W. G. Peters

Many think modern American society and its economy is sick, ill, and broken. I continually hear about the divide between the Haves and the Have Nots. Is our society really sick, and if so, whats to blame? Lets see if we can make a diagnosis of the real problem.

Some people like to talk about the Haves versus the Have Nots. While there is truth to this classification, it is not the whole truth. It is a symptom, not a disease itself. In reality, there is also the Can Dos versus the Can’t Dos, the Able Class versus the Unable Class and the Want to Do versus the Don’t Want to Do classes.

In discussing the Haves, we must ask why there is a class of people who seem to have plenty and the opposite class which seems to have little. Also, why is the Have Not class increasing. This cannot be done honestly without discussing the Cans and Can’ts.

In any society, some people have more value to that society than others. While some think they can legislate a person’s value to society through welfare payments and minimum wage laws; in fact that is erroneous thinking. Only society can determine the worth of the value of functions and vocations and an individuals worth to it. If an attempt to make some job more valuable through legislation occurs, it can only end in failure if society as a whole does not see any value to that job. In the end, those jobs disappear. How many buggy whip makers do you see around you? How many lawn cutters do we need? How many window washers? Only society as a whole working through the economy can make these decisions, and government can not decide. Society makes these judgments every day by its choices in what it buys and what it doesn’t.

Most people seem to think that they get paid for putting in the hours for their labor. At one time this was mostly true. Just 100 years ago, 90% of the population of the USA were farm laborers. It is not true any more. In actuality, people draw a salary for a combination of 4 basic things: Labor, Creativity, Knowledge (skill), and Risk taking. However, the advent of the machine age has replaced much of the need for actual labor, and increased the need for knowledge and creativity. Of course this creates a problem of what to do with all the people in society who are not creative, do not have any specialized knowledge, and are only capable of physical labor, and to a lesser degree, people who cannot contribute any of these commodities at all. While technology has changed the relationships between Labor, Creativity, Knowledge and Risk; it has done little to change the capabilities of the populace in general.

There are those who think the answer is more education, making people more knowledgeable. The Ph.Ds who are flipping burgers at Mickey D’s will tell you that there is a limited demand for knowledge, and simply having a better degree does not guarantee that the recipient will have any more value to society. In fact, the more education you have in a specific area, the fewer are the chances of actually being employed in that area. Look through the help wanted sections of any newspaper or a job site like Monster.com and note how many job openings there are for Psychiatrists, or Philosophers, or Chemists. Compared to the size of the population, not very many.

Suppose everyone was actually able to obtain at least a bachelor’s degree. Would this create additional jobs, or increase the value of those jobs to society? Doubtful at best. It would disappoint a lot of graduates though who believed they were going to get the cream of the jobs only to find out that they were not.

Then of course, there is a pretty large segment of the population who simply are not capable of higher education endeavors even if handed to them. A large portion of the population is below average in intelligence, and this fact must be realized. I do not say this to degrade anyone, its just the way it is.

That leaves creativity. Can creativity be learned? My experience says no, but maybe the right techniques have not been discovered yet. Bill Gates of Microsoft fame got where he is because he is a very creative individual, not just because he worked 18 hours a day.

As a result of a large segment of the population believing they are simply entitled to whatever they want, government has tried to oblige by mandating welfare and minimum wage standards. This has resulted in the Can Do class of people who are capable of and engaged in supplying the wealth of the country to become disheartened and angry. The Doers of society rightly feel that they should not have to support every one else. In fact, they have become slaves themselves to the Can’t Dos and Don’t Want to Dos. What often happens is that the Doers just decide not to DO as much as they could, as there is little point to it. Consequently, the Doers use their creativity to find ways to avoid having to support the Can’t Dos and Don’t Want to Dos. Creative people are quite good at finding ways to beat the system.

In its proper role, the purpose of any economy is to assist the survival of its individuals by allowing them to contribute to others in their own way and in so doing, earn their own survival. Hunters hunt, gatherers gather, farmers farm, welders weld, and each trades a portion of his work for what he cannot do himself. It allows us to contribute to the whole through specialization. But what do we do with people who have nothing valuable to contribute? This is the real Have Not, and Can’t Do problem. Further still, we live in a time where technology has increased the productivity of the Doers to the point that we need less of them to supply us with the essentials of life.

Basically, a large portion of humans are simply obsolete. How do we achieve the goal of retrofitting tens of millions people out of obsolescence?

In order to build a better America, this is the problem which must be solved. It cannot be solved by mandate. It cannot be solved by legislation. It cannot be solved by ignoring this root problem. We must solve it soon, or nature will solve it for us.

Adrian Rogers

“You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is the beginning of the end of any nation. You cannot multiply wealth by dividing it.”*

This is so self evident, but yet we never seem to get it. If it were possible to tax a nation into prosperity, North Korea, Cuba, the Soviets, and all the other highly socialized countries would be wealthy beyond imagination. But yet, we think it will work here. I have news, it won’t. We are rapidly sliding into 3rd world nation status because Americans no longer feel the need to be self sufficient, and have lost the work ethic. Americans expect someone else to work and pay. This is the heart of socialism.

Socialism leads only to slavery, servitude, and poverty. Is this what you really want?

Normally, I write my own articles. However, I have found a great article by Larry Hannigan that I feel everyone should read.

The origins of our current economic/political situation date back to 1694 when The Bank of England was created. King William of Orange was in financial difficulties as a result of a war with France. The Goldsmiths “lent him” 1.2 million pounds (a staggering amount in those days) with certain conditions:

1. The interest rate was to be 8%. It must be remembered that Magna Carta stated that the charging or collecting of interest was a serious crime.
2. The King was to grant the goldsmiths a charter for the bank which gave them the right to issue or create credit out of nothing. Prior to this, their operations of issuing receipts for more money than they held in deposits was totally illegal. The charter made it legal.

In 1694 William Patterson obtained the Charter for the Bank of England.

Larry Hannigan’s fable illustrates the evolution of banking and power since that time, from a simple barter system to the Fractional Reserve banking which enslaves us today.

Please take the time and CLICK HERE to read Hannigan’s story on his website.

Thanks.

The USA was founded with a government composed of three branches, each designed to keep the other two in check.  The Congress or legislative branch composed of the House and the Senate was given the task of formulating law, regulating the money supply, and raising revenue.  The House of Representatives was supposed to represent the people, and the Senate was supposed to represent the States.  The Executive branch consisting of the President and Vice-President, was given the task of commanding the Army, and providing for the execution of laws passed by Congress.  The Judicial branch consisting of the Supreme Court was tasked with being the final arbiter of what is right and lawful.  That was then.

The Senate’s role changed however with the passage of the 17th Amendment to the Constitution.  The purpose of the Senate was to represent the State as a whole and protect the rights of the individual states.  Originally, Senators were appointed by each State’s government.  However, the 17th Amendment, ratified in 1913, changed that to direct election of Senators by the voting population of the State.  The result has been a major erosion of states rights over the last century.  The founding fathers envisioned the states as being the major power structures, not the Federal government.  This has been debated over the decades of course, but its easy to see that individual states have mostly lost their sovereignty to the Feds.

The duties, obligations, and powers belonging to the House and Senate are well described in the Constitution, and limits of power were set on each body.  Likewise, Presidential powers and limits were spelled out describing those actions which the Federal government was allowed to do and which they were not.   For instance, the House of Representatives is charged with the responsibility for the budget, and regulating the value of the currency.  These stipulations created a balance of power within government so as to prevent any one branch from becoming all powerful.

But now, everything seems upside down.  Instead of the House representing the people, it seems to be representing the President.  That is not their job, and it is not the President’s job to make law.  Nowhere was this more apparent than when the Congress recently considered amnesty for illegal aliens.  The people bombarded Congress asking them to say NO to amnesty, with public sentiment showing 74% of the populace against amnesty yet Congress completely ignored  the people whom it is charged with representing. Recently, it seems Congress has turned a deaf ear to the populace, and listens only  to the President.

Government has only a few basic actions it can take.  It can spend money, levy a tax, or create a law.  These actions then become all important, and should not be taken without proper knowledge of the issues, and proper debate with input from the populace.  When the Congress becomes a rubber stamp for the President, this does not happen, and the people whom the government is supposed to represent are locked out of the process.

In matters of the budget, the President has no Constitutional authority to draft a budget for the country, yet every president does so.  It is the House’s responsibility to regulate and control the value of our money, but they have abnegated their responsibility letting the Federal Reserve Bank take charge.  Most of the people in Congress probably cannot even balance a checkbook let alone the Federal Budget and few seem to understand the simplest basic principles of the economy.   The House and Senate have acquiesced to just about every demand made by the President and ignored the general input of the electorate.  The bank bailout was a good example.  This has set up a defacto dictatorship.  The balance of power so thoughtfully worked out by the founding fathers is now broken.

Congress routinely passes legislation without even knowing what they are voting on.  From an outsiders view, they vote on the title of the bill instead of whats in it, which is sometimes much different.  How many in Congress actually read the original Patriot act before voting on it?  How many congressmen read the entire 1000 pages of the economic stimulus package?  Here’s what John Boehner had to say about it:

“The reason for passing legislation we don’t understand is because we passed legislation we didn’t read,” said Rep. Jeff Flake (R-Ariz.).  “Who knew what and when did they know it?” House Minority Leader John Boehner (R-Ohio) demanded on the floor. “This language was air-dropped into a conference that occurred behind closed doors involving very few members.”

This inversion of representation did not happen overnight, and probably goes back to 1913 with the creation of the private banking system which was misnamed the Federal Reserve Act.  At that point, Congress gave up its role in the issuance of currency and the regulation of its value.  As a result, bankers are now in control of the country.   Its an example of the golden rule: He who has the gold rules.

1913 seems to have been a very bad year for the country with the 17th amendment, creation of the Federal Reserve, and passage of the 16th amendment allowing the creation of the personal income tax.  We should have skipped 1913 and gone directly to 1914!

So, We The People are essentially left without effective representation, and stuck with a government that is essentially upside down.  I fear for my country, while hoping that everything turns out right.  I wish I could suggest a solution, but alas I cannot.  Maybe if I stand on my head, it will look right again.

As a result of this inversion, we have lost much of our freedoms.  We live in a time where asking our government to do the right thing tags us as an enemy of the state instead of being a co-creator of a better country.  We live in a time where fear is winning out over reason.  We live in a time where the country is terribly divided when we should be coming together to create a better tomorrow.  We live in a time where science has become politicized.  We live in a time where State’s Rights are being squashed by the Federal government.

This is not a Democrat vs Republican issue, or a Liberal vs Conservative issue.  This is a creeping disease which has infested the entire Federal government, and will eventually kill our country,

It is my hope that reason wins out.  In the end, we all want the same thing, a better America, peace, prosperity, freedom,  justice,  and security; the principles this country was founded on. At least I hope that’s what we all want.

The question is: Will the America we love and fought for still be here tomorrow?

Obama says the US needs to act quickly in the economic crisis. He says unemployment may exceed 10%. Its probably already over 10% because the official unemployment figures are totally false. They only count the people who are receiving unemployment payments; but once a person’s unemployment runs out, they are no longer counted as unemployed.

No one in the government seems willing to call a spade a spade and say that we are in the beginnings of a depression, but that’s what it is.

Recession and depressions are caused by the same thing. People stop buying goods and services. In any economy, it is production which provides jobs and income for people. When people stop buying, there is no point in producing, so people get layed off or their hours get reduced. When that happens people have less money to spend, and therefore buy even less. Its a vicious cycle.

What starts the downward spiral? The immediate cause is any event which causes the population to reduce its spending, like a sudden loss of wealth (housing bubble popping), a disruption in availability of resources (like an oil shortage), a natural disaster displacing a large number of people cutting off their income, or a large scale terrorist attack like 911 which through fear caused people to stop their normal spending, and finally, tax increases which reduce the spending power of the populace.

Government handouts to banks, and car makers, and insurance companies, and retailers do nothing to stop the cycle, as they do not address the basic problem of the population not buying goods. In fact they eventually make it worse because the government taxes people more to pay for their handouts. New York State is a good example with their announcement of 88 new taxes in place for 2009 so the government itself can go on wasting taxpayer money even when the taxpayers have less of it to spend themselves.

Handouts and stimulus packages will have even less effect now than they did during the great depression, because so much of the industry that supplies peoples needs have left our country and now reside in Asia. An economic stimulus package now will help China more than it will the US. Give every taxpayer $1000 to spend and watch the parking lot at Wally World fill up as people rush to buy all those Chinese goods. Once the money fills the cash registers, we are no better off than before. Any country that cannot produce the essentials of life for its own people cannot remain a First World Country.

What we need is incentives to bring back our manufacturing to our own shores, and provide jobs for our own people. We need jobs and industries that produce wealth, and that means manufacturing. Washing each others windows does not create wealth. We need legislation that encourages new manufacturing, and enables them to be competitive on the world market. Otherwise, the downward spiral will continue for years to come. Other things may work short term, but if America is to remain a country of wealth, it must regain its manufacturing base.

I doubt that any of our government leaders will do anything useful to save our economy. What they will do is protect themselves while trying to make the public believe they are working to solve our problems. Well, buying that line is the one thing which will not save our economy. I’m not buying it, and neither should anyone else.