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George Washington: Lack of Trust – Caused by Institutional Corruption – Is Killing the Economy

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People Are Losing Trust In All Institutions

The signs are everywhere: Americans have lost trust in our institutions.

The Chicago Booth/Kellogg School Financial Trust Index published yesterday shows that only 22% of Americans trust the nation’s financial system.

SmartMoney notes today that more and more Americans are keeping valuables at home because they have lost trust in banks.

Robert Shiller said Monday:

Our whole economy has been affected by variations in confidence. Central banks are sort of trusted, but the actions they have often affect people’s confidence by appearance rather than substance. We’re not in the most trusting mood now.”

The National Journal noted last week:

 Lack of Trust   Caused by Institutional Corruption   Is Killing the Economy

Seven in 10 Americans believe that the country is on the wrong track; eight in 10 are dissatisfied with the way the nation is being governed. Only 23 percent have confidence in banks, and just 19 percent have confidence in big business. Less than half the population expresses “a great deal” of confidence in the public-school system or organized religion. “We have lost our gods,” says Laura Hansen, an assistant professor of sociology at Western New England University in Springfield, Mass. “We lost [faith] in the media: Remember Walter Cronkite? We lost it in our culture: You can’t point to a movie star who might inspire us, because we know too much about them. We lost it in politics, because we know too much about politicians’ lives. We’ve lost it—that basic sense of trust and confidence—in everything.”

***

After a 50-year decline, just 14 percent of respondents in a 2011 Gallup Poll said that the federal government could be trusted “a great deal

Gallup reported last month that – for the second year in a row – Americans said that gold is the safest long-term investment.   This  shows that Americans don’t trust the government.  Specifically, as Time Magazine points out:

Traditionally, gold has been a store of value when citizens do not trust their government politically or economically.

Indeed:

  • The U.S. financial system is so corrupt and unregulated that many don’t believe the government and businesses’ promises to follow the rule of law … and simply won’t do business here anymore

It’s not just the U.S.

As the Economist reported in January, trust in institutions is plunging worldwide:

The latest annual “trust barometer” published by Edelman, a PR firm, on January 24th [finds that] overall trust has declined in the leaders of the four main categories of organization scrutinized—government, business, non-governmental organizations and the media. Of the 50 or so countries examined, 11, nearly twice as many as last year, are now judged “sceptical”, with less than 50% of those polled saying they trusted these institutions. Trust in Japanese institutions plunged to 34%, from 51% in 2011, not surprising given the handling by leaders of the Tsunami and its aftermath. But the collapse in trust was even more striking in Brazil, the country in which trust was greatest in 2011, at 80%, but now, following a series of corruption scandals, has slipped to 51% (admittedly, still above America and Britain, among others).

This headline slump in trust is due, above all, to the public losing faith in political leaders. In 2011, across all countries, Edelman found that 52% of those polled trusted government; this year, it was only 43%. Government is now trusted less even than the media …. Trust in business fell slightly, from 56% to 53%, as did trust in NGOs, which still remain the most trusted type of institution, at 58%, down from 61% in 2011. As in previous years, the barometer is based on a poll of what Edelman calls “informed people”, which typically means professional and well-educated, though this year for the first time the views of the informed were benchmarked against a poll of the public as a whole. For each institution, the broader public was even less trusting than the informed, with government trusted by 38%, business 47%, NGOs 50% and the media 46%.

Lack of Trust Is Killing the Economy

Top economists have been saying for well over a decade that trust is necessary for a stable economy, and that prosecuting the criminals is necessary to restore trust. Indeed, as we have repeatedly noted, loss of trust is arguably the main reason we are stuck in an economic crisis … notwithstanding unprecedented action by central banks worldwide.

Economist Daniel Hameresh writes:

A number of economists have shown recently that income levels and real growth depend upon trust—trust greases the wheels of exchange.

In 1998, Paul Zak (Professor of Economics and Department Chair, as well as the founding Director of the Center for Neuroeconomics Studies at Claremont Graduate University, Professor of Neurology at Loma Linda University Medical Center, and a senior researcher at UCLA) and Stephen Knack (a Lead Economist in the World Bank’s Research Department and Public Sector Governance Department) wrote a paper called Trust and Growth, arguing:

Adam Smith … observed notable differences across nations in the ‘probity’ and ‘punctuality’ of their populations. For example, the Dutch ‘are the most faithful to their word.’ John Stuart Mill wrote: ‘There are countries in Europe . . . where the most serious impediment to conducting business concerns on a large scale, is the rarity of persons who are supposed fit to be trusted with the receipt and expenditure of large sums of money’ (Mill, 1848, p. 132).

Enormous differences across countries in the propensity to trust others survive
today.

***

Trust is higher in ‘fair’ societies.

***

High trust societies produce more output than low trust societies. A fortiori, a sufficient amount of trust may be crucial to successful development. Douglass North (1990, p. 54) writes,

The inability of societies to develop effective, lowcost enforcement of contracts is the most important source of both historical stagnation and contemporary underdevelopment in the Third World.

***

If trust is too low in a society, savings will be insufficient to sustain positive output growth. Such a poverty trap is more likely when institutions -
both formal and informal – which punish cheaters are weak.

Heap, Tan and Zizzo and others have come to similar conclusions.

In 2001, Zak and Knack showed that “strengthening the rule of law, reducing inequality, and by facilitating interpersonal understanding” all increase trust. They conclude:

Our analysis shows that trust can be raised directly by increasing communication and education, and indirectly by strengthening formal institutions that enforce contracts and by reducing income inequality. Among the policies that impact these factors, only education, … and freedom satisfy the efficiency criterion which compares the cost of policies with the benefits citizens receive in terms of higher living standards. Further, our analysis suggests that good policy initiates a virtuous circle: policies that raise trust efficiently, improve living standards, raise civil liberties, enhance institutions, and reduce corruption, further raising trust. Trust, democracy, and the rule of law are thus the foundation of abiding prosperity.

A 2005 letter in premier scientific journal Nature reviewed the research on trust and economics:

Trust … plays a key role in economic exchange and politics. In the absence of trust among trading partners, market transactions break down. In the absence of trust in a country’s institutions and leaders, political legitimacy breaks down. Much recent evidence indicates that trust contributes to economic, political and social success.

Forbes wrote an article in 2006 entitled “The Economics of Trust”. The article summarizes the importance of trust in creating a healthy economy:

Imagine going to the corner store to buy a carton of milk, only to find that the refrigerator is locked. When you’ve persuaded the shopkeeper to retrieve the milk, you then end up arguing over whether you’re going to hand the money over first, or whether he is going to hand over the milk. Finally you manage to arrange an elaborate simultaneous exchange. A little taste of life in a world without trust–now imagine trying to arrange a mortgage.

Being able to trust people might seem like a pleasant luxury, but economists are starting to believe that it’s rather more important than that. Trust is about more than whether you can leave your house unlocked; it is responsible for the difference between the richest countries and the poorest.

If you take a broad enough definition of trust, then it would explain basically all the difference between the per capita income of the United States and Somalia,” ventures Steve Knack, a senior economist at the World Bank who has been studying the economics of trust for over a decade. That suggests that trust is worth $12.4 trillion dollars a year to the U.S., which, in case you are wondering, is 99.5% of this country’s income.

***

Above all, trust enables people to do business with each other. Doing business is what creates wealth.

***

Economists distinguish between the personal, informal trust that comes from being friendly with your neighbors and the impersonal, institutionalized trust that lets you give your credit card number out over the Internet.

In 2007, Yann Algan (Professor of Economics at Paris School of Economics and University Paris East) and Pierre Cahuc (Professor of Economics at the Ecole Polytechnique (Paris)) reported:

We find a significant impact of trust on income per capita for 30 countries over the period 1949-2003.

Similarly, market psychologists Richard L. Peterson M.D. and Frank Murtha, PhD noted in 2008

Trust is the oil in the engine of capitalism, without it, the engine seizes up. Confidence is like the gasoline, without it the machine won’t move.

Trust is gone: there is no longer trust between counterparties in the financial system. Furthermore, confidence is at a low. Investors have lost their confidence in the ability of shares to provide decent returns (since they haven’t).

In 2009, Paola Sapienza (associate professor of finance and the Zell Center Faculty Fellow at Northwestern University) and Luigi Zingales (Robert C. McCormack Professor of Entrepreneurship and Finance at the University of Chicago Booth School of Business) pointed out:

The drop in trust, we believe, is a major factor behind the deteriorating economic conditions.

***

As trust declines, so does Americans’ willingness to invest their money in the financial system. Our data show that trust in the stock market affects people’s intention to buy stocks, even after accounting for expectations of future stock-market performance. Similarly, a person’s trust in banks predicts the likelihood that he will make a run on his bank in a moment of crisis: 25 percent of those who don’t trust banks withdrew their deposits and stored them as cash last fall, compared with only 3 percent of those who said they still trusted the banks. Thus, trust in financial institutions is a key factor for the smooth functioning of capital markets and, by extension, the economy. Changes in trust matter.

They quote a Nobel laureate economist on the subject:

“Virtually every commercial transaction has within itself an element of trust,” writes economist Kenneth Arrow, a Nobel laureate. When we deposit money in a bank, we trust that it’s safe. When a company orders goods, it trusts its counterpart to deliver them in good faith. Trust facilitates transactions because it saves the costs of monitoring and screening; it is an essential lubricant that greases the wheels of the economic system.

In 2010, a distinguished international group of economists (Giancarlo Corsetti, Michael P. Devereux, Luigi Guiso, John Hassler, Gilles Saint-Paul, Hans-Werner Sinn, Jan-Egbert Sturm and Xavier Vives) wrote:

Public distrust of bankers and financial markets has risen dramatically with the financial crisis. This column argues that this loss of trust in the financial system played a critical role in the collapse of economic activity that followed. To undo the damage, financial regulation needs to focus on restoring that trust.

They noted:

Trust is crucial in many transactions and certainly in those involving financial exchanges. The massive drop in trust associated with this crisis will therefore have important implications for the future of financial markets. Data show that in the late 1970s, the percentage of people who reported having full trust in banks, brokers, mutual funds or the stock market was around 40%; it had sunk to around 30% just before the crisis hit, and collapsed to barely 5% afterwards. It is now even lower than the trust people have in other people (randomly selected of course).

In his influential 1993 book Making Democracy Work, Robert Putnam showed how civic attitudes and trust could account for differences in the economic and government performance between northern and southern Italy.

Political economist Francis Fukiyama wrote a book called Trust in 1995, arguing that the most pervasive cultural characteristic influencing a nation’s prosperity and ability to compete is the level of trust or cooperative behavior based upon shared norms. He stated that the United States, like Japan and Germany, has been a high-trust society historically but that this status has eroded in recent years.

Chris Farrell notes:

Trust matters. It’s kind of like a recipe or a software protocol that allows for economic exchange and all kinds of innovation.

***

There’s compelling evidence that both higher levels of trust in institutions and a belief in the general trustworthiness of individuals in society carry large economic benefits. Sociologists, political scientists and economists have all showed in an impressive body of research that higher levels of trust increase trade and even foster economic growth,.

Dallas Fed president Richard Fisher said last year that a growing distrust of the nation’s political institutions is keeping businesses on the sidelines.

Forbes notes in March that a lack of trust was one of the main factors hurting the Greek economy:

There are a number of issues that have contributed and exacerbated the levels of distrust. For instance, Greece, with the help of Goldman Sachs, concealed the state of their finances for over a decade until they ran into this major debt crisis. Because they failed to disclose the extent of their financial problems, the EU and other players in the global credit market are extremely reluctant to cooperate or put faith in the representations made by the Greek leadership.

***

If the leadership in Athens cannot reestablish trust with the citizenry and develop open and honest communication amongst themselves, their constituents, and the individual leaders of the financial institutions involved, the agreements they make will not even be worth the paper they are written on.

Ken Eisoldan internationally respected authority on the psychodynamics of organizations – writes:

Most of us view trust as valuable and desirable, something that improves the quality of our personal lives.  We seldom take the next step and view it as indispensable, a vital ingredient in society – and in the economy. But all credit is based on trust, and the fundamental problem in a credit crisis is not just the lack of “liquidity” but also the absence of trust, the trust that is essential to all financial transactions.”

But the problem is not that people should be more blindly and naively trusting. The problem – as Eisold points out – is that the institutions have to act in a more trustworthy manner:

The essential point is not that people need to be encouraged to trust. Most of us want to trust and have the basic capacity to trust. We need institutions that are trustworthy.

No Economy-Revving Optimism Without Trust

Economist Robert Higgs – who has studied the effect of World War II on the economy in great detail – argues that it was optimism, rather than stimulus spending, which got us out of the depression:

The performance of the war economy … broke the back of the pessimistic expectations almost everybody had come to hold during the seemingly endless Depression. In the long decade of the 1930s, especially its latter half, many people had come to believe that the economic machine was irreparably broken. The frenetic activity of war production—never mind that it was just a lot of guns and ammunition—dispelled the hopelessness. People began to think: if we can produce all these planes, ships, and bombs, we can also turn out prodigious quantities of cars and refrigerators.

***

The transformation of expectations—justify an interpretation that views the war as an event that recreated the possibility of genuine economic recovery. As the war ended, real prosperity returned.

Unlike after WWII, Americans now are pessimistic (even though we’ve been various wars against third-rate countries far longer than we were in WWII) and our expectations are stuck in the gutter.

Why?

Perhaps because we don’t trust our government, our big corporations or our other institutions to do anything very helpful for the country. Indeed, we don’t trust our government, big corporations and other institutions to even allow a fair playing field where we have a chance of competing fairly to get ahead on our own initiative.

Why should we work harder, invest more or spend more when we don’t trust that we might have a bright future?

Prosecuting the Criminals Is Necessary to Restore Trust

Nobel prize winning economist Joseph Stiglitz says that we have to prosecute fraud or else the economy won’t recover:

The legal system is supposed to be the codification of our norms and beliefs, things that we need to make our system work. If the legal system is seen as exploitative, then confidence in our whole system starts eroding. And that’s really the problem that’s going on.

***

I think we ought to go do what we did in the S&L [crisis] and actually put many of these guys in prison. Absolutely. These are not just white-collar crimes or little accidents. There were victims. That’s the point. There were victims all over the world.

***

Economists focus on the whole notion of incentives. People have an incentive sometimes to behave badly, because they can make more money if they can cheat. If our economic system is going to work then we have to make sure that what they gain when they cheat is offset by a system of penalties.

Robert Shiller said recently that failing to address the legal issues will cause Americans to lose faith in business and the government:

Shiller said the danger of foreclosuregate — the scandal in which it has come to light that the biggest banks have routinely mishandled homeownership documents, putting the legality of foreclosures and related sales in doubt — is a replay of the 1930s, when Americans lost faith that institutions such as business and government were dealing fairly.

Economists such as William Black and James Galbraith agree. Galbraith says:

There will have to be full-scale investigation and cleaning up of the residue of that, before you can have, I think, a return of confidence in the financial sector. And that’s a process which needs to get underway.

Galbraith also says that economists should move into the background, and “criminologists to the forefront”.

Government regulators know this – or at least pay lip service to it – as well. For example, as the Director of the Securities and Exchange Commission’s enforcement division told Congress:

Recovery from the fallout of the financial crisis requires important efforts on various fronts, and vigorous enforcement is an essential component, as aggressive and even-handed enforcement will meet the public’s fair expectation that those whose violations of the law caused severe loss and hardship will be held accountable. And vigorous law enforcement efforts will help vindicate the principles that are fundamental to the fair and proper functioning of our markets: that no one should have an unjust advantage in our markets; that investors have a right to disclosure that complies with the federal securities laws; and that there is a level playing field for all investors.

Nobel prize winning economist George Akerlof has demonstrated that failure to punish white collar criminals – and instead bailing them out- creates incentives for more economic crimes and further destruction of the economy in the future. Indeed, William Black notes that we’ve known of this dynamic for “hundreds of years”. And see this, this, this and this.

And when Zak and Knack – quoted above – discuss “enforcing contracts”, “raising civil liberties”, and “reducing corruption”, they are talking about enforcing the rule of law, which means prosecuting violations of the law. Likewise, when they refer to “enhancing institutions”, they mean regulatory and justice systems which enforce contracts and prosecute cheaters.

And when Zak and Knack promote reduction of inequality, that means prosecuting fraud as well. Specifically, as I recently pointed out, prosecuting fraud is the best way to reduce inequality:

Robert Shiller [one of the top housing economists in the United States] said in 2009:

And it’s not like we want to level income. I’m not saying spread the wealth around, which got Obama in trouble. But I think, I would hope that this would be a time for a national consideration about policies that would focus on restraining any possible further increases in inequality.

***

If we stop bailing out the fraudsters and financial gamblers, the big banks would focus more on traditional lending and less on speculative plays which only make the rich richer and the poor poorer, and which guarantee future economic crises (which hurt the poor more than the rich).

***

Moreover, both conservatives and liberals agree that we need to prosecute financial fraud. As I’ve previously noted, fraud disproportionally benefits the big players, makes boom-bust cycles more severe, and otherwise harms the economy – all of which increase inequality and warp the market.

Of course, it’s not just economists saying this.

One of the leading business schools in America – the Wharton School of Business – published an essay by a psychologist on the causes and solutions to the economic crisis. Wharton points out that restoring trust is the key to recovery, and that trust cannot be restored until wrongdoers are held accountable:

According to David M. Sachs, a training and supervision analyst at the Psychoanalytic Center of Philadelphia, the crisis today is not one of confidence, but one of trust. “Abusive financial practices were unchecked by personal moral controls that prohibit individual criminal behavior, as in the case of [Bernard] Madoff, and by complex financial manipulations, as in the case of AIG.” The public, expecting to be protected from such abuse, has suffered a trauma of loss similar to that after 9/11. “Normal expectations of what is safe and dependable were abruptly shattered,” Sachs noted. “As is typical of post-traumatic states, planning for the future could not be based on old assumptions about what is safe and what is dangerous. A radical reversal of how to be gratified occurred.”

People now feel more gratified saving money than spending it, Sachs suggested. They have trouble trusting promises from the government because they feel the government has let them down.

He framed his argument with a fictional patient named Betty Q. Public, a librarian with two teenage children and a husband, John, who had recently lost his job. “She felt betrayed because she and her husband had invested conservatively and were double-crossed by dishonest, greedy businessmen, and now she distrusted the government that had failed to protect them from corporate dishonesty. Not only that, but she had little trust in things turning around soon enough to enable her and her husband to accomplish their previous goals.

“By no means a sophisticated economist, she knew … that some people had become fantastically wealthy by misusing other people’s money — hers included,” Sachs said. “In short, John and Betty had done everything right and were being punished, while the dishonest people were going unpunished.”

Helping an individual recover from a traumatic experience provides a useful analogy for understanding how to help the economy recover from its own traumatic experience, Sachs pointed out. The public will need to “hold the perpetrators of the economic disaster responsible and take what actions they can to prevent them from harming the economy again.” In addition, the public will have to see proof that government and business leaders can behave responsibly before they will trust them again, he argued.

Note that Sachs urges “hold[ing] the perpetrators of the economic disaster responsible.” In other words, just “looking forward” and promising to do things differently isn’t enough.

As Wall Street insider and New York Times columnist Andrew Ross Sorkin writes:

“They will pick on minor misdemeanors by individual market participants,” said David Einhorn, the hedge fund manager who was among the Cassandras before the financial crisis. To Mr. Einhorn, the government is “not willing to take on significant misbehavior by sizable” firms. “But since there have been almost no big prosecutions, there’s very little evidence that it has stopped bad actors from behaving badly.”***

Fraud at big corporations surely dwarfs by orders of magnitude the shareholders’ losses of $8 billion that Mr. Holder highlighted. If the government spent half the time trying to ferret out fraud at major companies that it does tracking pump-and-dump schemes, we might have been able to stop the financial crisis, or at least we’d have a fighting chance at stopping the next one.

Of course, the Europeans have been trying to avoid fraud prosecutions as well.

On the other hand, Iceland has prosecuted the fraudster bank heads (and here and here) and their former prime minister, and their economy is recovering nicely … because trust is being restored in the financial system.

Indeed, even evangelical leader Pat Robertson agrees:

Pat Robertson discussed the banking crisis and glowingly spoke about how Iceland jailed many of the bankers who devastated their nation’s economy by taking out fraudulent loans. Robertson hailed the Nordic nation for its actions and said that Americans should deal with the financial crisis in the same way.

***

“They are putting people in jail.  Prime ministers are being indicted. They are going after banks. The people said the banks are ripping us off. We don’t like what they did, and they brought our country to ruin. Suddenly, Iceland is turning around and they look like a big success story!”

***

“We could start putting all of those bankers in jail. There was not one banker prosecuted and so many people were lying, and so-called “no-doc loans” and liars’ loans, and none of them have been held accountable.

***

Iceland is leading the way and their GDP is growing, and all of a sudden, they were in a terrible mess, terrible mess, and look what is happening!”

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125 comments

  1. gregg

    The most disturbing result of the poll is the high level of trust in the military — even after the debacles in Iran and Afghanistan.

    Are people hoping for a military coup to fix the economy and con-gress?

    1. chris

      That’s what stands out for me as well… not so much in terms of surprise but as more proof that our entire culture has been militarized to such an extent that our wars of choice and aggression – by any measure it is state sponsored terror – are smugly embraced by a majority who believe in the myth of our exceptionalism and Pax Americana.

      Praise the lord and pass the ammunition.

      We are so screwed…

      1. Ramon Creager

        Interesting you should say “Praise the Lord and pass…” because that’s the other one that surprised me: Trust in Churches and Religion actually went *up*, go figure. Granted in times of chaos and uncertainty people will turn to religion for stability. But what have churches and religion actually done to deserve this uptick in trust? Especially given that the Catholic Church is protecting pedophiles and, along with fundamentalist Protestants, attacking women’s rights. And, virtually without exception, most mainstream churches are not providing *any* leadership in attacking the epidemics of greed and corruption, endless war, torture, etc. that are blighting our lives, preferring instead to focus on women’s vaginas.

    2. LeonovaBalletRusse

      The “Southern/Western Strategy” included lavish dispensation of Military Industrial pork. North Carolina had Research Triangle Park before it had Amway and Bank of America for “might and right” to obedient shills of the 1%.

      1. Nalu Girl

        I think that people are thinking more about individual soldiers rather than the ” military-industrial complex” when they responded to that question. They think of their friends, neighbors, etc. not the decison makers. People who were put in harms way by “Mission Acomplished” Bush.

        1. JurisV

          Nalu Girl — I concur wholeheartedly. In my world most people support the troops, but understand that the “complex” of politicians, chickenhawks, and twits of the 1% really suck.

      1. Flying Kiwi

        Concur. The misuse of the military is blamed on the politicians and civilian military-industrial complex. I suggest a similar allowance is given to the police despite its actions vs OWS etc.

    3. nonclassical

      …trust in military…

      Americans are unaware Raytheon launches all missels…in other words, corporate privatization of WAR…

      When coupled with over 50% of “intelligence gathering” privatized, guess where this leads-”oh look…we need to deploy our military over there…”

      privatization is not in the interest of American taxpayers, children, or their children…water-electricity infrastructure, provided by taxes-taxpayers, are next…beware IMF intervention…

    4. Enrico Malatesta

      The DOD’s $5BB recruitment budget is the front for a pervasive cross-platform pro-military PR campaign. Isn’t a US military coup inevitable?

    5. Dan Kervick

      That doesn’t disturb me. People don’t blame the military for fighting bad wars. The military just fights the wars they are sent to fight by political leaders. The presidency and congress have seen massive erosions of trust from already low levels.

      What disturbs me is the catastrophically low trust of the congress. How can a country maintain a democracy if it despises its legislature so thoroughly. I’m worried that this country is poised for an authoritarian takeover by some charismatic general.

      1. alex

        Well put. One thing we’ve maintained in this country is civilian control of the military. If we get into stupid wars, blame the civilian leadership.

    6. different clue

      The debacle in Afghanistan, at least, was manufactured on purpose by the BushCo Administration. I don’t know enough to know why they diddit, everyone has their own theory as to why they diddit. But they ( BushCo) deliberately on purpose deprived the marines around Tora Bora of crucial support and resources so as to ensure bin Laden’s successful escape. (In silent gratitude for a job well done?) They (BushCo) deliberately short-circuited the Loya Jirga process and prevented Zahir Shah from returning to lead a caretaker government of unity while the Afghan peoples worked out whatever government would come next. BushCo deliberately on purpose rigged, forced, and manipulated the outcome to make Karzai president. I wouldn’t blame that on “the military”.

  2. F. Beard

    Our money system is rooted in fraud (“Your deposit is available on demand even though we lent it out”) and based on usury for stolen purchasing power. It is also UNSTABLE despite central banks. It is also DEADLY having killed 50-86 million in WWII alone.

    The real question is why anyone could ever trust such a crooked system? Because it kinda, sorta works well for a while? Because TINA?

    Well there is an alternative – ethical money creation.

    1. redleg

      That’s a good start, but with that must come relatively equal application of the law. Without a legal system that the people can trust, justice will be administered outside the legal system by pitchfork and torch.

  3. econ

    Excellent post by Washington. Kudos for content and variety of sources.
    There are several impediments to getting to the establishment of trust in USA. Democratic government must be established.
    Corporate donations to politicians and judges to be illegal in any manner for any reason. The inequality gap over the last forty years be systematically lessened and approved by Congress during each of the next 6 terms. Economically Main Street benefit from the real and productive economy to the cost of less financialization of the economy by Wall St.
    Note how all those above could have and would have been done over the last 20 years if all political parties and power was not corrupted by MONEY.

  4. Whoa!

    Criminal Justice +1? Whoa! We lock up more people than any other in the world, the drug war alone destroys lives, and banks are all over that profit incentive. This point alone is a searing indictment of an angrier, retributive public.
    Prisons exploded starting in the Reagan era, and not because people were suddenly committing more crimes. Stunning and depressing and a poor showing from whomever was polled.

    1. different clue

      Those were not upper class criminals locked up for upper class crimes. Those are lower class criminals locked up for lower class crimes. And many of them are locked up for infractions of artificial laws artificially engineered to be able to convict people of breaking. The so-called “laws” against so-called “illegal drugs” are a case in point. The desire for cultural retribution against our class equals who fail to validate our precious cultural standards (by, for example, using drugs that certain drughaters disapprove of) harms the whole circle by running around it. But retribution directed up the social pyramid to the social class enemies squatting at the point would relieve the weight of oppression here at the bottom courses of social masonry holding up the pyramid. Retribution upward against convictable criminals is a good thing; or would be . . . if we could could achieve it.

      1. young idiot

        ‘Those are lower class criminals locked up for lower class crimes.” Locked up for the sake of being locked up – for whatever so-called crime. you do do have a clue do you

      2. Synopticist

        MF global was the real shocker for me. The rich screwing the poor and the middle is one thing, when the very rich get away with shafting the merelly quite rich, then society has reached a pre-revolutionary, crisis phase.

  5. briansays

    like obama said to the russians about abms in europe
    in my second term
    you have give me some flexibility
    trust me

    to go after the bansters campaign contributions

  6. Procopius

    Another book which points this out (I haven’t read Graeber yet, but I suppose he agrees) is called “Nonzero: The Logic of Human Destiny,” by Robert Wright. He’s more interested in pointing out that over the millenia humans have prospered because they have developed ways for more and more people to participate in non-zero-sum games. Transactions in which both parties can win, rather than one winning at the other’s expense. It’s a fascinating collection of anthropological research, but basically he says it’s by developing trustworthy institutions (enforcement of contracts and punishment of fraud).

  7. LeonovaBalletRusse

    Let’s cut to the chase in America: “Who is above the Law?” Without “equal protection under the Law,” ALL else fails.

    Make William K. Black the Attorney General, or better yet, the President of the United States, in 2012 and we will see how quickly “trust” returns. The rest is important, but blowing the lid off fraud and and “making the grifters pay” is Job 1. Passing “Glass-Steagall on steroids” is Job 2. William K. Black knows what to do to restore trust in our “institutions” without delay.

    What are we waiting for? Traitors OUT. Black IN for a clean sweep. This is the remedy for “lack of trust” in our “institutions.”

    1. LeonovaBalletRusse

      What if all M.C.s, en masse, sued lobbyists and others of the 1% for extortion, and “obstruction of justice” through interfering with their proper duties in the Second Branch, subverting their authority of Office according to their Oath of Office: “to preserve, protect, and defend the Constitution of the United States” and to serve the population of their districts legitimately. Are they really “slaves” in Office of Despots in control of government, as Durbin claimed? Are they slaves also of the 1% Puppet President in whatever Administration? Must they remain slaves, or can they be heroes and save their skins thereby?

      Wouldn’t that be a surprise to the students of Clausewitz and Bismark?

      1. chitown2020

        Bill Black has their number. So does Eliot Spitzer. But, …no one can go anf fix this alone. We need indivisibility…

    2. Damian

      possession (of the federal government) is nine-tenths of the Law !

      there is – only – state sanctioned Fraud as the last tool in the bag – there are no rules, regulations or laws for the Banks – they own the politicians, judges and the regulators –

      while the compensation produced incentives for Fraud, it was the complete recognition there would be no criminal charges or sanctions for ANYONE that fostered the complete systemic collapse

      bankers can do anything they want – the latest agreement for $25 billion is the last straw – we now have no property rights whatsoever

      the banks are allowed to commit fraud and those “not” bankers are held to some standards

      we need “equal” treatment under the law – we all need to become……. Pirates – who have been sanctioned by the state to raid the equivalent of spanish galleons for the crown as buccaneers

      the state gets 30% and we all move to a level playing field !

      Haraaaah!

  8. Crazy Horse

    Greg, you hit the nail squarely on the head. The military is the biggest untouchable cost item in the national budget. It siphons funds away from expenditures that could actually benefit the people like infrastructure, free education, or national health care. It is the most inefficient enterprise in society, making dying industries like automobile production look like the product of genius. It is the employer of last resort for the lower classes, and teaches all its recruits that waste and stupidity are the way the world works. The primary beneficiaries are corrupt criminal enterprises like Halliburton and cost plus manufacturers of weapons of mass destruction.

    If the military’s job is to win the wars that the government chooses to fight it is a gross failure, having lost every conflict of any significance since WWII. Vietnam, Iraq, Afghanistan, the invasion of Cuba– the only conflicts you could remotely call victories are against a handful of Cuban troops in Granada or over the division of drug profits when we ousted Noriega from Panama.

    The fact that this failed institution is the only one trusted by the vast majority of people clearly points out the likely political direction of the future as the country drifts leaderless toward a complete breakdown in the rule of law. History shows that when you have an uneducated population that is unable to distinguish between the process of scientific inquiry and religious nonsense or propaganda created by their “betters” they always turn to a leader with a uniform on his back.

    1. Crazy Horse

      The above post is a recapitulation of a discussion I had with a Guantanamo trained retired naval commander. I chose to define the effectiveness of the military-industrial system on its own terms— victory in conflict– for the purposes of that argument, but that is a short sighted perspective.

      The persistence and ever more terrible means of fighting wars is a measure of the failure of the human species. If there were a god up in the sky to judge us, it would stand alongside our creation of the most massive species extinction event since the demise of the dinosaurs and our driving the planet toward runaway climate change as reasons why we may not be fit to inhabit this planet.

    2. Nalu Girl

      As I said above, I think tthat in their responses people were thinking more of friends and over ones who were serving in the military, rather than the top echelons an decision makers.

    3. rotter

      Its sad, and sickening that “The Millitary” still has the “trust” of 80%.We are trained to FEEL that way about “the millitary”.There are other varibles.Id like to see a study of Americans attitudes toward the American millitary – what they are exactly, who holds them and why.I think “the millitary” is the last common-ground institution in American Culture. Its the last bit of social glue holding us together as a polity (beside violent force). Partly by thier design,partly by default.

  9. Capo Regime

    The corruption is everywhere. At the risk of offending some, its not surprising that things are the way they are. The canary in the coal mine for me (and many others) has been family court. With 50% of marriages ending in divorce and 30% or more of children living in single parent homes you would think they would make things easy. Nope. Guy loses a job, can;t get child support lowered unless he can come up with 2k for a lawyer and event still may not get to court for months. Meanwhile he becomes a felon. The cases of this are legion and just like banks, congress and big pharma it strains credulity that there are defenders for things that have either evolved or devolved into plain ol rackets…….We no longer have institutions we have rackets and wealth consolidating organizations…..

    1. F. Beard

      “A fish rots from the head down.” Don’t even think of blaming the victims.

      The banks are responsible and have been since 1913 at the latest in the US.

    2. Eddie Munster

      Precisely why this country is criminalizing poverty, many authors write about this. There’s been continual discussion of debtors prisons too, including situations where they exist, with people held for many months unable to pay relatively smaller fines.

  10. Restoring Faith

    A federal judge in Manhattan said he would not dismiss a lawsuit against Swiss bank UBS filed by the federal regulator for two giant U.S. mortgage brokers.

    The Federal Housing Finance Agency, which oversees the Federal Home Loan Mortgage Corp., known as Freddie Mac, and the Federal National Mortgage Association, known as Fannie Mae, has filed suit against 18 banks.

    The FHFA contends the banks deceptively sold Freddie Mac and Fannie Mae $200 billion of bundled, mortgage-backed securities during the housing boom, The Wall Street Journal reported Saturday.

    1. chitown2020

      The deception is Fannie and Freddie were backing bad quality loans with the peoples money. Then they were buying back the bad quality loans THEY approved for pennies on the dollar. 1 in 5 of the loans they approved were liars loans. That means they were loans that were set up to fail for the buyer, though the buyer had no knowledge of this. The GSE ‘s were half public owned by the American people and half privately owned by the FED. So the American people funded the GSE ‘s crap loans and the FED bought back the crap loans the GSE ‘s approved for pennies on the dollar. BLOOMBERG NEWS reported the IMF is the biggest bondholder/shareholder in FANNIE MAE. So, there you have our set up to fail so that our foreign enemies can steal our National Sovereignty WITH OUR MONEY……THEY LENT US NO MONEY….THE TREASURY HANDED OUT THE PEOPLES MONEY TO THE FED LIKE CANDY. THEN THE FED COLLECTED INTEREST ON ALL OF THOSE MORTGAGES
      ON MONEY THEY NEVER LENT…USURY FRAUD ON A MASSIVE SCALE…THEY HELD ONTO THE MORTGAGES AND OVERSOLD INTERESTS IN OUR NOTES TO INVESTORS…..OFF OF MONEY THEY NEVER LENT AND COLLATERAL THEY NEVER HELD. THEN THEY GAMBLED ON THOSE. BUNDLED MORTGAGES THEY KNEW WOULD TANK AND THEY INSURED. THEMSELVES ON THE RISK EXPONENTIONALLY. WE WERE SCAMMED …DONT SURRENDER YOUR PROPERTY TO THESE THIEVES…WHO NEVER LENT US A DIME. THEY HIJACKED AND STOLE EVERYTHING ELSE WITH. THIS CREDIT SCAM….OUR GOLD….OUR BIRTH CERTICATES….OUR.
      WEALTH….OUR LAND….AND NOW THEY ARE COMING FOR OUR HOMES…… AND BUSINESSES AND OUR NATIONAL SOVEREIGNTY AND. THEY NEVER LENT US A DIME….THEY ARE NO MORE THAN GLOBAL SCAMMERS …..USING THE GUISE OF MONEY LENDING TO ROB US OF EVERYTHING WITH OUR OWN WEALTH….!

      1. Ivent

        Ivent, you start off rational, then ALL CAPS AND TOTAL INCOHERENCE. That’s a time honored technique, in case anyone is paying attention.

        1. chitown2020

          Please read the excellent link posted above…..and please ignore the stupid trolls comment below. This troll is just trying to hide the truth by attacking me. These are perilous times.

          1. chitown2020

            After reading the article to the link posted above, there could be more like me. That is what finding out the truth does…it makes you pissed.

          2. Troll

            ROTHSCHILDS, NWO AND HAARP FOR BUILDING 7 PLEASE DONT INGORE THE TRUTH! THERE ARE MILLIONS WE ARE LEGION, BOO NWO!

          3. chitown2020

            Here’s to the truth..! It will set us free. We cannot allow these crooks to be allowed to use fake money lending and the color of law to overthrow us and steal our Country…..!

    1. F. Beard

      That must smart!

      It could be The End but all we need is some easily created fiat and some reform to put it off for a while.

      1. Defiant

        Lets see if I get this.

        Print currency to pay off all debt, although the system will very likely collapse in this tightrope balancing act. The system created will not be much better than today’s as the counterfeit goes from one hand to another.

        If you see currency as simply a tool, a measurement, issuing new currency and removing old IOUs has no positive effect. There is actually negative as an effort is involved. I can assure you however that an entity pending to gain voters from control of the currency will do so in a heartbeat if it ever gained the power.

        1. Susan the other

          But when you see that money has no intrinsic value, it is merely a convenience, and you further realize that only the things you achieve by using money – i.e. social good – have any value, then it completely changes the argument. We need to stop being bean counters and start being achievers. No easy task for us monkeys.

          1. Defiant

            Yes we need to be productive. But let’s be honest, we have 3 cows and we want 6. That is the motivation. Even God would not have an issue with this as he asked us to feed our families with the sweat of our foreheads. More cows means security for our families. Put the cows in currency and its the same.

            Taking cows from one farmer because the other has less is criminal. The motivation of having more cows benefits society as a whole. So greed is good so long as the government does not select who gives and who receives.

  11. SophieCT

    Seven in 10 Americans believe that the country is on the wrong track; eight in 10 are dissatisfied with the way the nation is being governed. Only 23 percent have confidence in banks, and just 19 percent have confidence in big business.

    And yet, over 80% of voters will vote for either the Democrat or the Republican because running from one side to the other of the Titanic makes so much sense. Because voting 3rd party is throwing your vote away, as if voting for one of these clowns is spending it wisely.

    1. TK421

      As President Obama’s hardcore supporters have spent years telling me there is nothing a president can do to change things, I feel utterly free to not vote for him this fall and go third party instead.

      1. Sufferin' Succotash

        Even the “Supreme Court! Supreme Court!” mantra is getting a bit tiresome. Fact is, we already have a right-wing majority of Supremes and four more years of Obamney isn’t likely to change that.

    2. rotter

      the electoral system is incurably sick. if voting d or r is like running from one side of the sinking ship to the other,then 3d party runs are like climbing the mast. the ship will continue to sink..it dosent matter who has the captains hat on.

    1. tawal

      When I first heard that, I thought he meant they better toe the line going forward. But now I know that he meant that he will protect them, so carry on.

  12. Defiant

    There is no end of the world coming, but like what we’ve seen through history, we are at another step in the grand staircase of humanity. Although nature will force us to take that step, there are those holding on to the past. After all, it is what they have known for so long and what has gotten them their riches. Who will want to let that go.

    Obama, Krugman, Bernanke, Greenspan, Geithner, corrupt CEOs, unions, Kenesyans to name a few. There is a danger that a corrupt, liar Communist president, like Obama, will promise you everything for free, if you forego your freedom. How’s that for ironic. This is what your movement, OWS, dangerous. Most of of you are willing to give up freedom for free college tuition that the government will have to charge via tax or devaluation anyway.

    I’m hopeful you will wake up before the roadblocks are in place.

    1. chitown2020

      We already fund everything the do. Everythings a scam. The reason why we are in stage 4 cancer of socialism is they just never told us that we were funding and paying for our own robbery.

      1. chitown2020

        They make us pay for our land that we already own. Then we pay property tax rent on our land forever….That is exactly what they are trying to do with the homes…impose a world tax on our homes and businesses as a fraudulent fix for their mortgage fraud to pay them money back they never lent us in the first place. We have been duped by them out of almost everything. If the healthcare plan gets instituted, the gold backed dollar and the world tax….KISS FREEDOM GOODBYE….THEN IT WILL BE THE MICROCHIP INDENTURED SERVITUDE TO THEIR DEBT FOREVER..

        1. Defiant

          Chitown,

          I agree that there should be concern over our institutions, but I refuse to believe that America will sit back and let the corrupt go on a killing spree.

          There are a few things that fail to convince me of the Alex Jones scenarios. I ask, do these people gain from making everyone slave? If what you state comes to pass, there will be no economy left no-one to steal from, nobody to tax, no stock market and I believe that even a government would have difficulty standing.

          Although the level of lack of focus and lack of concern is definitely there withe OWS thinking that freedom is an entitlement rather than a constant struggle. I do believe that God will find the way into OWS and enlighten them and refocus the group to where it should have been focused since the beginning, Wash DC and with pitch forks.

          I also highly doubt that our brothers and sisters in the army and police will shoot at us. Those waiting will be in for a surprise.

          In a few years, we will be much better than we are today.

          1. JTFaraday

            “Although the level of lack of focus and lack of concern is definitely there withe OWS thinking that freedom is an entitlement rather than a constant struggle.”

            This is a very peculiar thing to say about people who are voluntarily throwing themselves into the maw of the police state in order to– as the reputedly Ghandian peaceful protest theory would have it– expose its true nature to people like you in the hopes that you’ll wake up tomorrow a little less ignorant.

            How is it that these people think “freedom is an ‘entitlement’”?

          2. maryevelyn

            Pitchforks. That’s pathetic. You’re going to need high powered weapons like the ones the ATF’s hired straw buyers bought by the 100s and walked into Mexico to sell to the drug cartels. Those guns killed two American Border Patrolmen and about 300 Mexicans. You are also going to need to be well organized. But it won’t work. A much more likely scenerio is the break up of the continental US into various blocks. This will all happen after the dollar collapses, which won’t happen until Americans lose all trust in the dollar as currency, which won’t happen until we experience hyperinflation which is on the horizon.

          3. Defiant

            I agree that they are making an effort but their leadership is selling them down the river. Just like the tea party. The hop co-opted the tea party and the dens are doing the same with OWS.Its not about the masses, its about keeping you out of focus. They are destroying the country in DC while we gather in NYC.

            Bringing weapons is sure to destroy any movement as that gives them the right to shoot. Simply surrounding the white house and Congress until they get their shit together will do. Lets not forget we put them there and we can take them off…

          4. chitown2020

            Defiant…It is the fixes for their fraud that we have to be careful of. The World Tax would be tyranny. The microchip IS hidden in the healthcare bill. The Vatican Gold backed dollar as well. We need our own currency..U.S. BANK NOTES backed by our own Natural Resource Revenues and all of the unsustainable debt must be forgiven. I am not willing to give these Globalist fraudsters another ounce of my freedom. I do believe that our National Sovereignty will win.

        2. chitown2020

          Rotter…they want to impose a World Tax. It will be like the property tax and we will pay it as a fraudulent fix for all of the mortgage fraud their perps committed. This means you will never own your home or business. If you have ever heard of Max Keiser, he confirmed that this is their plan. It is yet another sneaky way for them to rob us of our National Sovereignty.

      2. Synopticist

        “Stage 4 of Socialism”. For F*cks sake.
        You live in the most rightwing country in the world.

        Its wierd how in the US the rightwing wackjobs can’t even recognise their own society for what it is, a laissez faire free for all dominated by the super-rich.

  13. Timothy Gawne

    Interesting.

    But, as so often, it can be difficult to separate out cause and effect.

    In third world countries, where explosive population growth has resulted in widespread misery, and thus corruption because when the only way to keep your family from starving is to cheat, well, trust is low. But perhaps that is just a symptom? If we have a rich country, where people don’t breed like rabbits and the rich don’t import massive numbers of foreign nationals, then everyone can get by without cheating, and trust surely must follow.

    I propose that a failure of trust is a secondary effect of a flooded labor market, where too many people and not enough jobs means that people are forced into cheating to survive. I don’t blame the people. I blame those vile neoliberal economists who set these circumstances up in the first place.

    1. Defiant

      Unfortunately we all have to live with this and we all pay dearly. The cheating CEOs, unions and free loaders feed from the same host. The host has little blood left. I can see the host waking up soon and smacking off all the leeches off its body. Don’t think this will be pretty.

  14. different clue

    Anti-crime action against a crime-based ruling class would be an ultimate trust-restorer. In the meantime, can we find little zones of proximal trust to funnel our economic activity into and channel our economic activity through?
    I continue to trust my credit union not to defraud me of my money deposited therein. I don’t know that they can protect my money or anyone else’s money against regionwide fraud from above, but I trust them not to collaborate with it. I will continue to do bussiness, mostly in cash, with local stores and merchants which have given me goods and/or services in exchange for money in the past. If enough other people do the same, little lifeboat-island trust economies may be maintained where existed and possibly even created where presently gone. These little trustworthy lifeboat survival-economic fortresses could become our Caves of Yennan for the time being.

    Bigger Institutions? Of all the thousands of pieces of mail the Postal Service has sent to me or from me over the past thirty years I only remember 3 or so being damaged and a few lost. That near-perfect record inspires enough trust on my part that I will continue using the USPS for mailing all my bills and everything else. And I note that the Corporate BizNazi fascist conspirators work to sow distrust in the Postal System so as to destroy a trustworthy social framework around which other things could be maintained or built.

    Is there a way for people who think they “own” their houses to see if every aspect of ownership of those houses is physically recorded in a physical county courthouse location? If not, is there a way to force the “proof of ownership” of that house back to earth in a physical office in a physical courthouse? If there is, then those people who can prove they own their houses can invest in the trustworthy fact that the sun rises and sets and water sometimes falls from the sky . . . and turn their yards into super high-intensity gardens. That would give them a trustworthy food source.

    So islands and fortresses of trustworthiness can be built here and there in the shadow of a crime-based goverbussiness elite.

    1. Defiant

      This is the dangerous thinking Obozo is pushing for. You are asking for fairness but asking for unfairness to get there. What do we get? A hitler that’s what.

      Let me simplify – the government makes the laws, the companies and people follow them. If you and OWS are so concerned about thisrcountry you’d be in DC not in NYC.

      In the mean time we don’t give 2 shits about our freedom, no, we want free tuition and guaranteed jobs. Can you see how they are slowly conning the masses.

    2. different clue

      Defiant has filed some sort of stream-of-consciousness blather-spew in such a way as to appear to be a reply to my comment even though I don’t see it bearing any relation to anything I wrote.

      If someone wants to write an actual reply to the comment I actually wrote, that would be lovely. Or if not, then not.

      1. Thorstein

        Defiant appears to trust in no one. I have some empathy for people who are so lonely. Much of America has been uprooted. We no longer live in the same communities as our extended family. If we can’t even find trust in a local church where everybody believes in the same imaginary god, where can we turn? Even our best friends on TV don’t talk back to us. We are most of us displaced people in “our own” country. Perhaps that is why Defiant chose to reply to your small island of hope with such unfocused and cynical resentment.

      2. tawal

        One of the reasons the government wants to get rid of the postal system is that it is much harder to open physical mail than email.
        Another reason is they don’t want have to deliver those cheap flyers from local businesses because it isn’t cost effective.
        This reason falls in line with supporting big business; give all consumer delivery business to FDX and UPS.
        The freedom of using those two is that you can send most anything without immediate surveillance.
        But as we experience, that freedom is costly.
        But it is the only way to send those pitchforks and torches.

  15. Wyndtunnel

    America is so off the charts in trouble that only a domestic conflagration of Civil War proportions will
    ever set it right, or destroy it for GOOD.

    1. different clue

      Perhaps we will be lucky enough to escape with just a Soviet Union style collapse and delamination into separate countries. Some of those countries may settle for being semi-advanced Hungaries and Estonias. Others may aspire to the transcendant backwardness achieved by some of the Central Asian Ickystans or the glorious corruption of Russia and Ukraine. I hope I find myself in one of the quiet little “new Estonias or Hungaries”.

  16. kingbadger

    Lack of demand in the system is the issue in terms of the weak economy. Saying that “lack of trust” is killing the economy is no different to saying that “lack of confidence in the government balance sheet” is the problem preventing strong economic recovery. Do we need a Trust Fairy to magically appear and wave its wand to bring back Trust, then suddenly the economy will rebound? Trust in Congress or banks or the military is irrelevant in terms of economy.

    “more and more Americans are keeping valuables at home because they have lost trust in banks.”

    So what? If their money was sitting in the bank it would still be doing nothing. People spend more because they feel their economic situation is getting better. Higher real median wages and more demand for labour would help fix that. Keeping money at home instead of in the bank ain’t gonna change the economy.

    This post has a sky-is-falling gold-bug undertone to it. Gah. Demand, demand, demand is what matters.

    1. JTFaraday

      So, what is “demand” in a post-industrial economy?

      I am still waiting for that study from the academic central planning would-be policy entrepreneurs who demand demand but who never manage to do anything beyond bang the trays on their high-chairs with their plastic baby forks.

      I’ll take this demand seriously when I see some work.

    2. Defiant

      Higher salaries do nothing to recover the economy if we keep the current fiat system. In the grand scheme, it takes so much debt to grow the economy that a collapse is inevitable down the road.

      Companies and individuals should have had a nest egg for tough times if the fed wasn’t too busy inflation targeting. Prices go up while wages don’t no e – why give a raise higher than the inflation target when people can get another credit card to pay for stuff they want?

      End the fed, let free markets clear prices, re-institute the gold standard to prevent looting from government officials.

      1. F. Beard

        End the fed, let free markets clear prices, re-institute the gold standard to prevent looting from government officials. Defiant

        Yea let’s replace government counterfeiting of private money with private counterfeiting of government money! And let’s replace theft by inflation with theft by deflation!

        Oh and let’s rape the environment for an arbitrary shiny metal so we can rebury it in bank vaults.

        Your thinking is stale, obsolete, unjust, primitive and fascist.

        You claim to believe in God? Then where are your calls for just restitution for the victims of the counterfeiting cartel, the banks? And even if the banks were just honest lenders of existing money (which they aren’t), periodic debt forgiveness is commanded in Deuteronomy 15 and Leviticus 25.

        And the leading lights of your heroes, the Austrians, such as Mises and Rothbard, were agnostic at most. Want to share their spiritual destiny, do you?

        1. Defiant

          Have you been keeping tap of who is being corrupt and who is not. How do you know that a person with 50 million didn’t dwarves it? How do you know that a destitute was once 50 million rich and ended that way. Only one being knows, God. Not you, not me. So this idea that someone has to pay back another is so insane that I can’t believe you are asking for clarity.

          On the other hand a free market system will not bail out a bank, they would fail. A free market system will not get government subsidies, success will triumph and failure will fail. This will level the plainfield going forward.

          Gold will do a couple of things. If a government decides to deficit spend, it will ha have to pledge the gold or issue, devalue, currency or raise taxes. In other words, these “wants” will immediately bite. If the people want war ant it means 50% tax increase, or similar devaluation, than they see the effect immediately.

          You need to let this entitlement notion go. Teresa is no way yo take back what has been syltolen.

          1. F. Beard

            On the other hand a free market system will not bail out a bank, they would fail. Defiant

            There is nothing “free market” about requiring that government use gold for government money. Instead, that is government privilege for gold owners, gold miners, gold lenders and those who benefit from artificial money scarcity including the banks and hoarders.

            So which is it? Are you for free markets or for a gold standard? You can’t be both.

          2. Defiant

            Beard,

            Hoarders? Are you serious?

            I’m telling you what the free market will likely chose.. it should not be my choice nor your choice.

            Let’s see how long these hoarders will benefit if they can’t save for a rainy day. What you cannot have is a a government picking and and chiding who can steal, who gets free goodies and who gets cracked.

            The notion that gold is unfair is ridiculous.

          3. F. Beard

            I’m telling you what the free market will likely chose.. Defiant

            There is no ethical choice for government money other than inexpensive fiat. Anything else is a waste, government privilege for private interests and a restriction on a government’s inherent right to issue government money.

            As for private moneys (for private debts only) gold MIGHT be a contender for a while but I reckon common stock would win out in the end. Why? Because common stock money could be backed by gold if desired but more likely would be backed by performing assets instead of a metal gathering dust in a vault or wasted in coins.

          4. F. Beard

            The notion that gold is unfair is ridiculous. Defiant

            Gold is not only unfair, it is ridiculous as a modern money form too.

          5. Defiant

            Gold is unfair why?

            I don’t own an ounze and cannot see your logic. We spend hours defining currency as a unit of measurement, yet you still think that more of the denomerator will help us. One chicken is one and only one chicken whether whole or cut up up in a million pieces.

            Can you elaborate on how government printing vs cartel printing would help?

          6. F. Beard

            Can you elaborate on how government printing vs cartel printing would help? Defiant

            Deficit spending by a monetary sovereign introduces money into an economy that does not NECESSARILY have to be repaid. The counterfeiting cartel REQUIRES repayment plus further borrowing to pay the interest!

          7. Defiant

            I think I understand. So counterfeiting is ok so long as its done for the people.

            Beard, if you have 100 cows and I have 2, am I entitled to 49 of your cows?

            Do you think God would as that the person with 100 cows willingly help the one with 2 or do you think he would rip the the cows and redistribute?

          8. Defiant

            Conviniently ignoring the truth. A Cuban style take over does not work. The people in charge know it full well, but why would they care if they will get what they want.

            There is no need to redistribute, the thieves will quickly lose their fortunes if they don’t have the hands of the government helping them. We need less, not more government.

            Wrong is wrong whether its for a poor or rich.

          9. F. Beard

            There is no need to redistribute, Defiant

            Where have I ever said anything about redistribution? Or Cuba?

            Your dishonest arguing style should get you banned. Why you are still tolerated here is a mystery unless it is to demonstrate the stupidity, heartlessness and cruelty of the Austrians.

  17. Ep3

    But yves, I don’t think the world has enough natural resources to support all 7 billion of us having great middle class lifestyles.

    1. Old Soul

      I think that it does, Ep3. The concept of scarcity is based on an outmoded economic system.

  18. Don Levit

    What does this lack of trust in instititions have to do with the “full faith and credit of the U.S. Government?”
    I believe the faith barometer is not evenb close to full.
    How many more people are needed, before there is a concrete side effect of this loss of faith in institutions?
    Or, is the dollar the god that cannot be defeated?
    Don Levit

  19. Defiant

    Don,

    Focusing on the US might throw you off. We are in a global fiat system and every single country has the same issue.

    The collapse of the system should be beneficial to the lone reserve currency of the work. I also believe that clashes between the masses and the rich, which may mean war in countries like China, will push the value of the greenback higher. Nobody is expecting this and everyone is expecting collapse.

  20. Susan the other

    This must be why they decided to print “In God We Trust” on our dollar back in the 50s. We were already bankrupt, or going there fast, in the first decade after WW2. When we were assumed to be a powerhouse of wealth. We could have added the fine print that we trust in God because we need something to trust in; clearly we do not trust in our presidency, congress or banks. And now thanks to the Obama administration we no longer trust in the law.

    1. Defiant

      This not simply Oboso’s fault. The entire government is corrupt and useless. We ourselves have asked for this. We vote for the one that’s spends more, we rather watch porn and American idol than focus on the issues of importance. We rather talk about entitlements than freedom.

      1. F. Beard

        Pious nonsense.

        The counterfeiting cartel is responsible for the moral rot in the US.

        “A fish rots from the head down”, don’t you know?

        1. Defiant

          Beard,

          If the banks commit counterfeit without the law knowing, yes you are right.

          Who created the fed?
          Who created the 100s of government programs that promote counterfeiting?
          who bailed out the same banks you speak of?
          Who is responsible for upholding the law, banks or the government?

          Again beard, there are good children and bad children, the principle is there to uphold the law. This is how your God would do it – yes?

          1. F. Beard

            Government is a given but what is not a given is government for the benefit of counterfeiters.

          2. Defiant

            Correct.

            So do you go after every thief or do you fix the government to ensure the law is upheld. Going after a few thieves, banks, will not solve the issue when there are so many other potential thieves. And believe me, thieves are not only in banks.

            The government is there for us and should represent us. We need to show them we are unhappy, and want that they uphold the law or we will not sit idle.

          3. F. Beard

            or do you fix the government to ensure the law is upheld. Defiant

            You mean the laws that create and enforce a money monopoly?

            Those need to be repealed.

          4. Defiant

            Exactly.

            Add the 100s of government programs like HUD, Sallie, Freddie, healthcare, autos, unions, etc and we are on the right track.

            End the fed and our economy recovers.

          5. F. Beard

            I rather think we should eliminate the laws that favor the rich first since those are what CAUSED the need for laws that provide for the poor.

            Or do you want to have the blood of the innocent poor on your hands?

          6. Defiant

            No need. The poor are the ones paying now. Take the bill from them and they will be better off.

          7. F. Beard

            Add the 100s of government programs like HUD, Sallie, Freddie, healthcare, autos, unions, etc and we are on the right track. Defiant

            So you want to CUT-OFF aid to the poor and you think that is HELPING them?

            Stupid much?

          8. F. Beard

            If you wanted to end poverty programs and just give the poor money instead that would be an improvement, imo, but you just want to give them NOTHING?! Turn them out into the streets to starve?!

          9. Defiant

            That is not what I am saying. Let the people keep what they want to keep. Personally, I am all for helping the poor. But many of Therese things people see backwards. I’m in for a system that benefits society as a whole, not a few.

            Limit food stamps to rice, beans, milk, veggies, et. This benefits us all.

          10. chitown2020

            Defiant, you don’t get much more food than that on stamps nowadays. Don’t you think that it is wrong that millions of people are struggling because of what the FED banks and the crooked politicians have done to this economy? They sure are not feeling the pain from what they have caused. I am sorry but what is happening to the American people is a travesty. These crooks should be forced to pay the people back what they stole. I am disgusted with these corrupt politicians and the arrogance of mankind towards those who are suffering through no fault of their own. I believe there will be a day of reckoning for those people.

  21. Gil Gamesh

    Our elites must be mighty pleased with these polling results.

    What disturbs is that Americans still “trust” the military, the police, the criminal justice system. When the shit hits the fan, will our most authoritarian, coercive institutions take over the late constitutional republic, just until order is restored, with the support and approval of the majority of “freedom-loving” Americans? Has “security” become the only value (with getting and spending a close second) we all subscribe to?

    1. Defiant

      I don’t think that it will be that easy. Doing such will for sure end any remaining trust. Marshall law is not hard to implement, but there is no going back and that means that the few in power will have to trust many in the arm forces and police. To me, that proposition looks much bleaker than today’s situation. I don’t see this happening anytime soon.

    2. Leverage

      Look how many TV shows there are on topics of law, justice, police, military, and ‘state duties’ in general portrayed in positive ways etc.

      Do you think this is casual? This is a general propaganda effort that has been going on forever! You need “to build trust in the system”, and portraying idealistic images of the core coercive institutions of society is the way you do it.

      So when everything else fails, there is always raw power: the power of violence and threatening to sustain the status quo. And bankers, crony capitalists and their muppets may have a long life!

      Welcome to the neofeudal model.

  22. freedomny

    Unfortunately, the only thing that is “trickling down” in our country is corruption. When you have the most elite in our country behave like hoodlums, with no accountability, the message to everyone else is pretty clear. Get what you can… game, lie and think only about yourself. This is a recipe for disaster and the break up of a society’s moral fabric.

    1. freedomny

      OMG! Right after I posted, I received a call from the DNC, or some other democractic committee, asking if I wanted to donate $100 to them. Wow…bad timing. “###” from me. Like, I’m going to give money to any political party that hasn’t managed to prosecute those for the biggest crime against society. And yet they have the nerve to call me…for MY money? “REALLY? I MEAN…..”REALLY”.

      OMMM….OMMMM

      1. C

        I hope you told them that when you refused. In my experience the one time politicians or their parties actually take note of what people say about them is when we refuse to give them money.

  23. reason

    Church and Religion up! (But note still less than the police and the military.) Americans are nuts.

    The institutions they trust most are professional bullies and then professional liars.

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