When we had the last credit crisis in 08-09, we went right to quantitative easing.
QE is a well-established tool for returning us to “normal.” All the while, however, we were being told that it is “the new normal” — meaning that we could expect a big quantity of risk to be eased, with historically low interest rates, for a long time.
Eight years later, money markets still yield only 50 basis points, which is a huge quantity of risk.
What this risk is, exactly, is the fully assumed risk of loss existing in priority. Without gaming the system on a regular basis — know as cyclical risk — wealth naturally distributes to labor, naturally resisting credit crises, on demand. TBTF banks literally bank on the crises, demanding it on a regular basis, to form the capital described as “hoarding labor value” (surplus value).
If people actually have the means to demand the supply, there is less demand for credit and, thus, the crises that ensue by default.
The new normal has gotten old, and the Fed is raising the rate of interest as it “normalizes” its balance sheet. For 99% of us, we’ve been had — sytematically gamed into accepting the deliberate detriment (derived in late order — held in Federal Reserve) as something that “just happens” on demand. Nuts! That’s just a big fat lie!
The Federal Reserve Bank is now looking to ease the quantity of QE. Its member banks, which are TBTF, have profited enormously from this financial-gaming system. Remember, TBTF banks are where capitalists, like the Waltons, who own Walmart, store the capital in the form of “their wealth” (i.e., the wealth of nations, as Adam Smith described it). It will not be turned into “working capital” (what demands jobs) if it is taxed because “only the little people” (people that have jobs) pay taxes.
If jobs are created to provide the tax base, then the act of taxing increases the demand for debt, which, of course, results in a financial crisis by default. Instead of allowing the fully assumed risk of loss to naturally demand a more progressive tax code, capitalists argue that taxation is inherently bad and should be eliminated.
Across the US, municipalities have been using TIFs to create jobs, and are experiencing fiscal crises. (The ones that boast a balanced budget have simply borrowed their way out of debt — borrowing the money from rich people who financially benefit from the TIFs.) Especially when combined with rising healthcare costs, due to the ACA mandate to buy the insurance that supports the price (thus the argument that “the government sets the price”), government and taxes are generally bad. The profits generated from the government mandate, using the “insurance marketplace,” is good, however, because it has the natural legitimacy of existing on demand.
Since the risk cannot actually be reduced, but is a sum certain, existing on demand (much as Hobbes described political risk to the king), it is a quantity that cannot really be eased.
No matter how much it is held in reserve and gamed in late order by technocrats of the ruling class, the notion of being king by natural right (with the risk fully assumed in priority) is delusional. It is not objective reality. It is “made” to look that way, however, in the form of “making markets more efficient on demand” (i.e., the demand for consolidating industry and markets into “natural monopolies”).
Using a natural-model legitimacy, capitalists must create the illusion that political-economic power derives from a natural condition. A lot of “gaming the systemic risk” must go on to continuously avoid realizing the fully assumed loss, catastrophically banking the risk in all the futures, now.
Instead of the quantity being eased, it is actually being accumulated.
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