Some Knowledge

I’ve been looking around the net all morning reading about the financial crisis, trying to find out what caused it all to happen.  There’s some pretty basic problems in the way businesses handle money in this world.  In the first place, they take money from people for nothing but a promise and a piece of paper, if you’re lucky.  Paper is pretty cheap.  Ink and printing is a bit more costly.  Still, a nickel max for a sheet of paper that a stock or a deposit receipt is made out of.  A piece of paper and a promise that it’s worth something.

What happens to the money after you give it to the financial institution?  Why, they give it to somebody who wants to use it to run a business or buy something expensive like a house.  So, some investor gives money to a bank, and the bank lends this other person’s money to a person buying a house.  If they can’t pay the mortgage, the bank is stuck trying to sell the house.

Alright, that’s the general principle of the business.  Once the bank makes the loan, it gets it’s money plus interest back over a period of several years.  The problem comes when the economy goes to hell.  People lose their jobs, because the work goes to a factory in China.  Jobless persons can not pay mortgage bills.  Loan goes bad.  Bank is stuck trying to sell a house.  So many people lose their jobs, a lot of houses go on the market.  More houses than people can buy, the price goes down.  Bank is forced to sell house for less than it paid.  Bank loses money and goes broke.  Now, people who invested in bank or finance company are stuck, because their money is gone because some executive made a bad loan.  Government comes along and prints up a lot of money to buy the bad debt from the bankrupt company.

None of this addresses the problem of why so many people lost their jobs and could no longer pay for the things they borrowed money to buy.  The financial crisis is a manifestation of the greater problems in a society where people can not find jobs to make money.  Every industry in America is affected by this problem.  Companies don’t manufacture things in America any more because they would have to pay workers a reasonable wage.  Greed for more profit causes them to build factories in countries with lower standards of living.  The same greed that causes companies to outsource jobs undermines the consumer base for purchasing their product.  If people can no longer afford the product because some business president sent their job to Mexico, the company can no longer sell them a car and their profits decrease.

There are a lot of businesses and companies and government agencies involved in a working economy.  Money is created by the government to form the trade basis on which the economy runs.  Businesses manufacture products that people buy, and part of this money goes to pay the wages of the people who make the products.  Business owners and governments collect money from the cycle of manufacturing and sales.  There is a constant need for more money in the economic system so that people can save and collect money from their activities.  This need for outside input of monetary units makes the system unstable.  When you consider foreign trade, and the exchange rates between different currencies, this adds more instability.

Financial companies make money by moving money around between people who need money for various reasons.  For a financial company to be stable, it needs a continuous input of more money from its loans.  When the ability of people to pay back loans is compromised on such a wide scale by factors like job loss and falling prices for housing, the finance company gets hit.  Loaning money at an interest rate really does not produce anything that can be considered a product that can be sold at a profit, yet lending institutions try to further profit off loans by selling derivatives to speculators.  The whole system is a house of cards that depends on people producing more and more.  Resources are limited on this planet.  There is a finite amount of any kind of thing available to people.  Maybe it’s time economists started thinking of a stable system of trade that benefits all people instead of trying to think of yet another way to rob from the poor to support the rich.

There was nothing on TV last night at 9:00 PM, so I turned on the Glenn Beck show.  He had most of an hour with an interview of Ted Nugent.  Ted came out in his jeans and cowboy hat and started in on everything that’s wrong with America.  This program reminds me of the comedy parodies on Comedy Central, only it’s funnier because these people are being serious.

So, Ted Nugent is a conservative.  He did his best to try to convince me to vote for John McCain.  He bragged about how he likes to kill and eat various animals.  He talked about the idiotic environmentalists who know nothing about nature.  It was an entertaining show.  Then there was a clip of his tour, singing the same old songs he wrote in the 70’s.  It seems there are still a lot of fans for Ted’s guitar skills.  If you ask me, it’s more entertaining to listen to him talk.

What I thought was a bit ridiculous was the way these two enjoy putting down the average American.  According to Nugent, the average Joe spends more than he earns, sits around all day drinking beer, smoking cigarettes, and getting fat.  Maybe this is true for the average, caricatured American, but I think it’s pretty sad for two elitist, rich entertainers to sit around putting people they don’t even know down.  Of course, you have to say something to rile people up if you want them to listen to your opinion and vote the way you want them to.

I was entertained for a while by this interview, and I can see where people might get these kind of opinions, but I don’t necessarily agree with any opinions I see on TV.  It’s all well and good to sit around complaining about taxes and wasteful government and fat lazy bastards who max out their credit cards and drink too much beer, but what’s the point?  You’d think if a person interviewed a famous rock star they would ask questions about music, but aside from a short tour promotion bit, the subject never came up.  Of course, if there are two opinionated complainers in the same room, they are bound to complain about something until somebody tells them to shut up.

Closer examination of the purported body of a bigfoot found in northern Georgia showed it to be a rubber monkey suit stuffed with roadkill and slaughterhouse refuse.  It appears the idiots who cooked up this hoax are suffering some of the consequences.  The deputy has been fired by his department, because the hoax supposedly damages his credibility.  I don’t know what would make anyone doubt the word of a man who stuffed dead possums into a monkey suit and then tried to convince the world it was the body of a giant anthropoid creature.  What is the world coming to when a person can’t even try to fool the people of the world into believing that a lovable creature like bigfoot actually exists?

I think the people of the world have been primed by the mass media to believe that mythical creatures exist.  This is all a marketing thing.  If people believe in bigfoot, they will buy bigfoot-related products like movies and documentaries about these creatures that don’t exist.  It’s all just business.  These hucksters were just trying to give the economy a boost by promoting a creature that has a firmly-entrenched place in modern culture.  Next thing you know people will begin complaining about all the shows they play on The History Channel about these legendary monsters.

So, I turned on the news this morning and there were Russian tanks and trucks and pictures of soldiers shooting.  Russia sent troops on the attack this morning after one day of negotiated truce.  They seem to have looted and shot up the town of Gori, south of South Ossetia, and there were reports from convoys headed to the capital Tblisi.

There has been a civil war in Georgia since 1991.  Apparently, the Russian troops were sent in there in the first place to stabilize the region.  I watched an interview with the Georgian President this morning, and he appeared to be asking for military aid and said the people of Georgia would fight “to the last drop of their blood” to defend their country.  In another interview with this president I watched the other day, he described how he had to fire the entire police force of the country when he was elected because they were corrupt.  He also said there was a lot of corruption in the country of Georgia.

I don’t know what these people are going to do with their situation.  It’s never a good thing to be invaded by a foreign country.  War is a bad situation any way you look at it.  The United Nations really has no power to end disputes between countries.  There’s no precedent for filing suit in the world court, which is also fairly powerless in dealing with disputes.  Perhaps if they just gave up and asked the Russians to stop shooting up the place there wouldn’t be so much damage.

I don’t see the United States getting into any war with Russia any time soon.  It would be bad news for any region that got caught in the middle of a war between two nuclear powers.  If I had a few billion dollars to waste, I might set up a corporation called Conflict Resolution Industries to negotiate peaceful resolution of armed conflicts.  I would probably lose all my capital on this business in the Middle East and Africa, but it might be nice to do something positive for the world this way.  There seems to be no end to troubles in the modern world.  If I could find a way to make a profit out of settling conflicts I might become a rich man.  As far as I know on planet earth the only way to make money on war is by selling guns, bullets, and war machines.  Perhaps, in the end, this is the real problem.  A world with a surplus of weapons is primed for war, and industry makes money off of death.  Go world!

I just spent the last half hour trying to figure out what’s going on in Georgia with the Russian invasion.  Apparently, there’s a province in Georgia that is trying to break away from Georgia and go back to Russia.  Apparently, the Georgian army went into this region to either force it back into Georgia, or, according to the Russians, to kill the Ossetians who live there in some kind of ethnic cleansing operation.

Then it gets more complicated.  In return for 2000 troops sent to help America in Iraq, America has been training the Georgian army in how to fight.  Georgia probably wants help from America with its war.  Hopefully the American government will have more sense than to get into a war with Russia.  Russia is turning up the heat, bombing apartment complexes and hospitals and trying to bomb oil pipelines.  Russia claims there was some kind of genocide.  Georgia claims it was being invaded.  Once again, politicians are leading people into killing each other.

When will America learn to keep out of the affairs of foreign countries?  Is it our job to train up the armies of every podunk dictatorship on the face of the earth?  Maybe if people had leaders who went out of their way doing kind things for people instead of going around starting wars we wouldn’t have the violent world we have today.  The people of the earth are cursed with governments who build armies and then send the children off to kill.  There is no need for armies and wars.  War is destructive and non-productive of anything but chaos and death.  Instead of ethnic cleansing and bombing the hell out of people, our leaders should be working on ways that everyone can live in peace.

Stupid humans.

I spent the morning watching the bond appeal of the mayor of Detroit, Kwame Kilpatrick.  It was interesting to listen to all the lawyers argue and the judge try to sort out what was going on.  In the end, the judge found that there was some lack of discretion in remanding the mayor to jail and denying him a bond.  He set a $50,000 cash bond, no travel, and a GPS tether on the mayor.

After the hearing there was a statement by the attorney general of the state of Michigan that the mayor would be charged with assault for pushing two police officers on the porch of his sister’s house.  Apparently, they were going to wait for the mayor to post bond and be released from jail before booking him on the new charges.  The prosecutor stated that the mayor was not arrested at the time of the incident because the officers wanted to avoid a shootout with his bodyguards, who are Detroit Police officers and who were guarding the mayor at the time of the incident.

I find it interesting that one politician can cause and get into so much trouble.  Kilpatrick is up on four felony charges, and if he is convicted he will be thrown out of office and probably into jail.  The mayor will probably be in and out of court all day today, and if he causes any more trouble will likely end up back in the slammer.