Guest Post by Mike Shedlock
“Free Money” experiments are underway in several places: Canada, California, and Finland.
“Living wage” advocates are elated.
Ongoing Free Money Experiments
- Canada Is About To Start Giving Away Free Money
- 100 People in Oakland Will Get Free Money as Part of a Basic Income Experiment
- Finns to Get Free Money in State Experiment Set to Start 2017
The alleged studies are all fatally flawed because they do not scale. It’s one thing to give a few hundred people or a few thousand people free money, but it’s another thing to scale the experiment across an entire nation.
Free Money – Dauphin, Canada Experiment
Huffington Post author Zi-Ann Lum proclaims A Canadian City Once Eliminated Poverty And Nearly Everyone Forgot About It.
The problem with superficial analysis by Lum and others is they only focus on half the equation. Yes, citizens of Dauphin benefited, but it was at the direct expense of everyone in all of Manitoba that had to contribute “free money” to the residents of Dauphin.
Were the same scheme available to everyone in Manitoba, the money would have had to come from all of Canada.
And for all Canadians, the money would have had to come from Martians.
Nonetheless, in spite of such obvious flaws, economic illiterates have latched on to the free money scheme.
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Living Wage Idiocy
Reader Gary asks: Why does everyone deserve a “living wage”?
His own answer, widely believed, but easily rebutted follows: “Because without it the nation is weakened. Our nation is getting weaker. Automation will kill labor, but it will also kill capitalism. Without labor, you have no customers.”
Rebuttal
- If you pay people to do nothing, there will be masses of people doing nothing and getting paid for doing nothing.
- The globe is already overpopulated with people doing nothing productive.
- The necessary “living wage” would increase monthly, along with the number of people getting free benefits. Imagine giving everyone in Africa, India, and China a “living wage”.
- People from Africa, the Mideast and anywhere else not getting a “living wage” will all want to migrate to places paying a living wage for doing nothing. Look no further than Syrian refugees all wanting to go to Germany and Sweden because those nations offered the most free benefits.
- Any living wage experiment purported to have worked, didn’t. The experiments were flawed because they did not scale and will never scale.
Redistribution Nonsense
The idea that the government needs to redistribute money to make things affordable is ridiculous in both theory and practice.
Thousands of affordable home programs, tuition programs, and Obamacare prove the ridiculousness of the concept.
If the Fed and governments would just get the hell out of the way, prices would naturally find the right level.
But no! The Fed does not want prices to go down, and when prices go up, economic illiterates scream for “living wages”, attacking a symptom of the problem.
The problem is not insufficient wages. The problem is fractional reserve lending coupled with a Fed hell-bent on creating inflation in a technologically deflationary world.
Misguided minimum wages hikes, public unions, and political corruption all exacerbate the problem.
Challenge to Keynesians
My Challenge to Keynesians “Prove Rising Prices Provide an Overall Economic Benefit” remains unaddressed.
The BIS did a study and found routine deflation was not any problem at all. For a discussion of the BIS study, please see Historical Perspective on CPI Deflations: How Damaging are They?
Anyone wishing to rebut my challenge to Keynesians also needs to address the detailed BIS study.
Meanwhile, economically illiterate writers bemoan deflation, as do most economists, central banks, and academia. The final irony in this ridiculous mix is central bank policies stimulate the massive wealth inequality all of the above rail about.
It would behoove “living wage” advocates to consider the possibility the real problem is central bank sponsored inflation, not a failure of government to provide a “living wage” to those doing nothing.
I’d like to apply.
http://www.breitbart.com/california/2016/04/04/ca-city-pays-killers-12000-year-not-murder-guns/
I smell hyperinflation or flat-ass worthless paper…..oh wait.
Hugo says it is world Deflation:
I agree with Mish’s criticisms, but I think he may be missing the elephant in the room. Automation of various kinds – robots, expert systems, and plain old computer data processing – is moving into more and more areas that were traditionally sources of human employment. It’s not just repetitive factory work, it’s also becoming a lot of office work and most kinds of low to moderately skilled physical labor, and it is creeping into areas considered educated or difficult, like some types of legal and medical work.
If this continues – and that’s not certain, but there are no obvious roadblocks – we’re heading toward a place where the vast majority of people have no economic function as employees or producers. What then? You either have those people be permanently impoverished and living on scraps, like in India, or you do something to involve them.
Again, Mish’s criticisms are right, but you need to look equally at the alternative. If the alternative is worse, you might want to consider some form of basic income.
Oh yeah, the really ugly and delicate part. Paying people to do nothing encourages them to – DO NOTHING – and reproduce, as you can see in any US inner city since LBJ destroyed the social economy. This is bad. So you should somehow (a) encourage people to still do something useful, whatever it may be, and (b) discourage useless people from reproducing. If you’re a TBP regular you can pretty quickly list out the political, social and umm genetic characteristics of the kind of people you want to NOT reproduce. There’s a political conundrum for you.
This will all get resolved somehow. Most likely through a combination of 3rd, 4th, and to-be-created 5th generation warfare. I would recommend Neal Stephenson’s novel The Diamond Age for one possible view of this future.
$5,000 to the undesirables who agree to be sterilized.
No woman w/an IQ above 100 would be eligible.
I think you’re pointing in the obvious direction, but it would probably have to go much, much farther than that – and be somewhat coercive – to avoid an Idiocracy doomsday.
Listen, women need to set up a reparations IRA to pay men back for years of enslavement. They have been setting up men with supposedly free poontang and a couple of months later, wham! A guy is stuck with 18 or more years of indentured servitude paying the nut on her monthly rent, her BF’s beer, and for what? Something you could have taken care of manually.
They actually are the smart ones. Don’t be fooled by that innocent, klutzy scam. These creatures have been seducing men for ages and sending them out into the freezing cold with holes in their underwear and socks, mending socks is so yesterday. Maybe your mom will sew your socks, they say, I don’t do that.
At least niggers picked your cotton at one time. Women won’t even pick up your dirty underwear from the floor after you wore yourself out pleasing her insatiable appetite for making babies and dragging you deeper into debt.
Don’t worry. The incoming wave of VR, which has finally gotten good enough to become a consumer product, is going to create a quiet and humane way to wipe out a huge portion of the population via encouraging as many people as possible to escape into childless VR existences.
People using the current technology already talk about how just a half hour makes it so when you take the device off you have trouble re-integrating with reality, including body motor skills. This is in part because due to the immersion, your brain is rewiring your body to match the “new” reality in the same way that if you put on glasses that invert your vision your brain will eventually correct this for you.
Now take your average video game player or TV/Netflix watcher and the hours spent in them. Provide those same services but in a VR world where you can be relaxing in a recliner but can control yourself with minor movements of your fingers and eventually by brain wave monitoring (already possible in other applications very well).
Spend enough time and returning to *here* will not only be difficult for most people, it will be traumatic.
This is what is going to be done with the unproductive population. They will simply be sent to die in whatever virtual heaven they want without having children. And it’s coming online just in time. Almost like… there might be… a bigger picture going on.
Robotics, gasp!!! Creating massive unemployment, gasp!!!
I heard the same thing when someone invented the shovel–it will put a lot of cavemen out of a job. Think of the economy. Oh! Doom, Doom!
Ned Ludd is alive and well.
I’m glad Canada is willing to do this, so that we Americans can see the results before some idiot politician here decides we need to do the same.
The answer is to “weaponize” the phony banking debts, by “monetizing” the phony, banker debts. The 1200 Trillion is presently, listed as “Assets” on the phony Bankers’ books.
It is absurd.
The actual damage is 1200 trillion. The damage relates to inter-bank, criminal insurance frauds, predicated upon collecting phony insurance swaps (aka, “derivatives”) that are levied against counterfeit titles, operating in bogus “Trust mechanisms” (aka, REMICs) that are described as “Special Purpose Vehicles”.
“Keynesian”, “deficits-don’t-matter” and equally absurd, “unfunded liabilities”, do not apply to the 1200 trillion as they are criminal, in nature; as such they are, quid-pro-quo, as “zero-sum-game” frauds.
In other words, there must be a winner and a loser to each side of each phony “derivatives bet”.
This is why the banks have become mules for the drug and terror cartels: the system lacks “LIQUIDITY”, there is NO CASH!
(FIAT Currency, in the absence of ACCOUNTABILITY- “M3” HAS NOT BEEN REPORTED SINCE THE PHONY “FINANCIAL CRISIS” WAS FIRST ENGENDERED, 2006; THE DTC AND DTCC REFUSE TO REPORT “DERIVATIVES”, ALTHOUGH THAT IS THE REASON THE DTC and DTCC WERE CREATED, IN THE FIRST PLACE AND A COMPLETE SUBSERVIENCE OF THE COURTS TO BOGUS BANKING BEHAVIORS; THE REMICS ARE EMPTY!!!!! HENCE DEVOID OF ASSETS!!!!!, WITH FINES INSTEAD OF PRISON, LEVIED, WHILE THOSE FINES ARE PAID BY TAXPAYERS)
HSBC BANK is proven in their illegal behaviors and the tellers received specially-made boxes, designed to fit teller windows, with pre-packaged bales of CASH!!!! The banks, should they be forced to open their books, will be proven as unable to meet their liabilities, vis-a-vis, their assets. The emperor has no clothes!
Every single bank is involved in fraud, forgery and counterfeiting American Mortgages.
In the 90s, Neil Bush, yes, those Bushes, was robbing American Taxpayers, using the FDIC.
In Michael Lewis’s book, “The Big Short”, a lot of people missed the fact that Lewis demonstrates HFC-Household Finance Company as the template for later, predatory behaviors, in sub-prime lending.
Lewis’s book is great, but it doesn’t tell the whole story. Read: the article called: “Securitization Fail”, by Adam Levitin, economics professor from Harvard, if I recall correctly).
(An attorney from Nantucket also has written an easy to digest, one-page article, called “Foreclosure, securitization don’t mix”, by Rockwell P. Ludden).
It is also true, George Senior was a one-time president because of the Long Term Capital Management, Keating Savings and Loan scandals…
Most people never realized, until Snowden, that George Senior and his banker pals also attacked and intentionally destabilized the Russian Ruble.
Anyway, Neil Bush was opening S&Ls; giving his friends loans and then bankrupting the bank. The net result was: his friends paid pennies on the dollar for their loans and the Taxpayers picked up their tab.
In part, to thwart criminals like the Bush Family, “REMIC Trusts” were created- more to the point: banks were encouraged to use “REMIC Trusts” to avoid tax consequences that were considered “burdensome”.
A “loan” was granted 90 days for a bank to enter that “loan” into lawful, REMIC Trust- the bank was then given “Tax-Deferred Pass-Through Certificates”…
Most often, the terms, “Pass-Through series” is part of the name on the phony “Trust” that claims the ability to collect on your “loan”.
Of course, if the bank didn’t enter the “loan” into lawful Trust, but said it did, within 90 days, the “loan” becomes “Null and Void” according to some.
(Others, myself included agree the “mortgage” was never intended as a “loan” for property in the first place, while, instead, a fraud of conversion, where money was stolen from 3rd parties- “tertiary funding”, illegal, in-and-of-itself- and identities (homeowner’s names and social security numbers) and collateral (American Homes) were stolen to place bets on Wall Street.
Supreme Court, 1872: Carpenter v Longan, explains: when a note and lien (contract and papers that show the amounts etc, pertainig to that contract) are “bifurcated (separated)”, the “mortgage” ceases to exist.
When Wall Street Criminals separated the paper contract (the Note) and put it in their own pocket and then passed the lien any multitude of times among themselves, in order to put phony bets on its performance, the “loan” became, “Null-and-void”.
(As an aside, within the “Pooling and Servicing Agreements-PSAs”, written to keep honesty among thieves, these criminals explained a violation of the “90-day rule”, voids the mortgage).
Every person in America has heard stories banks encouraged homeowners to “go behind” on their payments for at least 90 days, in order to qualify for Obama’s “Hamp” NONSENSE.
Once the homeowner went behind, the “loan” became “null-and-void” and triggered payoffs to the phony “Trusts” according to the PSAs that governed those “Trusts”.
THE BANKERS WERE HEDGING THEIR “NAKED SHORT SALE BETS” BY “MAKING A MARKET” (in foreclosures) FOR THE “DERIVATIVES” THEY WERE BETTING ON, AFTER “DUAL-TRACKING” THE “LOANS” THEY WERE CLAIMING THEY OWNED, USING FORGERY, FRAUD AND COUNTERFEITING.
Using American Mortgages to launder terror and drug cartel money is bad enough and voids any claim to solvency any bank within the central banking system may presently put forward…
Read an analysis of these behaviors, that exists as written by Federal Court Judge Gleeson and the “Deferred Prosecution Agreement-PDA”, written by the DOJ of the Obama Administration and used by AG Holder and AG Lynch, to conceal the banks are using American Mortgages to launder money for criminal cartels that have killed American GIs.
The “deferred prosecution agreement” and criminal admissions of HSBC Bank were Booked in Sept 2012.
The agreed-upon, criminal behaviors, in what amounts to a plea bargain agreement, include: (Violations of) “TWEA- Trading With Enemies Act”; “BSA Bank Secrecy Act”; all “AMLs- Anti-Money Laundering Acts”; “IEEPA- International, Economic Emergency Power’s Act”.
The Moore Family of Philadelphia first exposed the DPA and Federal Judge Gleeson wrote the following analysis:
You may read the court document here:
Case 1:12-cr-00763-JG Document 23 Filed 07/01/13
The banks, as we now know, stripped Pension Plans to pay the “loans”, in – full, on the front – end and then the banks counterfeited their interest in those “loans”, claiming they, the banks, gave the money… They didn’t; the Pension Plans of the Police, firemen, teachers and municipal workers were used to pay the “loans”, in-full.
The criminals then claimed “ownership” to the “loans” they then stole, for themselves, in order to collect interest and principal payments on “loans” the Pension Plans already satisfied, in-full.
A 100,000.00 “mortgage”, in this SCAM might return some $500,000.00 to the banks that stole the title, over the course of the “loan” (20, maybe 30 years).
BUT…
THAT ISN’T THE WORST OF IT…
http://www.marketwatch.com/story/this-is-how-much-money-exists-in-the-entire-world-in-one-chart-2015-12-18
THE BANKS CREATED 1200 TRILLION IN “NOTIONAL DERIVATIVES, NAKED SHORT SALE BETS”, THAT ARE SIMPLY, INTER-BANK, CRIMINAL WAGERS, THE BANKS CAN ROB PEOPLE’S HOMES, USING PHONY REMIC TRUSTS.
WHEN THE TIME COMES, NOT FAR OFF, THE BANKS CLAIM THE AMERICAN PEOPLE ARE ON THE HOOK FOR THE BANKS’ DEBTS AND CRIMINAL BEHAVIORS- REMEMBER: THERE IS NO MECHANISM WITHIN ARTICLE 1, SECTION 8, THAT EXPLAINS WE THE PEOPLE MUST PAY FOR THEIR CROOKED LIES AND DECEIT.
THEY HAVE RUINED THEMSELVES- NOT US.
It is up to the American People to Nationalize the banks and prosecute the bankers. The “Derivatives” damage, to this very day, is not known, in its entirety: the banks refuse to report through the DTC and DTCC- the regulatory agencies designed to track and report on their phony, “Naked Short Sale Bets”, That Americans will lose their homes to counterfeit, forgery and fraud, aka: “Derivatives”.
~Michael Keane, 8/19/16
https://livinglies.wordpress.com/2016/08/24/new-york-judge-orders-release-of-hidden-documents/#comment-451045
Michael Keane,
You gave us a great slice of the truth regarding banker integrity.
Bankers are playing the piano…up and down the scale, and cash
in repeatedly on every note played. We knew there was a good
reason we don’t like those guys.
We can not do the universal “free” income deal…here there or
anywhere. Unless the bankers fund it, as a percentage of their
after tax $$, either as humanitarian aid/or penance.
The free flow of food may not be limitless. I don’t want to look
out of my high rise lux apt. and see ‘peoples’ dying on the street.
Of course feed them…but they have to give up reproductive rights…
or there will be too many to feed.
Thank you for your contribution,
Suzanna
Hey Suzanna! “Of course feed them…but they have to give up reproductive rights… or there will be too many to feed.”
A good friend of mine is a proponent of the universal income idea. One thing we agree on is that if there were such a system in place, it would have to include a way to prevent the “single moms popping out unending streams of children” syndrome. There are multiple ways to do it. You can do a “no Norplant, no check” approach where each recipient has to have some form of built in birth control. You can do a system where adults get checks, but you get no bonus for children. In other words, have a many children as you like, but you have to support them from YOUR basic check. Even if you adopt your child out, you still have child support taken from YOUR check. Of course you could supply free abortions, or maybe have several systems running parallel and people choose which they prefer, etc. The important thing is that you do NOT encourage people to have children they will not support, or children likely to grow up as nonproductive.
Personally, I would prefer to do away with the central banks, do away with fiat money, and do away with fractional reserve banking. That would solve far more problems than a simple universal income.
” It’s one thing to give a few hundred people or a few thousand people free money, but it’s another thing to scale the experiment across an entire nation.”
Or so one would think, but even though the global debt load teeters over 200 trillion, central banks show no sign of cooling the printing presses or slowing the credit carousel. As long as people are willing to accept computer generated cash/credit as legal tender, then yeah, money can effortlessly be created out of thin air and given away to entire nations…or more accurate nations of renters who never own anything and love their servitude of leisure.
The Privacyless, Freedomless Smart City of 2030 the Elite Are Engineering
Those who have no money can’t buy .Think of UBI as a bank owned retail bailout. It’s coming.
It’s A Retail Apocalypse: Sears, Macy’s And The Limited Are All Closing Stores
But let us also not underestimate the impact that the stagnating economy is having on ordinary consumers. Thanks to the last eight years, approximately two-thirds of all Americans are living paycheck to paycheck. More than a third of all Americans have a debt that is at least 180 days past due, and the rate of homeownership has been hovering near the lowest level that we have seen in about 50 years. As you read this article, more than 95 million Americans are not in the labor force, and that number has grown by 18 percent under Barack Obama. Homelessness in New York City and other major cities is at a record high, and as a nation we have accumulated the largest mountain of debt in the history of the world.
Let us hope that things can be turned around, but if current trends continue the retail apocalypse is just going to go from bad to worse, and we will continue to see lots of headlines about more stores closing down.
http://theeconomiccollapseblog.com/archives/its-a-retail-apocalypse-sears-macys-and-the-limited-are-all-closing-stores
Who will rent and who will own ?
“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered…. I believe that banking institutions are more dangerous to our liberties than standing armies…. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.” Thomas Jefferson
We’re ALL Debt SLAVES – Here’s Why
https://www.youtube.com/watch?v=bH-nBcrTwYI&t=3s
many thumbs Flash
PS: Ida’s ugly brown dress looks like it is on backwards.
Otherwise she is lovely…wait? her mind? not so much.
Keep it simple.
End the Fed and hang the bankers.
That would have a sobering effect on Bankers. But, Bankers do the bidding of governments. General, you have to focus on the real problem!
Who is John Gault?
Its just about here, and as Micheal and Flash illustrate so well, by design. The long game is a bitch when you are this far down the road.
Fact : since the early 70’s there has been downward pressure on wages in the private sector workplace while government workplace though not immune remained relatively untouched . When corporations reap billions in profits and a large percentage of employees are eligable for welfare assistance something is critically wrong with the system ! We hear the complaint “people don’t want to work” and it’s true ! People are not willing to work for shit wages that offer no breathing room for their efforts while being taxed to provide public service people with benefits that private sector employers cannot afford for themselves but laugh in the face of people the employ ! Imagine if the taxpayers told school teachers if they want a raise stick a jack up their ass or if they don’t like their pay they can go on up the fucking road ! All statements I have heard private sector employers make as they gradually shifted from Americans to illegals and laughed “I can pay 3 of them what I paid 1 American and those spics will work their asses off and I don’t pay workmans comp or nothing ! This is because there are shell companies providing labor and every few months they vaporize but nobody wants to catch them in the act any way . So you wonder why people are demanding higher minimums and wanting illegals deported ! Do the real math and you would know why ! Union wages are not to high , all other wages paid below are abusive labor practices allowed in our current system and that system is crumbling from within because the debt compiled due to reckless spending and low wages which translates to lower taxes which equals a death spiral for the country ! Congratulations Wall Street , K-Street & Capitol Street , you win but your victory will not last , you have destroyed the very foundation for success in America and the house of cards is collapsing , hopefully on those responsible !
If I move to Canada will they give me money? Can I get dual Canadian -American citizenship?
In the interest of TBP unity I would give TBP commenters their money back on a pro rated basis.
The trouble with the Neo-Fake-Economists is that they mistake currency for wealth. Fiat currency is not wealth, but merely a coupon for obtaining wealth.
If these Neo-Fake-Economists understood Homer’s Teeter Totter model of an economy, they would abandon their idiotic notion of wealth distribution by handing out free currency.
Homer’s Teeter Totter model is simply this: On one side of the Teeter Totter is currency, commonly known as credit, a coupon, and on the other side of the Teeter Totter is ‘goods’ commonly known as wealth.
For an economy to function smoothly the Teeter Totter must balance. If it becomes unbalanced, disruptions develop in the marketplace. The marketplace has the unique ability to remedy this imbalance, but in our system of Keynes’s economic model a small number of central planners try to engineer a balance relying on their expertise and knowledge. The problem is they lack the knowledge as the statistics they accumulate are incomplete as the marketplace is comprised of million and millions of transactions daily and it’s impossible to correlate them all. Also, the actions that they take are always behind the time, outdated. The marketplace reacts immediately, central planner don’t.
If the coupon side of the Teeter Totter goes down, meaning that more credit has been created (currency printed out of thin air), the wealth side goes up meaning that the wealth side becomes more valuable and it take more coupons to buy ‘goods’, commonly called ‘price inflation’. This has the effect of balancing the Teeter Totter.
If the wealth side of the Teeter Totter goes down, meaning that more ‘goods’ have been produced or credit has contracted then the coupons become more valuable and it take less coupons to buy ‘goods’, commonly called ‘price deflation’. Think about this–‘goods’ always meet a price. If it doesn’t no transaction takes place.
Coupons are infinite, they are created out of thin air, ‘goods’ are limited. If these Neo-Fake-Economists want to print up coupon out of thin air and give them to non producers, it will have the effect of more currency chasing fewer ‘goods’ and ‘price inflation’ will occur. Then these Neo-Fake-Economists will enact price controls to try to minimize the effects of their money creation. Then ‘goods’ will disappear from the marketplace shelves as no producer will sell at that price. This is exactly what happened in Russia during the cold war and in Venezuela today.
See, economics is easy and you thought it was hard. All the confusion you experience was from those that gamed the system for their own advantage and that advantage was an advantage over you!
This is the ‘Supply and Demand’ model that governs all transactions. The ‘Supply and Demand’
model is just empirical observation of what happens in the marketplace. Human Action!