Axon Tendril

Max Keiser rages in France

2009-07-17T12:20:00.000-07:00

Day 10

2009-06-22T00:51:00.000-07:00

The action in Tehran is beginning to look (and sound) like civil war.

Insomnia Babbling, Vol. 726

2009-06-09T16:01:00.000-07:00

Eyes puffy, movements sluggish, brain fuzzy. Can't remember my last full night of sleep. Caffeine is a poor substitute for sleep. Cubicle grey death. Digits in, digits out. Pixels, logic, bank account. Sipping espresso, listening to the executive schmooze the managers. Predatory laughter. Eyes glaze.

American corporations have perfected the model of a totalitarian state, but have not the will to use it. By now, other nations have dared. Singapore comes to mind. Here in the "good ol' U S of A," we still value what relative freedom we have, though we loathe the responsibility it brings.

I heard a teenager on NPR the other day, talking about how young people these days interact with technology. (Paraphrasing) "We don't understand privacy. We're monitored closely by our parents, by our teachers, our every movement is tracked electronically. So we don't bother trying to hide anything. We broadcast our movements, our thoughts, our feelings, several times daily, on MySpace, on Facebook, on Flickr, by group-text and video on cellphones. We live publicly." Now parents are paparazzi.

I'm horrified by the thought. When I was a kid, hiding was my favorite activity. My greatest joy was in knowing that at that moment, not a soul in the world could track me down. I had hiding spots everywhere. I had a passive-aggressive deal with my parents; the more they fucked up and pissed me off, the longer I disappeared. My bicycle was a magical teleportation device, freedom incarnate, the only object my parents could threaten to take away. I'd bum a quarter off a stranger in the 7-11 parking lot in El Cajon, call them from a pay phone (remember those?) and bargain. At first, they'd be mad (come home this instant, young man) but soon they'd realize they were not in control, that I had the will, the courage, to run away. Eventually they'd haggle, and we'd work out a deal. I would come home, as long as I wasn't in trouble.

I'm only 31 and already, I'm separated generationally from Kids These Days. These social changes, they speed up from generation to generation. I've often said that while technology changes quickly, social movement changes slowly. I now get the feeling that this is changing, that social movement, though still lagging far behind Moore's Law, is catching up. Perhaps someday I'll propose my own law, in some obscure computational neurosociology journal that doesn't exist yet, and never will be on paper.

William Gibson, whose futurism cred was solid from 1982, when he coined the term "cyberspace", to 1999 when he announced he could no longer writer scince fiction (the future is unknowable because the present is incomprehensible), believes that all social change is technologically driven. If that is so, then this gnawing anomie, this hyper-accelerated ennui, this rootless social millieu in which we tenuously reside, this whirlpool of change, will become a blender. Maybe it already is.

All social institutions are quickly losing credibility. The government is a sold-out auction house, regardless of the tenants. The citizens never tire of trying to vote themselves money from the treasury, while ignoring crimes of the highest order. The fourth estate has been discredited, with most newspapers going bankrupt, and cable news reduced to incoherent babbling by lunatics. Democracy's sheen has worn off; every democratic election everywhere in the world is immediately followed by cries of foul by the losers, the vote machines now computerized, their source code a patented trade secret making a profit for corporations whose boards contain almost as many conflicts of interest as the government weapons contractors. The banking system has been exposed as a massive shell game with a back-door into the public's pocket; a baffling, poorly-designed global scam, Ponzi writ large with magic wands and slick PR propaganda. The stock markets are certainly a blender, whose movements can no longer be understood, even by the technorati who run them, the quants and algos of the early 21st century. Public schools pathetic babysitting prisons, private schools indoctrination centers for the investment class.

And yet, people still make love, still have babies (though not through the vagina as often as in most of human history). People still write songs, though few of them feel authentic anymore. Having grown up in the age of CD's and Ipod's and mp3's, we've heard millions of songs by now, and they all start to sound the same after a while. The last musicians who never heard recorded sound performed before my grandmother was born. All music is now derivative, unless you want to get way out and make industrial feedback weirdness with no time signature and no melody. People still write poetry, but few still read it. I can't quite wrap my head around the impact of waning vocabulary amidst growing visual literacy.

People still get old, but as they do, they become more cybernetic. Hearing aides, contact lenses, pacemakers, tooth-fillings, knee replacements. Their bloodstream pumps with artificial additives- drugs for cholesterol, for diabetes, for headaches, for weight-loss, for rock-hard 80-year-old erections. Old people these days are a work of art, crafted in factories by scientists working in shifts.

Trees still grow. Birds still sing. Rain still falls. And sometimes, two people connect. Deeply. Intimately. Two pairs of eyes, reflecting each other in comfortable stillness. Emotional presence. Maybe things don't change that much after all. Maybe that spark, that connection, that presence, remains. Maybe the relentless onslaught of technology, the bewildering social madness we internalize, maybe it can't change love. Maybe love is an unassailable abstraction. Maybe no matter how much people change, love never does. It keeps us sane. Keeps us human. Keeps us coming back for more.

First Bank of Scott

2009-05-11T14:38:00.000-07:00

The recent financial catastrophe, in which America's five largest investment banks have disappeared, the world's largest insurance corporation and largest mortgage holders taken over by the government, and the unemployment rate nearly doubled, has gotten me thinking. Although I'm a polymath, I typically shy away from economics. I've never given much thought as to why. I've come to realize that the language of economics sets off my bullshit detector. It's a deceptive, manipulative language, a contrived complexity. But lately, being curious why and how 13 trillion dollars of American money has disappeared has forced me to try and learn this language of bullshit.

Starting with questions like "where does money come from?" One might assume it is created by the U.S Treasury. Not so. The treasury's money comes from the taxpayer. So where does the taxpayer get it from? A glance at a green bill in one's pocket yields the phrase "Federal Reserve Note," leading one to believe that our money is created by the Federal Reserve, the central banking system created by an act of Congress. Not quite so. After some digging, I'm fairly certain (again, the language of bullshit is thick in this arena, so I'm straining here) that the Federal Reserve monitors and controls how money is created. However, the Federal Reserve is merely a collection of private banks, run by a board appointed by the U.S. President. The money, however, is actually created by the private banks themselves, in the form of credit. Out of thin air. Poof. The Federal Reserve regulates how this is done, but remember, the Federal Reserve is a fancy name for a consortium of private banks. Making this consortium a Federal Reserve gives the banking industry a back-door into the U.S. Treasury.

If you read an economics textbook, it will tell you that a customer stores his money in a bank, and the bank then lends that money to someone else plus interest, then keeps the profit. Under this paradigm, the bank always has enough money in circulation to cover its deposits. Ah, how sweet a fable that is. It hasn't worked that way for quite a while.

Banks use what's called fractional reserve banking. That means that a bank isn't actually expected to have all the money. They're usually expected to have a dollar for every three or four that they lend. This 3-to-1 or 4-to-1 ratio is called leverage. I've always considered this dangerous, but it worked pretty well for a long time. However, decades of erosion in the laws that regulate capital, many of which were constructed in the wake of the Great Depression (an era we'd all do well to study), allowed investment banks to skirt the rules. Clever men in business suits, armed with MBA's and PhD's, cloistered in Manhattan power firms, found more and more clever ways to maximize their leverage. Some of these investment banks, such as Lehman Bros. and Merryl Lynch, were leveraged as much as 40-to-1.

Now, this isn't rocket science. If you have 40 dollars in outstanding debt for every dollar you possess, you are headed for failure. This is essentially a Ponzi scheme. As long as you keep new investments coming in, you can keep paying the previous investors. For a while. As long as the richest nation in history continues to get richer, everything is fine.

But everything is not fine. Everything is fucked. National governments around the world are teetering on collapse because of this. Millions of people are hungry because of this. The world's economy has ground to a halt, and you can almost hear six and a half billion people holding their breath.

But I know that the system will not clean its own corruption. The American system is terminal. Much of the profit in this system has has been invested in the political process. The investment banks were top donors to both major candidates in the 2008 presidential race. Most secretaries of the treasury and directors of the Federal Reserve are investment bankers. The bankers own this shit. They own you. They own me. We belong to them. You think you own your house? A bank owns it. You think you own your car? A bank owns it. How does your employer pay you? In a check issued by a bank. They own this shit.

A banker in an office in mid-town Manhattan creates money in a database. POOF! He transfers some of it to himself. POOF! Then he buys food with it. All of the people involved in making that food worked their asses off- the farmer who planted and harvested it, the trucker who hauled it to the grocery store, the clerk behind the cash register, they all worked for that money. But not the banker. The banker is a tick on the ass of the American people.

Not happy with food, the banker wants more. A mansion, a sports car, a yacht. Still not content, he begins to contrive more and more complex ways of creating money. More risk, more greed, trying to squeeze blood out of American workers as they labor to build the mansion, build the car, build the yacht, clean his house, grow his food. Eventually the schemes of the bankers crash the system. But remember, the system belongs to the banker. So the bank begs the Federal Reserve for an emergency bailout. But remember, the Federal Reserve is run by the bankers. In the interest of the banking system, the private banks that fund the Fed may bail out a fucked up investment bank. However, when the entire banking system goes belly-up, the Federal Reserve goes to the Treasury and begs the Treasury to bail out the banks. And the Treasury, which is run by a former investment banker, does so. It takes trillions of dollars of money from us, the taxpayers, and gives it to the banks.

So not only do the banks create money out of thin air, using it to get American workers to create their homes and cars and food, they get to steal tax money from those same workers. Trillions. The U.S. Government so far has given, loaned, or committed $13 trillion to the American banking system. How much is $13 trillion? I'll tell you how much. It's enough money to feed, clothe, and educate every single human being on Earth. It's enough to make a huge leap forward in the evolution of the human species. Instead, it'll be used to keep the richest humans in the history of the world rich.

If you ask a banker or economist if that's how it really works, they'll roll their eyes and pat you on the head and assure you that it's much more complicated. Then they'll refer you to complex texts involving statistical analysis. But that's bullshit. It's contrived complexity. The cold, hard, fact is that every time a bank makes a loan, it is creating money out of thin air. While coins and bills are printed by the Treasury, coins and bill represent a tiny portion of our money supply. The vast majority of money is credit. Bankers, after they've waved their magic wand and created money, spend the rest of their time obfuscating the deed by using euphemistic language and complicated arithmetic to distract us from their greed. We don't have time to penetrate the bullshit because we're too busy working to get money. From a bank. That's a scam.

I'd be furious, but I know better. I'm done wasting my emotional energy on things I cannot change. So instead, I've decided to start my own bank. Hey, if you can't beat 'em, join 'em. I want to create some money. I could use it to do good things instead of bad.

So I've downloaded an application to create a bank in the State of California. The application is one page long. All I need is a $5,000 fee. Then I must convince the state banking commissioner that I am a reputable person with a solid business model.

So here's my plan: raise $5,000 (venture capital, anyone?), glad-hand the commissioner, get a license, move my headquarters to the Cayman islands (so I don't have to pay taxes), apply for entry to the Federal Reserve System, bribe a few Fed governors, then declare bankruptcy, beg for a bailout, and retire to write my memoir "I am a Rich Asshole, and You are a Poor Schmuck". Then I'll go on a speaking tour. Of course, I'll donate the proceeds to charity.

I'll be in Switzerland by Christmas, where I'll apply for a job at the Bank for International Settlements .

Woody Guthrie- All You Fascists

2009-03-02T12:22:00.000-08:00

The Coming Decade

2009-02-19T13:18:00.000-08:00

Read this if you want to know what's happening to the economy.

Read this if you want some ideas of how to cope in the next decade.

Don't try to read them both in one sitting. They're long and the subject matter is intense. But do read them.

Wounded Healers

2009-02-13T17:26:00.000-08:00

burn through the pain

burn through the confusion

burn through the fear

burn with holy cleansing fire

and emerge reborn

conscious but not thinking

neither reflecting nor projecting

here now in this moment

open your heart and let feeling flow

the joy lives where the pain lives

two sides of the same coin

let them flow

face to face

flow with me

here and now

transcend this wretched beauty

two trees

lashed by the storm

bent and thrashed

straighten slowly in the morning sun

ready for spring

Hard Rain

2009-02-11T15:39:00.001-08:00

Dark clouds fill the sky. February has always left me feeling unsettled. As the economy continues to collapse, I see my loved ones facing hard decisions. More and more of my friends are unemployed. The money is running out. No one is hiring. While banks refuse to lend, house prices fall and rental prices rise. A sick feeling fills the pit of my stomach. Maybe instead of buying musical equipment and taking trips, I should have saved some more money. My job is safe for now, but for how long is anyone's guess. Our CEO called an all-hands meeting for 9am tomorrow morning. I'm trying not to worry.

The reverberations from the US financial collapse have staggered the world. Iceland's economy went bankrupt and their government collapsed. Dubai is filled with empty cars, as industrial expats watch their investments tank, the realization of Sharia's punishment for debt default sinks in, they leave the keys in the ignition and fly home on their last few dollars. The Chinese government just laid off 20 Million people. The business section of today's newspaper is a massacre. These reverberations are coming home now. We're on the edge now. This year will not be kind to any of us. Times of world-changing crisis are here.

I'm sure that in the long run, things will be fine. In the short run, we have to make tough decisions. We must be patient and remember to enjoy the simple pleasures. Try to keep your sense of perspective.

H.R. 645

2009-01-28T11:22:00.000-08:00

To direct the Secretary of Homeland Security to establish national emergency centers on military installations.

Machines Closing in on Human Abilities

2009-01-23T19:45:00.000-08:00

Reflections of Obama

2009-01-21T17:11:00.001-08:00

I used to regularly blog on politics. In the last year or two, my interest has waned, and my life has filled with other things that called for my attention. Also, spending my days reading and writing technical manuals doesn't fill me with the desire to opine after hours, for some reason.

During the first six years of the Bush Administration, I ranted and raved about their abuses, their hubris, their lies, their incompetence. Eventually, though, I just got tired of being angry. I could not possibly sum up how I feel about the savage gang of pseudo-intellectual, faux-patriotic pimps, pushers, power whores, and cronies who have run rampant over this land in the past 8 years. Whole bookshelves have been written on the subject, and perhaps, after some time has passed, I'll be able to find the words to assess the damage done and make a reckoning. But that night is not this night. This is a night for celebration.

In 2004 I was paying very close attention to the political scene, keeping an eye on the electoral race, and struggling to decide whether to vote for a walking corpse named John Kerry, or abstain altogether in disgust. On election day, I made the decision to vote for Kerry. I wanted my voice to be heard in opposition to the Bush Administration.

I regretted my decision the next day when, knowing full well the extent of voting irregularities in the last election, knowing full well the conflicts of interest created by a Republican administration that had deeply stacked the deck, Kerry rolled over and conceded defeat before the all the votes had even been counted. Later, the Comptroller General of the United States released an official report casting doubt on the validity of that election, but by that time, Bush's power was too deeply entrenched to ignore.

But something had happened during that cycle, the importance of which hadn't been immediately obvious. While purusing a news story about the 2004 Democratic National Convention, I read that the keynote speech had been given to a guy I'd never heard of. So I hopped on Youtube (which I was in the proccess of falling in love with- I'm now an official Youtube whore), and watched the speech. Out of the convention hall and into the limelight strutted a skinny young black guy named Barack Obama. I scratched my head in wonder. As he began to speak, I consulted the almighty Google and discovered that he hadn't even been elected to national office yet (although he was a few weeks later, due in some part to that speech).

I wondered "who is this guy and why is he being put up front so quickly?" But a few minutes later, as his speech began to sink in, as I watched his delivery and listened to his words, I began to get it. He moved me. Now, I am a very cynical observer of politics, and I have a pretty good bullshit detector for rhetoric, and yes, there were passages that sounded like boilerplate liberal idealism. And I've since heard old school Obama staffers laughing at that speech, which is apparently his original stump speech that he used to give to 10 people at a time in small rooms in the south side of Chicago, when he was a community organizer. But for me, that's exactly the point. Obama personally wrote every word of that speech. How many politicans can say that? Cerntainly not our last President, that meely-mouthed imbecile.

By the end of his keynote speech, I found myself nearly at the point of tears, amazed to hear a politician who sounded like he actually believed what he was saying. I could hear in his voice and see in his demeanor that he was not, like most candidates, from old money, or an established political family, had not been groomed from birth, that he had earned his way to where he was through hard work. I could feel it. And for a moment, I thought "this guy could be the first black president".

I didn't expect it to be so soon.

But here we are, scarcely four years later. These moments are generational. When, in late 2005, he asked one of his political mentors, Tom Daschle, if he thought he should run, Daschle said, "if you're ever going to do it, now's the time". He was right. We needed fresh blood. We needed a change.

Don't get me wrong. In the long run, Obama may or may not be able to change anything. I tried hard during his campaign not to fall in love with him so that he couldn't break my heart. But I couldn't pass up the chance to support what appeared to be the only political candidate in my lifetime that I could actually feel good about. I researched him as much as I could, read his critics extensively, watched all his major speeches (the 2004 DNC keynote, the Brandenburg Gate speech, the nomination acceptance speech, the speech on race, etc.), watched him debate, watched him stump. I couldn't find a single fuckup. Name any other politician and you can find a clip on Youtube of them making a major fuckup. Not Obama. Not in two long years of campaiging. The mind boggles.

He won, not only in spite of his name, race, and background, but he won decisivley, the largest popular vote in American history. He redrew the map of the American political spectrum, just like he said he would.

I promised myself when he was elected that I'd give him until at least Inauguration Day before I start kicking his ass. And yes, my friends, I will kick his ass. Because I voted for him, and because my taxes pay his salary, and because I respect my duty as a citizen in a demoratic republic to remain aware and involved, it is my duty to kick his ass.

But not today. Today, in the elevator at work, I talked to Finneus. He's the old black man that washes cars in the third sub-basement, where I park my car. We usually wave at each other, and once he helped me get into my car, when I'd locked my keys in it. Today he was grinning from ear to ear. He said he'd taken the morning off to watch the inauguration. I told him I could scarcely believe it was true. Then he said something I'll never forget. He put his hands to his face and said "I had tears streaming down my cheeks". We smiled at each other for a long moment, then I patted him on the back and walked away.

So here's to the new president, to the new American spirit. This spirit of change, the spirit of hope and renewal, may not last, it may soon be bludgeoned by the realities of war and economic collapse. But for this moment, I'm deeply grateful for Barack Obama.

Stay tuned for my next article about why Obama's national security cabinet appointments make me nervous and angry.

Steven Pinker: The Stuff of Thought

2009-01-12T02:13:00.001-08:00

This is a Farewell Kiss, You Dog!!!

2008-12-14T14:40:00.000-08:00

Fight of Our Lives

2008-12-10T12:33:00.000-08:00

Life has been good to me lately, but many of the people I care most about are suffering.

Ben Harper sings (screams, actually) in the song Better Way:

Reality is sharp, it cuts at me like a knife
everyone I know is in the fight of their life
but I believe in a better way

That's how I feel right now. There are hard times upon us. This world is full of evil people who live to take, live to inflict, live to feed on the goodness of the righteous. People reliving the pain inflicted on them by their fucked up parents, inflicting the same on their children, feeding the vicious cycle, propagating evil over and over, generation after generation. But those of us with a heart must band together. We have to take care of each other. I know that it's hard to shine love from your heart when the ticks and leeches of this world are sucking you dry, but I refuse to harden my heart. You can't fight hatred. You can't fight fire with fire. You can't kill evil. You can only absorb it. It's the only way to break the cycle. So I will absorb evil, absorb suffering. I will turn the other cheek, walk away, and find someone savable to nurture. You can't fight evil, but you can make love.

I wish I could save all of my love ones from their suffering, but all I can do is tell you all how much I love you. Hang in there. Keep your heads up. Don't give up hope. Have faith in love. Believe in a better way.

Here are some songs that I listen to when I need strength and comfort. These artists have found ways to articulate things that I feel deeply. Maybe they can comfort you and give you strength.

National Nukes

2008-11-24T01:26:00.000-08:00

Chinese

French

Pakistani

Russian

American

British

Old Newsreels

2008-11-24T00:49:00.000-08:00

Monk Fight

2008-11-11T13:16:00.001-08:00

Greek and Armenian monks box in the Church of the Holy Sepulchre... I don't speak Greek or Armenian, but it sounds like they're saying "hey, fuck you buddy, I'm trying to worship the god of tolerance, love, and forgiveness, get the fuck out of my way with your incorrect ritual before I fucking knock your ass out. Yeah, that's right, turn the other cheek, motherfucker!" I never get tired of watching religious people hurt each other. It's a beautiful thing.

Glowing Cat

2008-10-24T13:33:00.000-07:00

Scientists have created a glowing cat.

I can't wait to see how the good folks at icanhascheezburger.com handle this.

Powell Calls It

2008-10-19T10:23:00.000-07:00

For the next two weeks, I'll have my eye on the polls in Virginia and Missouri.

Missouri because politically, it's the bellweather state. Besides being geographically central, Missouri voted for the president in every election since 1948 (except 1960 and that was one of the closest elections in history). And Virginia because according the calculations, the GOP simply cannot win without this traditionally Republican state, in which Obama is now up in the polls by more than the margin of error.

Quants and Algos

2008-10-17T12:42:00.000-07:00

The Rise of the Machines

h+ Issue #1

2008-10-17T12:23:00.001-07:00

Transhumanist web-mag

Sad Guys on Trading Floors

2008-10-17T12:01:00.000-07:00

It was inevitable that someone would collect these. Snapshot of the national mood.

Degrees of Paulson

2008-10-16T20:20:00.000-07:00

Degrees of Paulson, courtesy of ProPublica.

Random Thoughts, vol. 223

2008-10-14T21:54:00.000-07:00

Hello blank page. Hello, white pixels. Hello flashing cursor. Hello keyboard buttons, symbols of abstraction. Hello characters on my screen. Hello blog readers, encapsulated as you are within the relative confines of time and space.

If a million monkeys typing for a million years could write the unabridged works of Shakespeare, can a middle-class Californian stoner with a beer, a bong, and some street-smarts craft anything of value? Anything meaningful?

There is a difference between value and meaning. Value is merely the intersection of scarcity and desire. Meaning, like melody, is harder to define. My definition of melody: the part of the song you whistle. My definition of meaning: whatever gets you out of bed in the morning. But isn't that the definition of motivation? Or is meaning the content of motivation?

None of us lives long enough or knows enough people to know for sure whether or not human nature ever really changes.

Anything you analyze deeply enough falls apart. Entropy affects even consciousness. If you define a word exactly enough, zoom into a microscope or telescope far enough, deconstruct any concept completely enough, it falls apart. I like that.

We all die in the end.

We are part of an an event we call reality, or the Universe. The cells that make up my body now did not exist when I was born, but the atoms that make up those cells were born in a star that no longer exists.

Or maybe not. Perhaps we are the work of a vengeful and jealous invisible man in the sky. Who knows? Not me. I know nothing.

Words live lives of their own. Words can provoke feelings. Words possess this power. Words can make you feel warm like an oven full of cookies on a cold, dark night. Words can make you feel sick, like bile dripping from the lips of a fresh corpse. Words can comfort like the purr of a kitten, or terrify like a knife to your throat.

The mind is a place of its own, and words are a kind of currency there (here?). Ordering and identifying, translating and exchanging, quantifying and objectifying, abstracting and specifying, logic defined by intuition.

Power. Watch this: look here. And here. See? Power.

Cause and effect? You be the judge. I am not qualified. Not yet.

Distibution and Depression

2008-10-13T23:00:00.001-07:00

Marriner S. Eccles, who served as Franklin D. Roosevelt's Chairman of the Federal Reserve from November 1934 to February 1948, detailed what he believed caused the Depression in his memoirs:
As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth -- not of existing wealth, but of wealth as it is currently produced -- to provide men with buying power equal to the amount of goods and services offered by the nation's economic machinery. [Emphasis in original.]

Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth. This served them as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied to themselves the kind of effective demand for their products that would justify a reinvestment of their capital accumulations in new plants. In consequence, as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.

That is what happened to us in the twenties. We sustained high levels of employment in that period with the aid of an exceptional expansion of debt outside of the banking system. This debt was provided by the large growth of business savings as well as savings by individuals, particularly in the upper-income groups where taxes were relatively low. Private debt outside of the banking system increased about fifty per cent. This debt, which was at high interest rates, largely took the form of mortgage debt on housing, office, and hotel structures, consumer installment debt, brokers' loans, and foreign debt. The stimulation to spend by debt-creation of this sort was short-lived and could not be counted on to sustain high levels of employment for long periods of time. Had there been a better distribution of the current income from the national product -- in other words, had there been less savings by business and the higher-income groups and more income in the lower groups -- we should have had far greater stability in our economy. Had the six billion dollars, for instance, that were loaned by corporations and wealthy individuals for stock-market speculation been distributed to the public as lower prices or higher wages and with less profits to the corporations and the well-to-do, it would have prevented or greatly moderated the economic collapse that began at the end of 1929.

The time came when there were no more poker chips to be loaned on credit. Debtors thereupon were forced to curtail their consumption in an effort to create a margin that could be applied to the reduction of outstanding debts. This naturally reduced the demand for goods of all kinds and brought on what seemed to be overproduction, but was in reality underconsumption when judged in terms of the real world instead of the money world. This, in turn, brought about a fall in prices and employment.

Unemployment further decreased the consumption of goods, which further increased unemployment, thus closing the circle in a continuing decline of prices. Earnings began to disappear, requiring economies of all kinds in the wages, salaries, and time of those employed. And thus again the vicious circle of deflation was closed until one third of the entire working population was unemployed, with our national income reduced by fifty per cent, and with the aggregate debt burden greater than ever before, not in dollars, but measured by current values and income that represented the ability to pay. Fixed charges, such as taxes, railroad and other utility rates, insurance and interest charges, clung close to the 1929 level and required such a portion of the national income to meet them that the amount left for consumption of goods was not sufficient to support the population.

This then, was my reading of what brought on the depression.