by Carl Dyke

There’s Madoff. Then there’s Social Security according to Rick Perry. Now here’s an essay (from a website about a book) that ups the ante. Ellen Hodgson Brown argues that the entire global financial system is a Ponzi scheme.

Brown elegantly shows how the whole notion that the national debt has to be paid down or paid off is a red herring, a fundamental misunderstanding of how the system works (money is debt; the national debt is, essentially, the national money; it is therefore constantly both paying itself off and recreating itself in the normal course). But she also shows how leaving the creation of the debt/money supply in private hands, as it is now, keeps interest from circulating back into the economy where it can be earned back by debtors and used ongoingly to pay their debts, making the system unsustainable. Essentially this creates toxic debt sinks that eventually have to fill up, so that the deficit fretters end up being right albeit for the wrong reasons. She recommends public banking as the solution, which as she describes the problem does seem sensible, albeit further infuriating for the Ron Pauls (warning: balky script at this link) of the world.

The essay clarifies some things nicely and I recommend it. At the same time I’m suspicious of this kind of clarity, which feels a lot like the sort of self-help advice where everything will be cool if you exercise, eat right and get plenty of fiber. I have this intuition, maybe small-minded and self-serving, maybe I can get some Dao cred, or maybe it’s the same thing, that problems on a global scale are fundamentally unfathomable, indeed that to treat facts at that scale as problems is a kind of existential category error. Of course I know better from Marx, but then again we’re still waiting for Marx to pay off on the solution side.

5 Responses to “Ponzirama”

  1. Long time, no comment. I must say that to me it has long been apparent that William Gibson’s description of cyberspace applies to the financial systems. They are all consensual illusions, hallucinations sustained by willing suspension of disbelief.

    Reminded, too, of the old joke about the chemist, the physicist and the economist stranded on a desert island with nothing to eat but a can of beans. The chemist builds a fire and wonders how hot it will have to be to explode the can. The physicist calculates how far the beans will fly. The economist says, “Assume a can opener.”

  2. Right. It’s all about the con(fidence). Ron Paul is instructive in that respect – he seems like a nice, well-meaning man, and not at all dumb, but completely literal-minded. So he’s already icky about money being symbolic, and when it becomes symbolic of intangibles he can find no purchase to trust it. It’s just not real to him, which is both true and catastrophically wrong.

  3. The official version posted on the 18th may still be an improvement, but the leaked version works just fine, thank you.


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