A Financial Fight Worthy of the Fourth of July ~ The Risk Averse Alert

Friday, July 04, 2008

A Financial Fight Worthy of the Fourth of July

"The true force of history lies not in the armed fist, nor in numbers rallied to the cause, but in the commitment by individuals. It lies in the power of ideas whose time has come, now, as in the past."Lyndon H. LaRouche Jr.

If God is to bless America, then let the reader understand practical matters connecting God with the beautiful idea of government spoken in the Preamble to the U.S. Constitution. The kingdom of heaven is revealed within.

Ours is power to self-govern with benevolent, magnanimous intent: establishing Justice, insuring domestic Tranquility, providing for the common defence, promoting the general Welfare, and securing the Blessing of Liberty to ourselves and our Posterity.

All these things came to be through the determined intent of individuals. If they are to remain, they will require much the same.

So, let's better understand the connection of the idea behind our federal government to our nation's extraordinary history. We are, indeed, living in extraordinary times.

Let's face it. You're reading me because we agree there are historic risks baked into many contemporary arrangements — financial, economic, political, social. We are aware of dangers considerably beyond mainstream perceptions. Yet, even in the mainstream, there's awareness "things are just not right."

So, let me shine a bit of historic wisdom on this Independence Day.

One power our form of government provides is capacity to utter credit applied to causes uplifting to the principles spoken in the U.S. Constitution's Preamble. Unlike all other nations on earth the People of the United States have sovereign capacity to finance great projects on their own account deemed vital to securing the Blessings of Liberty. Here is how such a thing looks:

H.R. 3400: Rebuilding America's Infrastructure

The "Federal Bank for Infrastructure Modernization" is a form of national bank. This institution is a reflection of the unique capacity the U.S. Constitution affords. It is power to finance at reasonable terms capital-intensive projects whose return over the long haul is abundant and secure.

Now, these endeavors typically do not become highly profitable over a period of a few short years (which is otherwise Wall Street's preference). Rather, astronomical returns require decades to materialize. Yet, the gains realized serve everyone's benefit, each in their own capacity. Such is how a People promotes its general Welfare, each at equal Liberty.

I am bringing this to your attention because we understand the nature of the inequity our contemporary arrangement is creating. We see the building risk. So, we should complacently wait on present-day benefactors to do what is otherwise our power to do ourselves?

Is it any surprise private financial institutions who wanted nothing of effective regulation, who do nothing but bash anything "government" as inefficient, who are now largely bankrupt, are now touting Public-Private Partnerships?

Does not tyranny ever reveal its form through divides it widens? So, we should let its financial manifestation determine how we progress, what gets financed and what's deemed "too expensive?" That is what Public-Private Partnerships portend in a United States of America otherwise longing for all of life's best.

Why should we settle for less when history otherwise reveals our nation's unique power to transcend its present mess? What great projects might we finance and secure the Blessings of Liberty to ourselves and our Posterity?

How about a massive build-out of state-of-the-art, modular nuclear power plants through which we can transform from a hydrocarbon-based to a hydrogen-based economy?

Forget about the problems. They are all surmountable. Every one.

Imagine the world we could create. Put away those ridiculous thoughts — pure fantasies — that say mankind only does harm. This is the politics of death and has no place in the United States.

Without President Franklin D. Roosevelt's transformation of Hoover's "Reconstruction Finance Corporation" into a virtual national bank for financing great projects, not only might Wall Street have not recovered from the depths of the Great Depression, it might have ceased from existing at all ... at least in any form useful to people like you and me.

Let's be clear. Wall Street has a rightful place facilitating American capitalism. Yet, an exclusive place, a dominating place? Given present circumstances this hardly seems wise.

Surely, there must be some among their number who recognize all hope in their own posterity rests in the wisdom of Alexander Hamilton.

Hamilton realized monied interests could make more profit investing their money in trade, than lending it to the Congress at interest and with greater assurance of payment. Yet, he also understood how they could be persuaded to loan their money for the security of the Union and thus, their own posterity. Hamilton put forward "a plan which will offer adventurers immediate advantages analogous to those they receive by employing their money in trade and eventually greater advantages, a plan which will give them their greatest security ... not only advance their own interest and secure the independence of their country, but in its progress have the most beneficial influence upon its future commerce and be a source of national strength and wealth." (Letter to Robert Morris; April 30, 1781)

Financing the nation's greater capacity to more securely conduct commerce was the practical idea behind Hamilton's proposal for "the institution of a National Bank."

Now, let's circle back to the Federal Bank for Infrastructure Modernization (H.R. 3400). Pay particular attention to the proposed rates of interest this bank would charge on its loans. Do you think such favorable terms could be had from financiers who advocate Public-Private Partnerships?

Then, too, think about those fee-based arrangements associated with projects put forward by supporters of Public-Private Partnerships. Toll roads come to mind. Would this not do less to serve those principles enunciated in the Constitution's Preamble and more to widen divides between the haves and the have nots? Should not basic infrastructure serve the good of all, independent of each person's means? Is this objective not reflective of the intent behind our Constitutional Republic?

In celebration of Independence Day in these increasingly turbulent times, we ought to think about bringing balance back into America's economic and financial life. Indeed, we ought insist upon it if we truly desire peace and prosperity.

This, then, is what I can do for my country before I ask what it can do for me: voice my support for "the institution of a National Bank" whose purpose is all about promoting the general Welfare of every citizen with the greatest efficacy, however long this might take...

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