ECONOMIC INSANITY

Insanity:
   Dictionary definition:

• 1. Persistent mental disorder or derangement.
• 2. Law. a. Unsoundness of mind sufficient in the judgment of a civil court to render a person unfit to maintain a contractual or other legal relationship or to warrant commitment to a mental health facility. b. In most criminal jurisdictions, a degree of mental malfunctioning sufficient to relieve the accused of legal responsibility for the act committed.
• 3. a. Extreme foolishness; folly. b. Something that is extremely foolish [˜ economics].

   Layman's definition:

• 1. Doing the same thing over and over expecting a different outcome [˜ economics].
• 2. Self-deception [˜ economists].

From 56 BC:

...But meanwhile, before the empire of Rome became coextensive with Alexander's, the most immediate and decisive effect of the universal enthusiasm was to impel men to incur the most impossible obligations. Nearly every one was at once both creditor and debtor; men lent one another any little money they possessed, and borrowed again whenever they were in difficulties. Italian society had become an inextricable labyrinth of debit and credit, through the system of Syngraphae or letters of credit, which were negotiated in the same way as securities and bills of exchange today, because the scarcity of capital and the frequent oscillations in prices would have made it ruinous for them to be redeemed too frequently. Those who were in need of money attempted to sell to some financier the claims they had on other persons, and the financier would give cash payment, of course with a proportionate discount according to the prospects of the debt, the needs of the creditor and the condition of the money market... The Greatness and Decline of Rome, Guglielmo Ferrero, Vol. II, pg. 57.

The short excerpt above describes the financial condition of the world today. It has been reported that international currency gambling speculations vary from $1 trillion to $1.5 trillions per day. Annuallized, this is more than ten times the total production of the planet in real goods and services. As much as $2 billion in corporate stocks change hands daily in U. S. markets alone. These cycles of financial gambling in debt have plagued humanity since well before the Roman follies reported above. Solon, as reported by some historians, confronted the same problem in early 6th Century BC Attica. Historically, there are many more examples of bubble and bust economies. So, we are doing the same thing and expecting a different outcome. What better explanation is there than insanity?

They [bankers] viewed national interests from the windows of the bank parlour. From their point of view, industry, commerce, agriculture, wages, employment, were but counters in the skilled game of international finance. They must be regulated to fit in with the monetary scheme. The monetary scheme must not be regulated to fit in with the needs and necessities of the world. The Money Revolution by Sir Charles Morgan-Webb, 1935.

It was reported in a fund-raising letter from 50 Years Is Enough that "Michel Camdessus, Managing Director of the IMF, in fact, told a group of U. S. religious leaders that he was willing to ‘sacrifice a generation’ in order to realize the so-called benefits of the macro-economic model."

That the fund-raising letter is credible is demonstrated by Camdessus's Structural Adjustment Program for Indonesia. First, a fifty per cent devaluation of currency which means Indonesians will pay a doubled price for imported goods; and second, a sixty per cent decrease in wages for Indonesian workers which will give them sixty percent less money to pay the doubled prices. Typical SAPs also require reduced government employment and reduced public services which creates unemployment, limiting medical, safety net, and educational services, and divestment of government run enterprises. Other requirements may be removal of any restrictions on capital movement in and out of the country and conversion of local life sustaining industry such as agriculture to cash crops for export to earn foreign currency to pay interest on debt. Food is then imported at high prices. The suffering visited upon the people sets off riots and violence which increases suffering and death.