Rich people continually get richer while poor people get poorer, and the middle-class maintains an awkwardly imbalanced posture on an economic precipice. This is a general fact of everyday life in corrupt economic systems powered by, yet, more corrupt sets of laws determining who actually gets rich, and how they go about doing it. When, for example, paper currency is represented by the ruling powers of a political regime as worth 100-percent of a basic monetary unit, such as an American dollar, and there exists a quantity of precious metal, such as gold or silver, backing-up those pieces of paper with one-dollar, ten-dollar, or 100-dollar amounts of that metal, there isn't any way that the particular specie of paper currency may, at any time, be worth less than the pre-determined set value. This is the only proper way through which a viable economic system is born and maintained. When there is no precious metal standard supporting paper currency, such as what presently exists under the constraints of the Federal Reserve System, an ordinary piece of paper (a Federal Reserve Note), only said to represent a particular value, may easily be manipulated, by the system that prints and circulates it, to have a real worth of only a fraction of its purported illusionary value.
If, perchance, one-thousand people choose to come together to form a new social compact, and with it a new government, and to collectively bring with them five-hundred-thousand pounds of gold, from which they would form fifty-million coins of different denominations worth one-dollar, five-dollars, ten-dollars, and so-on, the value set, for instance, on a loaf of bread, a gallon of milk, or a liter of gasoline (products produced by the one-thousand citizens of the new state) would not be subject to inflationary price fluctuation. That is, unless abject greed, and usury, would enter into the equation. Invariably, whenever a new government is formed, the economy that follows directly reflects the ultimate purpose of the government, and the laws legislated by it, which are to, either, serve to benefit only the few wealthy of that particular society, or the greater number of its common citizens.
In previous essays, "Economics and the Hershey Bar," and "Simple Statistics Showing the Inequities of Capitalism," the ultimately pragmatic purpose of labor, as the backbone of capitalistic corporate wealth, was underscored. Most people who end-up populating a new state are individuals who haven't many capital resources and investment potential. We may say with historical accuracy that the great majority of the rank-and-file people who actually took-up arms and fought in the American Revolution, to free the thirteen-original British colonies from British monarchial rule and to form a new nation, were poor struggling men who wanted the opportunity and liberty to create, and maintain, an enjoyable and satisfactory lifestyle for their families, and families-to-be. After the revolution, aggressively implemented designs for mercantilism and capitalism were deployed successfully by the one-to-two-percent of the new national population who were wealthy and had capital resources, and from such efforts a national workforce was formed. That was the beginning of the meteoric rise of capitalism in the new United States. Very soon, partnerships, corporations, companies, and syndicates were abounding, which churned out, over time, products, both luxury items and those desperately needed by the population of a fledgling nation-state. Those successful business organizations were originally created by a very few wealthy capitalists and employed the struggling men, women, and children who were unable, themselves, to make and sell products, and who depended upon their small meager salaries for their existences.
The basic notion underlying capitalism then, and now, was that the individual capitalist, who has the money and resources to create a business enterprise, should, by natural law, reap the greatest benefit from the result of his investments, even if the production, distribution, and sale of the products depends, in greatest part, upon the skilled labor of the employees hired by the capitalist to do the job.
Realistically, the chance that one-thousand ordinary, poor-to-middle-class individuals, seeking to form a nation, would possess enough gold or silver, collectively, to constitute the amount needed to create a monetary gold-based economy, is very slim. Much truer would be the realization that, nearly always, only a very few wealthy individuals among the many of the hoi polloi usually fund a revolutionary movement, and the evolution of a new state. Hence, the capitalistic motives of acquiring future profit from investment, and reinvestment, are the usual impetus behind the formation of any new regime. So, though supposedly responsible for an experiment in democratic government, the very wealthy men who designed and ratified the U.S. Constitution, and christened the ensuing political economy, were hedonistically narcissistic enough to ensure that features were installed in the government, and laws legislated, which would ensure that their wealth would be protected, maintained, and perpetuated over time, and that financial control of the new nation would remain under the control of the very opulent. They weren't about to lose their riches to a voluntary redistribution of national wealth under the auspices of a practical constitutional mandate of "socialistically promoting the general welfare." As President Herbert Hoover supposedly quipped once, off-the-record in 1930, "Why should I care more about the plight of a hundred-thousand struggling families than the machineries of industry?" Moreover, by multiplying one-thousand ordinary, poor-to-middle-class citizens by 300,000, the product would yield the present approximate population of the United States, developed since 1776. Unfortunately, in such a large demographically heterogeneous immigrant population, the chances for unanimity, almost assured with a homogeneous population of one-thousand, about the best type political economy for the greatest number of U.S. citizens would be very slim. Therefore, such a demographic diversity would serve well an organized group of the wealthy elite, and their on-going, government-based, plan for retaining financial control over the economy, in an effort to maintain a desired status-quo. This was, and is, the Federal Reserve System that, in conjunction with the federal income tax and its collection agent, the Internal Revenue Service, has reduced the U.S. economy to a vegetative inflationary state of affairs.
In such a plutocracy, why would a particular product, worth a certain amount of money based upon the cost of its ingredients or parts, maintain a standard price for twenty-years and then suddenly increase in price fifteen-hundred-percent in only five short years, when the product has not changed in substance, or basic value, at all? This is, essentially, what has gradually happened in the United States since the Federal Reserve Act was passed in 1913 and Federal Reserve Notes eventually replaced silver certificates as the circulating currency, or legal tender. Taking it to the present day, not that many Americans actually understand how the Federal Reserve has been surreptitiously fashioned to work. In fact, very few of them care about the legality and constitutionality of the current system as long as "some" system is intact. As long as they have a medium of exchange, even if it isn't really worth the paper on which it is printed, to us to buy and sell commodities and products, they don't seem to really give a hoot.
In a large nutshell, the United States Government abandoned the mandate of the U.S. Constitution, in Article 1, Section 8, Clause 17, in the year 1913, by using the illicit precedent set by a politically motivated U.S. Supreme Court in the 1819 ruling in McCulloch v. Maryland. In that particular constitutional clause called the "necessary and proper clause, the dictionary definition of the word "necessary" was altered by nine very wealthy justices, supposedly schooled in the English language, who certainly knew that the word "necessary" meant utterly essential instead of politically convenient. You see, the relative size of the federal government and the degree of its rule over the American people are directly determined according to the laws which are passed in order to execute the specific legislative congressional powers in Article 1, Section 8 of the U.S. Constitution. Most the Framers, who grew-up, and suffered, under the austere dominion of British monarchy, believed that a federal government was best that governed least. So, in clause 17 the mandate was agreed-upon to read, "Congress shall have power to make all laws which shall be "necessary and proper" for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the government of the United States, or in any department of officer thereof."
Certainly, it doesn't take a lawyer, or a doctor of English, to interpret the meaning set-forth in this foregoing clause, according to standard and accepted definition of the words. Nonetheless, there was a man, Alexander Hamilton, a monarchist, who grew-up in decadent opulence in the British West Indies, who, supposedly, was a Patriot and a writer of the U.S. Constitution. He was one of three, including James Madison and John Jay, who wrote the "Federalist Papers" in order to advertise the new text of the U.S. Constitution among the states. Hamilton, and certain other wealthy monarchists, wanted to see a national bank established, and controlled by the Executive Branch, in order to regulate the value of American money.
Thomas Jefferson, on the other hand, thought this was flagrantly unconstitutional in the face of Article 1, Section 8, Clause 17, because a national bank was not utterly necessary to the congressional role of coining money and determining its value. Jefferson had insisted that clause 17 was placed into Article 1 expressly to prevent unnecessary laws from being passed and the unconstitutional proliferation of the federal government's power over the states. Hamilton's documented Machiavellian manipulation over the less-than-scholarly President George Washington, a splendid soldier and farmer, but hardly erudite, prevailed over Jefferson's attempts to sway him from signing the First National Bank Act into law.
After the First National Bank, the express image of the Central British Bank, was established, there was an immediate attempt to judicially declare the bank unconstitutional. This led to the tragically political Supreme Court ruling in McCulloch v. Maryland, in 1819, which set an illicit precedent as to the "practical definition" of the word "necessary," which turned out to be connoted as "politically convenient" instead of utterly essential, the accepted dictionary definition. And this was how Franklin D. Roosevelt was able to triple the size of the federal government, from 1936-on, through his New Deal being ruled as constitutional by the Supreme Court justices he picked to replace the ones who had previously declared his alphabet soup bureaucracy unconstitutional three times. According to accurate history, President Andrew Jackson, during the 1820s, was, like Thomas Jefferson, also convinced that the National Bank, the predecessor of the Federal Reserve System, was unconstitutional and twice-refused to renew its charter. This angered quite a few wealthy politicians and resulted in the unfortunate slandering of a great American President who humbly chose to accept the wisdom of the poor-and-middle-class over the decadent whims of the wealthy elite.
Without the actual consent of the governed, the Federal Reserve System has been used to line the pocketbooks of a very small percentage of continually wealthy individuals, and is today the basic reason why small candy bars, worth, and sold for, 5-cents in 1965, are now sold for nearly one-dollar. And, even more surprising, American citizens are eagerly buying without even considering why they are so expensive. The ingredients, and intrinsic value, of a mere candy bar has not changed since it was first sold for 3-cents in 1940. What has changed is the basic value of the American dollar. In 1912, the dollar was worth 90-percent of one-dollar, in terms of silver and gold coinage. In 1965, the dollar was worth 78-percent, and gradually the Federal Reserve began replacing denominational silver certificates with Federal Reserve notes until all silver certificates were taken from circulation. With silver certificates, the citizen could go to any U.S. bank and demand the particular amount of silver, printed on the paper certificate denomination, in dimes, quarters, half-dollars, and silver dollars. Conversely, any Federal Reserve note was, and presently is, worth only what the interest rate set by the Federal Reserve Board determines as a transient value. You see, the Federal Reserve Board is solely owned and operated by private bankers and financiers. Fedex is, actually, just as, or more, federal than the Federal Reserve Board. Outrageously, the FED sells the notes it produces to the U.S. Government with a usurious interest rate attached. This is the interest rate that the FED raises-and-lowers according to the transient value it wants the U.S. dollar to convey. This is why the U.S. dollar is currently worth less than 15-percent of the near-100-percent value it had under the gold and silver standard.
When most of the silver certificates, which were placed into U.S. circulation from 1900 until around 1976, were removed throughout the United States, the minting of silver coins was stopped and coins, made of much-less than precious metal, were produced and circulated. These coins, most of which have been in circulation since the early 1980s, resemble the valuable silver coins, but are intrinsically worthless. At this moment in history, credit, the economic abomination of abominations, became a very pragmatic means to a consuming end. The "American Express," "Visa," and "Mastercard" were introduced as the preeminent means in which to buy cars, furniture, and other luxuries. Mortgages, home loans, car loans, educational loans, and business loans, based on arbitrary collateral, had already been in existence since the late 1800s. At the time of the Great Depression, Henry Ford had already introduced a means for poor-and-middle class Americans to easily purchase automobiles, dubbed installment buying in the early 1920s. It was hyped by the accepted financial geniuses of that era as the "only" best way to buy a car. Pay a certain amount of money down, and the rest in regular monthly payments, in order to own the Model "T" Ford of your dreams. This was the advertising propaganda that led to the sale of over two-million Ford autos within six-years time. If the average American family-man had a job, in 1926, earning 200-dollars per week, and owned a house with a 50-dollar-per-month mortgage, you could almost wager that he also was paying 35-55-dollars per month for his home furnishings and, probably, 60-dollars-per-month for a 2,000-dollar car. When you add-up the monthly payments, plus interest, paid-out by this person, it is quite apparent that that individual didn't really "own" anything outright. His creditors actually "owned" all of his possessions until the time he had finally paid what he owed for them. Waking-up one morning and suddenly realizing you didn't really own anything that you possessed probably put a new meaning on "living within your means." This sad fact made the hardworking individual totally dependent upon his job salary for the money to pay his creditors. Therefore, when you consider that less than 3-percent of all of people who bought Model "T" Fords were able to purchase them out-right, with cash, there was quite a bit of credit paper floating around the country in the late 1920s, without any money with which to back-it-up. So, when the crap proverbially hit the fan on Black Friday, in 1929, and 16-percent of the population suddenly became unemployed, most of the middle-class and lower-middle-class lost everything that they possessed, not owned.
How does this apply to the present day, late-2008, financial crisis in the United States? Well, it used to be, before 1970, that saving money was a much more thrifty, and sensible, thing to do than spending money unnecessarily and living beyond one's means. It used to be that you only, by necessity, went into debt for, perhaps, two things, a car and a house. But that changed quite radically when the American dollar became much like the currently circulated Chinese "floating" Yuan, which is systematically raised and lowered in value according to what the government deems as necessary. It has no basic intrinsic value in such an arbitrary Chinese political economy. Hence, when the Federal Reserve Board of Governors began to arbitrarily raise the interest rate on the amount of American money owed by the United States Government to the central Federal Reserve Bank, for the printing and circulating of Federal Reserve Notes around the nation, the only means of supporting an unsupportable debased economy was through the maintenance of a continuous spending cycle that depended mainly on credit. As the interest rate was raised, the value of the dollar went down, lower-and-lower, until the present value of an American dollar, which is less than 15-percent of the amount it was in 1950. Therefore, the housing market and their financiers, the large banking systems, began to feel the effect of severe unemployment and ballooning unsupported credit. I seem to recall the emphasis placed by the federal government on capricious spending, when those illusionary 2007 tax rebate checks were sent out. The Federal Reserve Board was desperately hoping that most Americans would immediately spend their small pittances, received from the government, to acquire more debt through credit. Now, outrageously, the Federal Reserve Board wants the federal government to spend 700-billion dollars of tax money to bail-out the filthy rich, the 2-percent of the people and corporations who have control of 98-percent of the usable money and capital, in order to perpetuate an unsupportable economic system, doomed to fail overtime.
Some representatives and senators in Congress are presently wringing their hands, wondering what to do about the current financial crisis. These are the ones who know what to do, but are afraid to do it. They certainly realize that the fate of the U.S. Constitution hinges on their collective realization that Congress has the only authorized power to coin money and determine its value. The Federal Reserve Board, as a basically unconstitutional entity is wholly responsible for devaluing the American dollar and creating the inflationary crisis that has gradually, over time, culminated in gripping the nation. Robert Samuelson said it well, in part, in one of his "Washington Post" editorials when he quipped, "The FED creates inflation, and the FED can control inflation." The correct part is that the FED creates inflation. It is manufactured in abundance much like sorely defective engine parts. The insidiously false part of his statement is that the FED cannot control the inflation that's inherently part of the Federal Reserve System. It just keeps getting worse and worse. The only answer is, as Rep. Ron Paul so emphatically declares, to abolish the Federal Reserve System and reinstitute a gold and silver standard into the American economy. You can't heal a festering infected sore by putting a loose dirty band aid on it. It will continue to become increasingly infected until it finally has to be severed from the body. The 700 billion dollar "bailout plan" is such a band aid.
The Constitution of the United States was expressly intended to promote the general welfare of all the Americanpeople through the provisions contained within it. The wisdom of the Framers, though somewhat skewed due to a legal promotion of capitalism for the wealthy, was shown by their very basic drive to erect an economy based upon a gold standard. A democratic socialist state economy would, also, be best predicated on a gold standard regulated and controlled by the legislative branch of government. But "any" government of the people that places the fate of its public finances in the hands of a small group of very wealthy private bankers is doomed to eventual failure.
Norton R. Nowlin took M.A. and B.A. degrees in the social and behavioral sciences from the University of Texas at Tyler, studied law for one full year at Thomas Jefferson School of Law, in San Diego, California, and earned an ABA-approved advanced paralegal certification from Edmonds Community College, in Lynnwood, Washington. Mr. Nowlin as attended LaJolla, California's National University and Malibu's Pepperdine University to attain graduate credits in business management and economics. Mr. Nowlin also attained a Texas State Teaching Certification, in social studies and psychology, from the University of Texas at Tyler. A paralegal, published essayist, poet, and free-lance fiction writer, Mr. Nowlin resides in Northern Virginia with his wife, the renown math tutor, Diane C. Nowlin, and their two very intelligent cats.
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