Harvard Lobotomies and the Disgrace of the Economics Profession

It’s worth stepping back on occasion to consider the progress that has been witnessed in particular academic fields. Astronomy took a giant step forward centuries ago when it finally realized the sun was at the center of the solar system. Geology adapted to the fact of a round earth. The continuous evolution of Physics boggles the mind. Engineering perpetually pushes into new frontiers.

And how does Economics compare?

Well let me take a moment to congratulate the few Harvard, LSE, Princeton, Chicago, MIT grads serving Wall Street, the Fed primary dealer cartel, the IMF, and the World Bank (and Larry Summers deserves extra credit). These economists drive the field, and they’ve brought it to a point that has taken us back to the days of medieval feudalism. The field is now more primitive than flat-earth Geology and Ptolemaic Astronomy. Congratulations economists!

Of course it’s not entirely the economists’ fault. They were taught from day one in Economics 101 that they will undergo a moral lobotomy. Neoclassical Economics goes to great lengths to indoctrinate new recruits that it’s a positive vs. normative “science.” Other sciences don’t bother to do that because the fact is there should be no conflict between the positive and the normative. Why is Economics the only field that does this? Because it wants to avoid the questions that good students interested in true progress would otherwise ask. It knows it’s hiding something in its content that conflicts with the normative and it doesn’t want students to search for and find the truth. Just remember this helpful indicator in your next life–anything that goes to such lengths to admit upfront that it’s morally bankrupt might be something around which you should NOT build your life!

The truth is that modern Economics has been designed to completely hide the monetary system that hovers above the economy. It assumes money is just a medium of exchange floating through the economy to facilitate a free market and generate wealth. At times that has been true, but today it’s probably the biggest lie of modern history. The current system does not generate wealth and freedom for most people. It generates debt and servitude. And it is not a free market. Today’s money flows from a top-down imperial power system expanding globally. It creates a master-servant relationship because all money comes from privately held debt.

Let me say that again. ALL MONEY COMES FROM DEBT (for those of us who suffered the most indoctrination by attending schools like Harvard, let’s pause here for a moment so we can catch up to the rest of the class). This means in order for governments, businesses, and people to have the liquidity necessary to live, they must agree to sign over a claim on their assets to banks. As the banking system inflates over time passing out credit, which makes everyone feel good with more digits in their accounts, it gathers claims on all the assets in the system for its private capital holders. Admittedly, this is one way of facilitating development (good students would’ve figured out a better way had they not been stifled). But it’s also the method for transferring everyone else’s assets to the balance sheets of the capital holders behind the banks once deflation sets in.

This is what we’re facing today. The global banking system has a claim on most assets in the world (except those in places like Iran, so it’s no surprise the military is gearing up to conquer the region for Wall Street and its Harvard employees…like JP Morgan Chase moving in on the mineral assets seized in Afghanistan because it’s a primary bank that pays the military-industrial complex to conquer territory for it).

Once the system has gathered all the claims it wants, senior capital will be removed, kicking off the next phase of deflation and a transfer of assets from the people to the banks. At that point we’ll probably see JPM Chase CEO Jamie Dimon, another Harvard lobotomy victim (there’s a high correlation between Ivy League lobotomies and billionaires), on CNBC threatening Americans to pay up as his firm jacks up their rates and takes their homes like he did in early 2009.

In this transfer process, the people’s equity will be eliminated. And this means, they will be returned to the life of a feudal servant to the capital holders behind the banks. This is not rhetoric, but the unarguable math and accounting of the banking system. It’s very simply a mechanism to transfer assets/equity from the balance sheets of the many to the balance sheets of the few.

So a final word for all the top economists out there:

Congrats again! It didn’t take much to buy you off. Today’s financial elite who control the global debt machine have rewarded you with paychecks and the status of the high priests of old. Sad. Do you have any pride, or is it really that easy to co-opt you with retreats in Jackson Hole, hobnobbing in Davos, and membership in the CFR?

Come on. Rise above it. You are obligated to fix this immediately:

1) Develop an interim solution in concert with the old time-tested bondage/jubilee, growth/rest cycles which gave the people, communities, land a breath of fresh air in the midst of empire growth. (if you’re writing that off as religious romanticism, ask yourself what top athlete doesn’t live by training/rest cycles…over-training results in deterioration, not progress)

2) Then develop and advocate a humane money system that facilitates the rebuilding of real community as opposed to one based on debt servitude that parasitically sucks the life OUT of communities.

We know the debt holders have a lock on Harvard and LSE (my days at Harvard were marked by professors preaching the greatness of Enron finance and Wall Street derivatives, so most Harvard grads are probably beyond recovery). But what about the rest of you? It’s time to step up and work toward progress like your colleagues in other fields. It’s time to move beyond the dark ages.

Humanity’s Defining Moment–join us Mish

Mish Shedlock has made a well-deserved name for himself, especially since the crash of 2008, as one of the few people who understand the problem we’re facing. I agree he’s way beyond the regular financial media that’s utterly clueless. This means he carries a certain moral obligation. But based on a recent article I’m afraid he has yet to step up to the plate because he’s still endorsing the same archaic left vs. right, union vs. business, capitalist vs. socialist rhetoric from politicians who have no clue about the flaws in our debt-based monetary system.

The 2-tier Economy

Embedded in the article is an unspoken assumption that the lower classes need to take pay cuts and layoffs so global bondholders and Chase bankers can be paid in full. That’s so…uh…20th century. If astute bloggers don’t start educating politicians by injecting into the political debate what they clearly know when they engage in market debate, the coming downward mobility for everyone but the bondholders is going to be galactic.

Mish agrees with NJ Governor Christie that the reason teachers are facing layoffs is because of teacher unions. Of course that’s true within the constraints of our current monetary system where lower class pay cuts are “good for the economy” while at the same time increased rent extraction by the financial class is “good for the economy.” One is the flip-side of the other. Manufacturing workers have learned this in spades, especially since their communities and way of life have been completely destroyed and moved to China. It’s a predator-prey economic relationship, precisely the reason unions exist in the first place. So what’s the real problem: the unions or the nature of the monetary system itself?

In a system where 100% of all money is sourced by going into debt to private capital holders who demand exponential returns, employees in fields like education which are managed on the balance sheet as “cost centers” must live within the austerity of cost reduction metrics. In real life terms, this means in order for the bondholders at the top to maintain their ever-increasing quality of life, millions of employees in cost centers must be happy with continually declining quality of life. During inflationary periods when capital holders are injecting more liquidity, this translates into cost center employees receiving raises that stay below the inflation rate (these teachers stayed ahead, but systemically across the entire economy, cost centers are managed below inflation–again just look at the offshoring). During deflationary periods when capital holders are removing liquidity, cost center AND revenue center employees take pay cuts and get fired so the capital holders can keep making more money.

Questioning the Status Quo

Unlike politicians, Mish is smart enough to step out of the existing monetary framework and ask himself what might be a better solution given the extreme situation we’re facing. Why doesn’t he? Why don’t most people? Perhaps they haven’t been faced with the type of austerity that forces a person to question the sanity of a system where all money is controlled by private capital. Or perhaps they’re “survival of the fittest” fundamentalists like Larry Summers, i.e. private sector bondholders deserve to win all the poker chips while everyone else is left with nothing. Or maybe they’ve just been enjoying a comfortable inflationary ride for so long that they can’t fathom the fatal flaw that’s been embedded in the monetary system from the very beginning.

That is…until now. The exponential game is reaching its end as the debt load approaches the point of saturation. If we don’t change the system before that inflection point, we’ll see the biggest austerity program ever as millions of people enter a tomorrow most people can’t dare to ponder today. In market terms, that inflection point is when global capital holders run on Treasuries and the Fed is forced to jack up its short rate to defend its balance sheet. That point may be next year or 10 years from now, but it’s coming if the status quo is not changed. And look out when it does.

This is not populist rhetoric, but the basic mathematical fact of our system.

Rather than justifying it, this should make us reevaluate the monetary system we’ve been living under for 100 years. We’ve experienced a lot of development. We’ve already built the brave new world. Does a never-ending stream of new gadgets from Apple, reality shows from Fox, and dead bodies from wars really justify milking more return on capital (ROC) from the lower classes forever? Of course we know that’s impossible. The system is reaching not only its human velocity limits but its mathematical limits. A systemic sabbatical has never been more necessary, so an alternative form of liquidity to supplement our current system is necessary.

Anything Else Has Zero Moral Authority

A structural adjustment in the global monetary system in the spirit of jubilee is clearly the only moral solution at this point. Every major religion and every sane philosophy demands it and compels us to implement it. Anything else is morally deranged and will result in a class-based world war where the capital holders turn violent governments against the masses.

Academic institutions and economists – you are obligated to develop and implement such solutions.

Bloggers – focus solely on this issue to educate the politicians

Wall Street and Silicon Valley employees – take a vacation and walk through the midwestern and mid-atlantic towns your work is destroying.

Top capital holders – this is your crossroads. Making the right decision will do everyone much good. Making the wrong decision will result in your spiritual and psychological death while many in the lower classes around the world experience premature physical death.

Global Empire and the International Banking Cartel (part 2)

Last week I wrote an article explaining what I mean by the international banking cartel that operationally rules the economy–the Federal Reserve primary dealers. Some astute readers wondered why I didn’t report on the global regulatory institutions that have power over that cartel. Good question. And others asked for more clarity on the cartel itself.

Regarding the first question, I purposely focused on the cartel because so many people still don’t believe it exists due to false free market propaganda. If people don’t realize that a cartel of predatory usury institutions operationally controls the US, then why would they care about the regulatory framework over those institutions?

But the point is well-taken. The article might have implied those 18 dealer banks have ultimate power. Not at all. The key word in the above paragraphs is “operationally.” The dealers operate within a larger framework. They do not strategically rule over the framework itself. The ultimate rulers are the most senior private capital pools in the world who use the dealers as capital laundering machines and who create their desired framework through the central banks, IMF, BIS, and political institutions like the European Union and G20.

Since WWII, their desired framework has been to fuel global empire by milking the US population through the debt-dollar system centered around the Fed. Now that the US has been milked dry, things are shifting to a new milking center for the 21st century–China. Behind the scenes will be the senior capital pools currently in London and New York and the banking establishment in Switzerland, but on the surface Asia will emerge with profound power as China becomes the operational center of a new global empire based on a new global currency. At that point, the key dealers will simply plug into that new system. The world will think this represents the end of the US empire. But a US empire never really existed. More accurately the US was simply the latest host of the parasitic international banking empire that leeches off countries and plays them against each other. The parasite will quietly slither into Asia while using its media to blame the US host for the damage it has done.

Now a few points of clarity for those who want to better understand the cartel dealers:

- They are not equal. Some play long-term strategic chess as they’re aligned with the senior capital pools mentioned above. Others play the short-term profit game as the chess players allow them. Of the US firms, JP Morgan Chase and Goldman Sachs are on top. While Goldman may appear to be #1 since its people have literally run key government agencies for about 20 years, I’d suggest that JPM Chase is preeminent. Not only does it have the most power due to its derivatives position, which gives it the highest claim on capital in the US, but also it’s the merger of the old aristocratic interests behind JP Morgan and the Rockefeller interests behind Chase Manhattan. So let’s just say it wouldn’t be in your financial interest to bet against this bank. Its power was demonstrated after the crash of 2008. The media suggested JPM emerged unscathed because it was the honest, good bank whereas bad, greedy banks failed. Yeah, and I live with Puff the Magic Dragon. Ask yourself, after the Corleone family killed the leaders of competitive families in The Godfather, did Congress investigate the losing families, or did they investigate Corleone? So why did Congress investigate the losing banks!? You don’t blame the firms that were driven out of business. You look to the firm that benefited most. The fact is, the crash of 2008 was the trigger for a restructuring M&A transaction of the US economy, and had there been a tombstone printed in the WSJ, just speculating here, the lead bank would have likely been JPM.

- Some members change over time. These are the short-term profit players. For example, Countrywide was a dealer while it helped inflate the real estate bubble and BT Alex Brown was a dealer while it helped inflate the first tech bubble. Both of them were leaders of their short-term niche markets because of their privileged risk/cost position as dealers, and both of them were acquired by senior dealers for a deep discount once senior capital was pulled, bursting their respective bubbles and leaving the losses in the hands of junior capital.

- The cartel is international, so we no longer live in a world of independent countries. It would be more appropriate to view countries as administrative districts of the banking system so the financial elite class can extract value from the lower and middle classes. One of the key insights from the movie Braveheart was how the royal elite from different countries cooperated with each other against the masses. Today it’s more sophisticated. The mathematical, formulaic banking system aligns the financial elite in different countries together against their populations by managing them as digits on a balance sheet. It’s a simple matter of math, accounting, and system management, not conspiracy.

- Both political parties serve the cartel. It controls and profits from the private sector corporate system (typically championed by the political right) and the government welfare system (typically championed by the political left). Choosing between Democrats and Republicans changes nothing.

- Finally, it means conventional wisdom about money is false. The problem isn’t that our money isn’t gold-backed. The problem isn’t fiat money. The problem is that all money is hierarchically controlled as an asset to private sector institutions and elite capital holders who have the ability to call-in their chips, i.e. your bank digits, whereas it’s an interest-bearing debt to governments and the people. This has immense ramifications I don’t have room to address here. Government neither prints money nor causes inflation in this system (if it would like the original colonies did to escape British banker austerity and usury, some of the current unemployed would have jobs and those losing their homes in foreclosure might find some relief). Rather, the cartel controls all money and drives inflation/deflation cycles. It has driven consistent inflation for 60+ years. So we are now facing painful deflation, or hyperinflation if the government makes a key mistake, as the senior capital pools attempt to bring about the new banking/currency framework. If the money system isn’t changed, the emergence of the 21st century global empire mentioned above is only a matter of time.

Monopoly Money and the International Banking Cartel

The Federal Reserve has been at the top of the news for a long time and it’s getting a lot of attention now as it appears the next down cycle in the depression may be upon us. So what’s the real reason the world listens so intently to an Ivy League bureaucrat like Bernanke? Of course, it has nothing to do with him. It’s who he is accountable to–the international banking cartel:

US
Bank of America Securities LLC
Cantor Fitzgerald & Co.
Citigroup Global Markets Inc.
Goldman, Sachs & Co.
Jefferies & Company, Inc.
J. P. Morgan Securities Inc.
Morgan Stanley & Co. Inc.

Britain
Barclays Capital Inc.
HSBC Securities (USA) Inc.

Switzerland
Credit Suisse Securities (USA) LLC
UBS Securities LLC.

Japan
Daiwa Capital Markets America Inc.
Mizuho Securities USA Inc.
Nomura Securities International, Inc.

Germany
Deutsche Bank Securities Inc.

France
BNP Paribas Securities Corp.

Canada
RBC Capital Markets Corp.

Scotland
RBS Securities Inc.

These institutions are the current primary dealers of the Federal Reserve System. They have power over the entire economy, everything in “the market,” very much a non-free market. They sit at the top of the world’s monetary system, currently the Fed’s debt-dollar pyramid, with a governmental license to what has been the most secure capital in the world–US Treasury debt–for a monopoly price that nobody else can get. And when it comes to global finance, the difference between the strongest banks vs. dying banks is just a few basis points in price (cost of capital).

These banks get first dibs on buying the servitude of the US population through the Fed/Treasury auction process. They distribute some of it to subordinate capital for a guaranteed premium, and they park a large amount of it on their own balance sheets as assets upon which they can speculate, trade, and fractionalize to create the rest of the money in the economy and put other countries, companies, and people in even more debt. So these institutions hold a monopoly position that even leviathan Standard Oil never dreamed of: a government-enforced usury license that generates trillions for their premium capital holders and senior employees and allows them to act as imperial armies sucking in more territory around the world as neoliberalism breaks down sovereignty.

This is why the country list above doesn’t mean what some may think. The institutions aren’t national. The list only indicates that the banking establishment has a permanent parasitic stake in those countries to churn their populations under the Fed’s debt system. All of the listed institutions are global in nature. Together with hedge funds and their other buy-side buddies, they have power over nations. Like any corporate institution, banks drive earnings per share (EPS) by expanding and leveraging their balance sheets, which for banks means putting everything else in more debt. So these cartel banks work to expand their territorial control beyond their national borders to put other populations in debt. This is a mathematical requirement of exponential growth enforced by the private capital system. The eventual end state of this dynamic is one integrated, global banking empire. It’s only a matter of time before their collective balance sheets (plus the large Chinese banks now that the cartel is colluding with them) control the rest of the world if people don’t awaken and choose to put a stop to it.

Will they succeed? The Fed system is in transition. The crash of 2008 was the first phase of global capital holders shifting their private capital out of the system so the Fed was forced to add public capital, i.e. your debt, into the system. More of this is likely coming. But does this mean the international banks behind the Fed are dying? No. They’ve simply transferred their bad assets to the public through the Fed and prepared to ramp up operations in Asia, which will be a primary churn center for the 21st century global banking system. Capital assets have been transferred, production assets have been transferred, and the capital holders can transfer much more capital in a short period of time if they so choose.

All the specifics of this coming transition may not be clear, but it is coming unless the global population says no. The banks have set up the ultimate voluntary test. If we continue to say yes by playing along with the banks and the multinational corporations they control, then they will have proven that a global empire ruled by an integrated banking system is preferred and possibly superior to independent countries. But they appear to be failing their own test. Ivy League neoliberalism has been exposed for what it is. The people are now indeed saying no.

On War, Armies, and the Brilliance of James Madison

The mass media’s way of communicating war is basically to put fake tough-guy narcissists like Bill O’Reilly, Joe Biden, or Dick Cheney on your TV screen speaking to the equivalent of a pre-oedipal 2 year old: “there are scary people out there…you need to be terrified…heroic saviors will attack and destroy their bad countries for you so you can maintain your mental fantasy that you’re safe. All you need to do is keep shopping, buying your little toys, while daddy keeps you safe.”

You can already see psychology and spirituality issues in that dialogue. But what about economics? One of the Council on Renewal’s tenets is that we currently live in a world where economics reigns supreme over every other dimension of life, including spirituality and psychology. This is literally embedded in the fabric of our legal system which says that the interests of private capital holders trump everything else in our system…everything…towns, counties, states, nations, families, individual humans. Given this system where Return on Capital (ROC) reigns, to understand the truth behind almost anything, you simply have to follow the big money to see what’s driving it…

So who makes money from war?
1. Mega banks in the cartel behind the Federal Reserve.
2. Military suppliers (Eisenhower called them the military/industrial complex).
3. Private mercenary contractors.
4. National media cartel.
5. Mega infrastructure and oil/mineral/resource corporations.

That’s pretty much all that needs to be said to understand why we’re in a perpetual war. But there’s a particular psychological element to it as well…

Who gains power from war?
- Royal families and the sick narcissists who pursue political power to rule the populations of the world.

This nexus of monetary gain (economics) and narcissistic power (psychology) explains most of human history, especially war. And what is the impact on individual spirituality, psychology, and economics?

Spirituality: our sense of meaning in life is increasingly tied to whichever war-fighting nation we’re stuck in. Our very identity starts to depend upon the battle, much like diehard sports fans get meaning in life from their team’s victories and their heroes (i.e. look at the angst suffered by so many because 1 random dude Lebron James chose a new employer).

Psychology: the infantilizing nature of war on national populations is profound. War allows the corporate media to keep the masses in perpetual fear, and like a child in an abusive family, such fear results in oppressed psychology. It sets up the daddy/child, strong/weak, savior/sheep mentality, which just fuels the narcissistic structure of society where psychopaths rule and everyone else hopes they keep them safe.

Economics: the population is forced into deeper debt slavery in war. It’s just a big transfer of money from the masses to the political narcissists and corporate/banking psychopaths, as Marine General Smedley Butler said.

So war is a great example of a negative economic system feeding negative cycles in spirituality and psychology as discussed in Lesson 6 part 3 of Renaissance 2.0.

How to stop it? Of course fixing the monetary system is the most important step since the math of debt-money is what fuels the imperial oligarchy. But when it comes to the issue of war specifically, we simply need to remember what founder James Madison said instead of listening to idiots in the media:

Of all the enemies to public liberty war is, perhaps, the most to be dreaded, because it comprises and develops the germ of every other. War is the parent of armies; from these proceed debts and taxes; and armies, and debts, and taxes are the known instruments for bringing the many under the domination of the few. In war, too, the discretionary power of the Executive is extended; its influence in dealing out offices, honors, and emoluments is multiplied; and all the means of seducing the minds, are added to those of subduing the force, of the people…. [There is also an] inequality of fortunes, and the opportunities of fraud, growing out of a state of war, and … degeneracy of manners and of morals…. No nation could preserve its freedom in the midst of continual warfare.

A standing military force, with an overgrown Executive will not long be safe companions to liberty. The means of defence agst. foreign danger, have been always the instruments of tyranny at home. Among the Romans it was a standing maxim to excite a war, whenever a revolt was apprehended. Throughout all Europe, the armies kept up under the pretext of defending, have enslaved the people.

Oppressors can tyrannize only when they achieve a standing army, an enslaved press, and a disarmed populace

A well regulated militia, composed of the body of the people, trained in arms, is the best most natural defense of a free country.

Pretty simple isn’t it? Permanent standing armies are bad news. The Swiss have understood this for hundreds of years–the people must be ready to defend themselves in community rather than outsourcing their security to a few tough guys. Adult human beings must discard the notion that other people will keep us safe or we are simply infantile, child-like creatures. Free people provide for their own freedom. Otherwise by definition, they are not free.

Elizabeth Warren (United States) vs. Geithner (global bank cartel)

Elizabeth Warren is the perfect person, the only person really, to head the agency that was largely created due to her efforts–the Consumer Financial Protection Bureau. Since the crash of 2008, she has been a rare advocate for the people in the midst of a Harvard/Wall St/Washington DC establishment, embodied in the Council on Foreign Relations (CFR), that unilaterally supports the top capital holders of the world and their banks. It’s rather shocking to see a publicly visible Harvard professor who has lost neither her ability to see the truth through the establishment’s fog, nor her capacity for empathy and compassion for the people beyond Harvard’s walls. But it’s awesome to see it.

On the other hand, it’s revolting to see Tim Geithner oppose her nomination (according to the Huffington Post). This is just one more piece of evidence in the already obvious case that Geithner represents the global bank cartel that has effectively foreclosed on many countries around the world and is now turning against the developed west. He does not represent the American republic, so of course he would oppose an advocate for the people like Warren.

Geithner would have no business sitting in the Treasury if its job was to serve the people. But the purpose of Treasury has been for a long time to serve as the collection agency for the global bank cartel that established itself as a permanent parasitic monopoly living off the people of the United States since the Federal Reserve Act of 1913 (see Revisiting American History). Now that the cartel has sucked as much wealth as possible from the U.S. and put it under an impossible debt load, Treasury’s job has shifted to managing the cartel’s foreclosure on the country as it restructures the world under a new global monetary system.

Geithner is perfect for this role. The people may blame him because they can see through him. He can’t sell the people on their own destruction like Harvard/Yale banker Robert Rubin could. He’s not likable like Harvard banker Jamie Dimon is. So the cartel will escape blame as it always does by using its media to focus the public rage that will emerge in the next phase of the depression not only on politicians, a staged enemy like Iran, and a general sense of corruption, but also on CFR insider Geithner if necessary (capos and hit men are readily sacrificed when appropriate). The cartel might then put CFR insider Jamie Dimon in Treasury to bat clean up and sell the American people on the final stage of the global restructuring.

The bottom line: put pressure on the administration to appoint Elizabeth Warren to this role rather than letting yet another patsy for the bank cartel takeover another agency. She will bring one small voice of the people to the government.

However, she will not be able to stop the global restructuring process. She may not even be aware of it. Stopping that will require the awareness and willpower of we the people. As I’ve said before, if we the people do not stop it, then the bank cartel and royal families are unfortunately correct that Thomas Jefferson’s noble idea of self government was just that–an idea.

Discussing our situation with Max Keiser

This is an important interview which discusses the most critical issues we face: