December 21, 2017—Ten years ago this month, I was journalling about the economy, on the eve of the 2008 financial meltdown that is now referred to as the ‘Great Recession.” On a philosophical level, I was deliberating about “free market capitalism.” My definition differs from the standard one, as I believe ultimately “capitalism” is an individual thing, in that the individual uses the wealth between her ears, in her “caput” to generate enough to survive.
Capitalism, in my view, is not about the soulless corporate amalgams of human protoplasm devoted solely to bottom line profits. No. A capitalist worthy of the name is self-directed, self-motivated, individual, and scorns government favoritism. Thus, to me, the US “economy” which serves the aggregate, works against the individual, who is only oppressed by government spending, debt, and money exporters, and is not served by government policies to “stimulate the economy.”
The following are some journal excerpts from that time:
ON THE SUB-PRIME HOUSING MELTDOWN
Friday, December 28, 2007 – My friend Louis wants to blame the borrowers who are losing their homes in the sub-prime mortgage meltdown. He represents the prevailing opinion among the TV-educated, the corporate advertisers’ version of current events. I didn’t explain well to Louis why his assessment is unfair.
I imagine a typical would-be sub-prime buyer. He’s an immature, overeager dreamer, with stars in his eyes, at the mercy of realtor, developer or home owner, banker and lawyer, all bent on selling this house to the first poor slob they can drag in, because they are all overextended and staggering under overhead. They gang up on him, paint rosy pictures, feed into his dreams, rubber stamp the loan applications, hedge on getting credit reports and down payments, and otherwise abdicate fiduciary responsibility.
Joe Buyer, who can barely read and write, because we depend on the government to educate children, signs contracts nobody understands, created that way intentionally to confuse and intimidate the naïve buyer.
At the closing, everyone in the room except Joe knows he is being set up. If anything bad happens, he is out on the street, minus his down payment, if he made one, and maybe in more debt than the house is worth.
But the realtor/developer/home seller, banker and lawyer have no reason to care. They get their money up front, no-risk cash, and they can walk away and spend their earnings that night. The banker sells Joe Buyer’s loan to a bigger shark upriver, along with as many other similar deals as possible.
Joe Buyer, who believes he has bought a home, when he has only bought a falsely inflated mortgage, now proudly holds the keys to the biggest debt trap of his life. He is fixing to see why, when the bottom drops out of a saturated market and banks are still charging yesterday’s interest on yesterday’s property values. I don’t blame him for walking away. Write it off as mass education in market forces.
Meanwhile, all the banks are doing this all over the country, as are all the rest of the sharks, as fast as they can process the loan applications. So, when too many Joe Buyers start walking away from their mortgages, the banks are left holding the tangible assets in other states, because that electronic paperwork has traveled to New York through a number of middle men and other bunglers . . . er . . . bundlers, who each got a cut of Joe’s future earnings. Now a New York megabank holds Joe Buyer’s mortgage in its computer-bank, along with thousands of others more or less like his.
The New York megabanks would be up a creek by now, if they didn’t have the federal government to bail them out. They now own thousands of empty houses, and they are responsible for property taxes, safety, maintenance, insurance, and other expenses that should be profits. This displeases the Fed, which has bought all the megabanks and the federal government with electronic money, so ultimately owns all these tangible assets that nobody can afford to keep.
Poor Fed. May it get what it deserves.
Thursday, December 27, 2007 – If Congress can practice medicine, I can write law. In a free, capitalistic democracy, there would be no Congress. Taxpayers would be shareholders, each with a binding vote on the government budget, and they would only pay taxes on services they wanted.
I’ve noticed there is almost no information in standard places about tax law. I checked book stores and library. My accountant is suspiciously silent on this most widespread and generally accepted practice of extorting money from people in order to boss them around.
What’s the big secret? That the income tax is unconstitutional, immoral, and unethical? What changed between 1895, when the US Supreme Court declared the income tax unconstitutional, and 1913, when Congress re-instituted it to provide a perpetual feed to the newly formed Federal Reserve?
It is not the free market capitalist’s job to support the self-ordained moralists in Congress, who presume they have a right to obligate my future for my health, wealth, and welfare.
Taxpayers who are willing to pay for their own enslavement do not deserve freedom.
ODE TO THE US CONGRESS
Thursday, December 27, 2007 – As self-proclaimed overseer of every human endeavor and master of none except getting something for nothing, the US Congress presumes to socially engineer America and the world into a better tomorrow.
The legislation regarding incandescent light bulbs symbolizes Congress’ attempt to turn out the lights and return to the Dark Ages. It’s the latest best reason to abolish Congress. Our hired bosses need to get out of the engineering and agriculture businesses. They need to quit engineering global warming with every stroke of legislation that insures quick, election-year profits and long term disasters.
They need to get out of the technology-promotion business, the debt-promotion business, the auto and energy promotion business, and the self-promotion business if they want to save themselves from irrelevance and expendability. They have lost credit and credibility with taxpayers, and their promises are coming due.