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Commentary :: Economy and Trade : Education : Electoral politics

A Re definition Of Progressive

-- An analysis of what may be missing from the program of the current progressive movement -- in the hope that, by re-examining the past, we may rise up and seize the future. [First published in 1993 in the North Coast Express] --



The United States today is in the throes of severe institutional crisis. Budget shortfalls at every level have gutted many necessary social services. Our civic, county, and state governments must raise property taxes, excise taxes, fees, and fines.

The federal government also is in hock and has been running an annual deficit in excess of three hundred billion dollars. The people also, for the most part, are mortgaged for life. Meanwhile, millions of homeless people -- no one knows the actual number -- wander the streets of cities, sleeping in alleys, doorways and under bridges.

Massive layoffs at domestic plants of General Motors, IBM, Texas Instruments, Sears, and many other corporations, impel hundreds of thousands of high skilled blue and white-collar workers close to the same fate, while these same corporations shift their operations to Mexico and other Third World nations. At the same time, prisons — the new "growth industry" — are being built at a phenomenal rate.

Prisons, however, are black holes in space, incredibly expensive to build and run, and add substantially to the state and federal debt. Even after jobbing the prisoners out to work as slave-labor for corporations (involuntary servitude and highly illegal under the Constitution), prisons still run in the red. The only people besides the staff and guards who benefit are the bond-holding class who own the debt.

What is the problem? We are told that capitalism is synonymous with democracy. We are told that the system we live under is "free enterprise" when in fact it is a form of usury-finance, monopoly capitalism. We are told that the "free market economy" (read stock market) is the greatest system ever devised by the mind of man. We are told that the proof of this is that communism and socialism have been "proven" to not work.

Yet the fabric of our society continues to unravel. The final phase — the Reagan phase of the Cold War, an enormous scam and boondoggle — may or may not have been the straw that broke the back of the Soviet Union, but it most assuredly bankrupted the American economy. We are now the greatest debtor nation on earth.

Where are the Progressives?

In the midst of this fundamental institutional crisis in capitalism, what is the progressive movement doing to make this country a better country, this world a better world? Does the current "progressive movement" even have an agenda, a plan, or any clue as to what to do to address the serious systemic flaws in our social and financial institutions?

In Berkeley, California, the supposedly radical Berkeley Citizens Action -- a collection of old Stalinists and fellow-travellers -- which ran the city for years, was at the vanguard of instituting creative new ways of exploiting the people in order to raise moneys for the civic bureaucracy.

Berkeley was one of the first cities in the country to have divided the city into lettered zones which require mandatory residential parking registration of vehicles. In order to obtain a designated letter-sticker to be able to park for more than two hours in any zone, one must be able to prove residency in that zone.

Accidental "offenders" under this system must pay an exorbitant price for being in the wrong place at the wrong time. Apart from the highly questionable constitutionality of such devices -- which clearly infringe on the freedom of the people (especially those among the homeless who still possess vehicles) -- this is a very predatory situation, and is just one more sign of the institutional crisis of capitalism.

Usury is a Form of Class War

Few people realize that the cities, counties, and states are experiencing their budget shortfalls precisely because the government(s) under capitalism are not allowed to create fiat moneys in the name of the people.

Instead, they must issue interest-bearing bonds and borrow "money" from banks. The State, then becomes the instrument by which the bond-holding class — the owners of the banks — extort and oppress the people in order to receive back their pound of flesh, the interest on their bonds, payable either in taxes, fines, fees, levees, or bail.

The contemporary "progressive movement," unlike the Farmer-Labor movement and the Progressive Party of Robert LaFollette in 1924, is not addressing this fundamental issue. We must get back to the root of the problem if we are ever to achieve an egalitarian society and eliminate the systemic means that perpetuate class oppression. We must learn the basic realities (not the academic establishment version) of economics.

It should be apparent that the obvious place to begin, is with the Federal Reserve Bank, the institution that functionally oversees the process of creating Money.

This mysterious, mystical Process -- the how of Money Creation -- was very simply and clearly de-mystified and explained in a manner that any school kid could understand in a book by Elsa Peters Morse, a wonderful woman and a famous Old Leftie who lived for years in the Richmond District of San Francisco. Her book was called "The Key to World Peace -- and Plenty" (1960)
Her book is just one more thing that needs to be found, scanned, digitized, and put on-line.

What Is Money? In the words of Elsa Peters Morse:

"Money is defined as the sum total of currency and demand deposits. Money as such is a social instrument — a basic utility. It is the medium for easily exchanging goods and services and storing the value of wealth.

"Therefore, to have a sound economy, money must be issued, and its value controlled, by the government for the general welfare of the nation and its people. Money should not, as now, be issued as debt against the collateral of private and public wealth by private business institutions at interest — for their private profits.

"Few people understand how a dollar bill is issued into circulation — as debt. Nor have they been informed how the billions of dollars of the national debt are set up on the books of the private banks under capitalism as a loan to the nation-at no financial cost to the banks-and yet drawing interest...

"The money of modern capitalist civilization is created as debt-credit on the books of the institutions that have the concession of issue. In the Process, debt is created — credit is created, and checks and paper bills are put into circulation as money.

"The system of pump-priming the economy through debt, otherwise known as credit expansion, is technically called deficit-financing.

"Deficit-financing through government spending or borrowing by increasing the public debt is now necessary to subsidize the whole profit-system economy-the economy of the entire capitalist world...

"The servicing of the public debt, or the paying of the interest charge (profit to the banks or other bond holders) on the capitalist nation's state, city, or country bonds, is reflected in higher and higher tax rates as the debt load deepens. The injections of debt-credit money are steadily increasing through the entire capitalist world.

"All money should be issued directly by the nation — by the government — and not run through the books of the banks — as a dole to the bankers and a debt to the people, thus throttling the overall economy through the toll of interest in the debt-profit system of issuing money.

"As long as Capitalism exists, it is obvious the debt can never be paid off, for then there would be no money in circulation. And any attempt to reduce it will bring a corresponding drop in the national prosperity. To get rid of the debt the people must get rid of the profit system." - end quote.

The Fed operates beyond public scrutiny and enjoys a mystical reputation for positively controlling the American economy. The Fed can and does create and destroy "credit money" at will. The myth that "inflation" is caused merely by the overproduction of printing-press money is a fatal misunderstanding.

At the present time [1993- auth] cash is actually being gradually taken out of the system. The real problem is the manipulation, i.e., the periodic inflation and subsequent restriction of "credit money" by the Federal Reserve and the banking system as a whole.

A distinction must be made between "inflation," defined as an expansion of cash money in the system, and "inflation," defined as the artificial creation and manipulation of "credit money" by banks. The one is good for the middle-class, the small business people, and the working poor. The other is good only for the bankers.

Thirty-five to forty percent of the federal budget (government agencies "cook the books" and the figures are highly nebulous) is currently channeled just to service the interest on the debt. Consider what this enormous expenditure could do for the nation and the body politic if it were channeled in other, more productive directions!

For example, homelessness could be eliminated, and millions of presently unemployed people could be put to useful work. The Democratic Party, however, is just as committed as the Republican Party to the principle that government spending should return a tidy profit in interest to the banks and the bond-holding class.

The Progressive Alternative

To really eliminate first the deficit, and then the debt altogether, the government should cease the practice of borrowing money at interest from the private banking system. This was the thrust of the Farmer-Labor Party platform in the twenties and thirties, and of Robert LaFollette Sr.'s Progressive Party of 1924.

To do this, the federal government would have to purchase back the capital stock of the privately owned Federal Reserve Bank and cease issuing interest-bearing bonds, notes, and securities, as Jerry Voorhis, the radical Congressman from Whittier ( who was Richard Nixon's first prey on his rise to power) suggested in his wonderful book, "Beyond Victory," (1944).

The 1932 Farmer-Labor platform began with Article 1, Section 8, Clause 5 of the U.S. Constitution and called for legislation to abolish the Federal Reserve Banking System-private ownership of the currency system-by repealing the present unconstitutional banking laws and then placing the currency system in the hands of federal, state, and local governments, so that the profits, if any, would accrue to them, thereby preventing panics, depressions and crises and private control of money.

That Platform called for non-interest-bearing U.S. notes to be issued as Fiat money by the government in the name of the people and for the mints to be opened to the free coinage of gold and silver. The coins, however, were not to be stamped in dollar denominations, but rather according to their weight and the fineness of the metal (e.g., one ounce, .999 fine), circulating as commodity money alongside the Fiat paper money.

Historically, former progressives knew these things and had an agenda to address the issue. In the 1920s the entire spectrum of the American left addressed the issue of nationalizing the Federal Reserve, the Central Bank, and eliminating usury. Their chief differences were of a tactical nature.

The Farmer-Labor, Progressive, and Socialist Parties believed that it could be done through the electoral process, by the ballot, while the Communist and Socialist-Labor Parties advocated revolution. Today, even most of the "revolutionary" elements no longer address this issue, at least not to a degree proportionate to its importance.

The process by which the American left was co-opted and decimated to the point that it abandoned the struggle to reform the government along the lines of nationalizing credit is easily the subject of several long articles, if not a book.

In a nutshell, the left has had to give up on this issue because it has become dependent upon money from the tax-exempt foundations. The problem, however, has not gone away; it has only increased. The words of the Minnesota Farmer-labor platform of 1934, which advocated nationalization of credit and of the Central Bank, still ring true:

"...the United States has the most wonderful resources, great factories, machinery of production, steam power and electric power and the millions of capable workers and farmers ready and able to produce food, clothing and shelter in great abundance for all.

"At this time when all of us could live in prosperity and happiness we find that there are millions of working men and women in poverty, want, and degradation and that there are also hundreds of thousands of farmers, business and professional people who have become poverty-stricken and bankrupt and millions of people in all walks of life are compelled to eat the bread of charity. Palliative measures will continue to fail.

"Only a complete reorganization of our social structure into a cooperative commonwealth will bring economic security and prevent a prolonged period of further suffering among the people.

"We, therefore, declare that Capitalism has failed and immediate steps must be taken by the people to abolish Capitalism in a peaceful and lawful manner, and that a new sane and just society must be established: a system where all the natural resources, machinery of production, transportation and communication shall be owned by the government and operated democratically for the benefit of all the people and not for the benefit of the few." -- [F-L Platform, 1934]

Unless the current "Progressive" movement moves to address the issue of money and credit and to present and advocate genuinely progressive solutions to the current crisis in capitalism, it will continue to find itself as a disengaged wheel, spinning in space, and the American people, the workers and the middle class, will continue to be easy prey to right-wing charlatans, demagogues and "friendly fascists.”
 
 

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