Class Warfare Blog

November 19, 2020

Think About It

Filed under: Culture,Politics — Steve Ruis @ 8:41 am
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As reported on the Nautilus website Aleksandra Cichocka, a political psychologist at the University of Kent, wrote recently in Nature. “Conspiracy beliefs have also been linked to feelings of powerlessness, anxiety, isolation and alienation. Those who feel that they are insignificant cogs in the political machinery tend to assume that there are nefarious influences at play.”

Gosh, do you see conspiracy beliefs around? If not, you haven’t had your eyes open. So, since these stem from the sources indicated, doesn’t that indicate that we are actually suffering from significant feelings of “powerlessness, anxiety, isolation and alienation?”

The grinding of the middle class and the poor under the heels of both parties at the behest of the plutocrats of this country as produced a high degree of such feelings, and they aren’t just resident in “those others” over there, they are in all of us.

If something isn’t done to improve the lot of the poor and the middle classes, and soon, expect our governmental institutions to continue to crumble at a rapid clip. The American experiment in self-government will be over. Long live the clueless.

November 11, 2020

The Wealthy Want What They Want and They Want It Now!

Filed under: Business,Culture,Politics — Steve Ruis @ 12:05 pm
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Recently the wealthy in California spent huge amounts of money getting a proposition passed; namely Proposition 22, which exempts “gig workers” from the normal protections of labor laws. See “Prop 22: why Uber’s victory in California could harm gig workers nationwide” <subtitle> Ballot measure exempting ride-sharing companies from treating drivers as employees could serve as model for future laws” in The Guardian.”

While that article addresses the fear that such efforts will spread across the nation (and they will because it is what the wealthy want), the main point is what is never, ever is mentioned in discussing Uber. And that is that: Uber is losing mountains of cash and has no conceivable route to profitability.

Uber is losing mountains of cash and has no conceivable route to profitability.

Uber built its business by subsidizing driver’s wages (and then lying freely on its required financial reports). The amounts collected by drivers are not enough to pay the driver and Uber’s overhead, therefore billions of dollars have been spent subsidizing Uber’s drivers “salaries.”

If all taxi companies were to go out of business tomorrow, Uber could only be profitable by cutting driver’s salaries to the point that most drivers will quit. Yes, it is that simple. Drivers aren’t stupid. They have figured out that after they pay for gas, maintenance (tires, insurance, wear and tear, etc.) they are barely making minimum wage. And when municipalities lose the income from taxi-cab licenses, don’t you think they will come up with an annual sticker for gig worker drivers to display on their cars. (I live in Chicago and we have to buy a sticker annually to be allowed to park in the city. If you never stop and park, you can do without the sticker . . . or in other words, you have to have a sticker. At $75 a year or so.)

Can you see now why rich people don’t want ordinary labor laws to apply to Uber drivers? So much that they were to spend big bucks and lie through their teeth to get a proposition passed to that extent in California?

Well, if this company has no way to make a profit, why do they care? Well, if they jack up the fares so much to be able to pay for everything, the taxi companies become attractive once again, so they can’t do that. Uber states that it is betting on driverless cars being made available in just a few years, which will eliminate the expense of a driver. But it would also necessitate the purchase of fleets of driverless cars, monitoring the cars, and maintaining the cars. (Who cleans the cars when a drunken rider barfs in the backseat foot well?)

As I said, there is no path to profitability for Uber . . . none.

So, why do the rich care? Because they can make huge sums dicking around on the stock market, that’s why. Studies show that the so-called “secondary market” which includes the vast majority of all stock market transactions right now, the buying and selling of stocks already sold, is a vast drain on the economy. That is it sucks money out of the economy, and it doesn’t produce anything in return.

I know, you were taught in school, how the stock market helps companies get started or expand through the initial sale of stocks. This is till true, but is a rare occurrence when compared with the numbers of shares bought and sold that are not new. The “support” for those newbie companies is long gone, the secondary market is just between buyers and sellers, and is considered a bit of a game. (Experts in game theory mathematics are employed.) The winners take money out of the market, and the losers leave theirs behind. Nothing tangible or useful is created and money is siphoned into the pockets of the already rich, who own the vast majority of the shares.

Our problem in the US is greed. The greedy have accumulated a great deal of wealth and they are using it to remake the economy to serve their desires (not needs, desires). If there is any way to disadvantage labor unions, they will do it. If there is any way to disempower working people, they will do it. They love a high unemployment economy because workers are just glad to have a job, any job, no matter how shitty and they won’t cause a fuss.

You see we abandoned slavery and the wealthy really, really miss it.

Getting It Straight

Filed under: Culture,Education,History — Steve Ruis @ 11:08 am
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I am currently making my way through a book “Origins: How the Earth Shaped Human History” which I am finding quite enjoyable. I reached the point in human history at which agriculture had been developed in multiple sites around the world. Here is a snippet of that discussion:

“The development of agriculture offered huge advantages to the societies that adopted it, despite the continuous labor involved in working the land and nourishing the crops. Settled peoples are capable of much faster population growth than hunter-gatherers. Children do not have to be carried long distances and babies can be weaned off of breast milk (and fed with milled grain) much earlier, which means women can give birth more often. And in agricultural societies, more children are an advantage for they can care for more crops and livestock, mind their younger siblings and process food at home. Farmers beget farmers very effectively.

Even with primitive techniques, an area of fertile land can produce ten times more food for humans when under cultivation that when used for foraging and hunting. But agriculture is also a trap. Once a society has adopted cultivation and its numbers have grown, it is impossible to revert to a simpler lifestyle; the larger population becomes entirely dependent upon farming to produce enough food for everyone. There’s no turning back. And there are other consequences, too. High-density, settled populations supported by farming soon develop highly stratified social structures, resulting in reduced equality and a greater disparity of wealth and freedom compared to hunter-gatherers.”

This is the standard patter on this topic and it is all true . . . but, oh, my there are so many carts that have been placed before the horses, so many it is hard to know where to start a critique.

I will start with “Settled peoples are capable of much faster population growth than hunter-gatherers. Children do not have to be carried long distances and babies can be weaned off of breast milk (and fed with milled grain) much earlier, which means women can give birth more often.” Does anyone actually think that early hunter-gatherer human beings thought about population growth beyond their own family? Even within their own family, women continued to nurse their children for quite a while because it did give protection against pregnancy. We know this because one of the actions when one tribe of humans “conquered” another tribe, was that they often killed the children, so that their mothers could become pregnant with their babies sooner.

Plus this “birth control” happened naturally, and “milled cereal grains” was not an effective substitute for mother’s milk. First of all “milled” grain didn’t exist then, only coarse, stone ground cereal did, which was harder to digest, required longer cooking, and was nowhere near as nutritious as breast milk; all of which was easily observed.

So, who benefited from having a larger population? The argument is there would be more hands to do work, but also there would be more mouths to feed. And a larger population guaranteed that all the prey animals in the area would be hunted into oblivion, as would the shellfish, fish, and other contributors to a healthy diet. (Think about what happened to the Lewis and Clark Expedition in Oregon. Hint: they ended up dragging a dead elk for three days back to their encampment to have something at all to eat.)

I do not think there was much of a society to make such decisions. Which brings me to: “The development of agriculture offered huge advantages to the societies that adopted it.” Societies didn’t adopt agriculture; people did. Before there were the first cities, there were many, many, many small villages which supported small populations of humans who mixed in a little agriculture (you had to hang around to tend/protect your crops) with hunting and gathering. Usually these were near a stream or river, which supplied fresh water as well as fish, shellfish, etc. Agriculture happened through the accumulation a small, family level efforts. It was never “adopted by societies.”

Which brings me to “High-density, settled populations supported by farming soon develop highly stratified social structures, resulting in reduced equality and a greater disparity of wealth and freedom compared to hunter-gatherers.” Excuse me but high density populations could not form until extensive agriculture was under way. This means irrigation controls, crop land controls with protections from foraging animals, and all of this over many, many hectares of land. This only happened because of “highly stratified social structures” existing first. Kings, viziers, priests, et. al. were the designers and organizers of “high density populations.” The archaeological evidence for this is overwhelming. Agriculture didn’t cause the stratification, large-scale agriculture was caused by the stratification.

Who benefits when “Farmers beget farmers very effectively.” It is not the farmers so much as it is the elites who are confiscating the “excess grain” to support them and their lifestyles. Grain is at the heart of most of these high-density populations because it can be dried and stored and so protect the community from the vagaries of weather and climate, infestations, and diseases. Since it can be dried and stored, it can also be taxed, that is confiscated. All of this requires a stratified society. The elites started in charge and they have stayed in charge, by hook or crook.

What was left out of the “standard patter” above is slavery. The elites took advantage of their confiscation of the “excess labor” (nice euphemism, that) of the masses to expand the number of elites (people who did not grow food or hunt for a living) in the form of “soldiers’ who raided nearby villages for slaves. Slaves did not need to be paid, just fed and only minimally at that and well, slaves beget slaves very effectively. The development of large scale agriculture also lead to the development of a large scale slavery.

Only the elites benefited from the growth of this “society.” The elites got lives of physical ease and even wealth and all the farmers and slaves got was . . . trapped. (It is a well-known fact that when agriculture became widespread, human beings became shorter, lighter, and more disease ridden. It is presumed this was due to the switch from a rich, varied diet to a vastly more narrow one.)

It is much easier on our egos to say “look at what agriculture did to us” as opposed to admitting that the greed of elites drove the whole process.

* * *

I do not blame the author for this lack of precision, there is only so much one person can know. I am, as I said, enjoying this book, and will report on the whole thing later.

September 28, 2020

When it was ’54 …

Republicans are often characterized as wishing our country would be restored to what it was like in 1954.

So do I.

 

September 9, 2020

Trickle Down Economics . . . and What to Do About It

I begin with an interesting quote:

Williams Jennings Bryan said: “There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it.”

He said this in 1896. Eighteen effing ninety-six!

Trickle down economics was not a new invention during the Reagan presidency, it is the tried and true instrument of the rich to retain and expand their wealth and also, they believe, their status in society.

We are in yet another Gilded Age of wealth accumulation. The filthy rich have bought the courts, the governments, and the news media and now those instruments of our society only bleat what they are told to bleat. And what they bleat is support for the position of the plutocrats, the wealthy elites.

Those elites have sold the idea that how much wealth you have is a measure of your social status, your worth as a person, so much so that religions have cropped up to support just that, e.g. featuring prosperity gospel preachers of the like of Joel Osteen and the perfectly named Creflo Dollar.

If we are to ever have a chance at real democracy, on in which “you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it,” then we need to take action. One thing under our control is to socially ostracize the very wealthy.

Is there any good reason that Jeff Bezos should have $200+ billion dollars of wealth? Could that degree of wealth be accumulated without the rules being bent to allow it? Think about this. If Mr. Bezos were to give you one billion dollars . . . if . . . if you could spend it in one calendar year, do you think you could do it? To do this, you would have to spend an average amount per hour of every eight-hour day, five days a week, fifty weeks in that year. (You’d get two weeks vacation, after all what good is being rich if you don’t get to enjoy it?) Do you know what that amount would be? It is $532,000 per hour! Think about how hard you’d have to work to spend just $532,000! Sure, you could go out and buy a house. So, now you have a house and you need to spend 532,000 more dollars in the next hour, and the next, and the next.

And Mr. Bezos has accumulated over two hundred billion dollars for himself.

Do you think Mr. Bezos thinks this is enough, that from now on he will take whatever he earns and share it with all of the Amazon workers who work so hard under trying conditions? Gratitude is important, right? Plus Mr. Bezos could spend $532,000 per hour of every working day for the next 200 years and not spend all of his accumulated wealth . . . not making one more penny.

Do you think he thinks enough is enough? No?

I do not, either.

Start the shame campaign. Impugn the patriotism of the uber-rich. Impugn their commitment to democracy. Shame them for their Greed. Unleash the Lash of the Mortal Sin of Greed upon their backsides.

Being wealthy is fine. Being filthy rich no longer is. Stop looking up to them, admiring them. Stop thinking of the Mitt Romneys and Donald Trumps of the world as “self-made men” when their fathers gave them millions of dollars of seed money. (I worked almost forty years as a college professor and earned about two million dollars of salary. Donald Trump was given five million dollars to “get started.”)

Repeat after me: Boo! Hiss! Every time one of the uber-rich appears in public, let them know their true social status: as greedy bastards who will grind armies of ordinary people under their heels to make themselves richer than Croesus.

Need Ammunition?
So, Bill Gates is a nice guy, right? Personally I think this is correct. Professionally not so much. Consider all of the lawsuits over shady business practices that Microsoft lost. The Internet Explorer scandals. The European anti-trust prosecutions, in essence, etc.

Jeff Bezos created and owns a large part of Amazon.com and all of its spin-offs. Amazon has been running commercials lately, highlighting employees who think working for Amazon is just swell. Have you seen these?

Have you seen similar commercials for Costco? No? That’s because they don’t exist. All you need to know what working for Costco is like you can see on the badges of its workers. many say “Employee since 1997,” others show 10 and five years served. People don’t stay with an employer unless they are treated . . . and paid . . . fairly. Costco has a reputation of being a good, even a very good employer. People stay with them. (And no, they are not perfect, just good.)

Amazon runs commercials to offset the bad press they have gotten from mal-treated and disgruntled employees. You, know, for canceling the health insurance of part-time employees at the beginning of the COVID-19 pandemic, things like that. The amount of money saved doing that to be put in Jeff Bezo’s pocket wouldn’t make a rounding error in his net worth. That’s how Mr. Bezos thinks wealth is created.

Do your research. Every time you feel yourself slipping into admiration for a very wealthy plutocrat, do some research and find out how they got all of that money. If they appear on a radio show, call in and tell them what you really think. If they appear on a TV show, change channels, so their ratings will go down. If a local news program shows a gushing puff piece for one of these bastards, call in and give them a piece of your mind.

I hope that booking an uber-rich asshole in the future will be about as popular as booking an avowed racist is now. Make ‘em bleed.

September 3, 2020

See the Pattern?

Filed under: Culture,The Law — Steve Ruis @ 1:13 pm
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Here are two accounts from recent news stories:

Tahir Ahmad Naseem – who his daughter remembers as the kindest and most gentle of parents – was on trial in Pakistan for blasphemy when he was shot dead last month in a high-security courtroom. The teenager who pulled the trigger, Faisal Khan, was arrested after the shooting and charged with murder. But he was also feted as a “holy warrior”.

Meanwhile in Kenosha, Wisconsin, US of A . . .

But a white teenager, Kyle Rittenhouse, could walk down a public street in that same city during a chaotic protest — in violation of a curfew — with a military style semi-automatic long gun strapped over his shoulder, and police officers didn’t stop him. Instead, they tossed him a bottle of water and thanked him for his help. According to news reports, protesters actually shouted to police officers riding in armored trucks that the 17-year-old Rittenhouse had shot someone. Yet not one officer grabbed hold of him. Not one officer used a Taser. Not one officer drew a weapon.

On Friday, Daniel Miskinis, Kenosha’s police chief, told reporters, “There was nothing to suggest [Rittenhouse] was involved in any criminal behavior.”

See the pattern?

How does a man toting a gun walk into a “high security courtroom” . . . with a gun. Gosh do you think that man represented the dominant culture and that was one of his privileges?

How could a young man walk down a public street during a raucous protest, with a rifle looped around his neck, with people shouting at the police that the kid had just killed two protesters, and the police did nothing? Could it be that young man represented the dominant culture and that was one of his privileges?

Do you see the pattern?

The Free Market Debate (sic)

Filed under: Economics,Politics — Steve Ruis @ 1:06 pm
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I am sure you have heard of this debate before, so I won’t be explaining just what it is. But I do have a question: what in your opinion is the biggest roadblock to having free markets? I am going to step out on a ledge and claim that you immediately thought of government intervention. It is the intervention of governments into free markets that messes them up and prevents them from doing what they do so well.

Am I right?

If I am, I think you now have proof of the manipulation of a public debate.

Think back to any financial crash you want. All the way back to 1929. Maybe the Savings and Loan Debacle. Or the Great Recession of 2008. Or the several times the Stock Market went haywire and we had a mini-crisis lasting just a few days. Were any of those caused by government oversight or government intervention? Any? Hmm, that’s interesting. If government intervention doesn’t cause financial panics or crashes, then what does? Let’s see, in 1929 it was runaway speculation by people playing the market to make easy money. In 2008, a major cause was the selling of bogus “financial instruments,” bundling lousy mortgages together and calling them Triple-A investments. Also, lenders were scheduling iffy housing loans based upon those faulty financial instruments.  There was an element of governmental controls during the S&L crisis as those regulations put many S&Ls into a box.

But, by and large, most of the financial crises have occurred because of market manipulation by market participants, not by government intervention.

For example, it was not long ago that corporations were not allowed to buy their own stock. It was thought that that would lead to stock price manipulation. But in the Clinton administration the business sector offered “campaign donations” to one and all if they would accept the reforms they thought were needed. One of those was to allow corporations to buy their own stock. At the same time regulations were passed to encourage corporations to pay their executives in stock options, rather than cash, to “give them a stake in the company.” You will have noticed that the majority of American corporations took their Trump administration tax cuts and used then to . . . create jobs, modernize their infrastructure, develop new products . . . uh, no, just kidding; they bought stock with the money, often their own stock. By executives deciding to buy their own stock, they drove up the price of their own stock, which made their shareholders happy, and made their salary payment in stock more remunerative for themselves. Do the right thing for their employees and society at large? Not on the agenda.

The “free market debate” isn’t a debate, it is a false dichotomy. The people promoting that this as an actual debate want there to be just two sides: one where the government messes things up, which it rarely does and one in which free markets, without any manipulation work like miracles. Somehow they always seem to leave out the markets as they really are: markets manipulated up the yin-yang by participants in the markets themselves.

Oh, and the days in which government dreamt up regulations on its own are long past. All new regulations are proposed by the industries being regulated themselves and is it any wonder those regulations seem to favor certain things?

August 25, 2020

The Cancel Culture—Real or Imagined?

Filed under: Culture,Religion — Steve Ruis @ 11:43 am
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On the Vridar web site, Neil Godfrey was reviewing a compilation of essays in honor of biblical scholar Thomas L. Thompson.

He began with “Why a volume of essays in honour of Thomas L. Thompson? The opening paragraph of the Introduction explains (with my highlighting):

Thomas L. Thompson has been, for the past five decades, behind some of the – if not all – major changes in Old Testament historiography, if we consider that his criticism of the patriarchal narratives, the exodus and settlement and the United Monarchy were each at their own time forerunners of what later on would become accepted in the field (Thompson 1974, 1987, 1992, 1999).

See below for those four titles. The first, 1974, was met at the time with such opposition that it left him “unemployed and unemployable for ten years”. The 1992 work precipitated his expulsion from Marquette University.”

Thomas Thompson’s Significant Books (I have read the fourth.)

Historically, the largest exponent of the cancel culture has been organized religion. If your beliefs contradicted theirs, you lost your job, in Thompson’s case multiple times, or had a hard time finding a job, or you lost your freedom by being locked up, or even your life. (Burn, Heretic, burn!)

The telling feature in this case was that Thompson was being punished . . . for being right. His heretical opinions have become “accepted in the field.”

August 23, 2020

Have You Been Listening/Reading/Hearing?

Filed under: Culture,History,Religion — Steve Ruis @ 11:46 am
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One of the core messages of this site is that civilization was built upon the backs of the masses. The elites coerced the labor of the masses and confiscated their “excess labor” (what they could produce minus the bare minium to keep the “slave” alive). The confiscated/taxed labor allowed the religious and secular elites the liberty to do what they did.

Now some claim that all of art, music, and high architecture, even science are the products of the leisure time bought through “civilization.” My point is that people were not asked whether they wanted to contribute to that effort and are still not asked (Has Bill Gates or Jeff Bezos asked you what you would like them to do with all of your money confiscated in excess of what they needed to live bloody well on?). One of the products the elites have created, possibly more than any other, is war. Do we ignore that and just thank the massahs for all of the art in the museums, and the grand buildings (pyramids, etc.), and science and such?

Here are some quotes I think you we see now slightly differently from before:

From “The Mud-sill Theory” speech by South Carolina Senator James Henry Hammond, given before the Senate in 1858:
In all social systems there must be a class to do the menial duties, to perform the drudgery of life. . . a class requiring but a low order of intellect and but little skill. . . . Such a class you must have, or you would not have that other class which leads progress, civilization, and refinement. It constitutes the very mud-sill of society of society and of political government; and you might as well attempt to build a house in the air, as to build either the one or the other, except on this mud-sill. Fortunately for the South, she found a race adapted to that purpose to her hand. A race inferior to her own, but eminently qualified in temper, in vigor, in docility, in capacity to stand the climate, to answer all her purposes. We use them for our purpose, and call them slaves.

This is the “better them than us” attitude later fostered by the elites to get southern whites to put on a uniform and fight those damned Yankees. I generally refer to this as the Law of the Totem Pole: “You can’t be sure you are not on the bottom unless you are standing upon someone else.”

* * *

And there was William Wilberforce, as sincere a philanthropist as Anglicanism ever produced, an ardent supporter of Bible societies and foreign missions, a champion of the anti-slavery movement, and also of the ruthless “Combination Laws,” which denied to British wage-slaves all chance of bettering their lot. Wilberforce published a “Practical View of the System of Christianity,” (published 1897?) in which he told unblushingly what the Anglican establishment is for. In a chapter which he described as “the basis of all politics,” he explained that the purpose of religion is to remind the poor:

That their more lowly path has been allotted to them by the hand of God; that it is their part faithfully to discharge its duties, and contentedly to bear its inconveniences; that the objects about which worldly men conflict so eagerly are not worth the contest; that the peace of mind, which Religion offers indiscriminately to all ranks, affords more true satisfaction than all the expensive pleasures which are beyond the poor man’s reach; that in this view the poor have the advantage; that if their superiors enjoy more abundant comforts, they are also exposed to many temptations from which the inferior classes are happily exempted; that, “having food and raiment, they should be therewith content,” since their situation in life, with all its evils, is better than they have deserved at the hand of God; and finally, that all human distinctions will soon be done away, and the true followers of Christ will all, as children of the same Father, be alike admitted to the possession of the same heavenly inheritance. Such are the blessed effects of Christianity on the temporal well-being of political communities.)

Source: Sinclair, Upton. The Profits of Religion: An Essay in Economic Interpretation (p. 33).

In this same source we hear from another pious person:

Hannah More bade them be happy because God had sent them her pious self. “In suffering by the scarcity, you have but shared in the common lot, with the pleasure of knowing the advantage you have had over many villages in your having suffered no scarcity of religious instruction.” And in another place she explained that the famine was caused by God to teach the poor to be grateful to the rich! “Let me remind you that probably that very scarcity has been permitted by an all-wise and gracious Providence to unite all ranks of people together, to show the poor how immediately they are dependent upon the rich, and to show both rich and poor that they are all dependent upon Himself. It has also enabled you to see more clearly the advantages you derive from the government and constitution of this country—to observe the benefits flowing from the distinction of rank and fortune, which has enabled the high to so liberally assist the low.

And if you do not think the religious elites were acting hand in hand with the secular elites yet, how about (from the same source):

In the year 1819 an act of Parliament was proposed limiting the labor of children nine years of age to fourteen hours a day. This would seem to have been a reasonable provision, likely to have won the approval of Christ; yet the bill was violently opposed by Christian employers, backed by Christian clergymen. It was interfering with freedom of contract, and therefore with the will of Providence; it was anathema to an established Church, whose function was in 1819, as it is in 1918, and was in 1918 B.C., to teach the divine origin and sanction of the prevailing economic order.

And as to labor unions! From the same source:

Let me quote another member of the English ruling classes, Mr. Conrad Noel, who gives “an instance, of the procedure of Church and State about this period (late 19th century)”:

In 1832 six agricultural labourers in South Dorsetshire, led by one of their class, George Loveless, in receipt of 9s. a week each, demanded the 10s. rate of wages usual in the neighbourhood. The result was a reduction to 8s. An appeal was made to the chairman of the local bench, who decided that they must work for whatever their masters chose to pay them. The parson, who had at first promised his help, now turned against them, and the masters promptly reduced the wage to 7s., with a threat of further reduction. Loveless then formed an agricultural union, for which all seven were arrested, treated as convicts, and committed to the assizes. The prison chaplain tried to bully them into submission. The judge determined to convict them, and directed that they should be tried for mutiny under an act of George III, specially passed to deal with the naval mutiny at the Nore. The grand jury were landowners, and the petty jury were farmers; both judge and jury were churchmen of the prevailing type. The judge summed up as follows: “Not for anything that you have done, or that I can prove that you intend to do, but for an example to others I consider it my duty to pass the sentence of seven years’ penal transportation across His Majesty’s high seas upon each and every one of you.”

You want evidence? I got evidence.

May 26, 2020

Who Suffers?

We all tend to think of what is normal for us economically is the way it has always been, but today the economic deck is stacked, possibly more so than in any previous time. And it is not stacked in your favor. It is stacked in favor of those who lend capital.

For someone to lend you money, there has to be an almost iron clad guarantee that the lender will be paid back. You almost always have to put up collateral for your loan. Fail to pay the loan back and the lender takes the collateral. So, if you buy a house, the house becomes the collateral. If you fail to pay the mortgage payment for a few months and Wham! The lender forecloses on the loan and repossesses the collateral, aka your house. All of the payments you made now count as nothing. It does not have to be this way. The “collateral” could be held by a court and put up for sale and the proceeds of the sale be split  between the two actors: the lender and buyer with the split determined by how much money had been put up so far.

But that is not the way it is. In our culture, the lender has all of the cards with almost no risk.

Consider the “Great Recession” ca. 2008. The housing market collapsed due to bad behavior on the part of realtors and lenders and suddenly mortgages that could not be paid resulted in repossessions of collateral worth far, far less that the amounts owed. So lenders bore some risk, then . . . except they used a powerful Washington, D.C. lobby to get bailed out so that they did not lose any money (or at least not so much). Were the people buying the homes also bailed out? Silly person, of course, they were not.

Lenders are so used to not having any risk associated with lending that corporations are currently awash in bad debt. They know they are okay because if anything goes wrong their “friends” in Congress and the White House, Democrat or Republican, will bail them out again. This is why economists invented the term “moral hazard,” but they do not apply it to those who line their pockets.

I have been slowly working my way through Michael Hudson’s book on how debt was handled in days long gone. I will give a larger book review (I have offered tidbits before) when I finish it.

To hold you over, here are some tidbits of Michael Hudson’s research and thinking:

“The pedigree for “act-of-God” rules specifying what obligations need not be paid when serious disruptions occur goes back to the laws of Hammurabi c. 1750 BC. Their aim was to restore economic normalcy after major disruptions. §48 of Hammurabi’s laws proclaim a debt and tax amnesty for cultivators if Adad the Storm God has flooded their fields, or if their crops fail as a result of pests or drought. Crops owed as rent or fiscal payments were freed from having to be paid. So were consumer debts run up during the crop year, including tabs at the local ale house and advances or loans from individual creditors. The ale woman likewise was freed from having to pay for the ale she had received from palace or temples for sale during the crop year.

“Whoever leased an animal that died by an act of God was freed from liability to its owner (§266). A typical such amnesty occurred if the lamb, ox or ass was eaten by a lion, or if an epidemic broke out. Likewise, traveling merchants who were robbed while on commercial business were cleared of liability if they swore an oath that they were not responsible for the loss (§103).

“It was realized that hardship was so inevitable that debts tended to accrue even under normal conditions. Every ruler of Hammurabi’s dynasty proclaimed a Clean Slate cancelling personal agrarian debts (but not normal commercial business loans) upon taking the throne, and when military or other disruptions occurred during their reign. Hammurabi did this on four occasions.

“In an epoch when labor was the scarcest resource, a precondition for survival was to prevent rising indebtedness from enabling creditors to use debt leverage to obtain the labor of debtors and appropriate their land. Early communities could not afford to let bondage become chronic, or creditors to become a wealthy class rivaling the power of palace rulers and seeking gains by impoverishing their debtors.

“Yet that is precisely what is occurring as today’s economy polarizes between creditors and debtors.”

I think you will find that some of this applies to our current situation, no?

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