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The great American tradition of individualism, entrepreneurship and revolution is being systematically undermined by a cadre of financial strongmen bent on turning us into just another "banana republic" – where a subdued and apathetic population is subjugated by a ruling class of wealthy oligarchs.
The gross irony is that the same capitalist system that molded America into the strongest, most productive and richest nation in history, has been transformed into a mostly private moneymaking enterprise whose beneficiaries are those who actually produce nothing but paper profits.
The story of America's transformation from great experiment to another banana republic is one in which economic crises were manipulated to create a political front for an elite banking class.
It's a story that's worth examining…
Politicizing the U.S. Economy
The evolution of our democratic capitalist system parallels the history of modern economics. Over time, real-world economic crises and the lessons drawn from them were manipulated into a political philosophy. Bit by bit, privately funded political influence orchestrated legislative initiatives that delivered economic control of the country to a cadre of rich-and-powerful moneymen.
Our Founding Fathers' enlightenment principles of egalitarianism and our own inalienable rights can be uncovered by understanding how economic lessons have been politicized. We still possess our rights, but we need to rid our economy of its financial-services masters. Wresting control of the U.S. economy and our capital markets from the grasping greed of a self-serving financial-services industry will reinvigorate our "animal spirits" and the American dream of opportunity.
It will also keep the United States from becoming just another banana republic.
It's no surprise that Adam Smith, the father of economics and a moral philosopher from the Scottish Enlightenment, would befriend our own country's senior Founding Father and American Enlightenment stalwart, Benjamin Franklin. They had a lot in common.
Adam Smith's magnum opus, "An Inquiry into the Nature and Causes of the Wealth of Nations" (often abbreviated simply as "The Wealth of Nations") was published in 1776. No doubt Franklin, who met Smith in France during his long sojourn there on behalf of the fledgling American colonies, would recognize Smith's overarching principle of an "invisible hand" guiding economic actors as a platform for America's own economic principles.
That freedom in America should include equal economic opportunity was guided by Smith's concept of a fundamentally self-regulating system. Smith believed that, if left alone, a population of many individuals – each of them acting in their own interest – would combine to create an economic environment filled with opportunities for all who wanted them.
Smith's "invisible hand," while great in theory, met with reality almost immediately in the new United States of America. Two other Founding Fathers, Thomas Jefferson and Alexander Hamilton, would become bitter enemies over just how an invisible hand would pay off America's Revolutionary War debts.
Hamilton wanted a stronger federal government empowered by a national bank to combine all the states' debts into a federal obligation. Jefferson, whose own vision for America was more agrarian and rooted in Southern tradition and states' rights, would eventually capitulate to Hamilton's "scheme."
Jefferson soon regretted the compromise he struck with Hamilton. But that fateful decision would serve to eventually coalesce once bitterly divided states – and actually became the glue that held the federal republic together and prevented it from splitting back into 13 separate nation states.
The states-rights focus – and the bitter philosophical divide over how the new nation should be governed that grew out of it – also set the stage for our two-party political system.
Nevertheless, it's not difficult to imagine the ghost of the rural-minded Jefferson – who also warned against Northern banking interests – confronting visitors at his beloved Monticello and stating, "I told you so."
Those Not-So-Efficient Efficient Markets
While Smith's invisible hand has been slapped on different occasions as it gets blamed for the mini boom-to-bust cycles that plagued our economy in its early years, it wasn't until 1900 that the path sought by overly ambitious capitalists would be cleared out and a political dimension attached to the economic philosophy.
The era of laissez-faire government was quietly ushered in by French economist Louis Bachelier. In his "Theorie de la Speculation," published in 1900, Bachlier's simple premise that all asset prices accurately reflect all known information and are therefore correctly priced was revolutionary.
It became the mantra in the United States that, if left alone, asset prices and markets would always be self-correcting and fair (this philosophy would later be institutionalized by famed University of Chicago Prof. Eugene Fama's "Efficient Market Hypothesis"). By embracing academic conclusions that free markets were self-correcting, big business – and, more importantly, their financiers – became politically protected by legislators paid to trumpet the benefits of unfettered markets.
In the meantime, more booms and busts would ravage the U.S. economy. Asset prices weren't exactly transparent in the Panic of 1907. The manipulation of a bubble in railroad stocks burst and only the intervention of super-financier J.P. Morgan, who would force New York bankers into providing enough capital to the public to stem bank runs, would save the day.
The lesson for bankers was that they needed government help to keep themselves from undermining each other. But, they weren't looking for more regulation. They wanted less regulation – but with a bailout backstop. Six years later, in 1913, they delivered themselves the Federal Reserve Bank System.
But, the U.S. Federal Reserve didn't have the right solution for fixing the market crash of October 1929. That crash fed into the Great Depression. Big bankers didn't want to extend more credit in a bankrupt economy, so they conveniently used the political argument that the Federal Reserve should tighten credit, as loose credit conditions had led to too much speculation and the crash.
Then along came John Maynard Keynes and the 1936 publication of his "The General Theory of Employment, Interest and Money," which became the guiding light that showed us how to get out of the dark tunnel we were in.
Keynes postulated that aggregate demand drives economic growth. And if the public couldn't facilitate demand, he said that the government should go into debt to provide the stimulus to create demand. One of Keynes' most quoted phrases states that if "the animal spirits are dimmed and spontaneous optimism falters, leaving us to depend on nothing but mathematical expectations, enterprise will fade and die." Keynes defined those animal spirits as a "spontaneous urge to action rather than inaction."
Banking on the Bankers?
Of course, when times got better, credit was given to sound banking. And when they got worse, bankers and their armies of lobbyists and paid legislators pointed to "regulation" as the culprit – the impediment to efficiently running, unfettered free markets. As the power of the banking-and-financial-services class grew, down came the regulatory walls that had been erected over decades to save us from the barbarian bankers themselves.
In very short order, in fact, the barbarian bankers at the gate became the oligarchs who controlled almost every aspect of the American economy. And just like a coterie of strongmen running another banana republic, they leveraged-up the country. All the while, they knew full well that they had in place all the necessary political force to hold onto their power – even to grow it and strengthen it – if the over-harvesting of their profits would denude their moneymaking farms.
Then came the so-called "Great Recession," the financial pox now upon us – and one that's threatening to betray the ideals of this once-all-powerful nation.
Of course, in the so-called Great Recession, it is the bankers and not the public who are being bailed out by their own Federal Reserve, and the government that cowers under its polished boots. The bankers have been lent cheap money, once again, courtesy of their central bank, and handed government-stimulus capital to facilitate demand and revive America's animal spirits.
This time, however, as Keynes warned, the majority of Americans have seen their animal spirits dimmed into inaction. The causes for that lethargy of spirit are legion: There's the gross inequality Americans see when looking up, dumbfounded, from the news that Wall Street's profits are back in record territory, or from the realization that the average bonus reaped by an individual banker is 10 times what a working-class American makes in an entire year.
If you're still surprised by these repeated revelations, you've clearly forgotten the "Golden Rule," which holds that "he who has the gold makes the rules."
It's Time to Take Back Control
It's time for a revolution in America. We need to invoke Jefferson and to remember this country's propensity fighting repression. We must take back the power that bankers and the financial services industry wields. The gold this country owns is ours from the fruits of our labors and entrepreneurship; it does not belong to the moneymen, who by merely handling it, somehow end up owning it.
The recent financial-regulation overhaul was a sham, a Trojan horse. There are no sustentative changes to the power structure that runs America for its own greed.
But the game isn't over.
Not by a longshot.
The midterm elections are looming. Get up and stand up for your rights. Get out and vote.
It's time to take serious steps to stop this slide before America really does become just another banana republic.
[Editor's Note: Shah Gilani, a retired hedge-fund manager and renowned financial-crisis expert, walks the walk. In a recent Money Morning exposé, Gilani warned that high-frequency traders (HFT) were artificially pumping up market-volume numbers, meaning stocks were extremely susceptible to a downdraft.
When that downdraft came, Gilani was ready – and so were subscribers to his new advisory service: The Capital Wave Forecast. The next morning, because of that market move, investors were up 186% on a short-term euro play, and more than 300% on a call-option play on the VIX volatility index.
Gilani shows investors the monster "capital waves" now forming, will demonstrate how to profit from every one, and will make sure to highlight the market pitfalls that all too often sweep investors away.
Take a moment to check out Gilani's capital-wave-investing strategy – and the profit opportunities that he's watching as a result. And take a look at some of his most-recent essays, which are available free of charge. To read one of his most-popular essays, please click here.]
News and Related Story Links:
- Wikipedia:
Scottish Enlightenment. - Washington State University:
American Enlightenment. - USHistory.org:
Benjamin Franklin. - Encyclopedia of Economics and Liberty:
Adam Smith. - Harvard Classics:
The Wealth of Nations by Adam Smith. - InvestorWords.com:
Invisible Hand. - WhiteHouse.gov:
Thomas Jefferson. - TheAmericanRevolution:
Alexander Hamilton. - TheAmericanRevolution:
Home Page. - InfoPlease.com:
States' Rights. - USHistory.com:
Laissez-Faire. - Wikipedia:
Louis Bachelier. - University of Connecticut Department of Economics (IDEAS):
Louis Bachelier on the Centenary of "Théorie de la Spéculation." - Princeton University:
The Efficient Market Hypothesis and Its Critics (CEPS Working Paper No. 91), By Burton G. Malkiel (April 2003). - Prof. Eugene Fama:
Univ. of Chicago Booth School of Business Faculty Bio. - WikiQuote:
It's a Wonderful Life. - NPR.org:
Lessons From Wall Street's "Panic of 1907." - Wikipedia:
J.P. Morgan and the Panic of 1907. - Wikipedia:
The Great Crash of 1929. - The BBC Historic Figures Series:
John Maynard Keynes. - Wikipedia:
Banana Republic. - Money Morning News Analysis:
Washington Reaches Financial Reform Deal That Packs Lighter Punch Than Wall Street Had Feared. - Money Morning News Archive:
Midterm Elections. - Money Morning Defensive Investing Series:
How to Pick Stocks in the 'New Normal' Economy.
About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
He helped develop what has become known as the Volatility Index (VIX) - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of 10X Trader, Shah presents his legion of subscribers with the chance to earn ten times their money on trade after trade.
Shah is also the proud founding editor of The Money Zone, where after eight years of development and 11 years of backtesting he has found the edge over stocks, giving his members the opportunity to rake in potential double, triple, or even quadruple-digit profits weekly with just a few quick steps.
Shah is a frequent guest on CNBC, Forbes, and Marketwatch, and you can catch him every week on Fox Business's "Varney & Co."
He also writes our most talked-about publication, Wall Street Insights & Indictments, where he reveals how Wall Street's high-stakes game is really played.
Great article… spot on. We must take notice and do something to stop the takeover of our country. Vote reponsibly…
But the game is rigged both sides are in the Oligarchy pocket and the system even the voting system. You may think you are fighting a few corrupt entities but we are actually fighting a philosophy and as long as people accept it you will not see real change only cosmetic change. The philosophy being the golden rule with a twist…"those with the gold deserve to rule and are the best rulers."
This article is basically the exact same thing that I've been saying for years. Nothing new here. Yes, we're in deep do-do. We MUST oust every single member of Congress if we're to regain our independence.
The Founding Fathers of this nation knew that if the people lost their religious underpinnings, that the experiment they were making would fail. All the rules, regulations, laws, commissions, panels, decrees and such are just attempts to institute moral behavior that a person of faith has by virtue of his belief in God and His laws. You can't legislate morality. Morality is a byproduct of religious practice, as morality is defined by no one but God. If my morality is one thing, and yours is another, where is morality? It is the lack of morality and ethics that is plaguing our nation. Because we've been taught (quite intentionally) that there is no God, people have become atheists. Not everyone, but a large majority in fact. So it is not surprising that the natural regulators of behavior, moral and ethical behavior, are becoming a thing of the past. The subtle influence of karma, our just deserts, is invisibly working behind the scenes to ruin the economic engine we have taken for granted. The solution to our dilemma today is to return to the God-conscious roots of our forefathers, not to engage in political wranglings of government control. If we become dependent upon God, and actually follow the laws He has set down in all the faiths of the world, all the problems we face will right themselves. It is not a coincidence that Lady Luck has been in America's hand for a long time. By the grace of God she appears, but if you lose His grace, she will leave.
I don't knwo where to even start. So I'll just do a few bullet points.
* Religion does not equal morality. Religion only defines its desired morality hence there can be immoral religions.
* Also you have it backwards religion is a by product of common moralities.
* Faith has been around as long as man has and devouts have sprung up and the worlds problems continue even for the devout. Why is that if all we to do it follow Gods law? Shouldn't there be something beside faith to prove your belief?
*Morality is defined by individuals,groups, countries, philosophies. They are spread and imposed by religion.
* Most people less than 13% are atheist. The overwhelming population believes in God yet here we are. Even bigger percentages of the populations in South America believe in god and it doesn't help their situation. Why not?
*No it not the loss of religion that has damned us. Its the lost of community. "Every man for himself", "Me and mine", "Us vs Them" and "If you don't convert to my belief then the hell with you" additude is why.
*What proof do you have that any god has "blessed" America? What about all the other countries? Why the favoritism from a God in one country?
*Lastly, educate yourself on the Founding Father's and the reasons they made America the way they did, I think you find you have been lied to by those wishing to impose a certain type of morality.
In closing, I know these statments will just slide off you as you aren't discussing. You are preaching and expecting faith to be enough. This post is more for the other readers to consider. Peace and take care.
I fully endorse the view as expressed in the article. This trend if not corrected in time, the U.S. economy along with the other states in the world that followed the U.S.'s is destined to inevitable disaster.
Thanks,
Rathin
"the invisible hand" is complete BS… wall street is the invisible hand. it has destroyed the economy, it is destroying the free internet, it's destroying the federal government. you don't want wall street to "innovate" because it's going to innovate against us. franklin and hamiliton were not on the same page as smith. hamiliton's national banking model is a national bank that invests new money creation into things that change, transform, and improve the physical territory and the physical economy. smith would promote the idea of central banking to fuel wall street asset bubbles. if we could somehow transform the fed into a hamiliton style national bank, we could recover permanent from this crisis and have breakthrus in science and technology (and correspondingly increase the standard of living, perhaps globally). keep the power of new money creation out of private, self interested hands!
Good report Mr Gilani: stand up for your rights and get out and vote! But you didn't mention who the hell to vote for to stop America sliding down the road to Banana Republic. Could you elaborate a little?
Dear Sir,
Your statement, "The great American tradition of individualism, entrepreneurship and revolution is being systematically undermined by a cadre of financial strongmen bent on turning us into just another "banana republic" – where a subdued and apathetic population is subjugated by a ruling class of wealthy oligarchs." is very similar to remarks I have been making
for years. I usually state that "North America is going to become just like South America" and everyone goes but "What can you do" while a select few will agree. We usually end up having a fairly reasonable conversation. I am encouraged by the fact that a man of your calibre is exercising First Amendment rights and getting the word out, so to speak. Keep up the good work.
A kindred spirit,
Bill Wickes
Bravo Shah!! Excellent summary of the fraud from our bought politicians and sleazy Banksters.
Unfortunately most appear too numb or stunned to realize they have been rifled by a grandstanding President obsessed with the sound of his own yap. Surrounded by a team of tax dodgers and ex Wall St cronies that should be jailed for looting the American people.
The only way to change Wall Street Hoods and Banksters is public executions. We should subcontract this job to the Chinese. Our Bankers exterminating our Banksters.
A much needed call to arms, but just getting out to vote in mid term elections is a woefully inadequate response, sorry to say.
i agrre with you. i think it is not only the bankesr but also the politicians. also i think it is too late they are so powerful it is incredible. if there is any hope what can be done it is only a vote who is going to change things. you need a radical change of the system completely.
You guys are spot on! Canada is close behind as well.
Keep up the good work!
Dave
Hello Shah,
I agree with all of your points and let's be honest, this is nothing new. Trouble is who do we vote for?
Here is an interesting economic question that was posed to me a while back. Does the US econony benefit greater by virtue of having 1000 citizens each in control of one million dollars (1000 millionaires) or by 1 citizen in control of one billion dollars (1 billionaire). It is a tricky question from a math perspective, but from a philosophical perspective one's answer decpicts their position on a wide swath of issues such as unemployment insurance/taxes/regulation, etc.
Cheers – Mick
Bravo!! I am a 74 year old senior who has watched with dismay as a financial con job has been foisted on the American Public since "Reagonomics" was sold to them. Obama's financial advisors are filled with people who are disciples of Robert Rubin, former Secretary of the Treasury, and architect of financial deregulation under the Clinton Administration. Since leaving office he made some $126 million prior to the last election. Chew on that one for a while.
If anyone will bring this country to its knees its people like him who seem to appear cluless as to any sane economic policies.
But vote for what. Tell me which party will change the system?
It's been at least 12 years I've been telling my friends to get their money out of the criminal Wall Street stock market and the US banking system but no one listened to me. Almost all of them are now broke; and several, having lost their homes and/or rented apartments, have had to move in with siblings or elderly parents.
The republicans, meaning the Rockefellers; Bushes, Astors and their ilk, have planned the world economlc demise ever since their association with Hitler's Nazi Germany back in the 20's. Roosevelt received advance information of their plans and stopped them, but with the help of Nazi behavioral scientists smuggled into the States, they've succeeded in altering the American mind, culture and goals through chemical foodstuffs and the American enslavement to pharmaceuticals and fast food, brain destroying anti music such as rock and rap, and the vivciously downgraded educational system. None of this was or is accidental. It was the Nazi world plan, thwarted by their losing WWII. The Croesus rich republicans kept that dream (for them, and nightmare for everyone else) alive and under wraps until Reaganomics and the Bush Mafia were in office to put them into operation. And, so, here we are. ALREADY A BANANA REPUBLIC. Come to think about it. The US should be so lucky! The real banana republics are not doing so badly!
I think you are right on..We are a people that came from countries that made rules against our forefathers..we are anti-rules,cowboys,our house is our castle,etc..we elect people like ourselves and the 1st thing they do is de-regulate the rules that are meant to protect us..I give you the Stiegle act of 1929..the de-regulation of the rule that led to the present bubble..the de-regulation of the energy act that led to Enron..the de-regulation of the airlines that led to the demise of Pan American..these led people to 'steal' what wasn't theirs and walk away with all the gold..
thanks
saul
I do realize what haas transpired over the last hundred years, but what can we do as people of this country. We are now faced with electronic voting (which can be manipulated for party use), a government that doesn't care about it's people and "The Federal Reserve" bank which is a private own bank. I know we have to vote the idiots out, but there has to be more we can do. My husband and I own our own company and are being eaten by ever increasing taxes, and we have lost money for 20 months straight. We are not sure what to do at this point. The Government as is today needs to disappear. But how, they won't regulate themselves with term limints, that would defeat their pupose in life. I guess I am looking for something more that get out and vote.
Unit we are force to be reckoned with, Divided we are a force to exploited.
Unfortunately, I believe the answer is we need to set aside specific differences and unite and change the philosophy of "greed is good" and "might is right" and any of the other beliefs we embrace individually but is harmful collectively, aleast for awhile. A truce, if you will; among people. To band together and come to a, if need be unconfortable, concencus to create change and not wait for it to come to us from the political system.
I say unfortunately because what do you think the chances of that happening anytime soon are?
It is a real pleasure to me to read your informed and incisive commentary on the politicization of the economy. Your historical perspective is really helpful in understanding how we got to where we are and the true nature of the challenge confronting us. However, I'm not convinced that getting out and voting in the mid-term elections can change anything. Both political parties are controlled by small cadres of power brokers, and elected members of both parties must follow their respective party lines – dictated by those cadres. In addition, both political parties are driven first and foremost by greed, just as the bankers, except a greed for political power rather than a greed for money. Why should we expect such people to save us from the bankers, when they are in collusion with them? I believe political parties are a major part of the problem, not a road to a solution.
"The great American tradition of individualism, entrepreneurship and revolution" has relied on slave labor within and ouside US borders and will continue to do so as long as "capitalism" instead of honest to goodness FREEDOM OF ENTERPRISE is what rules the land. We would be better off going back to the stone age than continuing on the present path, for sure: of course, the present path is sure to take us back to the stone age, only it will not be anywhere nearly as happy a place as the old one was but a rather grim one, without enough bananas to go around. There could be plenty of bananas for all to eat if economic activity were sensible, first things first –truly free and communitarian– enterprise, something that unfortunate it is not. From the heart of our banana republic in Detroit, Peace and Love to All from Mamadoc.
The recent United States of America census did in fact reveal that America is now completely different than days past. We need to come together as one, knowing what we had did NOT work, and move into global thinking. We don't have mom/pop shop or those shoppers anymore. Once we achieve a competitive level of education, we can again begin to soar. It is very depressing to see the value of the US dollar at a level just above the bottom of the currency value of 3rd world nations. How did the republican party let this happen to us???
It's time To keep America From Becoming Just Another Banana Republic
by Shah Gilani
Well, this is another case, of a foreigner, just arrived the other day, and adopting the arrogance of the native born in the U.S.
Shah Gilani, as a Latina, I I could also start calling you a "towelhead."
I mean, it's time to leave niceties behind, don't you think. Let's all join in in the insults.
Anyway, you Norte Americanos, don't you all love bananas? What would you do without them?
Oherwise, you'd have had, delectible tropical fruits, unknown in the U.S.: Mamey, Guava, Guayaba, Maranon, Saril, Manones, Pixbae, Caimito, Chirimoya, Mangostin, Mango de calidad, Aguacate de calidad, Fruta de Pan, among others.
The fact is, that it is the very U.S. corporations that took themselves over the Central America, forced the locals off farmlands, where diverse tropical produce was grown, and started growing bananas. That's ALL!
Now, we, in Central America have to put up with the pejorative, Banana Republics!
I, for one, certainly, DO hope, the U.S. becomes a Banana Republic. Get you all down off your high horse, and learn, how the other half lives.
It is a thing, whose time has come!
I don't not share your hope. But, I must agree we may deserve it as a whole. Actually, no one really deserves, it but we had no problem with it happening in our name to protect our lifestyle (willful ignorance does absolve us), so it does seem hypocritcal to call foul when it is us that has to pay the price for reaping what we sow.
Dear friend Fitz-Gerald
Applauses. A good and informative research of facts.
How can I, we and or other cooperate to endure America Greatness.The destruction of the Soviet Union by Regan,originated into the "weeakness" of this great Nation (USA)
Men justified the existance of God by fearing the Devil. By ruining Russia, USA killed the Devil. There is no justifiable reason for menkind to believe in the existance of God (USA),since the Devil (RUSSIA) is dead. America has to creates a new Devil by making wars, otherwise she will become a producer of Rum &CocaCola. War is, Democracy, Freedom and Capitalism
Saudaçoes
Do novo amigo Pedro Henrique
I agree that we are in big trouble but how do you expect that the Congress-the best Congress that money can buy-can be made to do what you ask? Several iwild ideas arise: 1) eliminate all lobbiests; 2)since we the people own many of the banks we bailed out, put the correct? people on the Boards of Directors and force them to reduce the monsterous bonusses and lend the money to small businesses; 3)somehow get the so-called financial regulations refprms amended to really do the right thing-whatever that is; 4) find a modern day Teddy Roosevelt.
Wonderful article, really wonderful, thank you. But I don't think voting Democrat or Republican will help at all. We need to persuade the advisers, Summers, Roubini, Geithner, Bernanke and the other Fed chiefs, and academia which will influence and produce the country's future leaders.
Dr. Martha Mussbaum,PhD, has been looking forward to confront and change
this sad reality.
We should take a serious look to ' the vital models for the democracy survival', as she proposes.
Its about time this news was given but some experts have been warning about this since the time of Eisenhower. After the death of JFK it become more obvious but since 911 it has become plainly obvious to those who can actually see. The world is going through a corporate banking takeover so that we will have a structure of elite family dictatorship. This is a plutocracy and a far cry from the once great American Republic. This is freedom verses slavery. The Rabbit hole goes very very deep on this enormous issue. It covers all the spectrums from politics, economics, science, law, sociology, psycology, history and down into ancient religions and fraternal orders. It just depends how much time you have to study this amazingly vast and fascinating and yet horrifying subject of subjects.
For those with less time, try watching "The Fall of the Republic – Alex Jones" or other films such as The Fall of America, Secrets of OZ, Don't Tread on me, Obama Deception, Moneymasters and also older films like, The Corporation.
Good luck with it
Had not yet read the article when I posted the remarks already made… I thought it well illustrated and most positive… The thing about voting is, how do we give meaning to our vote in a situation so dominated by deals both under and over the table. How do we say No to Wall Street, the Federal Reserve unless we vote in a series of specific referendums where issues are decided upon instead of who is going to make the final decission… Whenever money is involved, the process of selection of spokesmen from and for the people, for communities more specifically, becomes a dauntable task most likely to kill off all hope of redemption. We are doomed I suppose except to the extent we dare HOPE that KNOWLEDGE in the sense of WISDOM and a certain unnombered row of MIRACLES allow our progeny to resist the onslaughts of NATURE to which ultimately we all must submit. if we should only learn to be ready for death we may even manage to still live the century and more as a recognizable species… But one shakes at the idea of what science has in store for us. Without a lot of love this planet and its critters won´t last long and that may even be the best part of it! To just let the Spirit roam and forget about superior intelligence which as someone remarked, was most likely an evolutionary error. And Long Live Jefferson and the Monticello reservoir of treasures among which the seeds that old Tom gathered from many places. May we save our seeds from terminators planted in order to make all of humanity forever enslaved. The hidden hand of which Adam Smith spake might be found to actually exist but for all these other visible and invisible hands drawing into the pockets of the common trust for their own outrageous unholy and degrading desires. What a shame, Holy Mary Mother of God… what a total disgrace!
I share your wonderment of what technology will have in store for us. This is not the first time we have faced such things…its not our darkest hour despite the feeling of doom that hangs in the air. But it is becoming easier and easier for the few to destroy the many and to destroy ourselves on a mass scale. Unlike anything we were capable of before. We have always faulted in our existance and we have from time to time been allow to correct it. I wonder if technology (destructive) will someday prevent such corrections and lead to our downfall.
So…Because the Bush administration led the charge to TARP, we should now vote anti -Democratic? We should hand over government to business (even more than it already is) with Republican blessing? Our founding politicians never had a concept of the global corporate world that has little interest in the welfare of the people of the United States. Individual investors and CEO's must be the "individual" rights you alllude to – not the individual citizen rights to a healthy economy where all can hope for decent employment. Only when individual citizens have too little assets to keep corporations afloat through purchases of items made by workers in foreign lands will someone say: Darn! Too bad we killed off the U.S. economy. The cash cow is dead. Too late!
You are Correct.
Is sad to say this but… you're becoming in México.
I'm mexican. laws are made to serve the interests of a few…Carlos Slim, Emilio Azcárraga, Ricardo Salinas Pliego… only the government can manage the energy industry, the education and the medical services, but to mantain the power, let the unions those who command the state enterprise, in exchange for union and monopolies support the regime…
Investment in education is south Korea similar, but the educational level of the world lowest.
Medical services are so inefficient that no one wants to pay the fee to the government; even sick workers refuse to attend to medical services provided by the government, and end up hiring, and paying their own money to a private doctor.
The fee for medical services is required, but not cover their expenses as well, similarly to what happened to General Motors, the unions have too many benefits,and the same is true in almost all the unions of state enterprises mentioned.
You must know perfectly PEMEX situation.
I can see perfectly well that the american people are so frustrated and angry, as we still are, our mexican government also bailed out the banks at the expense of the taxes that we just finished paying since the mortgage crisis we had in 1995, think so… at least here in México, debt was reduced to half of many debtors.
now our brilliant president is frustrating us again … began to fight bravely against drug traffickers but … that's a losing battle … anyone who knows the law of the markets will realize that while the vast market of narcotic buyers from the U.S. exist, some will always like meet demand. Mexicans have no right to even carry a gun on the streets to defend our selfs and our families, but drug dealers have assault weapons smuggled from the united states… the problem is that trade at night, and tourism no longer exists in many cities the way use to be, taken over by drug traffickers, and that our economy slows.
I think that while our governments do not realize that the people and consumers are the same, that we are a vital part of economies, that implemented policies, today, are frustrating the people, and a vital economy participant frustrated does not and can not cooperate, it will not get much better.
Perhaps what i wrote, explain a little why many mexicans frustrated by decades and decades of failed policies that keep people ill-prepared, that have crippled the agriculture industry and have closed the competition in many other sectors, opt to migrate. You americans, at least, can vote for an option to do things differently … here in México, the three political parties are always committed to the same unions and monopolies.
Perhaps no one has realized that only exporters and services are doing well over here, the invention is practically nonexistent, so we are the U.S. caboose, rely on the american consumers.
isn't it more like "America was a banana republic" ?
Some people suffer from anxiety illnesses if they spend to much capital and they have no positive faith to believe these things will work out instead some people have bad panic attacks ,
because people tell them they worry to much, and worry get you know where but a good
positive plan helps
True about people and anxiety, But have a plan and faith that things will fix itself is not good either. Have a plan for the worst and hope for the best. What you state sounds "like plan for now and hope everything works out". I agree with half of that statement. Plan not only for now but address the fact that things may not "work themselves out" and plan for accordingly. Especially, when these things didn't just happen out of the blue so there is little reason to believe it will be self correcting.
Who will break up the banks and restore power to the middle class? Will it be our corrupt Congress and elected officials who prefer to lavish our future wealth on the criminal parasites that started this economic tsunami? Wall street money peddlers, fat cat bankers, and too big to fail businesses have no shame gorging like pigs at the trough draining our tax receipts while forcing a cruel austerity on main street that punishes children, the disabled, the elderly and other weakened constituencies. President Obama carries on a grotesque monologue affecting concern and promising action while cutting back room deasl that eviscerate any meaningful reform. Our government takes great care in conducting multiple criminal wars overseas while our nation crumbles and our citizens become homeless. It is past time for the true patriots to come together around unity for all Americans and empathy for their problems not the divide and conquer rhetoric of false reformers. Frankenstein is roaming the country and the body count climbs each day. It is time for pitch forks and torches. And all are invited to rid the land of this monster and take back our country town by town and state by state.
Mr. Gilani,
I had to answer a commenter to your article on keeping America from becoming a Banana Republic. The commenter blamed the Republicans for the Great Recession calling Republicans the party of "no". He then asked who should voters vote for. My answer, though all too brief considering some of the complexities, follows. I wonder if you agree with me.
Comment by Edward T. Mack
2010-08-06 23:59:37
Boris,
You are incorrect, wrong and misinformed. Republicans did not, repeat, did not get us into the Recession alone. The loose money policies and excessive mortgage lending got us into most of the problems, starting with the Community Reinvestment Act under the Carter administration. Most Republicans also went along with this and even Bush mentioned this home ownership mantra. Democrats Barney Frank and Christopher Dodd and Fannie Mae CEO Frank Raines corruptly drove this reckless lending along with a lot of the banks. I draw on Dr Thomas Sowell, the preeminent economic scholar of this era, for much of this analysis. Look it up. Don’t depend on biased Lamestream media accounts or misinformed opinions by leftist eggheads. A lot of Republicans tried to do something about this reckless lending but were blocked by corrupt Democrats who were given large donations. Some, such as California Democrat Congress woman Maxine Waters, are facing ethical charges, quite remarkable in a democrat controlled Congress. Yes, some of the Republicans, such as the Bush SEC failed to identify and regulate. Republicans, being the minority party, have to say “no” to the crazy, ineffective Democrat initiatives, and worthless bill and laws. This goes with being in the minority. Republicans are at least responsible enough to oppose bad legislation.
The candidates that Shah is referring to are ones who “invoke Jefferson and remember this country’s propensity fighting repression” and who “stand up for your rights”. You will have to find them for yourself. I suggest some tea party adherents.
Sorry but you are right but only looking at half the equaltion. SNL scandals. back room deals both parties are responsible as well as those that sat on the sideline and let it happen. You obviously get facts but only the ones those trying to influence you want you to get. You will find that your comment "Republicans are at least responsible enough to oppose bad legislation." is quite far from reality. that is unless you are willing to make the same statements about Democrates. Glad to see you doing research and waking up but sad to see you are being lead, much like a mouse, to only certain truths while keeping other hidden, so that your opinion and conclusions can be limited to a certain ideology. Much like the majority of Tea Party adherets today you are trying to hold on to your ideology that was responsible, in part, for the mess and expect change by rethoric. Say in not true? Look at the so called 'Litmus Test" the Tea Party adherets subscribe to. It trying to adjust a corrupted system by doing revert back to what didn't work before and didn't exist at the time the suggest we go back to. Do you know why? Becuase that time you are trying to restore it to "economically" was part of the problem ,only the illusion was still believable then, but you refuse to acknowledge it as such. Proof your fail to acknowledge that republicans just recently became the minority. When they were the majority in Congress then had no problem helping these problems blossom. But then I guess we are supposed ignore half the problem…that always works.
I think the entrepreneurs left the building long ago….they probably found out they have to be re-educated, because self learning is 'bad' and going to a school for 6-8 hours a day, five days a week for all of your childhood, teenage hood and in some cases part of adulthood is 'normal'. …Even IF YOU LEARN NOTHING!
I still can't believe that anyone would ever spend any money on an 'American style education'. It is like volunteering to be in a communist re-education camp in China in the 1950's. It is that bad. REally.
Keith,
Briliant piece. Your one sentence which says,"The gold this country owns is ours from the fruits of our labors and entrepreneurship; it does not belong to the moneymen, who by merely handling it, somehow end up owning it."
This statement should be forwarded to every congressional representative in Washington so they could tack in on their walls and remember who they work for.
Unfortunately the reality is that very few of the "right" people will get to read your words of wisdom. Keep up the good work.
Richard S. Sowa, Certified Financial Planner(tm)
Mr. Gilani,
Please accept my apologies. In my excitement and haste I directed the credit for the article to Keith instead of to you. Sorry about that.
The author of this excellent "Banana Republic" article is Shah Gilani, Contributing Editor, Money Morning
Richard S. Sowa, Certified Financial Planner(tm)
great! i belived in a new public stock common investers like kids grandmas ets not the corporations. vote constitute one vote 4 everyone and not board of directors to call the shots !!! its a scam to use our fruit of labors tricked by lawmakers(we do not need 535 law2makers!) profits belonged to shareholders 4 long term but easily fleeced by chosen few -directers prez etsc…we were taught in school of justice systems only lawyers can represent you before us supreme court!!! and sec is a scam to protect the proffessionals who lives to prey on the innocents that why we cant sue them in court easily or whatever and the se3c is always 4 corp. which is nothong but piece of paper that has no feelins no heart no sweat but chosen few has or own you as slaves!!!!!!get rid of sec restore normal sue the bastards in court and very harsh sentenced institetuted upon preyers and do give em silver bullet to thie
At long last, a healthy-minded, true to the 1774 Constitution American! Your essay, although brief in length, is so concise as regards the essential principles of economy as a human, collaborative activity (and not a quasi-supernatural (!) hotch-potch of "precepts", promulgated in order to bamboozle the General Public out of its inalienable rights to partake of the turnover effected by the society it constitutes) that the impression generated is akin to happening upon a cold, fresh mountain spring after a long trek in a sun-bleached desert! Should your views prevail, the Enlightenment shall not have been in vain…otherwise, global Communism, of a creed and rigour incomparably harsher than that espoused by the USSR cannot but shortly prevail.
why nobody thinking an opposite part of the world to whom we call the third world to assist them being a part of our economy building a pool in between east and west providing them a sence of the time and knowledge using our tecknology taking thier manpower which we will be in need of it in future otherwise they will make thier another block confronting us will hamper us .
Can I have a copy of your comparative analysis of the Egyptian empire (the full 3,000 years) the Chinese empire, The Holy Roman empire (Charles Martel through Charlemagne etc) The Ottoman empire, the British empire, the Roman empire to name just a few that enabled you to make the statement below.
….. that molded America into the strongest, most productive and richest nation in history, …..
This comaprison will of course use some form of discounted cashflow to demonstrate you are comparing like with with like. Or are you just making this up??
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WHY CRISIS IN WORLDWIDE?
1/ THE HUMANITY LIVE WITH GREAT MAN ,BUT NOT WITH A GREAT SYSTEM. THUS WITH A GREAT VARIATION THE RESULT IS ALWAYS THE INSTABILITY OF THE SYSTEM IN ALL DOMAIN
2/ THE HUMANITY CONFUSED THE GOAL AND THE MEAN TO ACHIEVE A GOAL. IT IS THE GREAT DEFAULT OF THE EDUCATION AND UNIVESSITY IN WORLDWIDE .WHO RUN THE HUMANITY TO GET MONEY WHATEVER THE WAY AFTER A DEGREE OF DIPLOMAS
WHAT THE HUMANITY THINK MONEY IS NOT A GOAL BUT A MEAN TO ACHIEVE THE GOAL
THE SOLUTION IS THAT INITIALLY EACH MAN MUST TO AKNOWLEDGE TO RUN IN THE SAME GOAL
TO AVOID THE GREAT VARIATION AND ELIMINATE YOURSELF HIS DEFAULT
TO KNOW THE PSY. OF THE WORLD
SET UP A NEW SYSTEM BUT NOT TO CONTINUE TO AMELIORATE AN INSTABLE SYSTEM.
IN FACT IT IS IMPOSSIBLE TO FIND SOLUTION HERE .THERE IS AN INDEPENDACY STRENGHT WHO WORK TO MAKE STABLE THE WORLD .OBVIOUSLY WITH OUR "SYSTEM"
whatever we do all is SYSTEM but the man is only the ELEMENT OF THE SYSTEM. and the humanity is victim of his own system.
Very interesting… how Adam Smith wrote his magnum opus around 1776. I'm interested in theological economics. That is to say, Dispensationalism, which is:
GOD's distinctive method of governing mankind or a group of men during a period of human history, marked by a crucial event, test, failure and judgment. From the divine standpoint, it is a stewardship, a rule of life, or a responsibiltiy for managing God's affairs in His house. From the historical standpoint, it is a stage in the progress of revelation. (from Dispensationalism, by Charles Ryrie)
So, Adam Smith's book was published at a time when Capitalism was at its zenith, usually the time just before something's fall. This was also a time of great exploits in the church. Fields all over the world had opened up for missionaries. The Apostle Paul writes to the Thessalonians about a great "falling away" from the faith. This falling away has just occurred, between about 1890 and present day, when Liberalism crept into the church and all aspects of life now. Apostasy runs rampant. The church has become the great tree with all kinds of birds (always symbolic of evil in the bible) in its branches, with every conceivable heresy from political to religious. This all parallels the current economic crisis we are in.
Every dispensation is to end in man's failure. This one currently– the dispensation of grace– is being abused by ignorant men. It will end in the Day of the LORD, Daniel's last seven, or the Tribulation Period with birth pangs leading up to, including earthquakes real and in Wall Street.
Ok,ok, I'll state the obvious. You want to know how men have failed to keep the current dispensation? So what is the crucial event, test, failure and judgment of this time we live in? The event was the death, burial and ressurection of Messiah, Jesus. The test is, will you believe in & receive Him as the Son of God (God in the flesh)? And the failure is in rejecting Him (Psalm 2) and not even searching out God (which corruption is itself proof of the Redemption of Man) and the judgment for all of this you know.
You should just have put repent and ye shall be saved. That basically your summary. Don't do anything just have faith that you haven't been lie to about life and religion and let it just happen.
Good article, but short on "what to do". The problem IS the voting, neither candidate will really change anything and it usually comes down to the lesser of evils. That's why the lethargy and unfortunately I don't see that changing soon. But right now, voting is not the answer.
Greata article, although not much on what to do. The information on the what is great and you mention how directly it happen but you don't seem to explain why or over how it was allowed to happen on such a grand scale and without much resistance.
Also, I'm saddened that you may just believe and trumpet a fallacy that the very people you are claiming are "raiding the coffers" sold to our representatives and public to gain such ability. That being that "the same capitalist system that molded America into the strongest, most productive and richest nation in history.
First it not that same system anymore. Second, it was not that capitalist system that made America great, it was however as you stated entrepreneurship, revolution and innovation that did that. The system just allowed that to happen on grand scale compared to other systems. That is not the same thing. For as you can see the system like any other system it can be fixed and taken advantage of. A hammer allows one to do thing more effeciently but you do not praise the hammer above the person using the hammer. Why do we do so with Capitalism? Do we give thanks to everyone that doesn't hamper our efforts and praise them for allowing us to go about our work? I guess it hard to for many to critic their philosophy (capitalism today is more a philosophy like religion than a true system, as it rely heavily on faith) when so much of their life and self is connected to it. If you cling to the notion that this coutry is tied to capitalism inately you really can't complain when the conclusion to such a system turns ugly. Unfortuantely, you suggestion is to try to work with the system to have it fix itself.
We need to do more than change the names or enact a few reforms. We need to rethink what we've been lead to believe and stand up and by the things we know are good for all of us and the countries continue health.