Saturday, September 5, 2015

What passes for “normal”…

A little while ago, I saw a scene that unfolds daily in every city around the around the world: two police officers patrolling down the street.
I don’t know if it was something about their demeanor, or the particular prominence of their guns on that day that struck me, but I had a little aha moment and I thought, “Gee, it should not be a normal state of affairs that we need armed individuals to keep watching over the population”.
The fact, that as you read this, you are likely to think I’m off my rocker is perhaps even more disturbing, I find, ha ha!
There are so many things in the world that we take as being “normal”, which are in fact passed the point of crisis, war being just one example.
But they usually belong to the field of the Humanities, and so we assume that we can’t solve them (another thing that shouldn’t be normal to have to postulate.)
Today’s startup founders’ focus is on technological innovations; however we are currently at an inflection point where technology impacts the Humanities: by unleashing the internet, we’ve shaken the fabric of society at its core.
The fact is that advancements in all branches of knowledge, including the Humanities, constitute innovation.
Presupposing a catastrophic situation to be normal precludes solving it. And this can be used against us by those “in the know” who want to manipulate us through our ignorance, for example.
Take the banking sector, for instance. All perfectly normal, isn’t it? Well, perhaps not.
Below is an excerpt taken from the Epicenter Bitcoin Podcast, Episode #93, posted on August 24, in which Simon Dixon talks about current banking practices.
See whether you still think all is normal after reading it:
“The reason that we’re in the financial problems we are is because we’re trapped in a multi-decade Ponzi scheme as it were, where in order to have an economy, you have to have more debt. And the reason for that is simply because money is debt. And so in order to have a growing a stimulating economy, you have to have governments take on more debts, you have individuals take on more debt, you have to have corporations take on more debt. And then you get growth. And that’s simply because Economics has made an incorrect assumption; and that assumption is that banks are intermediaries between borrowers and lenders, which is just not true.
…When you deposit money with a bank, they become the legal owner of your money.
…The second property that needs to be solved is that when banks become the legal owner of your money, they can spend it as they wish. And so what tends to happen is they spend it on things which help their shareholders and their bottom line, which aren’t good for the economy. Banks were originally around to make loans for businesses, businesses can then produce something, they create some jobs and they can repay the loan and it produces some value in society. What’s evolved is that the loans have always moved to the least risky and the most profitable thing to do. The most profitable thing to do is financial speculation which adds no value.
…A bank is actually the creator of money supply. Whenever you have a positive balance, in your online banking, that’s simply somebody else’s debt; and they created that money into existence at [the] point of issuing a loan. And so 97% of every penny in the economy is created that way, which means that the only way to drive sustainability, if you want an economy to grow, is you have to have more debt. If you want less debt, then you have to have a depression. And that’s why we have boom-bust, boom-bust, boom-bust.
…I believe the financial crisis was a banking problem, it wasn’t a capitalism problem. Capitalism is my opinion is not the crisis, yes there are problems with it — I believe it is one is the best way of organizing structures.
The problem right now is that capitalism is built upon a banking system where the petrol, the fuel of capitalism is money, and money is built upon a process whereby in order to be created it has to be created as debt; and therefore, that completely skews where money is allocated, who can access capital, and the size of certain organizations that have access to capital. So I believe that we have a banking problem, and that then leads to a corporation problem, because corporations have access to finances that small to medium size enterprises don’t have access to, and therefore you get skewing of the economy. And we’ve never had capitalism to actually test.
Now, if you look at countries like Iceland right now, they are testing capitalism in its true extent. They’ve sent the bankers to prison, they’ve sued them for counter-fitting their money supply when they issue loans, and they’re looking at crypto-currencies as a foundation for their economy.
… The only way you’ll get the government to change is a complete meltdown. They have no appetite to change prior to any kind of meltdown. Unfortunately, necessity is the mother of all invention. Banking and government are completely entrenched. We’ve already seen an example of meltdown post the sub-prime crisis. And we saw exactly what they would do. They’ll create another central bank which puts together more control, they’ll lock up more control currencies, and they’ll always be issued as debt. And then all they do is kick the can down the road a little bit further.
… They chose the exact cause of the problem as the solution to the problem, and I believe they will do that forever because the brave person that goes into government and tries to exercise some of the powers which they totally have to create money without issuing debt would be met with such massive, ginormous resistance.
… If you model out the economics of our existing system, you are going to get a few results. The results that you have is a larger divide between rich and poor. You have larger consolidation of assets between ultra-wealthy, connected people and ultra-wealthy, connected institutions. And with each bailout you move the bar in terms of the debts to the most indebted people. You re-distribute the debts to the taxpayer and that increases the rich-poor divide in its infancy, but eventually, there comes a point where people will no longer lend to government — they just won’t do it because of the interest rates that come in the bond markets of that country.
…What happens is that individuals need bailing out, and so the government comes out with a scheme to allow you to buy your house, get your further into debt; but eventually they can’t repay their interests because their mortgage becomes greater than their income. And so when wages are going down and their mortgages are going up, that is just skewing money toward the banking system. Eventually the people can’t afford it, so the banking system has some kind of collapse and correction; and because all money is created by a bank, and the bank is the economy, the government then [will] bail it out, and the government then goes to a central bank, and the central bank [will] bail out the government through quantitative easing or whatever it is; but eventually, financial engineering ends.
And when that is — I’ve got no idea how much more financial engineering they have, but eventually it does end.
… The money, the assets underneath this, have to come from somewhere at some point, and there’s only so poor you can make people. There’s only so much debt you can get people in. There comes a point when people just default on their debt. And once everyone defaults on their debt, the entire system collapses.”
And then take the Ashley Madison hack.
Fred Wilson wrote a blog post about it, endorsing the following:
…society needs to be accepting of and forgiving of transgressions like using a website to arrange extramarital affairs.
He added:
…all of us are in for having our deepest darkest secrets outed at some point. So let’s hope society becomes more forgiving over time. It’s going to have to.”
That’s saying it’s “normal” for people to be unethical, perverted, etc., and so as the internet tends to leak out many a secret, then we’ll just have to lower the bar of our morality.
The end result of that would ultimately be a degenerate society (as if it wasn’t that way enough as it is!)
A lot of what we consider “normal” is in fact a severe failure of the human condition.
It behooves us to pause long enough at times to at least recognize when a situation is in fact abnormal.