits of technology to populations – benefits such as rising living standards, falling costs of living, and lower business costs. The new economics was that of John Bates Clark and his colleagues who rejected the classical concept of economic rent [economic rent = income without any labor, without any enterprise, without any cost of production]. These neoclassical economists insisted that any type of revenue stream and wealth/ownership position was fair game. Classical and neoclassical economics are nothing alike! The latter is a wholly bastardized, corrupt version of the former. Mainstream economics today shares the same affliction, or should we call it propaganda, its use of mental gymnastics, adulteration of history, and use of refined mathematical equations… to conflate the Natural Commons with Capital [the product of spent Labor], to conflate wealth creation with wealth extraction, to conflate IOUs with commodities. I invite the reader to check out two of my older posts, Milton Friedman, the Liar and Thomas Edison explains modern money in 1921.

Mainstream economists conflate value with price, or tow the line that value is derived from prices. In other words, if in a particular time window, condemning people to poverty and unemployment is monetarily profitable, the value of those humans [workers] and production units [buildings and equipment] should drop to reflect the price. It’s insanity, and in their madness they successfully manage to determine the price of everything and the value of nothing. Instead, the goal is or ought to be to decommodify land, and turn society into a sane and equitable one, in which price follows value. That’s what the classical economists were all about, the labor theory of value + the rent theory of pricing. They understood that Labor is the creator of Capital, and that Land is completely unique and distinct to the aforementioned two. Because of the peculiarity of Land, the classical economists argued for a special tax on it.

Back when socialists and national strategists were expecting the Industrial Revolution to be a strong enough force to turn parasitic financial systems into useful avenues, and subordinate them toward the imperatives of technological and societal development, Thorstein Veblen warned of Wall Street’s crooked agenda to derail the entire phenomenon. Veblen could only look back to the time when economics sought to guide government policy, not oppose it. This sane tradition in Western economic thought can be traced to the 13th century scholars of the Just Price theory, to the physiocrats, all the way to the classical, historical, and socialist schools [both in the marxist and non-marxist traditions]. Veblen’s post-mercantilist and proto-socialist analysis, warning that finance capitalism was derailing industrial capitalism, was expunged from the mainstream curriculum.

The same goes for Henry George; his type of laissez-faire [in its full true meaning] would “open the way to a realization of the noble dreams of socialism.” George understood that the labor and investments of both the private and public sectors increased site values, and if these values remained uncaptured by the Government, they were free to be appropriated by landlords and money lenders in the form of rent and interest [unearned incomes]. George was also against patents, another form of rent extraction. But unlike those socialists who wanted full collectivization, George was of the opinion that property should remain in private ownership, that labor, buildings, sales, and enterprise should go tax-free, while the State captured land values.

“I do not propose either to purchase or to confiscate private property in land. The first would be unjust; the second, needless. Let the individuals who now hold it still retain, if they want to, possession of what they are pleased to call their land. Let them continue to call it their land. Let them buy and sell, and bequeath and devise it. We may safely leave them the shell, if we take the kernel. It is not necessary to confiscate land; it is only necessary to confiscate rent.”

In a letter to James Madison dated October 28th, 1785, Thomas Jefferson wrote, “[…] As soon as I had got clear of the town I fell in with a poor woman walking at the same rate with myself and going the same course. Wishing to know the condition of the laboring poor I entered into conversation with her, which I began by enquiries for the path which would lead me into the mountain: and thence proceeded to enquiries into her vocation, condition and circumstances. She told me she was a day laborer at 8 sous or 4d. sterling the day: that she had two children to maintain, and to pay a rent of 30 livres for her house (which would consume the hire of 75 days), that often she could no employment and of course was without bread. As we had walked together near a mile and she had so far served me as a guide, I gave her, on parting, 24 sous. She burst into tears of a gratitude which I could perceive was unfeigned because she was unable to utter a word. She had probably never before received so great an aid. This little attendrissement (emotion), with the solitude of my walk, led me into a train of reflections on that unequal division of property which occasions the numberless instances of wretchedness which I had observed in this country and is to be observed all over Europe.

The property of this country is absolutely concentrated in a very few hands, having revenues of from half a million of guineas a year downwards. These employ the flower of the country as servants, some of them having as many as 200 domestics, not laboring. They employ also a great number of manufacturers and tradesmen, and lastly the class of laboring husbandmen. But after all there comes the most numerous of all classes, that is, the poor who cannot find work. I asked myself what could be the reason so many should be permitted to beg who are willing to work, in a country where there is a very considerable proportion of uncultivated lands? These lands are undisturbed only for the sake of game. It should seem then that it must be because of the enormous wealth of the proprietors which places them above attention to the increase of their revenues by permitting these lands to be labored. I am conscious that an equal division of property is impracticable, but the consequences of this enormous inequality producing so much misery to the bulk of mankind, legislators cannot invent too many devices for subdividing property, only taking care to let their subdivisions go hand in hand with the natural affections of the human mind. The descent of property of every kind therefore to all the children, or to all the brothers and sisters, or other relations in equal degree, is a politic measure and a practicable one. Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions or property in geometrical progression as they rise. Whenever there are in any country uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right. The earth is given as a common stock for man to labor and live on. If for the encouragement of industry we allow it to be appropriated, we must take care that other employment be provided to those excluded from the appropriation. If we do not, the fundamental right to labor the earth returns to the unemployed. It is too soon yet in our country to say that every man who cannot find employment, but who can find uncultivated land, shall be at liberty to cultivate it, paying a moderate rent. But it is not too soon to provide by every possible means that as few as possible shall be without a little portion of land. The small landholders are the most precious part of a state. […]”

Before any type of meaningful debate can be had on [different] ways to achieve the same end, we should all start from the same premise – otherwise the debate is going to be pointless. In the 13th century, Thomas Aquians developed a most solid case against usury and price gouging – that the lender was receiving income for nothing, since nothing was actually lent, rather the money was exchanged. A unit of money could only be fairly exchanged for another unit of money, so asking for more was unfair. Aquinas later opposed any unfair earnings made in trade, basing the argument on the rule that a Christian should treat others as he himself would like to be treated – which means the Christian should trade value for value. Aquinas believed it particularly immoral to raise prices because a certain buyer had an urgent need for what was being sold and could be persuaded to pay a higher price because of local conditions. “If someone would be greatly helped by something belonging to someone else, and the seller not similarly harmed by losing it, the seller must not sell for a higher price; because the usefulness that goes to the buyer comes not from the seller, but from the buyer’s needy condition.” Aquinas would therefore condemn practices such as raising the price of building supplies in the wake of a natural disaster. Increased demand caused by the destruction of existing buildings [negative supply shock] does not add to a seller’s costs, so to take advantage of the increased willingness of buyers to pay constituted a type of fraud in Aquinas’s view.

Land is the 1st factor of production, made by Nature, not man. The Natural Commons extends to the broadcast spectrum too. In 2017, at the Union of Theological Seminary at Columbia, historian and economist Michael Hudson gave a speech called “The Land Belongs to God,” in which he explained what Jesus’ first sermon was all about.

At first Jesus said: “Good to be back in Nazareth, let me read to you about Isaiah.” In Luke 4 says it that this was all very good, and they liked him. But then he began talking about debt cancellation, and they tried to push him off a cliff. So basically you have the whole origin of Christianity as a last gasp, a last fight, to try to reimpose this idea of the economic renewal – of a Clean Slate – that goes back at least to the 3rd millennium BC and probably all the way to the Neolithic. So you have this last attempt to try to get a Clean Slate, and we know what happened to Jesus. His followers were not able to bring it about. So by the 1st and 2nd centuries of our era, what could the Christians do? You’re never going to get the Roman Empire to announce a Clean Slate
[this debt jubilee includes not just financial debts, but restoration of property confiscated by creditors]. As a matter of fact, when the kings of Sparta, at the end of the 3rd millennium BC, tried to cancel the debts, the oligarchs of Greece called in Rome. Rome went to war against Agis, Cleomenes and then Nabis and destroyed Sparta. They were going to fight against anyone who wanted to cancel the debts. Mithridates in Asia Minor in the 1st millennium fought against Rome, canceled the debts, and also killed about 30,000 Romans in the ancient Near East. It was a long bloody fight, and they all lost.

So all the Christians could do was have charity. Well, the problem with charity is that you have to be rich in order to lend to somebody. […] You can buy the debt and pay somebody else’s debt and give money away, but that doesn’t really fix the system. The result was, it really was the end times. The choice was: either you’re going to have economic renewal and restore people’s ability to support themselves; or you’re going to have feudalism.
That basically is how the Roman historians described Rome as falling. The debtors were enslaved, not only the debtors but just about everybody was enslaved […] Finally, you needed to have a population, so you let people marry and you gave them land rights – and you had slavery develop into serfdom. Well we’re going into a similar situation today, where I think we’re going into a kind of neo-feudalism. The strain of today’s society is as much a debt strain as it was back then
.

When the market libertarians of today speak of freedom, they speak of the feudal class’ freedom to do what it wants with YOU and not be accountable! The type of unearned income that they hate isn’t income derived from privatized land rents, from usury, arbitrage, from cartelized markups, or from patents – no, not at all – their hatred is reserved for food stamps and welfare checks, money that actually ends up in the pockets of sellers of goods and services and workers, money that circulates in the economy, and doesn’t sit idle on poor people’s balance sheets, like it does on the balance sheets of the rich and ultra-rich.

Besides, the welfare system is a Federal Program. Welfare dues aren’t “unfunded liabilities,” as the pathetic deficit hawks like to claim, nor are they under threat in case of lower tax collections, as the dumb deficit doves insist. Federal Government programs are financed from Federal Government fiscal debits, not tax revenue. The purpose of Government money taxation is threefold. 1-To create a permanent demand for the Government’s currency, giving it thus extrinsic value. 2-To drain income out of the economy [a tool to regulate levels of Aggregate Demand and thus control inflation]. 3-To incentivize and or penalize various socio-economic activities. I encourage the reader to see a paper from 1946 by Beardsley Ruml, then Chairman of the NY Fed, called Taxes For Revenue Are Obsolete.

Can the traditional welfare system be reformed? Yes. Should it be reformed? Absolutely! A Job Guarantee program and or a Basic Income would be much better than the means-tested welfare system, which comes with bureaucratic overhead and, worst of all, the perverse effect of “trapping” people in it, because if a person gets a job and the employer decides to fire him or her immediately after, that person has to go through the bureaucratic gauntlet again, so it deters them from actively seeking work. We should also regard the employment figures in a circumspect manner. The assessment of unemployment has changed during the years – if you work a couple of hours a week, the State statisticians catalog you as “employed.” If people have lost hope of finding jobs, and no longer register at the local offices, the State statisticians label these people as “voluntarily” without a job, so they don’t count them in the actual unemployment figures. Labor force participation has been going down in the USA.

And would it matter if the participation rate rose, while wealth extraction grew at pace with wages and profits or outgrew them? Theoretically, we could have full employment tomorrow if everyone agreed to work for peanuts, but that society would be categorically worse off in net terms!

If we compare welfare and health insurance conditions in the US to the leading countries in Europe, we see that the US is actually closer to 2nd world states, than to the 1st world states. The average libertarian in the US bears little difference to the so-called libtard, I call them libertardians. They want open borders, no regulations, endless rent-seeking, and oppose hawkish foreign policy only because the State is engaged in it; they’d prefer private companies [mercenaries] to do the killing, the bombing, and the invading.

Government thus has to intervene in economic life for the benefit of all not only to redress grievances, but also to establish enterprises that promote economic efforts but, because of their size, are beyond the means of individuals and even private corporations. These are not paternalistic measures to restrain the citizens’ activities; on the contrary, they furnish the means for promoting such activities; furthermore, they are of some importance for those great ends of the whole state that make it appear civilized and cultured. Important roads, railways and canals that improve the general well-being by improving traffic and communication are special examples of this kind of enterprise and lasting evidence of the concern of the state for the well-being of its parts and thereby its own power; at the same time, they are/constitute major prerequisites for the prosperity of a modern state. The building of schools, too, is a suitable field for government to prove its concern with the success of its citizens’ economic efforts.” That’s a quote from the founder of the Austrian School of Economics, Carl Menger, whose basic tenets the contemporary Austrian adepts utterly reject and rabidly loathe. In fact, the modern deficit hawks today [the libertardians and the cuntservatives] would label the classical economists as dangerous, evil statists, and communists, if they were inclined to actually read their work. That’s how hopelessly indoctrinated they are. Two different quotes more and I’m done – and the authors are Adolf Hitler and Kenneth Boulding.