-----Oorspronkelijk bericht-----
Van: owner-heidegger@xxxxxxxxxxxxxxxxxxxxxxxxxx
[mailto:owner-heidegger@xxxxxxxxxxxxxxxxxxxxxxxxxx]Namens bob scheetz
Verzonden: maandag 4 oktober 2004 15:56
Aan: heidegger@xxxxxxxxxxxxxxxxxxxxxxxxxx
Onderwerp: Re: [fyi] Economic Mythology
he misses the core myth of the times, "the market", ...the deified market,
to which everything is owed and whence all good comes, ...and its great
adversary, "gummint", and source of all that is evil
And the thinking on this myth-market is, again, the most dangerous
form of thinking: the one that only meets confirmation, as its fuel.
The myth of Greek myth as the mother of all myth, is the myth of the
really helpless, of those who can keep their lips above the rising water
only with help of values, that miraculously have a status, just by
claiming them: the best founded mythology: spiritual emptiness expressed
in physical emptiness - money.
Obsessive lying shows what they really are: victims.
Whoever is caught in this myth, goes under, pockets full or empty.
Sucked by the one big vacuum cleaner.
Which makes me think: when, as Heidegger writes, we've reached an age in
which 'what is' and what's in this 'what is' (Geschick) touches every
individual *directly*, could this have been done without the real exising
myth of democracy and freedom...?
Even if it's the most ingeneous of myths with a happy ending, the truth
(destruction) of this myth has it in a fest grip. As Nietzsche hoped, the
power of the individual then increases enormously, and he is the real
president, to whom things and words flee.
rene
----- Original Message -----
From: "Jan Straathof" <janstr@xxxxxxx>
To: <heidegger@xxxxxxxxxxxxxxxxxxxxxxxxxx>
Sent: Thursday, September 30, 2004 4:40 PM
Subject: [fyi] Economic Mythology
> ECONOMIC MYTHOLOGY
> By: Jim Willie
>
> In ancient Greek and Roman times, mythology
> served a strange but valuable service. First,
> it channeled pervasive belief in spirituality
> and deity in general, beyond the mortal
world.
> Second, it cooperated with the sense of
> individual human helplessness by putting
> structure to the higher powers. In today's
day
> and age, we have become fixated on the spirit
> of money and what it buys in the way of
> possessions, entertainment, and leisure. Here
> too, the individual is dwarfed more than
ever.
> The powers that be have assembled a
structure.
> The apparatus consists of a truly bizarre and
> frightening intertwined network of derivative
> gears, intervention devices, bank lending
> methods, mortgage finance centrifuges, stock
> equity conversion means, promotion systems,
> and advertisement conflict of interest. The
> spin for the system is a complex series of
> economic myths, not unlike the great Greek
> mythology that endured centuries. The
American
> version is certain not to last as long. When
> complex systems begin to fail, as the US
> Economy surely has since the 1980 decade, the
> system absolutely requires a convincing
> mythology to serve as unquestionable dogma.
> Ponzi outlined the importance of dogma to
> perpetuate a system gone awry. In the United
> States, a complex system has emerged with
> irrational beliefs which have no bearing on
> reality. We have the Oracle of Delphi in the
> Federal Reserve, whose spokesman is Chairman
> Alan Greenspan. Despite his constant stream
of
> errors and fallacious analysis, he is looked
> to for counsel as a precious seer. Mount
> Olympus is the Austrian School, whose
> teachings have been ignored since the Bretton
> Woods divorce in 1981 with tragic
> consequences. That divorce opened Pandora's
> Box, without question. Partygoers rarely
visit
> the mountain, too busy in celebration. Zeus
is
> Robert Rubin, architect of the Strong Dollar,
> whose power and luster has surely diminished.
> His wife Hera might be the Japanese central
> bank, which lifts him whenever he falls on
his
> face, and stumbles in sleep walking
overnight.
> Achilles, the great warrior, is the US
> Military ready to do battle to defend Greece,
> the US-centric world of commerce. Powerful
> Atlas might be JPMorgan, unable to hold the
> world of derivatives atop his strong
> shoulders. The many nymphs prancing about,
> exploiting their sexuality, are the money
> lenders, whether bank leaders or car dealers
> or electronics merchants with their sexual
> front. Chief among them is beautiful
> Aphrodite, embodied in Fanny Mae after it
rose
> from the 1989 Savings & Loan debacle out of
> its restructured ocean foam. Helen of Troy
> might be the wonderful US mfg base, long
gone,
> not exactly taken, but not yet desired back.
> Poseidon, god of the ocean, clearly is Wall
> Street which governs the sea of capital and
> debts. Brokerage houses urge money infusions
> from the public much like the Sirens, as they
> lured sailors to the rocks and wreckage.
> Diana, the goddess of the hunt, might appear
> with corporate initial public stock offering
> launches, arrows flung into the equity
> markets. The satyrs chasing nymphs are
> household consumers, who find themselves
> thoroughly spent after satisfying the loan
> terms. Ulysses is Joe SixPack, who struggles
> mightily, and less certain to enjoy the
> success of the ancient Greek sailor. Medusa,
> the serpent lady with snakes as hair, turns
> men to stone in much the same way that
> bankruptcy does. The grand odyssey involves
> negotiation between Scylla and Charybdis. The
> multi-headed monster dog Scylla lurks like
> inflation, easily dragging its prey into the
> cave of value erosion and debt writedowns.
The
> dreaded giant whirlpool Charybdis has already
> begun to show its power, as secular deflation
> circulates in its cycles. China commands the
> whirlpool's bamboo stirring spoon, as it
> limits wages and prices. The Chinese yuan
> currency peg serves as a Trojan Horse, taken
> in by our economy, only to wreak horrendous
> damage, but not yet recognized. The modern
> American economic mythology is soon to turn
> into a Greek tragedy. The system has become
> unsustainable and begs for correction.
>
> THE NATURE AND ROLE OF MYTHS
> Today, the Macro
> Economy Myth is under siege, a certain quiet
> attack. Currently at work is the third in a
> long list of myths used as mental glue to
hold
> together the internal mechanisms of the US
> financial system, to maintain foreign
> confidence in our markets, and to attract
> enormous sums of capital on a daily basis to
> keep both Wall Street and the US Economy
> going. The petro-dollar foundation, the basis
> of world commerce, has been shaken in the
last
> two years. It is fortified at irregularly
> timed interventions by foreign central banks,
> without which sudden swoons in currency
> exchange rates and sudden rises in interest
> rates would deliver massive shocks to real
> economies around the globe. The petro-dollar
> is complex, fully intertwined with
> geopolitics, with banking & monetary system,
> with financial markets, and with
international
> commerce. A quick dismissal of its importance
> by economic pundits is absurdly shallow and
> recklessly na^Øve. It is most likely linked
> with military motives. In the 1970 decade,
the
> United States began on a course which altered
> modern history. Following the Bretton Woods
> divorce between the USDollar and gold,
> commitment toward social programs, war
effort,
> and collectivist sponsored home ownership
> deepened the departure from true money.
Public
> and world embrace of myths are of central
> importance in order to buttress a foundation
> of false money. World commerce is undermined
> if only the masses recognized the foundation
> of the unbacked USDollar as untenable. Since
> when does US Treasury bond issuance provide a
> legitimate countervailing force to physical
> crude oil? Buying energy supplies with gold
> might be impractical. Buying energy with debt
> securities, however, goes beyond insanity.
> Myths perpetuate because the monetary system
> cannot stand on its own merits. The USDollar,
> since 1971, has not been backed by gold. By
> default, it has in practicality been backed
by
> USTBond debt. The flipside of the USDollar is
> a USTBond, which is a soft sand foundation
for
> any economic house to be built. The first
> great myth was motivated by the need for
> stimulus, to remove the US Economy from the
> worst recession endured since the Great
> Depression. Saddled by enormous ground swell
> of costs from higher energy prices, amplified
> by growing head winds from the rising costs
of
> federal social programs, the nation and its
> Congress had to be convinced of the first
> myth. We have proceeded from one myth to
> another, hopelessly unwilling and unable to
> accept the tragedy of the divorce of the
> USDollar from its golden anchor. All world
> financial crises can be traced to the Bretton
> Woods divorce. Public economic policy has
> become commandeered by adolescent guesswork,
> abandoning a century of European experience,
> making it up as we go along, experimenting
> with the world as its oyster, in a reckless
> game where economists cannot prove their
> theories. They have done nothing but destroy
> the system.
>
> 1. 1 SUPPLY SIDE ECONOMIC MYTH
> (TRICKLE DOWN) Eight years later,
> President George H. W. Bush would get it
> right, when he called it "Voodoo
> Economics." During its day, it was
> embraced with some hesitation, as few
> options seemed available on the
political
> table.
>
> President Reagan, armed by theories from
> Laffer, urged on by Pentagon defense
> contractors, convinced Congress, tacitly
> approved by the public, to sponsor tax cuts
of
> magnificent size and to recommend
> unprecedented military buildup known as the
> Strategic Defense Initiative (aka Star Wars).
> The reasoning was that massive stimulus in
> money supply, both in the private corporate
> sector and in the public defense sector,
would
> engineer economic growth, lift wages, and
pull
> us out of recession. Eventually, demand would
> match supply, stride for stride. Myth #1 is
> the Supply Side Economics known as
> Reaganomics. While the US Economy did emerge
> from the tight grasp of economic stagnation
in
> the mid-1980's, the myth was unmasked a
> fateful day called Black Monday. Stocks,
> housing values, and the USDollar had all
> continued to rise for well nigh a full year,
> even as interest rates had ratcheted upward
to
> serve warning. The warning was not heeded;
the
> system built upon debt was sent reeling. A
> Pyrrhic Victory had been won. We did emerge
> from recession, but with crippling federal
> debt, which had risen by $2000 billion under
> Reagan. Many regard the price as worth it,
> since its investment buried the Soviet Union.
> Little did Supply Siders realize that seeds
> were being planted to trigger secular
> deflation, as debt collapsed and production
> came into over-supply. Asia was the grand
> beneficiary of an acceleration in trade
> surpluses, used fractional banking practices,
> built up it manufacturing base in magnificent
> style, and prepped the day for the Asian
> Meltdown ten years later. Supply Sider
> principles had earned the nation an extra $2
> trillion in federal debt, huge Asian
> production capacity, and a fresh troublesome
> lingering recession from 1988 to 1992. A
stock
> bear market, coupled with a housing decline,
> left the economy in tatters. Yet the myth
> prevails to this day as a success.
> Underpinning the Supply Side myth were
several
> construct beliefs, all laughable but held
> firm. We had the NAIRU, non-accelerating
> inflation rate unemployment, which claimed
> that a jobless rate under 5% was innately
tied
> to higher price inflation. The Phillips Curve
> put a mathematical face on this absurdity, as
> it formalized the mythical relationship
> between the two factors. When that failed,
the
> line was drawn at 4%. We employ better
methods
> now. We simply measure a participation rate,
> which counts the number of people excluded
> from the employed. The jobless rate merely
> measures those receiving state benefits. By
> removing federal extensions for jobless
> benefits when those benefits become
exhausted,
> the jobless rate fell, a certain political
> benefit. The Laffer Curve expects higher tax
> revenue from higher tax rates in a direct
> response with no reaction. It also expects
> higher tax revenue from much lower tax rates
> in an exercise in powerful elasticity. In
> other words, tax collection receipts benefit
> regardless, have the cake and eat it too. How
> incredibly silly, but widely accepted. Budget
> Director David Stockman was a certain
> charlatan, as he sold the idea, later changed
> his numbers, but Reagan used an erroneous
> numbers anyway in an historically hilarious
> Keystone Cop event. Evidence of the failure
of
> the first myth is the abandoned mfg base, a
> 1987 Black Monday stock bust, a 1989 Savings
&
> Loan disaster, and the birth of the Plunge
> Protection Team. The most damaging symptom to
> this myth was the rise in the USDollar in the
> middle of the 1980 decade. In reaction, the
US
> manufacturing base gradually went sent
> offshore to Asia, first to Japan, later to
the
> Pacific Rim where the Asian Tigers reside.
> Back then our cast of economists was much
more
> competent. They realized the removal of the
> mfg base meant lost jobs, lost wages, and
> national impoverishment. Today we know better
> !?!?! The Plaza Accord was agreed upon by the
> industrial power finance ministers. It was
> intended to reduce the value of the USDollar,
> in order to encourage a return of the US mfg
> base. While the US$ was steered lower, the
> labor cost difference between Asian and the
> USA could not be addressed by currency
> adjustment alone. Their labor costs are
> between 5 and 20 times lower than inside the
> USA. The mfg offshore movement continued,
only
> to accelerate ten years later.
>
> 1. 2 NEW ECONOMY MYTH
> (TECHNOLOGY MIRACLE VIA PRODUCTIVITY)
>
> Unlike the previous cycle, the Federal
Reserve
> played
> a major role in what came next. The name
> Clintonomics never caught on, nor did it have
> much meaning, for good reason. No significant
> planks of public policy were urged on by
> President Clinton. The entire nation was
> gripped, nay infected, by the notion that
> advances in technology had paved a path to
> greater corporate profitability through
> enhanced productivity. Financial markets and
> new patterns of investment behavior were the
> dominant themes. The tech miracle had really
> changed lives, lowered prices, but not aided
> earned greater profits. Myth #2 is the New
> Economy powered by technology and
> productivity. Not only was the trend in
> corporate earnings in a severe downtrend, but
> productivity had been superior in the
previous
> decade. Stock valuations were unsustainable,
> unjustified, and ultimately collapsed.
Savings
> disappeared, as stock accounts were
considered
> savings. We bought on credit, powered up our
> credit card debt, and considered ourselves
all
> wealthy from inflated assets. We earned
> ourselves the greatest stock bust since the
> Great Depression. In the wake of the 2000
> stock bust, a recession came soon afterwards.
> The Fed, led by Chairman Greenspan, had been
> the myth's greatest proponent and
cheerleader.
> To this day, his reputation and public
> confidence in him have not been marred, which
> is an even greater miracle. Rubin Strong
> Dollar Policy was reckless, totally in
> contradiction to prudent Plaza plan, and a
> firm betrayal of the American working class.
> Of course, he and the Fed represent interests
> of the banking aristocracy. Household debt
> rose all through the decade. Dependence upon
> inflated asset values grew. Imports from Asia
> became a constant fixture in our economic
> landscape. More to the point though, the
heart
> of the myth was false. Corporate profits
> peaked in 1985 and have trended down for two
> decades. Productivity, the real surprise,
> actually has been falling since 1990 despite
> certain technological developments. We all
> know about cell phones, fiberoptics,
broadband
> connectivity, internet commerce, fast PC's,
> cavernous storage devices, and breakthroughs
> in medical research. It has not translated
> into greater corporate profit nor
> productivity. Instead, it has resulted in
> lower consumer prices, cemented by Asian
> production dominance. The US public saw the
> technological marvels, as did the
> tech-ignorant Chairman Greenspan. As a
> cheerleader for our financial markets, the
> good chairman worked overtime to sell US
> stocks and bonds. He operated as the champion
> over price inflation and the advent of
> perennial prosperity. Almost all his claims
> were revealed as a sham during the stock
bust,
> but to this day they are still widely
believed
> as part of a productivity miracle. Today,
that
> miracle is closely aligned with job loss
> through Asian outsourcing. We now import that
> same productivity from Asia and its cheaper
> labor. The scourge of three decades of
> monetary inflation is seen in the form of
> heavy debts, lost jobs, and Asian excess
> production. In other words, secular deflation
> and its massive forces. Evidence of the
> failure of the second myth is the 2000 stock
> bust, the telecom debt bust, the sharp rise
in
> household debt, the Enron, Arthur Anderson,
> WorldCom, and other scandals. The bubbles
have
> been replaced with bigger bubbles, and the
> accounting & brokerage scandals have not
> ended.
>
> 1. 3 MACRO ECONOMY MYTH
> (INTL CREDIT FLEXIBILITY & ASSET INFLATION
> WEALTH) Greenspan boasts that the Federal
> Reserve has successfully dealt with the
> symptoms of the 2000 stock bust, rather than
> provide a lasting authentic remedy to its
> underlying problem. This is pure heresy by a
> central bank, since a stock and telecom debt
> bubble has been replaced by a Treasury bond
> bubble, a mortgage finance bubble, a housing
> bubble, and a deep dependence by the US
> Economy upon housing values and equity
> extraction. This he calls "wealth generation"
> which any central banker worth his or her
salt
> rejects summarily. Chairman Greenspan speaks
> like a hedge fund manager, not a central
> banker. He has become the banking system
chief
> political spokesman, as he justifies a record
> of reckless inflation and debt explosion.
> Absence and abandonment of a manufacturing
> base, long dispatched to Asia and other parts
> of the world in search of lower costs,
> resulted in massive trade gaps. Those gaps
> have remarkably escalated (a prediction of
> mine in spring 2002) despite a declining
> USDollar index. Federal deficits have risen,
> partly from the economic stimulus of tax
cuts,
> partly from a war to resist terrorism and to
> secure foreign oil supplies. Foreign capital
> needs have reached crisis proportions,
> currently running at $2 billion per day.
> Credit needs are minimized in feeble
arguments
> by our Fed Chairman in what he describes as
> "flexibility" of the macro economy. Myth #3
is
> the Macro Economy powered by asset inflation
> and funded by the flexibility enabled by
> foreign savings. It attempts to justify a
> horribly imbalanced US Economy, dangerously
> dependent on foreign capital, which lacks
> valid income generation from capital
> investment, actual production, and wage
> growth, rather than financial investment
which
> hopes for continued price inflation. Several
> miracles are in progress: housing prices rose
> 30% or more nationally instead of falling
> their customary 15% following recessions, as
> buyers seize on cheap money in mortgage
> finance foreign central banks purchase over
> 35% of USTBonds in order to continue to
> support an overly indebted and crippled US
> Economy stock valuations continue to march to
> the beat of the Fed Valuation Model which
> employs a multiplier inversely related to
> interest rates\ the public still believes we
> benefit from productivity gains No system can
> survive for long as it depends on foreign
> credit supply in the present magnitude. Asia
> has its own credit needs, growing to be sure,
> and surely in conflict with their willingness
> to supply the US and its voracious appetite.
> No system can survive for long when its
> depends upon asset inflation as the primary
> wealth generating power source. Natural
> corrections surely come, and when they do,
> immense problems will come to the US Economy.
> The foundations of the current myth are far
> more laughable than the previous two myths.
> Recently, Greenspan speeches center on social
> programs being scaled back. He recognizes
that
> Social Security, Medicare, Medicaid, and
other
> entrenched programs cannot be funded. He
cites
> a growing federal budget deficit, which
causes
> neither alarm nor desire for reduction. In my
> opinion, he is actively engaged in a
publicity
> campaign to create an alibi for upcoming
> failures and systemic shocks. Backroom
cleanup
> efforts must be intense, as the JPMorgan
> hedgebook and Fanny Mae balance sheet require
> full-time attention. Such undertakings are
> kept quiet though, and far from the
> undiscerning public eye. JPMorgan and Fanny
> Mae stand as vivid evidence of the failure of
> the previous two myths. Evidence of the
> failure of the third myth is the constant
flow
> of jobs in Asian outsourcing, the Fanny Mae
> mortgage finance faulty foundation,
dependence
> upon the housing bubble to continue consumer
> spending, growing trade gaps, and growing
> federal deficits. Denial is reaching
> unprecedented epidemic proportions. To be
> sure, many symptoms of failure are being
> hidden from the public, like the sanitization
> of the JPMorgan hedgebook. How could bond
> revolts in summer 2003 and spring 2004 have
> escaped the world's largest holder of bond
> derivatives?
>
> CONCLUSION
> Far too little scrutiny has been focused upon
> the foundation of the world monetary system,
the
> petro-dollar. The name "petro-dollar" is used
> to convey the critical transaction whereby
> energy is priced and purchased in USDollars.
> All prevailing myths, both past shattered
> myths and current exposed myths, are
essential
> to maintain the system, to urge on
confidence,
> to confuse the public, and to deceive
> foreigners. The real problem is that the
world
> monetary standard, the USDollar, has no
> intrinsic value. It is not backed by gold or
> any other hard asset. The world's largest
> economy, in the United States, has become an
> inflationary engine, with significant
> abandoned manufacturing base, and vanishing
> income producing machinery. Its once powerful
> wealth production apparatus has been
> systematically dismantled in search of lower
> costs. What happened to its awesome mfg base
> is now in the process of being duplicated in
> the vast service sector. The US Economy has
> become tragically dependent upon inflation as
> a primary power source. In order to keep the
> charade going, the nation, its trading
> partners, and investors worldwide must be
> fooled, tricked, and deceived by myths.
> Without such myths, we would be forced to
> endure a painful correction to inflated
> assets, and be subjected to a severe debt
> downgrade. The consequence would be a grand
> decline in the standard of living for most
> American households and citizens. The world
> economy depends too much on our spending,
even
> if that spending is led by evermore debt in
an
> overly burdened debt environment. In all
> likelihood, the world economy would enter a
> deep recession, or worse. So maintaining and
> perpetuating myths is essential. The better
> questions remain: When will our inflated
> assets (stocks, bonds, housing) correct
> downward in price ??? When will Asians grow
> tired of exchanging their industrial output
> for risky debt securities ??? What will the
> next economic myth be, sold to the world ???
>
>
>
>
>
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