30 September 2008

Richard C. Cook has admirably embarked on a Clifford Hugh Douglas Social Credit revival while commenting on the financial crisis of recent months in Global Research, which has led to his celebration of the mostly Republican defeat of the bailout bill and a castigation of the Democrats. As I’ve said, the difference in support of the bill between the two parties is a result of closer races for Republican incumbents.

That last point is important because the public outcry of both parties is not related to the ideology of the electorate, except to the extent conservatives oppose national debt despite the Republican record deficits of the last 30 years in the executive branch (which always picks the amount of the federal budget even if Congress changes what it’s spent on), and the extent that liberals view this as asking the public to finance the political interests in Wall Street that have counteracted their wishes. I’m not going to speak for the public but it the backlash seems tied more to general anger towards the inequalities inherent in consumer credit and the act of asking the public to finance the maintenance of this system by paying off the lenders and not the borrowers.

I agree that inaction would cause a credit crunch and recession, and I agree that the reaction by Wall Street and the corporate media to the views of the public has been arrogant and uncompromising. Uncompromising, because deference to the public structurally contradicts the mantra that money for purchasing power should be extended to the poor at a greater cost than money extended to the rich, the mantra that consumer identity through ‘credit worthiness’ for the purchase of housing, cars, and health care is sustainable. So we are being asked to prop up the status quo while the public is given the psychological concession of lower executive salaries and questionably effective congressional oversight.

The question of whether to castigate Obama from a Douglasite prism is similar to the question of whether to support him despite disagreeing with him on important issues like health care, the war on terror, etc. Major Douglas would certainly say that we are financing a flawed system but didn’t see national debt as being a breach of doctrine.

Douglas (pictured) viewed profit and consumer credit as part of the same problem. An economy based on profit presupposes that the purchase power of the corporate employee is less than the cost of the product produced, and charging interest exacerbates the inequality, so workers should be compensated based on their real value of production through companies and the national credit office.

What’s happened in recent years is that profit-taking and interest has been so indulged that a structural imbalance has taken place. The Iraq War raised the price of oil due to centralized corporate control of the Middle East shipping routes, has shifted public expenditures overseas, and has so exploded the national debt that there’s less capital available for lending. The deference paid to the profits of Big Oil by Bush has crippled the rest of the economy. Meanwhile, the higher interest of sub-prime credit which covers the higher default rates has understandably raised default rates, since higher interest decreases the likelihood of repayment.

So ending or reducing the wars, diversifying energy sources, and regulating consumer credit create a more moderate application of the Laws of Douglas through a belief in effectively ‘sustainable profit and credit.’ Of course, the concept of sustainable profit and credit is an anathema to Douglasites, as capitalism is inherently based on expansion and accumulation, but one way or another, the perceptions of Douglas and others that ring true are not going to be applied by a legislative faction that supports expanded wars and opposes consumer protection and regulation. Douglasite analysis can cut different ways and policies can be applied with differing degrees of purism.

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