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HUMANITY DOOMSDAY CLOCK - Moves forward to 2125 due to election of US President trump.

Estimate of the time that Humanity will go extinct or civilization will collapse. The HUMANITY DOOMSDAY CLOCK moves forward to 2125 due to US President trump's abandonment of climate change goals. Apologies to Bulletin of the Atomic Scientists for using the name.


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The Jobs Theory of Growth []

Moral Economics []

Balanced Trade []

There Are Alternatives to Free Market Capitalism []

Specific Country Economic Policy Analyses - More Than 50 Countries from Argentina to Yemen []


Wednesday, June 13, 2012

T P P Bad for the USA

Barry, My Liege :

The Trans Pacific Partnership trade agreement is bad policy for the Economic National Security of the United States.

We pray you not sign this bill if it reaches your desk.

We pray also that it will be tabled or voided in Congress.

Your faithful servant,

Angelides : Break 'Em Up

Barry, My Liege :

The man who wrote the book on bank failure, Phil Angelides, has called for breaking up the big banks.

'If the largest banks can only be run so recklessly that they harm the economy as well as themselves, they should be broken up, Angelides said in a talk at the Center for National Policy, an independent Washington D.C. think tank.“By 2011, the top 10 banks in this country held 77 percent of the nation’s banking assets. The top five banks – JPMorgan, Citi, Bank of America, Goldman [Sachs] and Morgan Stanley – held $7.9 trillion in assets and 95 percent of the $304 billion in [OTC] derivatives held by U.S. bank holding companies,” Angelides said.

“These banks are too big to fail. They’re too big to manage. They’re too big to regulate. They’re too complex to understand and they’re too risky to exist. And the bottom line is they offer very little benefit,” Angelides added.'[Reuters, June 12]

He then called for breaking them up into smaller banks that would not pose a risk to the economy.

Here's my take, My Liege:

Banks should be allowed to fail. Make the depositors whole through the FDIC and then let the shareholders go through bankruptcy.

When Jamie Dimon says the Volcker Rule would have prevented the risky trade at his bank as he did in Congressional testimony, then we know the Volcker Rule is fatally flawed, and that is only because Jamie Dimon supports it.

Big banks are a danger to the economic national security of the United States.

Your faithful servant,

Tuesday, June 12, 2012

Recovery : Social Security, Medicare

Barry, My Liege :

Social Security and Medicare are the most successful government programs of all time. And, we cannot cut these programs and expect economic recovery and job growth at the same time.

They have achieved the goals of making old age for United States citizens a happy time instead of a time for terror.

Not only that, but the economic impact of the programs is considerable ; any reduction in these programs will have a dramatic and immediate impact on GDP and job creation.

Here are a few facts about Social Security from Roberto Gallardo and Al Myles in Daily Yonder [] :

Social Security supports 8.4 million jobs and makes annual payments to recipients of about $1.2 trillion. 51 million people receive checks from Social Security - that's about 15.7% of the of the total population.

Gallardo and Myles have calculated that a 5% reduction in Social Security payments will reduce GDP by $63 billion, reduce employment by 419,000 jobs and reduce federal tax collections by $7.8 billion.

While there may be an argument in favor of adjusting the formulae used in the programs, it is clear that significant reductions must be prevented in order to secure recovery and growth.

Your faithful servant,

Monday, June 11, 2012

"Those who cannot remember the past, are condemned to repeat it." Geo. Santayana.

Barry, My Liege :

Perhaps the reign of English King Henry VIII can offer some parallels to today.

The King was a very human man; he was the King who founded the Church of England by cutting ties with the Roman Catholic Church in 1534.

But, the interesting parallel to today does not rest in his treatment of his wives or the Catholic Church, instead it rests in his actions to finance his Kingdom.

English Kings were reluctant to tax the population because the House of Commons had to approve a tax ; Kings would rather finance their own than beggar themselves before Parliament for a tax.

In the early 16th Century the Roman Catholic Church still owned a network of monasteries and churches across England. Henry thought he could finance his government by sacking those properties. And, if a few clerics lost their lives, well nobody really cared about those Romans anyway.

But, Henry decided to let some of his palace friends undertake the sacking on a sort of 'outsourced, private contract' basis instead of doing it with government troops.

Naturally enough, some of his friends grew quite rich from the project and were his happy supporters as a result. Eventually, however, all the prosperous monasteries and churches had been sacked and that revenue stream dried up.

But government expenses continued, so Henry took the next logical step : he debased the coinage.

As a result, there was a general inflation throughout the land.

" 'The proportionate value of meat today is nearly three times the old rates, that of corn nearly two and a half times, that of dairy produce two and a half times. But the rise in wages is little more than one and a half times,'
[Thorold Rogers in THE HISTORY OF BRITISH CIVILIZATION] In other words, the poor man .......emerged from the Reformation and Counter-Reformation with less food and less clothes and less command over the good things in life than before.... The ring of nouveaux riche who had grown fat on the profits of the monasteries were impatient for another share out, and the straits of government were desperate. Accordingly the next objects to be singled out were 'colleges, free chapels, chantries, hospitals, fraternities, brotherhoods, gilds and stipendiary priests.'"
[THE HISTORY OF BRITISH CIVILIZATION, Wingfield-Stratford, Routledge & Kegan Paul, London, 1928]

My Liege, perhaps that may sound familiar to you.

After all, are the rapacious not coming today for the colleges, the pensions, the police, the teachers and the firemen?

It did not end well for England and the King ; and, it will not end well for us.

Your faithful servant,

Recovery : Punitive Bank Regulation and Glass-Steagall

Barry, My Liege :

The United States of America in which most of the population lives has learned a lesson. We have learnt this clearly and absolutely ; we know it as well as we know our names.

The lesson is this : Bankers will not consider the effects of their actions on other parties. They have proven repeatedly that they act as if they are in a vacuum. They take no responsibility for any harm they cause.

Banks caused the recent economic meltdown ; they will cause future recessions and depressions unless they are restrained.

From that lesson it follows that the government of the United States has the responsibility to protect the population from bank practices.

However, My Liege, we have the distinct impression that the bank lobby has corrupted the political and regulatory processes thoroughly.

This is the source of our discontent.

Once in our history after great misery and social malaise, we created a bank regulation process that protected the population.

This group of laws was passed in the 1930's. These laws were based on the assumption that banks cannot be trusted to act in the public interest.

These laws were successful in providing a stable financial system for half a century. During this stable period, we enjoyed great prosperity. The laws were extensive and punitive.

The basis of the system was the Glass-Steagall act which prohibited a commercial bank from buying or selling stocks or insurance. Commercial banks are banks which take deposits and make loans.

Some of the other laws are listed below.

The Federal Deposit Insurance Corporation [FDIC] was created to insure the safety of commercial bank depositor's accounts. When a bank failed, the FDIC paid off the depositors, but allowed bank owners to lose their investment.

Investment banks were created to make investments in stocks and other instruments. They were allowed to fail and there was no insurance to protect the owners or investors.

The Securities and Exchange Commission [SEC] was created to protect investors from criminal stock promoters.

All companies which took deposits and/or made loans were regulated ; there were no unregulated financial institutions.

Savings and thrift institutions were regulated so that they could take deposits, but were allowed to make loans on residential real estate only. They were not allowed to issue checking accounts.

Insurance companies could not trade in stocks, make loans or take demand deposits.

The Federal Reserve Bank established limits on interest rates that could be charged to borrowers and paid to depositors by banks. The FED also examined banks carefully to ensure their loan portfolios were sound and the managers were capable. And, the FED established and enforced capitalization ratios to ensure that banks would stay sound during hard times.

My Liege, this is only an introduction to the concept of ensuring the financial stability of the United States of America.

You will note that all the listed laws, and the array of acts, laws and statutes not covered here, have as their common foundation a simple idea.

That common foundation is this : banks cannot be trusted.

We pray you will adopt that foundation, for we fear we are doomed unless you do.

The article in this link provides evidence of criminal bank behavior :

Your faithful servant,