In Politics It’s All The Same

June 22, 2021

You may have heard the expression that ‘there is no difference between Democrats and Republicans’. You may also have defended either side as different. 

Perhaps you have called Democrats socialists or perhaps you have called Republicans fascists. Or worse, perhaps you do, or do not, support Donald Trump. 

There are many differences between the left and the right, but those differences are ultimately not important to how the world works. 

There is a saying about making assumptions, you make an ass out of your and me. In the case of modern day life, there are assumptions that are making an 'ass' out of all of us... - Jarl Jensen, Optimizing America

The World is Based on Economics

None of the politicians argue against these basic workings of modern life.

  • The world works by having wealthy people employ poor people. 
  • The world works by taxing the rich and governments taking care of the poor, if possible. 
  • The world works by banks lending money to the rich and the rich spending that money by employing poor people to work for it. 

False Assumptions

There is a saying about making assumptions — “When you assume, you make an ass out of you and me.” 

In the case of modern day life, there are assumptions that are making an ‘ass’ out of all of us. Our unchallenged assumptions are causing governments to go bankrupt trying to prevent poor people from rebelling or starving to death. Hopefully, future generations will wake up. They’ll be scratching their heads saying, ‘What were they thinking?.

Perhaps, the problem is that people are just unaware of the assumptions that are going unchallenged by politicians. So, here are some of the key unchallenged assumptions that are ruining our world:

  1. Work (that garners a wage) is created by wealthy people since they are the only people with money.
  2. Governments must take care of the poor when wealthy people fail to employ poor people.
  3. Commercial Banks must keep the economy healthy by lending money to wealthy people.

Where are the assumptions being made? 

Each of the above three assumptions is so ingrained into modern society that everyone simply accepts them. Let me share with you some analogies that expose them as fallacies. 

1. The False Assumption of Work

Work is simply when one person helps another and money is exchanged for that help. The problem is that many people do not have money to ask for help. 

So, society has come up with bizarre workarounds. It’s work to shine a rich man’s shoes because he pays for it. Its charity to feed a poor family because they can not pay for it. 

Feeding a poor family is incredibly beneficial while the rich man’s shoes are only shiny until he steps in a puddle. The assumption is that poor people should not have money, not even a little bit. They have not done work for wealthy people to get the money. 

The underlying assumption is that only wealthy people should get money from banks through bank loans since they have enough wealth to pay the loan back. 

2. The False Assumption of Government Support

Governments are left holding the bag for all of society’s problems — especially for taking care of the poor. 

  • The economy does not produce work for old people so the government has created social security. 
  • The elderly often can’t afford health care so the government has created Medicare. 
  • People often lose their jobs for one reason or another so the government pays people while they are unemployed. 

The list goes on and on. Governments have to do so much spending because the economy simply does not function to the benefit of many people. 

The assumption is that governments should be taking care of people because the economy can not. In other words, there are no other options and if the government did not take care of the less fortunate then there would be civil unrest. 

However, the economy can take care of everyone if the false assumptions were exposed. The false assumption is that money must trickle down from bank loans to the poor and if the poor do not get any of it then the government will fix it. 

The truth is that money can trickle up to the wealthy instead of just down to the poor. Money can be issued to everyone through direct deposits directly from the central bank. This would eliminate the government’s responsibility to take care of the poor when the poor can take care of themselves with trickle up economics. 

3. The False Assumption that the Federal Bank is Owned by the Government

The Federal Reserve is America’s central bank. The assumption is that its a government institution, when in fact it’s a corporation owned by commercial banks. 

The Federal Reserve is mandated to keep full employment, low inflation, and a stable financial system. In other words, commercial banks are in charge of the economy. 

It’s up to them to get wealthy people to borrow enough money to grow the economy.  It’s up to them to tame inflation by reducing the number of loans.  Inflation is directly correlated to wages which means that banks actively look to prevent people from making more money. 

It’s up to them to make sure they ‘themselves’ do not run out of money because the economy slowed down from not enough money being lent out. 

  • The assumption is that commercial banks are the best guardians of our economy despite repeatedly failing to do so time and time again with recessions, depressions, and “boom and bust” cycles. 
  • The assumption is that the banks are not responsible for the government’s mounting debts. 
  • The assumption is that the banks are not responsible for income inequality and decades worth of stagnant wages. 
  • The assumption is that the commercial banks can properly control the economy by simply raising and lowering interest rates on their loans. 
  • The assumption is that the commercial banks are not just looking out for themselves but they are looking out for society and humanity. 

These are obviously false and dangerous assumptions. 

man playing chess

Challenging the Assumptions

When people are exposed to assumptions that are beliefs that they have held for a long time they tend to get defensive. “But, but, but…” They are all undoubtedly saying. Here are buts… and rebuttals…

1. Direct Deposits will Spiral Inflation Out of Control

Inflation will be out of control if everyone gets a direct deposit that is not based on debt from the central bank. Inflation is tamed with higher interest rates — as is the case for the economy today. 

Interest rates have been too low for too long. Direct deposits will give the banking system an opportunity to raise interest rates to a much healthier level.  

2. People Will Take the Deposit and Be Lazy

People will not work if they get a direct deposit. No, people will not work for wages that are too low. Wages will have to go up. 

This solves the biggest problem with our economy — too many people searching for too few jobs. In addition, it solves the problem of too many existing jobs paying too little and making it harder for wages to go up. 

3. Too Much Money in Circulation

There will be too much money in circulation not tied to debt and the central bank will lose control of the economy. Commercial banks will simply stop using the central bank as the source of money and will use direct deposits as the source of money instead. 

Why should debt be the only source of money? Why are banks allowed to take peoples deposits and lend it out? 

If commercial banks want to keep control of the economy they have to solve these problems. If they can’t, then put engineers and scientists in charge since they have a proven track record of controlling complex systems like the combustion engine. 

At the end of the day, direct deposits solve a host of political, governmental, and global problems. Having the banking industry solve for the consequences is their problem since they have tasked themselves with the responsibility of the economy.

4. Politicians Won’t Listen

The politicians will not listen to us. This is true. Or at least, the politicians have not been able to identify the underlying assumptions. They have not solved the problems we face by dismantling society’s flawed fundamental assumptions. 

The rebuttal is to do something about it, send this blog post to your friends, your senator, and your president.

 

The Damage is Greater than Most People Realize

It would be nice if banks only caused poverty, income stagnation, and government debt explosion — but unfortunately, there is more. 

Banks are the primary culprits in global warming, pollution, and skyrocketing healthcare costs. 

  • Banks have decided to fund coal mines, oil wells, and gas-guzzling trucks with low-interest loans. 
  • Banks have also decided to not fund solar and wind farms because they were not profitable enough to pay back those same loans. 

Banks are in charge of our economy, but they have much bigger responsibilities then people assume. 

  • Banks could solve the global warming problem by simply granting negative interest rates on loans for renewables. 
  • Banks could lower health care costs by lowering interest rates for preventative medicine. 

Banks do not do anything besides try to make as many loans as they can under the current interest rate setting. But banks are to blame — banks are responsible for just about everything that happens in our economy. 

Isn’t it about time we stopped assuming that banks should just be left alone under the guise of ‘free’ markets? 

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