Re: The Wealth Gap and the Collapse of the U.S.
I start with a basic truth: A persistent pattern of violence against people, community, and nature is inherent in the institutional structure of our existing economy.
You don’t treat a cancer with Band-Aids, and we can’t resolve our current economic crisis with marginal regulatory adjustments. It is time to rethink and restructure.
Our economic institutions have been designed by Wall Street interests to secure personal economic and political power in the hands of members of a small ruling elite. They do it well. Unfortunately, it is the wrong purpose. We need a top to bottom redesign to put in place the institutions of a new economic system, a New Peace Economy, designed to share power and resources in a world that works for all.
So how bad is the failure of our current system? It is public knowledge. A brief review, however, is in order.
The Wall Street financial collapse has stripped tens of millions of previously middle class Americans of their jobs, homes, and retirement assets and plunged them into poverty and despair. The federal government and the Federal Reserve have responded by pouring trillions of dollars into the Wall Street financial institutions that created the crisis with minimal conditions and oversight, all in the hope that some of this money would trickle down as loans to the productive economy. The recipient financial institutions used the money instead to fund acquisitions that make “too big to fail” banks even bigger, pay dividends to shareholders who by market rules should have been wiped out in bankruptcy proceedings, award obscene bonuses to criminally culpable executives, and launch new predatory financial scams that create new systemic risks.
Wall Street says we have now weathered the crisis, which basically means the profits and bonuses of its most rapacious financial institutions have been restored. The jobs, homes, and retirement assets of ordinary Americans have not. To the contrary, job losses, bankruptcies, and housing foreclosures continue.
This, however, is only the tip of the iceberg. In the absence of progressive tax and public service policies, the institutions of the old economy create an ever-growing wealth gap between the profligate few and the desperate many. This obscene injustice is tearing apart the social fabric of family and community essential to a healthy society. The resulting fear, insecurity, and sense of injustice fuel the forces of violence as expressed in terrorism, genocide, political deadlock, and high rates of crime, incarceration, and suicide. All are both consequences and indicators of a failed economic system.
Now we come to the system’s ultimate failure: environmental collapse. The rules and institutions of the Old Economy drive endless growth in wasteful and destructive forms of material consumption that deplete soil and water, disrupt climate patterns, and convert Earth’s natural capital into toxic garbage, thus reducing Earth’s capacity to support life, creating massive human displacement, and intensifying a violent competition for Earth’s remaining resources that finds expression in bloated military budgets and wars of occupation.
Start with virtually any dysfunction or injustice in our society and it traces back to a failed economic system. Follow the money, and it leads ultimately to Wall Street.
A Failed Experiment
For some thirty years, we have been engaged as a nation and as a species in a social engineering experiment to test the claims of an extremist economic ideology known as market fundamentalism.
Ideology of the Sociopath
You’ve heard the sermon preached by its most fanatic true believers:
“Permit me to issue and control the money of a nation and I care not who makes its laws.”
-Mayer Amschel Rothschild,founder of the Rothschild banking dynasty.
There is no public interest—only an aggregation of private interests, which are best served when we each pursue our individual greed in a marketplace unfettered by rules and other forms of government interference. Public assets must be privatized to increase their productivity and efficiency by selling them to the highest bidder. The faster we consume, the faster the economy grows and the wealthier we become as a rising tide lifts all boats.
Inequality is essential to social order and prosperity. It provides us with wealthy investors able to bear the risks of investing in the creation of jobs and a working class motivated by economic insecurity to work hard at those jobs at a globally competitive wage. There is no alternative. If a few get rich, instead of condemning them out of envy—which is a mortal sin—celebrate their good fortune, because as the rich get richer, wealth trickles down and we all get richer. In America, anyone can succeed who applies himself. Failure is a sign of a flawed character.
Is this story familiar? It is no mystery why this economic theology leads to ruthless competition, obscene accumulation, and reckless consumption that destroys the environment and tears apart the social fabric. It embodies the moral philosophy of the sociopath.
It is now time to acknowledge the lessons of this disastrous experiment. Markets do have an essential role in a healthy economy, but market extremism does not. It turns out that markets do need rules, there is an essential role for government, we all have more when resources are shared, and Jesus and the other great religious teachers were right. We are members of a community and we all do better when we care for one another and act with mindful consideration of the needs of others.
Wall Street as Operating System
The institutions of the economy determine how, as a society, we allocate whatever resources are available to us. In an earlier time, we organized ourselves into clans and tribes in which we cared for one another and allocated resources to secure the well-being of all. Resource allocation decisions were local and relationships were mediated by bonds of mutual caring and security. Money in the earliest human societies was unknown.
In our current society, most relationships on which we depend for the basics of survival, including food, water, shelter, and health care, are mediated by money. This gives enormous power to those who control the creation and allocation of money. In our country, that would be Wall Street.
To use a computer analogy, the Wall Street financial system has become the operating system of the economy and the society. The values and priorities of Wall Street thus become the defining values and priorities of the larger society. Wall Street has one value—money—and one goal: to maximize financial returns to those who control the money system. Social or environmental consequences find no place in Wall Street decision making.
A Choice-Making Species
…For the past 5,000 years, we humans have been living in a cultural trance of our own making that alienates us from the land, our true nature, and our place in the cosmos.
Our reflective consciousness gives us the capacity to choose our future with conscious collective intent. It was a risky experiment, however, because the capacity for self-awareness gives us an ego that can run out of control if it forgets it exists only as part of a larger whole.
In our earliest days, we humans raised our children collectively in the clan, tribe, or village, initiating them to the ways of life and the need to care for our Earth as she in turn cares for us.
Over millennia, as our human consciousness was awakening and our capacities for self-direction grew, we learned to communicate through speech, master fire, domesticate plants and animals, and construct houses of skins, wood, stone, and dried mud. We developed the arts of pottery, painting, weaving, and carving. We undertook vast continental and transcontinental migrations to populate the planet and adapted to vastly different physical topographies and climates. We created complex languages and social codes that allowed for life in larger communities.
Then, some 5,000 years ago, something began to go terribly wrong. We turned from the ways of Earth Community and embraced the ways of Empire. It was a time of separation and forgetting. Community, partnership, and the celebration of life gave way to individualism, domination, and violence.
The few expropriated the wealth of the many. The masculine drove out the feminine. We continued to worship the Sky Father, but turned against our Earth Mother. We came to value the power to kill and destroy more highly than the ability to create and nurture life.
Conquest became the measure of greatness. Economies came to be based on servitude and eventually money became the prime arbiter of human relationships.
Consider the dynamics inherent in a dominator system. With a few on the top and the many on the bottom, everyone is placed in competition with everyone else for the favored positions and the bonds of caring and sharing are broken. The creative energy of the species is redirected from securing the well-being of the tribe to advancing the technological instruments of war and the social instruments of domination.
The winners expropriate the available resources to maintain the system of domination. Positions of power are too often claimed by the most ruthless and psychologically damaged members of society. And so it has been for 5,000 years.
If this discussion of Empire sounds familiar, it is for good reason. The kings and emperors have been replaced by corporate CEOs and hedge fund managers, but we are still living in the Era of Empire—and the basic dynamics still hold.
In the past 100 years, we humans have achieved technological mastery beyond the imagination of previous generations. Yet, lacking in the wisdom of place and community that is the heritage of indigenous peoples, the cultures we call mainstream have lost their way — forgetting what it means to be human and denying our connection to the web of planetary life. The time has come to rediscover our humanity and bring ourselves back into balance with our living Earth Mother. Creation has presented us with our final examination to determine whether we are a species worthy of survival. We must not, need not, fail.
When Money Rules
At its core, our current economic crisis is a spiritual crisis framed by this well-known scriptural verse from the Sermon on the Mount:
No one can serve two masters: for either he will hate the one, and love the other; or else he will hold to the one, and despise the other. Ye cannot serve God and mammon. Matthew 6:24.
Mammon refers to wealth as an object of worship; the worship of a false god; a form of demonic possession; an evil force in opposition to Life.
Our worship of Mammon is the consequence of an illusion: the illusion that money is wealth and that making money is synonymous with producing wealth. The truth, as Wall Street has so dramatically demonstrated, is very different. Money isn’t wealth, and it is quite easy to make lots of money without producing anything of value to the larger society.
Money, the most mysterious of human inventions, a magical number of no meaning or existence outside the human mind, has displaced life as our object of sacred veneration and become the ultimate arbiter of human priorities. Money determines the fate of nations and shapes the boom and bust cycles of economic life. It allows some to live in grand opulence in the midst of scarcity, while confining others to death by starvation in the midst of plenty.
This is money as a system of power, a tyranny all the more complete because it is largely invisible to those it enslaves. To liberate ourselves from the tyranny, we must demystify money and recognize that it is a mere number created from nothing with a simple accounting entry when a bank issues a loan. As economist John Kenneth Galbraith once famously observed, the process by which money is created is “so simple it repels the mind.”
When you take out a loan from a bank, the bank opens an account in your name and enters the amount of the loan in its ledger. That becomes a liability on the bank’s accounts, offset by the corresponding asset of your promise to repay with interest. Two simple accounting entries, and money magically appears from nowhere. This simple fact makes banking a very profitable business and is the key to the ability of the institutions of Wall Street and its global counterparts to rule the world.
Mayer Amschel Rothschild, founder of the Rothschild banking dynasty, once famously said:
“Permit me to issue and control the money of a nation and I care not who makes its laws.”
That pretty well sums it up. In our current system, this control is centralized in and monopolized by Wall Street institutions that value only money and seek only private accumulation. From a societal perspective it is a devastatingly unwise and destructive arrangement.
Money, particularly money that is created out of nothing without any contribution to the creation of anything of corresponding value, is phantom wealth—it has no substance or intrinsic utility. Creating phantom wealth is a Wall Street specialty. They call it financial innovation. I call it theft.
A Real Wealth Economy
So what is real wealth? We might say it is anything that has a real intrinsic value: land, labor, knowledge, food, education.
Most valuable of all are those forms of wealth that are beyond price: Love, a healthy, happy child, a job that provides a sense of self-worth and contribution, membership in a strong caring community, a healthy vibrant natural environment, peace—none of which find any place on Wall Street balance sheets or in our calculations of GDP.
Pull back the curtain, as the financial crash has done, and the truth is revealed that Wall Street acquires its power by destroying real living wealth to create phantom financial wealth. Wall Street is more than immoral, it is an institutional manifestation of evil.
So what will the New Economy look like, and how will we achieve it?