Friday, April 22, 2016

The Castrating Effects of the Invisible Hand: How Globalization Became a Giant Ponzi Scheme

In case you haven't figured this out, globalization is simply a giant ponzi scheme. And everyone who believes otherwise has simply sold their soul to the religion of the markets and made it their unquestionable messiah.

It's not as complicated as it seems, but it's always presented as if it were so complicated only Wall Street Bankers can possibly understand it. All charlatans use this "smokescreen of complexity" to hide their slight of hand to pick your pocket. And globalization, and the financial pilfering of the entire planet that has now destroyed the Great Barrier reef - something that took millions of years to form, but has been destroyed in a matter of months, thanks to pollution and climate change - is basically no different.

Banks, as everyone knows by now, run everything, and own everything. They provide money and make loans to people, corporations, countries, you name it. Those loans become money in the bank's pocket as soon as they are issued. For example, if the bank makes a loan to Joe for Joe to buy a house, for say, $100K, that  $100K becomes money on the banks books, and thus money in the banks pockets. Presto! Just by issuing the loan, the bank has made $100K, plus interest.

Then, through the financial alchemy of "securitization," the financial markets bundle a bunch of those loans together, and, because of the interest on those loans, sell them to investors. And some of the biggest investors of all are Freddie Mac and Fannie Mae. In other words, if I make 10 loans to 10 different Joe's, I can then take those 10 loans, and make them look like they are 1 single loan, for a million dollars. Then I can sell that million dollar loan plus interest, like a commodity to anyone who is willing to take the risk that any of those 10 Joe's will stop paying on their loan. The hope, of course, is that even if one or two of them stop paying, the rest will continue to pay.

Companies like AIG, however, allow me to insure my investment, just in case most or all of those 10 Joe's stop paying. AIG covers my bet that Joe will pay his loan, and if he doesn't, then AIG will pay me instead. Basically, I can't loose. This is how money is used to make more money, even though nothing is being produced or generated, but larger and larger bank statements. And as the bank statements of the banks go higher and higher, the debt of everyone else gets deeper and deeper. And that's because as we take the loan on the front end, our tax dollars are used to buy that same loan from that bank, on the back end.

It's no coincidence, therefore, that private profits have been rising in tandem with the increase of public debts around the world,  and that every industry is following the example set by the head of the snake. Every industry from Big Finance to Big Pharma has lobbied hard for deregulation of their markets, and by doing so, has made trillions in profits This is made possible by U.S. taxpayers, who either purchase those loans through quasi-governmental agencies like Freddie Mac and Fannie Mae, or who provide massive amounts of funding for the R&D of drugs through NIH (which have allowed Big Pharama to become the most profitable sector of the entire U.S. economy). Additionally, the deregulation under Reagan allowed those pharma companies, once they had purchased the patents for those drugs at bargain discount prices (even though those drugs were developed thanks to more than 80% in public and taxpayer investment), to advertise directly to consumers.

Every industry has followed suit, from the military industrial complex which constitutes the largest sector of the U.S. economy, thanks to massive funding of wars, military expansion, and R&D (compliments of U.S. taxpayers via the Pentagon), to the War on Drugs and the Prison Industrial Complex, which is one of the fastest growing sectors of the U.S. economy because it is being "privatized" (much like much of the U.S. military, by the way), which means it is sold to private companies that then sign contracts with the states which guarantee occupancy rates. And who pays those companies to house all of those inmates? You guessed it, the tax payer!

But wait - It gets even better! By offering 401k's and encouraging regular people to invest in the stock market, regular employees become shareholders, and thus willing accomplices in incentivizing the companies they work for to maximize profits. And one of the ways that companies try to maximize profits in order to keep all their shareholders happy, is by firing as many of their employees as possible, or moving to countries with cheaper labor and no health care  & retirement plans or environmental regulations,  so they can save money. Hence, to keep you as a shareholder happy, the company is forced to treat you as an employee like crap. 

Don't bother trying to get on welfare, however, since the public debt (because of the egregious amounts of spending on bogus wars and prisons filled with cheap labor) is too great to support lazy, unemployed American's who are simply trying to take advantage of other "hard working Americans" through their obvious desire to have government take care of them from the cradle to the grave, via "socialist programs and wealth redistribution."

 And thanks to international trade agreements like NAFTA and TTIP, and politico-economic unions like the EU, which serve only to protect and advance the interests of banks and corporations, people in general, and increasingly their governments as well, have less and less say about any of this. In short, people's ability to redress its concerns through its political bodies has been effectively neutered by Adam Smith's invisible hand.

Goodbye to the Great Barrier Reef. Humanity is not long behind you.    

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