MY NATION IMPAIRED!

 by C. S. Franklyn

Chapter VIII

OUR FRAGILE ECONOMIC SYSTEM     Part I  

The Nation's most troublesome dilemmas are barely apparent to our population. Most of our Citizens judge their condition of Life in terms of money and how good they "feel" from day-to-day. These modern Epicureans dominate our social and economic systems, spending $500 billion a year to watch football, basketball, baseball and hockey games and another $440 billion for casino gambling. This does not take into account the billions spent on state lotteries which are patronized by people from all social levels -- many who cannot afford to gamble, especially those who live on welfare.  This kind of National Lifestyle foreshadows a grim Future because what I see is a Society so naive and gullible that it will someday awake and discover WE are bankrupt and slaves to a Socialist Regime!

Add to that a Sports Media that consumes more time and Media space than any other single activity. Overriding much of this confusion is a politically instigated preoccupation with the Rich/Poor issues, all designed to keep the Under-class in a state of managed frenzy. The purpose of this pot boiling is to move our Society ever closer to a Socialist state where Big Government dictates everything we do. 

We have paid little attention to how our liberal politicians have systematically put us -- the Nation -- deeper and deeper into debt. The cat is out of the bag now, of course, thanks to Ross Perot's brief effort in 1992. Bankers, foreign countries  and financial houses throughout the world hold our mortgages. The USA Middle Class is their "cash cow". Meanwhile, our Youth, except for those of our Enemies who live among us, shun Learning and refuse to acknowledge their responsibilities for the difficult days coming!   

Perot's voice is now silent, having done his dirty deed of making it possible for Bill Clinton to beat G. H. W. Bush. Meanwhile, everyone has forgotten that our National Debt continues to grow beyond six trillion dollars. Soon it will be double that. How quickly it dropped off our radar screen thanks to a MEDIA that is clearly our Cultural and Religious enemy!

Be assured that our creditors do NOT want a "balanced budget". Nor do the bankers. Nor do any individuals or groups who think they will be forced to be more self-reliant in a pay-as-you-go country. The best way to assure that Americans will spend all they earn is for the Government to spend more than it ever collects in taxes. That's easy! Irresponsible government begets an irresponsible citizenry -- and vice versa!. Today, American's are technically in bankruptcy, owing billions and having NO savings. That very situation allows the bankers & Loan Sharks to manipulate our Economy to suit their own political ambitions. The Nation's Credit System has been manipulated in such a way that all but a few of us are dangerously in debt!

In case it has escaped your attention, there is one truism that applies to American politics: those without savings will always vote Democratic!  As a family accumulates some savings and begins to feel some financial security, they become Conservatives and they begin to vote for Republicans. The logic is simple and is based upon a fundamental motivation: Benign Greed. Once people accumulate possessions, assets and a secure job, they realize that they have become the Haves who must take care of the Have-Nots. Enlightened Citizens -- assuming they are reasonably generous and altruistic -- understand that a part of every Society must be looked after and cared for. Not half of us, however!

But in countries like the USA, millions of the so-called Poor use government programs to supplement their already-adequate income simply as a matter of upgrading their lifestyles. Our Black population have been taught how to exploit our generous government and they (i.e., the Blacks) are experts!

A   M A N I P U L A T E D   E C O N O M Y

Keeping the American Society perched on "the edge of insolvency and bankruptcy" has been going on since the close of WW-II. This precarious positioning is the result of a "manipulated" economy that has created a manipulative political environment as well. Government, the Economy and Business institutions are now hopelessly engaged in an interrelated lifestyle that defies understanding by most of us! It is a juggling act among many other acts going on in the greatest circus on earth! These three environments -- Government, Economic and Political -- are intimately inter-mingled today for the purpose of mutual preservation.

The policy of Manipulation has been necessary to prevent America slipping back into the Depression that haunted Franklin D. Roosevelt to his grave. With sophisticated data collection systems and computers, it is now possible to listen to the heartbeat of America's economy. Perhaps, we should begin to think about ways to raise annual growth to 5%-8% rather than an anemic 2.4%-4.5%. Not an easy task, however! Such a program requires a change in incentives to inspire people with money to invest it. This is dangerous, however. People who become investors, also become Conservatives and, more often than not, they become Republican voters.  The Democrats great problem has always been keeping the Poor folks poor! As people transition into the Middle Class, Democrats have to find more poor people.

The circus metaphor above is appropriate since our Constitution created three governing bodies: the Executive, Legislative and Judicial branches. The changes which we refuse to recognize as Decadence exists in all of these three areas. It has also spread across the Land. In America, everybody wants to get into the act!  

A fundamental flaw in our economic system is that while this monetary strategy controls income of the Lower and Middle classes, an Elite Upper class continues to take a larger proportion of the Wealth we create. Absent organized Consumer action, there are very few ways to absolutely control unreasonable profit-making in America. It has, in fact become another form of entitlement. Competition, like many other economic tools (e.g., Supply vs. Demand), are easily compromised as small companies are absorbed through mergers and acquisitions.

It is difficult, if not impossible, to convince the Lower/Middle class groups that they are major beneficiaries of this manipulated system. Without such a strategy, the peaks and valleys of their personal economy would be more extreme, probably even more devastating. And a key part of this manipulative system requires controlling Consumer spending.

Consumers, in general, have no self discipline, however. Their buying habits are guided by misinformation, incentive gimmicks, seductive advertising and blind trust in government statistics -- most of which are unreliable and "configured" to make people feel good and want something More and better..

By design, Corporations and businesses are expected to accumulate more wealth. Not only do they manage their assets better but their profits are controlled and maximized in ways that were once considered illegal, unethical and immoral. No more! Price fixing has become sophisticated and subtle. They pass all costs including taxes (if any) onto the Consumer. We pay for everything! This is -- for the most part -- all very legal! And, today, more than ever before, LEGAL is IN! What is Right, Fair or Moral is OUT!

Add to these aggressions on our earnings, the unrestrained practices of credit card companies and the grievous misuse and abuse of bankruptcy laws and we see a relentless marketing effort that is immoral and unethical. Yet, it is aided by government policies at local, State and Federal levels ( e.g., postage).

T H E  U N O R G A N I Z E D  C O N S U M E R

In a "free market", it is the Consumer who is forced to carry the greatest risks. Our limited protections rest entirely in our hands. But to do us any good these protections must be put into motion! Unfortunately, this is an unrealized power because it is not organized or ever well-focused. Consumers seldom discipline the Maker and Marketer of bad products because they are not an organized, consistent force in the marketplace. The assaults made on the Consumer by Marketers and their slaves, the Advertisers, are so extreme, numerous and obvious today, we can only conclude that most Consumers, by choice, are incompetent as Buyers. Many would agree! 

The reason for this is: most Consumers are lazy, irresponsible and uninformed. These are weaknesses perpetuated by each Citizen and our governing bodies. Probably the most egregious scam by American business is how it prices its products .The use of rebates, coupons and various incentives are all part of the marketing "mania" that leads the Consumer into deeper and deeper debt. It is impossible today to learn what the real price is of any product! The fact that products are inferior and designed for a much shorter life span than ever before, seems to bother no one. It is true, however, that as the Global Marketplace becomes stronger, our economic health is becoming worse and worse. In their frantic effort to deal with foreign pressures, our manufacturers are reducing the quality of their products while Consumers pay more and more for them. This subtle change seems to escape the attention of most Consumers! 

G O V E R N M E N T  S A N C T I O N E D  S C A M S

Buy a new car or van and look at the Bill of Sale! Because Consumers have no idea what anything is worth or what is a fair and honest price, they are victims of all kinds of promotions, rebates and scams. If you buy a car with a $2,000 factory rebate, the dealer still charges you the State tax on the Rebate! The States keep millions of dollars of this kind of money. Charging a sales tax on money that never changes hands is a scam and, in fact, violates every rule of Buyer/Seller ethics and purchasing protocol -- the law as well!.

Few of us ever question "the deal". Some may believe they are being cheated but they are too busy to do anything about it. Their response is to join the scam parade and find ways to join this nationwide program to bilk one another -- especially the government and the IRS. The moral decay in America began with such frustrations mainly due to business and government-sanctioned rip-offs.  

Citizenship and Consumerism in our kind of government should be taught starting in the First grade. The creation of an active, healthy Citizenship spirit has been one of the most disappointing failures of our learning institutions. Few young people can explain the relationship of Citizenship to Politics. Nor do they care much about the subject.

T H E  R E A L  I N T E N T  O F  A  C A P I T A L I S T I C  E C O N O M Y

It is not well understood or appreciated that a capitalistic economy like ours is designed to assure economic power at the Upper level. All systems whether in the world of physical science, or in the affairs of Human Beings, have a natural gradient along which Power (like Energy) flows. Wealth, in the form of money that comprises wages, salaries and pensions, is expected to circulate as people feed themselves and acquire goods and property. Just as an electrical current cannot do work unless it flows in a closed loop, money must flow circuitously, also. This kind of system allows the accumulation of wealth ONLY in the upper levels, especially where an Individual has control over Pricing and Markets.

The prevailing attitude of the Financial Mind is that money must remain in motion and money experts, since they "facilitate" this flow, demand a fee for their services. A less evident part of their view is that they shall assume "no risks" or even the cost of insuring those risks. If this is a surprise to anyone, then they do not understand what we mean when we say ours is a Capitalistic system. Its goal is to promote an environment that allows all citizens to accumulate wealth, large or small, but few ever save enough to become Rich. Making a profit is the Thing and it is the Only Thing! Business is a game much like football: winning is everything!

Many strategies are at work in our economy to assure that money continues to circulate. When it does not circulate, it accumulates in holding pools and we have a "recession". Recessions occur in a cyclical manner and they are connected with politics, more now then ever before. By controlling the Public's emotional sense of security, contrived statistics, fictitious polls, "talk shows" and TV exposes, have become political weapons of choice. They are used to "shape" the Citizens attitudes and sense of trust in the immediate future, which becomes critically important around election time.

The Capital Gains tax, for example, is a kind of valve that stimulates or stagnates the flow of money. The cost of renting money (i.e., interest rates) is a more familiar valve. Since the Socialist Democrats believe that Capital Gains affect only the Rich, they want the tax rate to be high, which dams up billions of dollars that could be invested to expand a business. The Capitalist Republicans would like to keep it lower so that this earned wealth is returned to the economy to promote more economic activity -- and more profit for them -- without giving the tax collector too much of it. In this bitterly fought issue, you see a fundamental difference between Liberals and Conservatives! Having said the above, it may surprise you to know that the wealthiest people are the Democrats!

Both groups have difficulty remembering that between the Rich and the Poor, there is a very large Middle Class in America who is affected by these issues. Wealth is not sharply defined in America. It is distributed along a bell curve. Where is the break point between Rich and Poor? Should it be defined in terms of money only? I think not! Some of the most impoverished people I know have lots of money. The bell curve distribution of wealth is a product of a reasonably free economy. Unfortunately, Liberals who depend on poor, uneducated voters want the bell curve to be skewed so that the Have-Nots have more. They achieve this through laws (called programs) that give the Under Class the opportunity to make more money than they deserve or could earn in a Normal and Free working environment.

There are many more gimmicks (i.e., laws/programs/regulations) that serve the same purpose as Capital Gains which is nothing more than an incentive and/or disincentive device. In such a system, the psychological forces become awesome. Human behavior is an energizing force for both Good and Evil.

Political behavior is something else. It connives and conspires to manage the flow of money and attitudes based upon ideologies and personal greed. Today, powerful groups have learned how to manage the Managers of the money flow and therein lies a story that is not pretty. It is called Special Interest organizations.

The above deserves a brief paragraph to understand the way special interests impact our prosperity.

M A N I P U L A T I N G  P R O S P E R I T Y  

The New York Stock Exchange frequently makes sudden changes (usually downward) in response to something said by the Chairman of the Federal Reserve Board. Contrary to popular opinion regarding the capricious nature of the Market, these changes do not occur as undisciplined, random responses. They usually occur quickly for two reasons.

First of all, they are truly theatrical events! Remember the Markets have been dominated by professionals for all of the Post War-II period.

The Stock Market's action seeks to discipline the Reserve Board for making statements it regards as unfriendly toward their growth. The Market prefers an Administration in Washington that is friendly to its profit-making goals. Low interest rates provide the kind of environment the Market prefers: using other people's money without paying a fair price for it! This is the typical Shylock Image you find in all equity markets. Jews are experts in this game! New Yorkers love that kind of game! High-rollers don't deserve that much edge! But they enjoy that edge today more now than ever before in this overheated Clinton Era which has all the earmarks of an conspiracy to puff up the Economy.

Any talk about raising the prime interest rate causes the Market to react violently. They harangue and intimidate Washington and especially the Reserve Board. Their reaction is no different than when Consumers object to an increase in the price of a product or service. Consumers, however, seldom show that much vigor or moxie!

Controlling the price of what you use is a daily chore. The Stock Market is better organized to do this than the ordinary Consumers. Consumers are never organized. They very seldom make strategic buying decisions until late in the game. They are individuals. Furthermore, much of the money spent is controlled by women who have absolutely no idea what anything is worth. They are, however, a formidable spending force no matter how incompetent they may be.

H O M E  B U I L D I N G

A second group, reasonably well-off working middle class people, apply a similar discipline over the home building marketplace. To keep interest rates low, begun at the mid-point of the 1st Bush Administration, is no longer justifiable. The economy has recovered and rates should return to higher levels. This practice is -- in every respect --  Welfare For the Well-Off. It continues even in mid-1998!

At this moment, the interest rate being paid to those who save money and who depend on earnings for living income, is shamefully low. It has been kept there by political pressure rather than by natural market forces. The FED says otherwise, of course. What little earnings on savings is received is taxed at the full rate for those who are retired and cannot work. This country needs a comprehensive economic plan for over-65 Citizens. Far too many Seniors, however, expect the AARP to do these things. Sadly, they do NOT realize that the AARP is nothing more than a merchandising and marketing organization!

The fact that the Economic indicators where kept at favorable levels during the 1996 Presidential election, is evidence of our "managed economic system". Manipulation of the numbers to give a false impression of our Economy, is dishonest but is justified on political grounds. The Market, Washington, the Banks and other groups who profit from low interest rates have demonstrated an unprecedented arrogance since 1992. Apparently, most Republicans in Congress are heavily invested in The Market, otherwise they would not sit in awed silence when Allen Greenspan pontificates on this subject. Greenspan speaks of "irrational exuberance" but he  knows Clinton and Bob Rubin are driving the Economy beyond the limits of an honest marketplace. Quietly, in such an atmosphere, corporate fraud and theft rises and people eventually will be hurt -- including the Economy itself! 

 T H E  C R E D I T  C A R D  S W I N D L E

At the root of most of America's false prosperity lies the Credit Card system: an invention of the Devil and two drunken Socialists who meet regularly in a Washington bar!

At the base of this willingness to steal from the Nation's Savers, is the ominous influence of large, sophisticated money managers who, like the tail of the dog, are wagging our entire Economy. This is the predictable result of Concentrated Wealth that began in the Reagan Period when huge mergers and acquisitions began.

(That, incidentally, is when the Individual Retirement Accounts system was authorized, also. After sucking nearly a trillion dollars into the Market with IRA money, Greenspan immediately lowered the interest rates which effectively wiped out the projected earnings for Seniors holding those IRA accounts! Throughout the Clinton Era. an overheated economy and inflated prices for equities, thanks to the manipulations of Bob Rubin, Secretary of the Treasury, while everything was booming, no one gave a damn for the Seniors who had pumped all their savings into the IRA system!) There is considerable proof that Democrats were keeping interest rates very low so Seniors would NOT realize as much earnings as the Reagan Administration projected!

The results of the aforementioned mergers is visible now as the Communications Reforms Act of 1995 kicks in. TV cable fees have already increased 40%! And more attacks on the Consumer's pocketbook will appear out of this law as time goes on. The law was supposed to lower prices by promoting competition! If the intended results of a new law is not realized within a specified period, it should be brought back to the floor of Congress and thrown into the faces of those who sponsored it! Then fix it right! That would only happen a few times before such shenanigans would end. Most of the increases are being applied to the enormous debt incurred by mergers and acquisitions. Consumers -- You and I -- pay more immediately so we can pay for the mergers while the CEO's skim off huge salaries and stock options!
 

This American Experience, we are lamenting, reflects a philosophical debate lasting over the centuries as to whether Power and Leadership is best vested 1) in educated and knowledgeable and profit mongering people or 2) in the hands of Ignorant, uneducated people, therefore inept but honest people. It is a timeless exercise in which we keep trying to answer one great question: who is the more Honest? Who should we and can we believe? The choice of doing business with a educated charlatan or an honest ignoramus is depressing to say the least. But that seems to be the only choices we ever have in this country.  

Reasonable people would choose the first option. Not that it is a good choice. I say this because nothing compounds our problems more than a Leader who is both Ignorant and Dishonest! Party politics has created that monster but most of us do not know which is which! We usually find out how much we have been scammed when the other political party returns to power!

Selecting the Educated charlatan would block the rapid rise of a tyrannous Majority who could -- and probably would -- destroy the Nation. Such people prefer to appropriate -- or redistribute the Nation's Wealth. Their basis for decision-making reflects the Rich versus Poor argument, the oldest of human preoccupations that dwells on Envy and Greed. Obviously, neither formal education nor absence of it, has anything to do with Honesty in either public or private affairs. It is a matter of  Good Character and the matter of Right or Wrong -- a quality that is rare today!

All of which calls to mind Teddy Roosevelt's comments that " To educate a Man in Mind and not in Morals is to educate a menace to Society!" Sounds almost prophetic, eh, what? Someday, we will know the truth about the present Clintonesque Economy. 

In my judgment, our Moral bankruptcy in the Boomer leadership can be laid at the door of those who accepted Dr. Spock's ideas on progressive child rearing. The most popular ideas are those that makes things simpler, easier and convenient. Parenting is where it began! And, lest we forget it, WE WERE THE PARENTS!

One key to avoiding the "tyranny of the Majority" is Education or Enlightenment. Sadly, it is a medicine that takes two decades before the headache subsides! An equally important strategy is that people elected to public office should be reliable, reasonable thinkers. Intelligence and good sense must occupy the minds of the People as well as money in their pockets. Unfortunately, intelligence cannot be borrowed or rented. The result is that more than ever before, voters elect candidates who resemble themselves in most every aspect. They seek to replicate themselves in everything they do as a form of self-validation. A dangerous practice, of course!

When the population suffers massive invasions of illegal immigrants, plus the simultaneous and forced infusion of millions of African-Americans into mainstream America, as well as the absorption of millions of females seeking to prove themselves in what was once a male-dominated business environment, the tyranny of this Under-class is already loose upon the Land. Neither the Culture nor the Economy can easily adjust to all of these changes at the same time. Now -- this conflict is fully engaged.

And we are a lesser Nation for it!

A B A N D O N I N G  S T A N D A R D S  o f  P E R F O R M A N C E

These have been very unusual times. Many natural barriers to human advancement have been laid aside by arbitrary government action. The abdication of pre-requisites and qualifications formerly required to achieve success to a Better Life, Education and other Privileges, is now considered to be unnatural, unfair and unsound. Correcting the unfairness of requirements for access, therefore, is proper we are told. At this moment, the elimination of SAT tests for college entrance is being considered. Advocates insist that test scores are a poor indicator of future success. Who said that was their purpose? Need we say more? Perhaps! What you are seeing, my friends, is a philosophical revolution called Relativism unfolding before your eyes! 

When the "bar" is lowered arbitrarily to permit everyone to enter, we destroy the intellectual and physical vitality that motivates all our reward systems. You don't see that kind of tampering with standards in the sports and athletic fields. Sports activity considers records of performance inviolate. Thousands of would-be athletes are eliminated every year because they do not measure up to the recognized standards. When you try to "democratize" or "relativize" any activity in the name of increasing access and participation, as Excellence gives way to Mediocrity, you destroy everything! Not sports, however! The degraded performance of athletes in sports competition would be so obvious and so unacceptable, audiences would protest and stop supporting the games. Strength enhancing drugs for athletes is another matter, however!

Intellectual competition is as vital to our Economy as any other invigorating process whose purpose is to promote excellence through competition and growth. The idea of universal college education will not succeed if students must meet ridiculously low standards. Not only will such ideas waste the Nation's wealth, it will promote deeper Mediocrity -- not to mention, ridiculously high expectations by graduates who did not really learn much. Such a process, begun in the late 1960s in colleges and universities, has brought us to where we are today. The Federal government's activities in setting standards to increase participation has been an abysmal failure because implementing such policies promotes more mediocrity. When Liberal Politics is the ulterior motivator of change, it destroys human performance!

Where is your Courage, Pride and Mental Toughness, Pilgrim? How far will you let politicians go in their quest to guarantee they remain in office?! Trust me, the Nation will survive after Senators Kennedy, Byrd, Stevens and Dodd and many others are sent home to stay!