31 January 2008

The Road to Poverty -- Part I

John Edwards has asked both Barak Obama and Hillary Clinton to adopt poverty eradication as part of their election platforms. (See this report at BBC News.) Whatever. Any plan to do something significant about poverty but which does not include, among other things, dismantling the federal reserve system isn’t a serious proposal.

It’s all well and good to blame corporations and corporate greed, but if you can’t offer an explanation of how these supposedly evil, greedy corporations are able to work their greedy will, then you can’t begin to work on a solution. You haven’t stated the problem by just saying, “Corporate greed, blah, blah, blah.”

Look at it this way. If someone is accused of murder it is not enough to say, “This man’s death was caused by that man over there.” It has to be established how the dead man was killed and how the accused caused the death of the decedent. Similarly, saying, “Your poverty is being caused by that evil corporation over there” explains nothing. We need an explanation of how these evil corporations are reducing people to poverty.

Well, you say, they pay their executives outrageous salaries for ruining the companies they run, but they fire the working people at the first sign of financial trouble. Executive salaries keep going up, but hourly wages don’t. And the minimum wage doesn’t keep up with inflation. And speaking of inflation, these evil corporation, because they are so greedy, keep raising the prices of everything. We’re all working harder and harder and watching our dollars buy less and less because all these corporations keep raising their prices – probably just to pay their fat-ass executives more and more money for doing nothing. Oh. Yeah. And then those executives rob their employees’ pension plans and so forth.

That covers most things adequately, I suppose. But it is, in fact, a rather superficial explanation. It stops as soon as it makes the most obvious inference: corporations raise their prices only because of greed. I’m sure greed plays its part. But, like I said, it is a simplistic argument to make, superficial even. Part of the superficiality lies in the understanding of inflation entailed in it. (I'm going to overlook that fact that crimes are committed by specific entities. "Corporations" are committing any crimes. The crimes are being committed by this corporation, or by that corporations.)

Inflation is related to price increases. Don’t get me wrong. But the price increases are less related to corporate greed than it is to government greed. The price increases are more a response to government action than to anything else. I mean really. Has it never occured to anyone that in order to stay in business, corporation must ultimately rely upon at least a modicum of good will among the buying public?

If you understand how, then congratulations. You understand the federal reserve system, how it actually increase poverty, and (hopefully) why it has to go.

If you don’t understand, then, in my next posting on this, we’ll begin a game of make-believe.

Part II

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James Frank SolĂ­s
Former soldier (USA). Graduate-level educated. Married 26 years. Texas ex-patriate. Ruling elder in the Presbyterian Church in America.
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