Adonis Diaries

Posts Tagged ‘capitalist liberal democracy

The economy did not restart.  The effective rate of unemployed citizens is increasing and converging to the dangerous critical mark of 20%.  That means 12% of the lower middle class citizens are jobless.  The Real Estates bubble is still infected.  Bursting the abscess of property ownership is not for any time soon for good reasons:  most foreclosures are illegal.  The documents of property ownership, amassed in the last three decades by banks and financial institutions, do not exist or are not available.

Paul Krugman, Nobel of economics for 2008, explains. Property rights are badly defined since nobody possesses  adequate documents for ownership.  In most cases, proper documents do not exist:  many loans have been extended by shady financial organizations intent on “showing numbers”.  The mortgages were sold to “funds” ad hoc that dismantled the loans into financial products and supported by mortgage borrowing.

The laws demand that these “funds” obtain the titles of mortgages detailing the obligations of the owners.  These legal formalities were considered to be useless and thus, were neglected by the financial institutions.  Consequently, most current foreclosures are illegal.  Facing this judicial nightmare, the courts are currently relying on sworn testimony of banks with written declarations signed by “robo-signers” or employees having no idea what they are signing on, simply because supervisors ordered them to sign.

The code order from the government to the justice system is: “If a bank declares to own a property then, you have to take their words for granted.”  The problem is that the “funds” cannot produce proper documents of ownership.  The mandatory parties (the financial institutions saved by the government after the crisis) can be sued by investors who bought the titles to ownership; these titles have fractions of their nominal values.

In my previous three articles I discussed reforms for this liberal capitalist democracy.  In this post I want to extend a reasonable way out for the bursting of the Real Estates bubble fiasco that is dooming the system to another financial crisis soon. Since the government has the legitimacy of creating the proper rights for ownership I suggest this proposal.  How about all properties “owned” by banks and financial institutions be considered as rented by the government for a short duration until laws of ownership are revised and proper documents delineated to be needed for property titles like the good old times?

It is advisable that reformed election laws that adequately represent the lower middle class and women be instituted to discussing property laws. If reforms are not to pass “peacefully and democratically”, at least, the next financial crisis will be postponed as the government is renting properties that lack legal documents for titles. People can still purchase these rented properties and State governments can extend the lease to 30 years.

The “Old Money” of the 1% oligarchy, capturing 30% of the nation’s wealth in the capitalist liberal democracy of the USA, knew of the incoming latest financial crash:  their immediate code order after the crisis was “Regaining confidence in our capitalist brand system”.   The code order meant “The common people must have lost hope that our political, social, and economic structure can continue to work as usual.  We must find a tactical scheme that extends hope that “change is very possible in our one century old-established system”.  The people must be worked upon to be re-convinced that our system is the only alternative to producing wealth; that the trickle down policy of the rich reaping the profit first before the scraps are re-distributed is still the most valid structure to contributing to a stable economy.”

Since economic reforms are out of the question and that restarting the economy any time soon is not feasible then,  a quick and dirty smoke screen effect scheme was to be generated.  The oligarchy, aided by the unethical technocrats, devised a diabolic believable smoke screen: “Let us elect a charismatic “Black Citizen” for President of the Republic. At least we will have demonstrated that our liberal democracy can absorb social change”  This scheme hides the untold purpose: The capitalist superstructure behind this ideological liberal democracy will resume functioning and will try to re-establishing security and stability in economic life after the people is exhausted and his savings depleted.

The Obama ticket did the job wonderfully.  Obama spread the requisite hope of  “confidence” in fantastic rhetorical speeches.  Then, Obama was put on short leach in order not to institute dangerous euphoric hopes that could run overboard.  The limited national health care coverage reform passed with the requisite roadblocks:  Reforms should not be taken for granted and done quickly because the people want it.  No other serious reforms were put on the table for discussion and for making decisions:  Just mentioning reasonable financial reforms were too dangerous to start with.

It does not look promising in the near future for any reforms.  The Republicans and the Democrats are sharing the same oligarchic bed and just sending angry smoke screens working on people’s fears of instability and insecurity.

Note:  I do not necessarily include the billionaires of the last two decades in the 1% oligarchy:  They might be more willing to support reasonable reforms to this brand of capitalism.

Women are back to being the most vocal and active members in society as in the 1840’s, though the “Mamas Grizzly” are on the wrong side for the proper political reforms.  Fact is, women are not equitably represented in the political system. In economical downturns, unemployed men feel worthless and barely take on their responsibilities in the family.  Unemployed men and husbands start imagining that women and wives have the magic wand to making ends meet.  Unemployed men and husbands hand long faces and loaf around in the house; wives want men out of the house, away from their skirts.  Wives want the government to open up free extracurricular activity centers so that men are out-of-the-way and enjoying their free time.  Wives don’t need adult husbands behaving like kids, complaining and whining and expecting wives to tranquillize their unsatisfied ego.

Save a limited health care reform that is yet to be effectively executed next year, nothing is working in the US after the financial crash.  The number of unemployed is increasing, the economy has not restarted, foreign policies for stabilizing world disturbances have not changed much, the environment degradation did not improve, and the troops are being relocated and reshuffled to other “hot regions”; there is diminished credibility that the dollar is worth the expense of printing it and no viable medium-term resolutions are seriously contemplated.  Politics in the US is heavily biased toward short-term election timeline.

Nothing is giving the US citizens and the world communities much hope that change in on the way; any kind of change.  The banks and financial institutions were salvaged but productive lending transactions have not materialized.  All financial facilitation laws are encouraging the elite richest class of the 10% to resuming their disgusting flatulent life-style, as if the system was meant to satisfying their greed and large ego.  The budget for the military and the thousands of “security agencies’ (old and newly established) are taking up 25% with no substantial returns for the common people.  The modernization and maintenance of the infrastructure are on slow burner waiting for better times.

Women are the most vocal and active members in this economic downturn that has no light at the end of the tunnel; women are demanding transparency in the political and economic decisions, procedures, and processes; women are demanding accelerated reforms options with fair representation of their gender and all the economic classes, especially the lower middle class representing 50% of the population.

The Federal Regulatory Commission known as the FED has maintained the lowest interest rate ever for years and is now zero per cent.  What for?  So that the richest enterprises can borrow more money and not spending it on creating new enterprises.  Actually, billions are invested in other more promising States economies such as Brazil that witnessed its currency the Real appreciates 30% in less than 20 months. 

To make things worse, the FED wants to be imaginative:  Its chairman Bernanke is planing on purchasing the long-term loans.  With what?  Printing more worthless money that has lost all credibility in the exchanges of world finance and economy.  What are the consequences?

First, the ever successively devalued dollar, unable yet to compete with emerging countries, will reach a critical point that will wipe out the liquid savings of the elderly and retired people who won’t be able to survive for another couple of years.

Second, China and Japan would reduce purchasing the treasury T-Bills to the bare minimum commensurate to political concessions.

Third, The competitiveness of the US is far from being appetizing to exporting goods.  China has appreciated its currency 20%  up but the US could not compete:  the direct consequence was for Vietnam and Malaysia taking on the slacks for Wal-Mart and other wholesalers.

The worst part is that the government has decreed a moratorium on immigration from Mexico.  How can the economy restart without fresh, and young immigrants aiding small enterprises to restart or be created?  Giovanni Peri, assistant professor at the University of Davis, wrote in Foreign Policy in Focus that “Mexican immigrants increase production capacity, stimulate investment, and is a catalyst for specialization.  Young Mexican immigrants never had any negative consequences in the US economy in the last 40 years.  In the last 40 years, the active potential doubled and salaries increased 40%.”

Peri goes on: “Immigrants are basically competing among immigrants but do not rob jobs to Americans.  When immigrants are hired, productivity increases and Americans are elevated to higher ranks such as supervisors and foremen, simply because they know the language; thus, this process increases the base of the lower middle class.  Immigrants complement the economy and do not substitute for existing jobs except when highly educated and specialized.  An engineer cannot do anything alone; give the engineer workers and enterprises are created.” 

With the dynamic market system in the USA, hundred of thousands of jobs are lost and an equal number re-appears.  The more there are able and young workers on the market and the higher are the odds for creating new enterprises.   Immigrant salaries are low but still high compared to what they earn in their homeland, even when the higher cost of living is factored in.

The International Monetary Fund (IMF) met in Washington DC with its 187 representative members to discuss this raging war related to currency appraisal.  The institution demonstrated incredible impotency to resolving this problem, giving the illusion that currency value is the main and critical factor for restarting economies and stabilizing world commerce. Chairman Strauss-Khan pointed out that more focus should be on strict supervision of the vulnerable factors in the most advanced States.  Thus, the IMF is going to study the viability of zero interest rate in the US  that is diverting investments to other promising economies such as Brazil.

The US brand of “capitalist liberal democracy” has to be revisited and fairer representation of women and the lower middle class be reformed in election laws and procedures.  This liberal democracy guided by the elite richest 10% of the population and hoarding 50% of the wealth of the nation must reformed so that the lower classes can have a say on the kind of laws that preserve their interest during economic downturns.

The gimmicks of slightly increasing taxes on the rich classes with large loopholes cannot continue indefinitely.  Political power should be reinstituted to the common people and election laws and procedures simplified to encourage the lower middle class to run for election and get organized.




May 2023

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