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Our Economy is Broken and Equity, What Is It?

Updated: Sep 17, 2023





A picture is worth a thousand words. The U.S. economy began to break in the 1960s and 1970s. Democracy is in gridlock, rendering a solution unlikely. One side is canceling, and the other side is ignoring. This is the real existential threat to our life, liberty, and pursuit of happiness. For the first time since the 1950s, our children are on track to underperform their parents.

In the 1960s, a progressive radical, California Berkley Bill, proudly wore his free speech button on his chest. Once the radical left politically collected various minority factions into a near-majority, they deployed Saul D. Alinsky's Rules for Radicals.

Saul's root character flaw is self-exaltation and self-deception. He thinks he knows better than everyone else, including God. The biggest tragedy is that he's not even aware of it. The story shows he is completely blind to his arrogance and always believes he's in the right.
  1. "Power is not only what you have, but what the enemy thinks you have."

  2. "Never go outside the expertise of your people."

  3. "Whenever possible, go outside the expertise of the enemy."

  4. "Make the enemy live up to its own book of rules."

  5. "Ridicule is man's most potent weapon."

  6. "A good tactic is one your people enjoy."

  7. "A tactic that drags on too long becomes a drag."

  8. "Keep the pressure on. Never let up."

  9. "The threat is usually more terrifying than the thing itself."

  10. "If you push a negative hard enough, it will push through and become a positive."

  11. "The price of a successful attack is a constructive alternative."

  12. "Pick the target, freeze it, personalize it, and polarize it."

For more explanation of each point, click Saul Alinsky's 12 RULES FOR RADICALS.

Note the highlighted items in the rules for radicals above. Sounds more like a war than a democracy where considerate loses.


The first chart shows us that something happened in the 1960s, a tipping point that changed equity in the United States of America. The second shows the real existential threat to the USA that will destroy life, liberty, and the pursuit of happiness. What do you think the third chart means?


The Gold Standard

The historical world economy has been based on gold and silver for most of history. Gold and silver have been used as currency for thousands of years because they are rare, durable, and easily divisible. They were also seen as a store of value, meaning that their worth was not likely to fluctuate wildly. Today's world economy is mainly based on fiat money, and we see reckless spending, inflation, and unsustainable debt. Capitalistic economies must suffer the consequences of baseless government spending and adjust to a new basis for the currency of the world's economy. U.S. spending and borrowing are not sustainable.


The gold standard was a monetary system in which the value of a currency was based on the amount of gold it contained. This system was in place in many countries worldwide for centuries until it was abandoned in the 1930s during the Great Depression. The next crisis, WWII, resulted in the world stabilizing on the U.S. dollar, Bretton Woods system, which remained backed by gold. It also helped that the U.S. was the only significant power whose infrastructure was undamaged during the war. Everything was fine until the 1960s when things started to go wrong and out of control:

  1. Martin Luther King Jr. delivered this iconic 'I Have a Dream' speech at the March on Washington on August 28, 1963. King wanted equality, fairness, and justice. He firmly believed in blind adherence to merit over race or any other identity attribute for who gets a job or entrance into a university. In a speech in 1965, King said: "Affirmative action is not giving a Negro a job because he is black; affirmative action is giving a Negro a job because he is qualified and was denied the job because he is black. Affirmative action is not giving a Negro a seat in a university because he is black; affirmative action is giving a Negro a seat in a university because he is qualified and was denied the seat because he is black." In a speech in 1967, King said: "Affirmative action programs are designed to create a more just and equitable society. They are not designed to hurt white people. Affirmative action programs can help white people by creating a more diverse and inclusive society."

  2. In 1963, a government conspiracy likely assassinated a popular Democratic President, John Fitzgerald Kennedy. This could have marked a dark and dangerous turning point in U.S. history, showing how far politics can go to achieve its objectives. The people have always felt the truth. As President Lincoln said, "You can fool some of the people some of the time, but not all the people all the time." Living with this without transparency damages our souls.

  3. Democrats, led by Lyndon Bains Johnson, devised a political plan to capture the black vote with the promises attached to the Civil Rights Act, some of which have turned out to be unconstitutional, costly, and bad for the U.S. economy, resulting in repeated inflation, removal of our gold reserves and harmful to the black people that were promised hope.

  4. Part of the LBJ political plan was to win some Republican support by a show of force in Vietnam, a position supported by Republican President Richard Milhouse Nixon until public opinion turned heavily against it.

  5. In 1968, both Robert Kennedy, JFK's brother, and Martin Luther King were assassinated, truly unfortunate for the future of the Civil Rights movement and politics in general.

  6. In 1969, the U.S. fulfilled JFK's challenge to land a man on the moon and return him safely to Earth.

  7. Neither Democrats nor Republicans worked to resolve the flaws in the Civil Rights Act that put a big dark cloud over the U.S. future.

  8. Called the Nixon Shock, the U.S. abandoned the gold standard in 1971 to curb inflation and prevent foreign nations from overburdening the system by redeeming their dollars for gold. The clouds darken.

  9. In the 1970s, democrats started heavily implementing "Rules for Radicals," forging partnerships within academia using political correctness, new keyword definitions, and canceling free speech.

  10. From 1995 to 2023, the festering wounds from the 1960s-1970s have redefined two fixed realities using "rules for radicals" 24x7 online social media techniques, replacing individualism with collectivism surrounding and combining ideological factions into the two political parties that have redefined free speech, debate, vocabulary, and scientific fact resulting in gridlock. The surviving two political parties represent most individuals who collectively believe they are right and have all the answers. For many, reality no longer comes from God, but knowledge and truth come from self.


1977 Dictionary Definition of Equity

The following 1977 definition from the Merriam-Webster Dictionary is edited for young teenagers. We picked 1977 to capture the true meaning just before social justice academia began shifting the definition. Secondly, it is said that to be understood by most people, things should be written at the teenage level.

  • equity -

  1. fairness or justice in dealing between persons, a system of law that is a more flexible supplement to common and statute law and is designed to protect rights and enforce duties fixed by statute or common law.

  2. The value of an owner's interest in a property over claims against it.


Social Equity

The first, oldest use in the English language of EQUITY, and the second use, subsequent oldest, meanings are social to denote fairness and justice between persons and entities. The government's role in this fairness and justice is as a referee, similar to referees in an NFL Football game. Justice is fair and blind. To not be blind is to be unfair and unjust. Any economic role of government would be unfair and unjust. Social Equity is a legal matter between two specific parties, not between identities. Any social equity issue not covered by statute or common law is an ideological issue like religion and is not the state's business.


Economic Equity

EQUITY's third and newest meaning is a person's ownership of economic value earned in a capitalistic free market. Economic value taken, taxed, from earners to be distributed to non-earners, free money welfare, is unfair and unjust; therefore, not equitable. Often, free money is funded with borrowed money funded through enormous debts. There are better, more efficient ways to help those in need. Until high debt leads to high taxes, many tax-deductible charitable donations and new jobs from high earners help those in need. However, when the government gets too greedy or has to raise money to pay interest on its debt, people are less charitable and create fewer new jobs. All the free money welfare that initially stimulates the economy soon causes harmful inflation. This is cruel financial repression where the government takes value, equity, from people who lend it money; inflation is good for the government but a harsh tax on everyone else. If the government provides money to those in need, they are helped until their money runs out; giving people a job builds self-esteem. Workfare instead of free money welfare creates a path to self-sufficiency for those in need while reducing debt and inflationary damage to the capitalistic free market that hurts everybody.

Ideological Equity

Today, if you Google "equity," you will find some ideologies working hard to redefine many words, "equity." For example:


“equity” refers to fairness and justice and is distinguished from equality. "Equality" means each individual or group of people is given the same resources or opportunities. Equity recognizes that each person has different circumstances and allocates the exact resources and opportunities needed to reach an equal outcome. Equity can be understood as the means, and equality as the end. Equity leads to equality.” I would argue that success in achieving equity does not and cannot automatically lead to equality. What it can do is severely restrict the extent to which poverty and inequality are passed on from parent to child. And that is huge!

The problem with this view is to "allocate the exact resources and opportunities needed to reach an equal outcome." A public education is limited to the standard cost per student; anything else would be unfair, unjust, and, therefore, inequitable. Each person, every student, has different circumstances, and the ability of public education to do the best it can do, limited by budget, for every student is a challenge. Do we want to return to a segregated school system? I do not think so. Diversity is our strength.

THE SOLUTION

There is an existential threat, and it is not climate change. One could say it is our growing debt, but there is more. Think you can tame the national debt? Click on this question and try playing the Washington Post's online game. You will get your results once you answer all the questions about the changes you will make. It is hard, isn't it? If we had stayed on the gold standard, JFK would have lived to serve two terms and fixed the problems with the Civil Rights Act, doing what was correct rather than politically expedient, our economy may not have suffered.


The gold standard was on its way out worldwide before 1971. Still, nevertheless, a new basis for disciplining government spending and borrowing must be found and implemented quickly to circumvent the tipping point that will plunge the U.S. into economic disaster. Even with an excellent solid financial discipline, our existing debt must be paid, which will be painful.

In general, with our new process, we would like to restore the advantages we lost when we left the gold standard and gain a reversal of as many disadvantages we experienced under the gold standard. The benefit is we can save the United States of America's economy and set a leadership example for the rest of the world. The points to consider in order of priority are:

  1. Eliminate Hyperinflation leading to economic failure.

  2. Eliminate any Currency crises.

  3. Do not allow financial repression and inflation.

  4. Protect Social Security and Medicare.

  5. Protect property rights and fixed-income retirement savings.

  6. Provide long-term price stability.

  7. As an economy's productive capacity grows, so should its money supply.

  8. Mainstream economists believe that economic recessions can be largely mitigated by increasing the money supply during economic downturns. The money supply must be rebalanced as the economy recovers to match its productive capacity.

  9. Avoid high short-run price volatility; instability in short-term price levels can lead to financial instability as lenders and borrowers become uncertain about the value of debt.

  10. Minimize deflation, which punishes debtors. Therefore, Real debt burdens rise, causing borrowers to cut spending to service their debts or default. Lenders become wealthier but may choose to save some of the additional wealth, reducing GDP.

  11. Any solution must not be susceptible to speculative attacks when a government's financial position appears weak.

  12. Discourage the government from engaging in risky policy (see moral hazard).

  13. If currency devaluation is required, the change must be gradual instead of sharp.

  14. Try to minimize the policy of most economists who favor a low, positive inflation rate of around 2%. This reflects fear of deflationary shocks and the belief that active monetary policy can dampen fluctuations in output and unemployment. Inflation gives them room to tighten policy without inducing deflation.

  15. Provide practical constraints against the measures that central banks might otherwise use to respond to economic crises. Creating new money reduces interest rates, increasing demand for new lower-cost debt and raising the demand for money.

  16. If there is money in the economy that exceeds productive capacity, GDP, an inflationary condition, it shall be the government's duty to take that money from collected tax revenues and retire it, meaning not spend or distribute it in the free market, restoring production and money supply balance. This will be politically unpopular, but it is the right thing to do. This should be a Constitutional Amendment beyond the gold standard in modern America.

The way forward requires that nearly all free money be eliminated from the national budget. What is free money? Any dollar spent entering our free market that is not backed by competitive free market capitalism productivity is free money. Only people with disabilities would be given limited free money should it be necessary to supplement support from charitable, tax-deductible contributions. For others in need, welfare is terminated and replaced by a workfare setup with tax benefits for participating businesses. The government would become the referee and not the player in the economy. Defense and infrastructure projects would be put to the free market using an equitable competitive bidding process. If taxes need to be increased to pay down the national debt, tax on business profits would be the first to be raised, followed by those earning an above-sustainable income. Those on fixed incomes above a lifetime lifestyle sustainable level would be considered last for a tax increase.


Conclusion

What is wrong with Rules for Radicals? The word "radical" says it all. The rules for radicals are suited for a war, not a democracy. Democracy is a slow, progressive process where vital decisions are only made and implemented after an objective, spirited, open, free-speech debate where all knowledge and scientific facts are understood and a majority or super majority, if required, is achieved often a lot of compromises, and respect takes place on both sides. All fiduciary decisions of the government must be constitutional, equitable, and in the people's best interest.

The Social Justice movement aims to reverse discrimination to manipulate Economic Equity towards a point of Equality. This will make all of the US poor so that we are all rendered equal as opposed to the situation more often found in natural evolutionary law, where the more productive are rich, and the poor are better off.

Rules for radicals will produce an unsuccessful society of pirates. In a future article, I may contrast the two books "Rules for Radicals" and "12 Rules for Life". Both books list 12 rules for living a successful democratic life. One focuses on making yourself a better and more successful diverse individual. The other is all about creating a war-ready army of like-minded, focused warriors believing the end, winning, justifies the means.




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