Public Interest - how innocent we were

One of the really difficult things for people of my generation is to come to terms with is how venal our legislative and legal systems have become (the bankers are simply part of a complex equation). The post-war generation to which I belong was brought up with the tenets of liberal democracy - some of which you will find set out at page 6 of this paper of mine. We believed that government was responsive to public concerns; that our civic input (in whatever form - letters; political membership; political involvement and argument - not least as local councillors) would ensure the system operated in the public interest. The evidence we have seen in the last decade has, however, has forced us to the reluctant conclusion that laws are created generally to protect the rich and powerful; and that the judiciary (despite or perhaps because of its claims of impartiality) is in fact not blindfold but highly susceptible to the interests of the rich and powerful. I leave open the question of whether this is a new phenomenon - or simply one which less deferential a more educated and connected society has become aware of.
The examples I quote are first from a bastion of social democratic values (Canada) and then the better-known practitioner of venality and hypocrisy which happens to be its southern neighbour.The first article identifies the huge inequities in how banks are treated – compared with the rest of us.

They are often protected (from foreign competition); subsidized (for example, in the way capital gains tax worked), and bailed out when needed. But what do banks actually do, in return for all that money? What is their actual economic function?
Let’s cut through the mystification of high finance, and ask that simple question: What do banks do? What do bankers actually produce?
The practical answer, in concrete terms, is simple: nothing. They produce nothing.
In that, the banks are different from the real economy, where hard-working people like you and I produce actual, concrete goods and services that are useful.
Banks, and the financial sector more generally, don’t produce goods and services that are useful in their own right. They produce paper. And then they buy and sell paper, for a profit.
Here’s a little economic lesson. You can’t live off paper. You need food, clothing, and shelter to survive – not paper. And since we are human beings, not animals, we need more: we need education, and culture, and recreation, and entertainment, and security, and meaning. Those are the fundamentals of economic life. Not paper.
What is paper actually good for? You can wallpaper your house with it. You can line your birdcage with it. In a pinch, you can wipe your butt with it.
But other than that, paper is just paper. It is not concretely useful in its own right.
How do banks create that paper? Let me put it bluntly again: They create it out of thin air.
It is not an economic exaggeration to state that the private banking system has the power to create money out of thin air.
Not cash. Not currency. Only the government can produce that.
But most money in our economy – over 95% of money in our economy – is not currency. Most money consists of entries in electronic accounts. Savings accounts. Chequing accounts. Lines of credit. Credit card balances. Investment accounts.
In that electronic system, new money is created, not by printing currency, but through creating credit. Every time a bank issues someone a new loan, they are creating new money.
It’s like a big magic machine, creating money out of thin air. And it’s called the private credit system.
One of my favourite economists, John Kenneth Galbraith, put it this way: “The process by which private banks create money is so simple that the mind is repelled.”
How do they do it? They start out with some capital. Let’s say a billion dollars. Then they lend it out. Then they lend it out again. And again. And again and again, 10 or 20 or 50 times over.
Each new loan, is new money. The economy needs that money, let’s be clear. Without new money, we wouldn’t be able to pay for the stuff we make. So we’d stop making it, and we’d be in a depression.
So the creation of new money (or credit) is as essential function for the whole economy. It’s like a utility. But we’ve outsourced that crucial task to private banks. We’ve given them a legal license to print money – and the freedom and power to do it on their own terms.
Their goal is not providing the economy with a sensible, sustainable supply of the credit we need. Their goal is using their unique power to create money out of thin air, to maximize the profits of the banks, and the wealth of the shareholders.

The second article I owe to a site - Byliner - which offers simply good writing. Out of curiousity I hit this piece which tracks how the American judicial system treated someone outraged with the secretive and iniquitous way heritage land was being sold to commercial gangsters.

WHEN DECHRISTOPHER’S CASE finally went to court last March, 2,000 protesters showed up. So did the Salt Lake police department, federal marshals, and Homeland Security agents. The trial lasted three days, with Judge Benson making a few things clear up front. First, DeChristopher’s attorneys wouldn’t be allowed to use a necessity defense—the argument that he had to disrupt the auction because of his beliefs about climate change (he had successfully bid for about 12 lots of land with no intention of paying). Second, the defense couldn’t bring up the fact that DeChristopher had actually raised money to buy the land; the court’s view was that, by then, the fraud had been committed. Finally, the defense could not inform the jury that past bidders had not been able to pay for their parcels either. Shea and DeChristopher’s other attorney, Ronald Yengich, were left to argue that their client had acted on impulse and hadn’t intended to disrupt the auction. The prosecution didn’t have much trouble refuting this, given DeChristopher’s public statements, and it came as little surprise when, on March 4, DeChristopher was convicted

You can imagine the behind-the-scene discussions which went on to fix that!

Culture corner
And, after these photos of reality, let's have a fix of something more worthwhile in these latest paintings from Its about Time