Senator Warren Discovers Benevolent Life on Mars! ~ The Risk Averse Alert

Wednesday, May 08, 2013

Senator Warren Discovers Benevolent Life on Mars!

An enthusiastic cheer is raised here for a U.S. Senator with a mind evidently friendly to the one and only Alexander Hamilton! Massachusetts Senator Elizabeth Warren today submitted a bill (S.897) directing the U.S. Federal Reserve to open a credit window allowing the U.S. Department of Education to offer college students qualifying for Stafford loans financing at the Fed's discount rate (currently 0.75%), this for the purpose of making college tuition as affordable as bailing out hopelessly insolvent albatrosses—titans of tyranny—masquerading as usefully functioning banks.

At last, American leadership! But bolstering the American republic's extraordinary cause calling all mankind to equality is the fact a woman has submitted this extraordinarily important bill before the U.S. body politic. Didn't someone say women were from Venus? Well, it rather appears Senator Warren has taken command of the Curiosity rover and dug up benevolent life on Mars in the form of a "Bank on Students Loan Fairness Act"!

Listen, this is big—the unmistakable sign of a living pulse proving the utter impossibility of nullifying history. Unquestionably necessary is Senator Warren's proposal, and we might add the only sane reaction to its unique directive is its being brought to social consciousness none too soon.

If the distinction between a Hamiltonian credit system and today's dominant (and bankrupt) imperial monetarist system has been difficult to fathom in your mind, then the direct connection between "credit" and "investment" Senator Warren's bill establishes should clarify the matter. Just ask yourself this: is it likely that, in the aggregate college loans will be paid back many times over by labor made more productive through its higher education? Then the more receiving this education, the merrier, no? That's what credit is meant to foster. This was Hamilton's unique contribution to language in the U.S. Constitution, that the means of satisfying the federal government's worthy objective stated in the Constitution's preamble be established. Senator Warren's bill simply ventures to begin restoring government's direct, active capacity to secure the nation's posterity, which accomplishment in fact rests in the productive fostering of the creative capacities of the greatest portion of the nation's citizenry. Nothing like a college education to get 'er done.

Now, we should also be clear that, Senator Warren's bill is only a foot in the door, albeit a big one. We might add Europeans once again have been given by their American cousins suitable ammunition which now to fight back against that nostalgic fascist menace bedeviling the continent. To my knowledge every nation within the EMU possesses a sovereign central bank capable of uttering credit for the sake of fostering productive investment within each respective member state. This is not about increasing borrowing and competing with sovereign ventures attempting to bail out hopelessly insolvent European banks choking on monetarist garbage manufactured in the Venetian school of hyper-insurance (i.e. derivatives). Rather, national banking would facilitate the means by which sovereign debt actually might be repaid, and in more valuable currency at that. As European banks are unwilling or, more aptly, unable to finance the means by which the productive powers of the European labor force are to increase, sovereign governments are left to fill the void. Elizabeth Warren's bill should show these governments how this can be done. Bottom line, increase the productive powers of labor and the means of extinguishing debt are effectively secured.

You see, the one and only benefit accruing from central bank actions to date since the financial crisis of 2008 is demonstration of will to create credit out of thin air. So, yes, this can be done. Central banks across the globe have proven in spades for all to see new credit is as abundant as the air we breathe! Now, where is it written in stone mandating that, new credit central banks create exclusively must go toward sustaining the market value of garbage? Nowhere! With only political will can credit be created to facilitate any objective, worthy or otherwise. Narrowing down the former, as must be done by necessity, increasing the productive powers of labor deployed in both agriculture and manufacturing certainly is a most worthy cause demanding credit be created by any means possible, even out of thin air if need be. In fact, before there was an Alexander Hamilton, Benjamin Franklin understood this idea quite well when in 1729 he wrote, "A Modest Enquiry into the Nature and Necessity of a Paper-Currency." The bane of gold bugs even to this day!

There isn't a monetarist monkey on the planet with a credible argument against what Elizabeth Warren is proposing here. The Capo Confetti Fed surely has paved the way completely legitimizing the mechanism by which Senator Warren's bill ventures to finance the U.S. Department of Education's Stafford loans, this with credit issued through the Federal Reserve's discount window.

Thus, too, the ECB likewise could be acting toward the EMU as the IMF, itself, originally was intended: a supra-national issuer of credit financing projects involving multiple sovereigns. Were it necessary to bend rules established by treaty forming the EMU and empowering the ECB, well, the past five years certainly has provided no shortage of precedent. That is to say anything's possible. Or, where there's a will, there's a way.

What's most critical to understand about a Hamiltonian credit system is the manner in which investment is prioritized, this by consensus formed through political deliberation. This distinction stands in stark contrast to today's largely market arbitrated investment decision making. We can see with our own eyes the unacceptable, deleterious effects resulting from this slavish devotion to markets as arbiter of all consequential investment decisions. Young people throughout the trans-Atlantic today face an increasingly hopeless future, and this is but one among many problems proceeding from the ongoing disintegration of today's imperial monetarist system. Addressing these requires immediate and effective action should we truly desire both peace and prosperity for ourselves and our posterity.

Although Senator Warren's proposed legislation certainly can be viewed a step in the right direction, it really still is principally a symbolic measure begging much fuller manifestation. Should we but agree that, there is more work than we can shake a stick at waiting to be done—the building of an energy intensive physical economic platform worthy the 21st century, leveraging mankind's every creative accomplishment going back as far as the 16th century's Golden Renaissance—we will then begin to fathom how Warren's initiative, itself, must be leveraged, and not just in the United States, but across the entire globe.

Resistance to reinstating Glass-Steagall, indeed, might be fierce, yet there is in fact a back door to reaching this desirable objective much the same. Don't look now, but Senator Elizabeth Warren has just opened this back door! So much for chivalry in the age of equality among sexes. And so begins the countdown awaiting the appearance of men in the senate with balls enough to walk through the door Senator Warren graciously has opened for both the American people, as well as all the nations of the world desperate for thoughtfully concerned, determined leadership...

Word on the Street
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