Friday, September 10, 2010

Rich & Poor

Using Money is the Creator of Value 

How to Cook a Goose in Three Decades.

The Capitalist economic system is based on the private

production of goods & services for the consumption of

the private citizen, Public institutions of government

and social institutions,

1. Employer (consumer)

2. Employee (consumer)

3. Government (consumer)

4. Social Institutions (consumer)

5. Consumer (employer – employee – government – social institutions.


The Two major parts for most of our American history

was the interaction between employee and employer.

In the earlier years of this nation the employers were

entrepreneurs with very few employees. The only large

employers were governments who only represented a

small part of the of the work force except in time of war.

Because of a shortage of labor outside of the plantation

slavery system of the South, the earlier years were marked

by a balance of economic strength between components in

the free market system. In someways the Plantation system

was a precursor to Corporate America. It was the ultimate

imbalance between Employer and employee.


Corporation began to become more important early in the

1800′s when some states began to grant them more flexible

powers of operations. In 1819, the U.S. Supreme Court granted

corporations a wider range of rights. The Corporation as a

whole was labeled an “artificial person,” possessing both

individuality and immortality. Because of the limited liabilities

of corporation they have become the primary method of doing

business of both the big and small employers.


One of the growing needs of larger employer units was a

constant and universal currency to conduct efficient

transactions in the market place of the growing consumer.

The tension between Banking power and government

power had made a National Currency. The Greenbacks of Abraham Lincoln’s Treasury Department was the closest

creation until the birth of the Federal Reserve Banking System

in 1913.

In the interim there were some major bank Panics

that wrecked havoc between the production and consuming

components of the capitalist economy. Unfortunately the

Federal Reserve did not prevent the Greed of Banking interest

from causing two large Economic disasters including the

Great Depression triggered by the levered Stock market

Bubbled of 1929.


The Banking reforms and Labor reforms of Roosevelt

during the 1930′s set up a stabilized condition between

the rise of Corporate Capitalism and Union Labor.

The Wealth spread between the Middle Class and the

wealthy elite narrowed and 50 Years of prosperity ensued.


Then came Reaganomics. The Banking reforms were gutted.

The Rich were give the larger slice of the Economic pie and

were trusted to trickle down on the Middle Class. He broke

the back of of the Union movement and made the wage

earner a slave without power to the Corporate Capitalist.

The Middle Class languished and is now dieing. The Corporate

Capitalist shifted the wealth to themselves at the same

percentage that existed under the imperial rule of Hoover and

the Bankers. Once again Bankers had the power to leverage

money to make money with out adding anything to the

consumption equation.



The Corporate Capitalist that were engaged in the

Production, Employment, Consumption cycle were

in the meantime killing the Goose in the search of the

Gold they wanted so badly. Technology and offshore

job transfers were expanding the profit with great

rapidity while the purchase power of the working class

was rapidly declining. The Middle Class was sliding

into limbo. The economy was being carried on the backs

of the Credit cards that Banking was getting rich on and

the inflation of the Housing Boom was creating a spending

boom among the privilege class of home owners.

The Boom Busted, the Bankers begged, Bushed Bailed.

Every Banker took home a Bonus and all was happy 

among the Financial Barons.


There was one small flaw in the plan. With credit dead

in the water due to the the Housing mess and the tight

credit market and the rash of Bankruptcies destroyed the

 consumption by the labor market .

Business is recovering because Technology and layoff

have made them profitable. But consumption and hiring

will be slow returning.   Republicans were in House and Senate

 Screaming “Burn baby Burn”   

It is their hope to pick up the pieces of power and they could

care less about who pays the price. They have and will block

every piece of legislation that is designed to uplift the

American worker and try to force the Congress to save the

unseemly rewards that have been reaped by the most wealthy

among us.

 I have news for the Corporate Capitalist who want

someone to buy their stuff. The Bankers have cleaned your clock

And they are busy resetting time to make another rape of the

old system and you will be among the victims.

Copyright © William Hodge 2010

One Response to “Rich & Poor”

  1. Jennifer Lancey Says:
    Great Blog post. I am going to bookmark and read more often. I love the Blog template

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