Hoarded Fiat Currency Units Are Arbitrary Liens On Other People's Initiative. It's Financial Sharecropping, Pure & Simple.

   (Commentary posted by Roger Erickson)

Eric Tymoigne writes that "Half of surveyed U.S. individuals saved 5% or less of their income."

Saving large amounts of denomination units? Does that make any sense at all?

Why should a dynamic electorate try to "save" EXCESSIVE amounts of their fiat? Citizens can't save Aggregate Public Initiative any more than they can individually save personal initiative. Initiative can only be invested when it appears ... or it's lost forever.

The only alternative is sacrificing teamwork by trying to hoard units denominating the personal initiative of other people, including emerging citizens (grandchildren). In other words, slavery, indentured servitude or sharecropping.

Yet hoarded fiat currency units are unproductive liens on other people's initiative (and your grandchildren's options). Savings beyond basic liquidity needs inevitably undermines current & future teamwork. That's why it's CALLED a "demand leakage." It's financial sharecropping, pure & simple. Otherwise, we would have called off D-Day back in 1944 and "saved" all that munitions output ... and those human lives as well.

If NeoLiberals (those promoting every man for himself) were remotely honest (or intelligent), they'd urge us to save lives and teamwork and other things, not just fixate on saving excessive amounts of fiat denomination units (which is what they secretly crave). NeoLiberalism is merely a psychological disorder. One of endless flavors of obsessive-compulsive behavior.

Why do voters preferentially elect OCD patients who obsess over saving excessive amounts of fiat? Why not elect people obsessed with saving other things? Lives? Democracy? Real output? National capabilities? Cultural Adaptive Rate? Our grandchildren's options? What's so uniquely special about nominal accounting numerals?

Maybe only an association of sports coaches can save us. After all, there's no "i" in teamwork. Only in unregulated capitalism.

To pursue the absurdity, is there no "i" in teamwork ONLY because most "me, me, me" is hoarded in politics? If we reform politics, will all sports teams fall apart? What are we afraid of? Cross contamination, or cross training?

Do we have to amend Jefferson's maxim, and insert a clause into our Constitution requiring that we formally regulate the ratio of personal greed to teamwork, to keep that ratio within survival tolerance limits for our social species? Shouldn't that be obvious, after the last 100K years? Or is homo sapiens regressing into homo saps?

Preamble to a Constitutional Amendment banning financial Benedict Arnolds:

"[NeoLiberal capitalists] have no country. The mere spot they stand on does not constitute so strong an attachment as that from which they draw their [stolen, fiat liens]." Thomas Jefferson

Hell, I'd vote for that amendment.

BIG DATA? .... Use It EVERYWHERE .... or don't bother applying it anywhere

   (Commentary posted by Roger Erickson)

[Serf] hunting is now a matter of ‘big data’ and not how well [serf's] perform at an interview

Is anyone else underwhelmed by this advice? Applying Big Data to achieving even more wealth & income inequality?

There's a puzzle here. Why can't these same logicians apply systems logic to all steps leading to aggregate output? Such as ounces of prevention, not just pounds of system cure?

If they were really capable of a bit more imagination, they might think of applying their BEEG EMPLOYMENT BRAINS and BIG DATA methods to preventing systemic social ills inexpensively, not just hideously expensive ways of supposedly repairing them.

How, you ask? Here's how. To have more novel inventions, and even faster cultural evolution, we could use a LOT more people adequately self-employed, i.e., finding it easier to HELPFULLY generate their own income from their co-citizens. That's better than just helping small numbers of oligarchs maintain a pool of starving, desperate serfs, on hand for whenever the slow-thinking Central Planning feel that docile "workers" are needed.

There's an accumulating list of suggestions for how to maintain cultural aggregates with more distributed net income, and hence far more aggregate agility - and adaptive resiliency.

1) no FICA tax?
2) no medicare tax?
3) significantly lower income taxes on labor
4) cure the monomaniacal fixation on the "deficit in fiat"
5) reduce the micro-regulation of micro-businesses? [Ya think?]

6) And, of course, start prosecuting some of the Control Frauds?

7) And, start regulating at least SOME of the larger banks again.

8) But all that presupposes an electorate that can select at least a FEW intelligent + honest politicians - and KEEP selecting similar ones.

9) So as a capper, we need methods for re-shaping this electorate into one that views aggregate policy as a logical process, and a straightforward science to practice?

10) We have enough people who know HOW to do that, but they're not the same people who know yet HOW to get this electorate to LET us do that. Too many specialists & too little shared context awareness. We need a small-scale skunk works demonstration? Somewhere where it's possible for even a few aware people to QUICKLY allow a local electorate to allow itself to excel?

11) We need specialists who can humble themselves just enough to work WITH people who can and want to get elected, and themselves have enough humility to do whatever is needed. Organizations are defined as collections of specialists who can also look past the distributed inexperience (and egos) of themselves and others, and work for big outcomes, not just settle for Pyrrhic personal victories. Do those who know how to do specific things want their country to be successful ... or do they want people to know that they were right? In a large electorate, EVERYONE is inexperienced about something. That's what diversity means. The good part is that it's so easy to find people to work with and hence for one another. Teamwork works. The bad part? We're all conditioned to criticize - and be impatient with - people who don't specialize in what we specialize in. Teamwork works ONLY if members actively look for ways to cooperate on big outcomes, while patiently ignoring irrelevant details and minor frictions. That means looking beyond personal frictions, as a matter of rote.

   (That's another - simple - subtlety about systems, which we could, in our schools, easily teach to every 10 yr old ... but don't.)

None out of 11? That's bad. So far.

How bad? That always depends on how long does it take a mulish aggregate to reorient to continuously changing context.

'Bout as fast as aggregate 2x4s appear - in the form of unexpected system shocks? Shocks can be very dangerous & violent. If that is the ONLY fallback tool we rely upon to trigger adaptations, one of these days the USA mule may not survive a reawakening.

Currency = How Dynamic Nations Denominate All The Credit That Citizens Of Growing Populations & Economies Continuously Extend To One Another.

   (Commentary posted by Roger Erickson)




For decades & centuries, people have been repeatedly asking: "Is there any limit to how much currency a nation can create?"

The answer seems intuitively obvious. Why doesn't everyone know it? Maybe some don't WANT this answer to be widely accepted? Or are entire populations really this timid and lazy about considering such a simple yet fundamental topic?

Whatever teamwork can produce, then the cooperative credits which team members extend to one another already exist. 

The only question is how accurately to denominate and track those distributed credits, so that all team members can use their credits, when and as needed - to rapidly explore even more team options.

The goal is to expand future team options, NOT to hoard current fiat (aka, the distributed inter-citizen credits that drive & sum to aggregate growth).

Amazingly, those bastions of the modern G7, the policy bureaucracies of the USA, Canada, Europe & Australia, all seem to be ignoring that self-evident answer. Hence, they have to be constantly reminded - even today - by people like Bill Mitchell, Warren Mosler & Randy Wray.

Even More Unexplored Options for Europe (& others)

'You will note that:  

[Nations] do not spend by “printing money”. They spend by creating deposits in the private banking system. Clearly, some currency is in circulation which is ‘printed’ but that is a separate process from the daily spending and taxing flows; 

There has been no mention of where the government gets the ‘credits’ and ‘debits’ from! Central banks create bank reserves (money) out of thin air; and 

Any coincident issuing of government debt (bonds) has nothing to do with ‘financing’ the government spending – a point that is explained further on in this chapter.'

Smart Companies? What About Smart Electorates? Smart Countries? Smart Governments?

   (Commentary posted by Roger Erickson)

How Investing in Good Jobs Lowers Costs and Boosts Profits

The Good Jobs Strategy ... shows that even in low-cost settings, leaving employees behind with low wages and bad jobs is a choice, not a necessity. On April 4, we’ll discuss how smart companies are turning the Walmart business model on its head by investing in good jobs while earning strong investment returns. Sponsored by UFCW and the AFL-CIO.

These are merely politically correct ways of discussing loyalty in teamwork. 

For Pete's sake! Common sense is no longer allowed to be declared sensible until a photogenic university professor declares to be? And then only for "smart companies" with "strong investment returns."

Unfortunately, the good prof & the AFL-CIO don't define the terms of what constitutes a "strong investment returns." How long will it take until they realize that they don't really agree on the terms of that definition? Yet another generation of stalled labor-capital reforms? Is this the AFL-CIO's way of admitting defeat?

Something subtle is missing here, and it's not clearly apparent until you analyze what they're actually saying. This whole "Good Jobs" approach reminds me of Deficit Doves. They're trying to agree with their masters while also agreeing with the serfs ... at the same time? Doesn't that always turn into groveling?

Smart professors don't miss the point? 

Only clever ones trying to tout the uber-capitalist party line, masquerading as aggregate common sense? Usually in order to get tenure, and maybe a fellowship or endowed chair from an institute set up by some billionaire (non-labor) capitalist.

Can we just skip all the capitalist mumbo jumbo, and get straight to the point? 

Wouldn't a "Resilient Electorate Strategy" represent adaptive reality, and therefore common sense? Can't we just come right out and say that? Apparently not, because ~1% of people hoarding vast amounts of static assets feel that they have too much to lose personally, if they relieve constraints on and control over the rest of the electorate.

Bad move. Always suicidal. It's only a matter of time.

How did supposed capitalists forget that labor-capital is also one of the equal, arbitrary classifications of "capital?" Biasing a system to persistently make some forms of capital more equal in all contexts than other forms of capital is - by definition - constraining aggregate options, draining resiliency and reducing aggregate agility.

Yet that is obvious only if one stops to actually think.

Maybe we need to forget capitalism? And just go back to consistency across biology, anthropology, sociology, democracy and statistical process control? Let the capitalist mysticism go the way of the pythagorean mysticism?

Conflating CURRENT FIAT with FUTURE REAL OPTIONS

(Commentary posted by Roger Erickson - replicated from a comment first posted Dec, 2012 at Seeking Alpha)



Every citizen should learn the rudiments of Situational Awareness by, say, age 10, so that we as a people can keep exploring real national options, not just working at looting one another.

Teamwork. Surely that's not a difficult concept in such a sports-mad country?

Teamwork, like any goal, requires assessment systems, so we can practice before seeing if we can be successful in novel situations. Successful outcomes can always be interpreted in short, medium and long-term metrics. How about these familiar standbys?
.. fiat currency accounting?
.. proportional population employment?
.. survival of the country (based on capabilities & affinity ... of US citizens).

No citizen can assess what they can do for their country if they don't understand the basic operations listed above, starting with fiat currency.

Yes, we already have these measures that could let the public track success, but that doesn't mean that they're used. Largely because most citizens don't learn much about policy tools we already possess. Most of our problems were, in fact, taken care of by the Automatic Stabilizers enacted during the 1930s-1940s (social security, FDIC, unemployment benefits, etc). The only one remaining is Control Fraud (google William K. Black), and that's only because we let crooks talk us into deregulating financial crime, right up to repealing Glass-Steagall.

Everything else comes down to a fight between merchants and citizens, waged through the currency supply, either restricting it to preserve the buying power of hoarded cash, or letting it depreciate to continuously grow liquidity. Let's see how many grasp the following argument.

How do we afford to pay the "fiat interest on fiat bonds."

If carried far enough, that discussion eventually leads to 2 points.

First, we can't fail to pay the interest, since we can always generate as much fiat liquidity units as we want.

So, second, the argument reduces to either:

a) Arbitrarily maintaining the purchasing power of previously hoarded fiat (liquidity units), by progressively depriving an increasingly complex economy of both relative liquidity AND return-on-coordination [i.e., pay the fiat interest by draining private savings of previously issued currency; even though population & net capabilities... are both increasing]. [Even fools don't want that, when faced with a choice. Only pure sociopaths do.]

or

b) Instead, enlarge the fiat currency base [the unit of liquidity] with expanded issuance (public spending), thereby diluting the absolute buying power of yesterday's liquidity units. Why? In order to provide enough liquidity to readily DENOMINATE and hence rapidly explore the expanding options of tomorrow's return-on-coordination. Coordination possible from the pairing of more people with more capabilities.

That is the "SOCIAL-SPECIES DILEMMA." Evolve and stay in the adaptive race, by organizing on a larger scale ... or ... become a has been culture, and become either extinct or a domesticated lunch source for some other, more rapidly adapting species - i.e., one optimizing it's liquidity in order to explore expanding options faster than your culture does.

People who save excessively, i.e., hoard fiat beyond liquidity needs, are hoarding today's output and thereby depriving their grandchildren of expanded options.

Our grandchildren's options are reduced without our full investment in generating those options. Our Output Gap = grandchildren's Options Gap, and the relation is not linear, but exponential.

If our output gap is "j", their options gap is [j(e)], i.e., "j" to some unpredictable exponential "e".

That's how evolution has worked since the dawn of time. We die so that our descendents can be far more than we were. It's called sexual recombination, or cultural recombination, or - in general form - Options Recombination. (see the "Traveling Entrepreneurs Task")

This all follows from the simple, bottom-up dynamics of organized systems.

Walter Shewhart: "In all complex systems, the highest cost, by far, is the cost of coordination."

Obvious corollary: "In all complex systems, the highest RETURN, by far, is the RETURN on [investing in] coordination."

***

SeekingAlpha Commenter Zmartmoney added a key point.

To all who care to notice, you've just explained all our problems in one short treatise. The fact that 90% of the population does not understand any of what you wrote is our heritage - we, as a nation, are now virtually clueless as to how govt, business, or economies work and what role each of us plays in it. This is a testimony to the insidious nature and capabilities of politicians and their success in dragging the discussion into the ditch to drown it quietly while stealing from everyone in sight. The number of statesmen in the Legislative, Judicial, and Executive branches of our govt can be counted on two hands, and we'd probably argue about which ones those are. Our doom is sealed by our inability to grasp why we are here and what solutions, if any, might lead to our recovery to a state of being well informed and capable of making decisions in our personal lives and our govt. Sorry.

We as an informed electorate were not always this ignorant, nor do we need to remain that way. I hope we can someday prove him wrong. To do that, our grandchildren need more options, and they need to be AWARE of them. To provide those options and capabilities, we need to express more initiative (fiat) now, and also select where to apply it - wisely, not randomly.

Media Strategies To Thwart Federal Oversight, And The Rise Of A Control Fraud Industrial Congressional Service Complex

(Commentary posted by Roger Erickson)

Move over MICC, a meaner dog's movin' in. It's purpose? To help the USA better target it's own foot. Indirectly, of course. There's big money in this industry, so it SEEMS better to not ask questions. Besides, if you do stop and think, you won't like what you perceive, and you'll never be happily ignorant again. Don't say you weren't warned.

Would your business like to have a professional Media Strategy to Thwart Federal Oversight? There are companies that specialize in this service ... regardless of the industry sector. Google terms like "Avoiding Federal Oversight" or "Hiding From Regulation" or even "Swaying Public Opinion" - or simply "Lobbying" ... and see what pops up. There are endless techniques for obscuring one's activities in plain sight, and methods for promoting the legality and/or utility of each of those methods. Who specializes in promoting public acceptance of any and all narrow-purpose methods - regardless of the net outcome?

Meet the CFICSC - which "ads" up to a Control Fraud Industrial Congressional Service Complex. Like banking, it's HQ has also traditionally been in NY city, although it keeps notable colonies in places from Hollywood to Miami, and every media outlet in between. That is the industry which is largely responsible for ensuring that justice remains blind ... and distracted too. If confused, divided and conquered sometimes follows - no matter  how often - do they have any responsibility to care? Maybe not as long as Swiss bank accounts remain secret, legal and even publically approved.

Dwight Eisenhower and his warning about the MICC? A piker! For decades before that, Edward Bernays and others had already been advising political parties to get good at propaganda, so that they could operate beneath the bounds of their own public regulations, and be hidden above the law. Of course, Bernays himself always claimed to be "shocked" that such techniques were continuously misused for significant profit extraction dedicated to narrow purposes - including his own income. C'est la Vie. Whaddya gonna do?

Nothing? Or something?

Let's get to the central question. Is unselective, self-manipulation of our own teams - instead of teamwork - really necessary for successful growth of a culture? Narrow competition by any & all system components to manipulate team resources may be a key method of capitalism. Yet a method does not address the ultimate purpose of capitalism, which has never existed in a vacuum. Excessive, uncoordinated pursuit of capitalism's methods absent alignment with evolving group strategies only produces mob behavior rather than organized culture. What would John Calvin and Max Weber think of today's interpretation of Bernay's Sauce as a "Calvinistic" way of further evolving "God's Work?" Clearly, a given method cannot define strategy or purpose. The word "capitalism" cannot adequately define tactics, strategy, goals and desired group outcomes simultaneously. The concepts vary too richly for description by one word.

Yet how do we make it more natural to select adaptively? Oh, just try enough interaction to generate affinity and feedback with all team members? Then see what outcome options pop up? That's what social species do, folks. That's what we do.

There are many who didn't see any adaptive logic when Bernays advised Central Planners to pursue unregulated efforts to manipulate rather than align team members. Yet today, many citizens still remain confused, and use their critical thinking skills only sporadically, if at all. For instance, one has to wonder why so many sports coaches are unthinking capitalists. There's no "I" in team, but apparently a few too many in unexamined capitalism! 

An unregulated collection of gangsters irrationally competing to manipulate one another produces only parasites consuming the decaying remains of their team, community or nation. Such mob outlooks can only produce a whole less than the sum of it's parts. Group success tracks a better way, but it requires a deliberate, informed policy choice.

Please remember that, next time you read an advertisement that targets YOU as nothing more than an irrational component ruled by herd instinct.

“The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. ...We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized. Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society. ...In almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons...who understand the mental processes and social patterns of the masses. It is they who pull the wires which control the public mind.”
Mr. Invisible

How does that pull YOUR mind? As an alternative, there are 30-70 Trillion cells in the average human body, and they are NOT ruled by a few. Rather, their amazing, net agility - you - is a product of all your cells coordinating with all your cells. There is no Central Planner cell, or even a central committee. When agile teams work together, they accomplish truly amazing things. Bernays' version of this sauce has certainly gone rancid. In fact, it was toxic from the beginning. If used in food, Bernays' Sauce would have been outlawed, for failing all Clinical Trial testing.

Perhaps we really do need a more formal Civic Trial proof of concept, for all proposed policy changes randomly suggested by citizens. An Outcomes Impact Statement? Maybe that's how we the people may more quickly SELECT adaptation from cultural-auto-immune social diseases, or self-parasitism. Simply by making the effort to have all of us receive influences from all of us. Surely that is the foundation of an informed electorate?

Instead of attempting the oxymoron of a Centrally Planned mob rule, can the Unseen Affinity of a democracy's Middle Class stay continuously one step ahead of it's own, inevitable, fraud faction, and thereby rule itself more rather than less adaptively?

Only if we inform our electorate well enough to see through the anti-self-regulation advice of Ed Bernays, the Father of Control Fraud Protection Services.

You'd Think People Would Catch On .... That This Is Not Business As Usual

commentary by Roger Erickson

6m trapped in poverty: Poor earning Brits fail to cover cost of living
More than six [UK] million workers are not earning enough to drag their families above the breadline. And for the first time since records began, working families in poverty outnumber the 5.1 million jobless households in poverty.

Unlike in the USA, Cameron's UK administration forget to re-define official poverty levels downwards fast enough to keep 'em conveniently below median labor-class incomes.  If you want to stay ahead in a continuous race to the bottom, you need the finish line to fall faster than the contestants.

When will the 1% and their newly poverty stricken acolytes catch on? When they start suggesting euthanasia, and start running out of lower classes to keep their incomes and wealth levels above? Will that be before or after we all re-recognize that we'll either hang together, or hang en masse? What good are supposed honeypots if there are no ant "servants" to utilize and re-consume the group output that honeypots hoard? What good are even capitalist Central Planners who think that they can personally dole out Group Intelligence faster than the quality of distributed decision-making - even among those on the dole - can rise?

Forget Al Qada. The worst terrorist threat is always Uu Qanta, and it's staring out from your own mirror. The only way to kill that terrorist threat is to kill the notion that we can control, rather than simply unleash and enjoy, the quality of coordinated, distributed decision-making. Instead of seeing increasing gross liquidity as a deficit, call it by it's more appropriate name - "asset."

Note to Central Planners. There is no way to hoard and dole out Group Intelligence, Group Agility and Group Adaptive Rate. It's equivalent to hoarding group suicide. Good luck with that.

When will our mega tribe realize that they themselves are the prime asset, that currency is simply liquidity, and that anything hindering society-wide liquidity limits return on coordination - and hence our future options? Hopefully not after it's too late to avoid setting us back another generation. Hopefully at least slightly before then?

There is a better way.

We can't accelerate return on coordination without getting rid of all royalty and most royalties, forever. Every bit of personal initiative withheld and forgone (i.e., hoarded) forgoes some compounding return on coordination. The only way to optimize growth of any organization is to both grow the system AND keep the components adquately maintained. That's a 2-stage optimization task, neither neo-capitalism nor neo-socialism alone, but a dynamic function of both continuously summed. This is NOT difficult. Any 12 year old exposed to algebra can learn the core concept of return on scalable teamwork, aka return on coordination.

Steven Rice — Group Intelligence Correlates With Social Aptitude, Not IQ

Considering the complexity and global nature of business today, work is nearly always a team activity, and often those teams are embedded in ever-shifting networks. A new field of study, collective intelligence, is measuring the ability of teams to solve problems. This research is yielding powerful insights into improving the performance of networks, teams, and other collective groups. One breakthrough finding shows that collective intelligence is variable and measurable and — most surprisingly — correlates more with the social abilities of the team members than with the team's aggregate individual IQ....

In large 21st century organizations, executives have recognized that networks and teams play a key role in organizational excellence and are a form of collective intelligence. It's true that networks foster innovation through informal collaboration and the exchange of expertise and ideas. Networks also move information quickly and freely and determine where work really happens and how. Whether we like it or not, hierarchies are more and more relics of the past while networks determine where value is created.

The Harvard Business Review | HBR Blog Network
Group Intelligence Correlates With Social Aptitude, Not IQ
Steven Rice

"Collective" means that "networks, teams, and other collective groups" are social systems comprised of elements and subsystems, together with relationships, usually rule-based and characterized as cultural or institutional. Cultural relationships are informal, based on tradition and convention, and they are implicit. Institutional arrangements are generally formal and explicit. A collective group is structurally and functionally different from an aggregate. Collective groups exhibit collective consciousness and coordinated behavior that is different from aggregates.

Why, in this day & age, Can't ALL Citizens See the Utter Futility in Our Aggregate Policy?

“I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. Corporations have been enthroned, an era of corruption in high places will follow, and the money-power of the country will endeavor to prolong it’s reign by working upon the prejudices of the people until the wealth is aggregated in a few hands and the Republic is destroyed.”
..., (attributed to) USA President Abraham Lincoln, 1863

That was in a day when wealth was still mostly perceived as static assets to be hoarded.

Few saw the timeless & complete dominance of dynamic value over supposed static value.

Today, people have explicitly written for decades about cost-of-coordination being the highest cost, and the implicitly obvious corollary, that return-on-coordination is the highest return.

Aka, teamwork easily trumps any amount of individual hoarding. Well Duh!

Given that coordination cannot be hoarded by individuals, only by aggregates, why on earth is our electorate so stubbornly ignorant about the ramifications of this simple conclusion? Why do we keep training & rewarding individuals to hoard negligible commodity value, while doing so inadvertently starves their aggregate of the insanely great return on coordination?  Our best & brightest know the present course won't work, and say so.

"Success follows the quality [& tempo] of distributed decision-making"

"We generate tempo by decentralizing decision-making"

So why don't we just teach that in Kindergarten?

It's one thing to be ignorant. To wilfully insist on remaining ignorant defines stupidity.

American's didn't use to be this stupid. Recognizing the obvious is taking too long. Have we quit looking?

Given our population density, we're in the process of a permanent transition from dominance of personal hoarding of assets, to aggregate hoarding of coordination capabilities.  That's always been true, since the dawn of life on this planet.  Yet it's 2012, and most of our population does not adequately grasp this simple truth.

In fact, our population is mostly still mystified by dynamic semantics, and the concurrent manifestations of density.  A confluence of densities is not funny.