Thursday, February 19, 2009

The Great Credit Shaft

listen and I hear commmentator after commentator say 'we need a healthy banking system' and 'we need liquidity' in order to justify channeling all bailout money through megabanks. I observe the politicians worldwide now trying to build support for their next giveaway to the banks in the name of 'keeping the credit system healthy'. It seems that the only way for a business or a consumer to benefit from all this stimulus is to take on more debt. Then it hit me (I know I am slow). The government wants all money to funnel through the credit system because that has become its chief mechanism for attempting to control the economy. Simply put, the government wants to keep you in debt so it can benefit itself and its favored ones, and so it can prevent (or try to prevent) politically unpopular natural economic cycles. And now, in the hour of greatest need, governments can see no further than to continue this system, even while the consequences of its failure ravage economies worldwide.

This of course sets up another of the great dramas of this age, that of the retrenching, credit averse consumer/business versus the governments and bankers, who are intent on preserving their credit-based economic control mechanisms at all costs. When you, the consumer or business CFO, refuse to take on more debt, you deal another blow to this pernicious system because you lessen their control and refuse to play the game. This of course is bad for them, because they are piling every chip in the house on restarting the credit engine, and keeping the Great Credit Shaft going.

Obviously, then, we are witnessing the government not acting in the best interests of its citizens by their continuance this Great Credit Shaft. How do we collectively fight back? An Idea I have championed before here is that we start to explore alternative means of investing and borrowing money. For instance, there is a potential for the formation of loose economic cooperatives based on people banding together with a common economic purpose. The money now 'invested' in the equity markets in 401K's, or in US Government instruments, for instance, could just as well be invested in your local community. Why invest it in the government who will only dole it back out to you on usury terms through the megabanks it uses as its tools? Why invest it in the equities markets that benefit mega corporations that drain wealth from the local communities and who will lay off thousands at the drop of a hat to preserve their bottom line and maintain their unsustainable growth? Why not instead have a local bank or credit union where we all invest in our local communities and businesses? Why not build things through networks of small businesses, banded together in ways that can attain great things?

Let's reinvent the economy with a localized, realistic focus by voting with our remaining money. Let’s check out of the debt and credit machine that is draining our lifeblood. Let’s find ways to unite as communities with our dollars as well as with our hearts and minds and our work. This is the way we fight back, by breaking free. It will have better consequenses than tax revolt or other kinds of unrest. It can be done, and we can start doing it today.

1 comment:

  1. This makes sense.

    By the way, are you familiar with the linguistic phenomenon in the history of English, "The Great Vowel Shift"? Your title here reminded me of it.