This page has been archived and commenting is disabled.
Guest Post: We Need A Value-Creating Society As Opposed To A Value-Extracting Society
Submitted by Damien Hoffman at Wall St Cheat Sheet
Last year we awarded Dylan Ratigan one of our First Amendment Awards for Outstanding Journalism
for his job calling out the scammers who were bringing down the
economy. Dylan and I were chatting about how things have played out
since then, and what we need to do to continue fixing the broken
infrastructure of capitalism …
Damien Hoffman: Dylan, what financial reform do you think we’ll end up with?
Dylan Ratigan: Since it’s Washington, I have no idea. But if I were
to bet, I think we’ll end up with derivatives reform. I’d love to see
it deal with the issue of collateral because that would expose the
fraud of the entire system. Credit derivatives are just a mechanism to
monetize the future for the present.
Actually, three things would expose the fraud: forcing investors to
post collateral on derivatives, an audit of the Fed, or an assignment
of forbearance to the homeowner and away from the banks. These three
problems illustrate that we’ve got a highly leveraged banking system in
which the bank executives are paying themselves a lot of money. They
are claiming it’s a yield to our economy when — if the state bears the
rip in the banking system — it’s nothing more than a tax on capital.
Damien: What about the transfer of risks?
Dylan Ratigan: We’ve got an inefficiency by which a few people
figured out how to monetize the future and then sell the government a
mathematical formula that is wrong. Then, they had the state bear the
risk of that wrongness. This allows the private sector banking system
to retain the profits and transfer the losses. It’s a pretty bad deal
for the country.
Damien: The country can’t afford it right now.
Dylan Ratigan: Right. But the bankers don’t care. That’s why they
are viciously fighting off any attempt to reform the status quo. The
Democrats and the Republicans have a tremendous fear that it will
reveal the leverage. That would call into question why the people
running these banks are paying themselves all this money when there’s
accounting and underwriting fraud at the heart of these banks who are
misrepresenting their assets. Basically, they’re levering their
misrepresentations through accounting relief with the Treasury and then
paying themselves.
Damien: So are we in a Catch-22 where either we expose the
fraud or if we’re too scared to expose it, we end up recreating the
same playing field which is going to lead to an even worse or similar
style crash somewhere down the line?
Dylan Ratigan: Yes, exactly. That’s exactly right. But we may have a
few years. It is like we’re being told we’re going to have a heart
attack. But instead of just taking advantage of the fact that we’ve
been given a five-year warning to make a plan – getting off the sugar,
maybe some exercise, whatever – everybody is still trying to deny the
heart attack by saying, “We’re not going to have a heart attack.”
It’s kicking the can down the road to our generation and the next generation.
Damien: If we go down this road again, we will be in a lot
worse trouble because the boomers are going to be tapping Social
Security and Medicare like never before. So then how the hell are we
going to pay for anything?
Dylan Ratigan: The end game is the paper currency is toast. Look at
the implied rate of returns or the pension funds at 8%. Then look at
the demographics. There’s not enough money, right? Paper currency has
no value. So how do you get out of that?
Well, we actually have to start to produce things of value. This
means we need to have an efficient lending and investing mechanism as
well as a robust educational mechanism. People must make something for
other people as their job. Then we will have a value-creating society
as opposed to a value-extracting society. Right now we’ve mastered the
art of extraction.
Damien: How do we make the switch when extracting is so much easier in the current system?
Dylan Ratigan: You and me and everybody else must become aware of
the penalties that are being assigned to our generation in the form of
social disruption or potential austerity measures and taxation. Not to
mention the deprivation that is less felt but is very much present
through high yields, underwater homes, etc.
But the government and banks don’t want to do it because they’re
afraid of what they would have to do if we all understood the scam.
Stay tuned for Part II of my interview with Dylan …
»
- 4902 reads
- Printer-friendly version
- Send to friend
- advertisements -
Damien, you sound like the advocate of the Devil! :)
Isn't it funny that Ratigan, a guy screaming for mass welfare programs such as UHC that places huge burdens on and extracts values from a society, now critisizes people for extracting too much?
The guy makes a good politician.
One criticism: Right now we’ve mastered the art of extraction.
Who the fuck is "we"? Maybe he is self-including based on his own past servicing Wall Street. As for me, I am not included in "we" and resent any such implication. I make stuff. By choice.
He means "the royal we, you know, the editorial."
Oh, "you" are part of the "we", "we" are all part of the "we". Either directly or indirectly nearly all have benefitted from "extracting" more and more from the future.
That is until the balloon payment comes due.
Didn't get your strawberry pop-tart this morning?
Richmond,
-- Agreed. I'm an engineer because I wanted to make useful stuff. I make power supplies for phones, computers, lighting, computers and what-have-you. But I do agree with the statement as it pertains to the general American sentiment. Lots of entitlement attitudes. ?
"would expose the fraud of the entire system"
If you "exposed" the fraud, there would be no system. The system is built upon a fraud. Derivatives are devices used to extend the fraud by using hyperleverage to sustain the system further on paper. Eventually the derivatives will be blamed for the collapse but that was going to happen anyway.
Derivatives are tools to make people think they can get out, this allows the system to be extended that much further. If the lemmings figured out there is no out, they would stop marching this second. That is not the purpose of the system.
The purpose of your masters is to make you believe in false gods, Helicopter Ben. Whenever you have doubt, you will hear Helicopter Ben will drop money from the sky to save you. They are giving you hope that there is an out.
All you need to do is turn on CNBC... Cramer: buy, buy, buy!!!!
Elimination of the parasites would instantly improve the health of the host.Too bad all we normally hear is how it would be the end of the world....for the parasites, that is!
You have it backwards. You are the parasite. You are sucking from the future along with 7 billion other parasites, the host is now dead, so what happens to the parasite?
Want further proof, Japan has been sucking off the rest of the world for 20 years. Without the rest of the world that country would have been flames decades ago.
Are you off your meds?
What do you believe the average person should do, if anything other than despair?
"What do you believe the average person should do, if anything other than despair?"
Start having more kids to pay off your debt;-)
(Not really, I value human life more than that)
SWRichmond
You have choice, either stop believing the lie(and stop spreading them) or continue to believe the lie(and keep spreading them). The choice is yours, but to say you are a victim or innocent is just another lie. We have all been guilty. If you can't accept this Truth, than you certainly will continue the lie.
What everyone is doing is playing the blame game, well lock 7 billion up and start digging up the billions that have all already committed the crime. That is not the way to move forward, especially when you haven't addressed the issue and when you are actually just talking about someone breaking some Man's rule.
The crime is Man trying to move lies inviolation of Law which are not Man's rules.
Man is the parasite, sucking off himself, sucking blood exponentially from himself in the future. Eventually the host dies and a very good chance of plenty of the parasites going to.
All you've just done is demonstrate that either you can't or don't wish to answer a simple question, or you are in fact off your meds.
What do you believe the average person should do, if anything other than despair?
I guess he's / she's selling despair, then. I'm not buying.
I see a surprising amount of this on Internet boards; people selling doom without offering anything. I suspect it is religious (recruiting?) or maybe some psyop to make us believe we can't change the system so we should stop trying and just resign ourselves to our fates. I "got into it" with Hyperkitty once and pushed and pushed for "OK, what should we do?" and all I ever got was "Open your eyes" and "Stop believing the lies" and other stuff that I'm sure was supposed to be deeply philosophical but was in fact totally useless and a waste of time.
There is a solution: communities creating local currency, which is not based on debt and forbids charging interest, and living within the goods and services provided by that community.
http://www.puresimplicity.net/~hemi/Pics/Humor/wharrgarbl.jpg
Stop paying taxes, get in excellent physical and mental condition and help anyone you can, especially those you care about, do the same.
and all this time, I thought I was doing god's work.
Damien Hoffman: Dylan, what financial reform do you think we’ll end up with? Dylan Ratigan: Since it’s Washington, I have no idea.
Is this really Mr. Ratigan ? I would have expected him to say, "well, we will protect certain senators, financial firms and some GSE's to maintain the extraction of Billions, but they will certainly crack down on the Millions of dollars in bank & credit card fees to protect the consumer." I like Mr. Ratigan and enjoy his show more than any other commentary on TV. He brings about more transparency in the financial / washington / wall street cesspool than any other person in the media. It's only a matter of time before MSNBC executes orders to get rid of him (when's his contract up ?).
Before we begin creating value, we'll have to abolish the FRB and have major legislative rollback and tort reform. Bankers and lawyers have killed initiative in America. These changes may not be complete in my lifetime.
But value creation is so hard and unpleasant! Factory work is hard, and sometimes resource extraction stuff blows up (e.g. in the Gulf) and spews goop everywhere. It's so much easier to just outsource all that overseas. That way we can pretend to be clean and perfect and green and all get rich trading little pieces of paper with each other, and all the brown people can huff all the lead fumes emitted by manufacturing all our toys.
You just summed up pretty much the entire upper-middle class in this country.
+100. Anyone who thinks they aren't part of the problem is deluding himself. Not that he had any choice. You can run with the crowd or get dragged along with it. As big a bunch of felchers as the squid crowd may be, who doesn't live "better" because of the system they created? Regardless of your age, consider the difference between the middle class lifestyle of today, and when you were a child. More affluent? Bet your ass. Is it sustainable? No. It's a fraud. When this abortion is over, we will ALL take a beat down. Is Mako right,,,Leo,,,Gordon??? Can't know. But those who have recognized the problem, accepted the outcome, and made adjustments and/or plans will be hurt one Helluva lot less than those with their heads in the sand.
Hard times are coming, and with it, hard work. We will become producers once again, but only because of the threat of starvation. Then and only then, we'll see how much sand the American people have left.
The problem is government. Government caused this problem and is now attempting to "fix" it. Get rid of all the bureaucrats and most of these problems will go away just like the wind.
So if Obama introduces a VAT, will anyone in the US need to pay it?
Forgive my naivete' but from my simplistic view (I'm engineer, not a financial guy) my understanding is that to pay off all the debt we have amassed as a nation we need to generate wealth. A measure of that is the GDP. As I understand it the financial system does not generate wealth (at least directly), it just moves money around, so does not contribute to GDP. We need to produce things. Again, simplistic I know, but isn't that it in a nutshell?
I know zilch of all the technical that are discussed here and don't mean to dumb down the discusiion.
Peace,
Scindite Jugula Eorum
Read this: http://freedom-school.com/money/how-an-economy-grows.pdf
Then this (and browse the whole site): http://www.shadowstats.com/alternate_data/gross-domestic-product-charts
IMHO
Yes except for GDP. It is not a good measure for wealth.
General Electrics Motto... "We Bring Good Ideas to Life"
Should be... "We maintain and hope to grow our marketshare thru legislation"
This is the corporate culture that we are stuck with.
It is cheaper to legislate than complete Research and Development runs for new products, why not maintain and hope to grow and take all of those crazy smart guys out back and shoot them... think of the savings I mean extra bonus monies... grow market share and control cost, FUCKING BRILLIANT. Until they are 20 years behind in the markets for development.
For instance... http://www.reuters.com/article/idUSTRE6075DV20100108
G.E. lost, at home... against an offshore company. the legislative power seems to have failed them, or more accurately they were not bribbing. Oops, Lobbying the right people on that one...
The tech.. is from the 1970's... Billion dollar production lines for 1970's disco era tech.
***** "Between 1850 and 1970, over six million wind machines were sold for use in the United States, primarily used to pump water, and later to provide electricity in rural areas." *****
"We Need A Value-Creating Society As Opposed To A Value-Extracting Society"
Take your materialist value based philosophy and shove it where the sun doesnt shine.
Your approach is just another way to skin the cat- doesnt touch the core of the problem.
The humanity needs to become a spiritually developed society as opposed to a value obsessed pack of wolves. Animal spirits like you and your mentors need to be sent to the slaughterhouse to perish for humanity's common good.
But aint gonna happen. Not anytime soon b/c wrong mentality takes generation(s) to change.
As for the economic value- nowadays robots make some of it and that trend is only going to grow. I hate to admit it, but the future doesnt need us. Most of us in our present form, that is.
http://www.wired.com/wired/archive/8.04/joy.html
And I am very afraid that some smart people out there realize that, and thats why they are borrowing the future with both hands- because there is no future.
A crash caused by truth will probably be much more liberating and rejuvenating than another crash at the end of yet another manipulated cycle.
I'm ready for my bitter medicine. I want to feel better sooner and stop living in this lie.
What say you?
Isn't it funny that Ratigan, a guy screaming for mass welfare programs such as UHC that places huge burdens on and extracts values from a society, now critisizes people for extracting too much?
The guy makes a good politician.