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Working Together

Wednesday, October 1st, 2014

As you may have noticed our human economy does not work very well. In fact, it barely works at all. One of our major problems is that we humans mistake money for wealth. They are not the same.

This error results in a world that works for no one. The 1% would argue that the world does work just fine for them, but they would be wrong.

One of our best human thinkers writing in 1970, explained this error clearly. He felt this error represented such a great danger, that it might destroy the United States of America within the next 30 years.


Wealth Versus Money

Alan Watts

In the year of Our Lord Jesus Christ 2000, the United States of America will no longer exist. This is not an inspired prophecy based on supernatural authority but a reasonably certain guess. “The United States of America” can mean two quite different things. The first is a certain physical territory, largely on the North American continent, including all such geographical and biological features as lakes, mountains and rivers, skies and clouds, plants, animals, and people. The second is a sovereign political state, existing in competition with many other sovereign states jostling one another around the surface of this planet. The first sense is concrete and material; the second, abstract and conceptual.

If the United States continues for very much longer to exist in this second sense, it will cease to exist in the first. For the land and its life can now so easily be destroyed—by the sudden and catastrophic methods of nuclear or biological warfare, or by any combination of such creeping and insidious means as overpopulation, pollution of the atmosphere, contamination of the water and erosion of our natural resources by maniacal misapplications of technology. For good measure, add the possibilities of civil and racial war, self–strangulation of the great cities and breakdown of all major transportation and communication networks. And that will be the end of the United States of America, in both senses.

There is, perhaps, the slight possibility that we may continue our political and abstract existence in heaven, there to enjoy being “better dead than Red” and, with the full authority of the Lord God, to be able to say to our enemies squirming in hell, “We told you so!” On the grounds of such hopes and values, someone may well push the Big Red Button, to demonstrate that belief in spiritual immortality can be inconsistent with physical survival. Luckily for us, our Marxist enemies do not believe in any such hereafter.

When I make predictions from a realistic and hard–boiled point of view, I tend to the gloomy view of things. The candidates of my choice have never yet won in any election in which I have voted. I am thus inclined to feel that practical politics must assume that most people are either contentious and malevolent or stupid, that their decisions will usually be shortsighted and self–destructive and that, in all probability, the human race will fail as a biological experiment and take the easy downhill road to death, like the Gadarene swine. If I were betting on it— and had somewhere to place my bet—that’s where I would put my money.

But there is nowhere to lay a bet on the fate of mankind. Likewise, there is no way of standing outside the situation and looking at it as an impartial, coldly calculating, objective observer. I’m involved in the situation and therefore concerned; and because I am concerned, I’ll be damned if I’ll let things come out as they would if I were just betting on them.

There is, however, another possibility for the year ad 2000. This will require putting our minds on physical facts and being relatively unconcerned with the United States of America as an abstract political entity. By overlooking the nation, we can turn full attention to the territory, to the actual earth, with its waters and forests, flowers and crops, animals and human beings—and so create, with less cost and suffering than we are bearing in 1968, a viable and thoroughly enjoyable biological experiment.

The chances may be slim. Not long ago Congress voted, with much patriotic rhetoric, for the imposition of severe penalties upon anyone presuming to burn the flag of the United States. Yet the very Congressmen who passed this law are responsible, by acts of commission or omission, for burning, polluting, and plundering the territory that the flag is supposed to represent. Therein, they exemplified the peculiar and perhaps fatal fallacy of civilization: the confusion of symbol with reality.

Civilization, comprising all the achievements of art and science, technology and industry, is the result of man’s invention and manipulation of symbols—of words, letters, numbers, formulas and concepts, and of such social institutions as universally accepted clocks and rulers, scales and timetables, schedules and laws. By these means, we measure, predict, and control the behavior of the human and natural worlds—and with such startling apparent success that the trick goes to our heads. All too easily, we confuse the world as we symbolize it with the world as it is. As semanticist Alfred Korzybski used to say, it is an urgent necessity to distinguish between the map and the territory and, he might have added, between the flag and the country. Let me illustrate this point and, at the same time, explain the major obstacle to sane technological progress, by dwelling on the fundamental confusion between money and wealth. Remember the Great Depression of the Thirties? One day there was a flourishing consumer economy, with everyone on the up–and–up; and the next, unemployment, poverty, and bread lines. What happened? The physical resources of the country—the brain, brawn, and raw materials—were in no way depleted, but there was a sudden absence of money, a so–called financial slump. Complex reasons for this kind of disaster can be elaborated at length by experts on banking and high finance who cannot see the forest for the trees. But it was just as if someone had come to work on building a house and, on the morning of the Depression, the boss had said, “Sorry, baby, but we can’t build today. No inches.” “Whaddya mean, no inches? We got wood. We got metal. We even got tape measures.” “Yeah, but you don’t understand business. We been using too many inches and there’s just no more to go around.”

A few years later, people were saying that Germany couldn’t possibly equip a vast army and wage a war, because it didn’t have enough gold.

What wasn’t understood then, and still isn’t really understood today, is that the reality of money is of the same type as the reality of centimeters, grams, hours, or lines of longitude. Money is a way of measuring wealth but is not wealth in itself. A chest of gold coins or a fat wallet of bills is of no use whatsoever to a wrecked sailor alone on a raft. He needs real wealth, in the form of a fishing rod, a compass, an outboard motor with gas, and a female companion.

But this ingrained and archaic confusion of money with wealth is now the main reason we are not going ahead full tilt with the development of our technological genius for the production of more than adequate food, clothing, housing, and utilities for every person on earth. It can be done, for electronics, computers, automation techniques, and other mechanical methods of mass production have, potentially, lifted us into an age of abundance in which the political and economic ideologies of the past, whether left, middle, or right, are simply obsolete. There is no question anymore of the old socialist or communist schemes of robbing the rich to pay the poor, or of financing a proper distribution of wealth by the ritualistic and tiresome mumbo jumbo of taxation. If, if we get our heads straight about money, I predict that by ad 2000, or sooner, no one will pay taxes, no one will carry cash, utilities will be free, and everyone will carry a general credit card. This card will be valid up to each individual’s share in a guaranteed basic income or national dividend, issued free, beyond which he may still earn anything more that he desires by an art or craft, profession or trade that has not been displaced by automation. (For detailed information on the mechanics of such an economy, the reader should refer to Robert Theobald’s Challenge of Abundance and Free Men and Free Markets, and also to a series of essays that he has edited, The Guaranteed Income. Theobald is an avant–garde economist on the faculty of Columbia University.)

Naturally, such outrageous proposals will raise the old cries, “But where’s the money going to come from?” or “Who pays the bills?” But the point is that money doesn’t and never did come from anywhere, as if it were something like lumber or iron or hydroelectric power. Again: money is a measure of wealth, and we invent money as we invent the Fahrenheit scale of temperature or the avoirdupois measure of weight. When you discover and mine a load of iron ore, you don’t have to borrow or ask someone for “a thousand tons” before you can do anything with it.

By contrast with money, true wealth is the sum of energy, technical intelligence, and raw materials. Gold itself is wealth only when used for such practical purposes as filling teeth. As soon as it is used for money, kept locked in vaults or fortresses, it becomes useless for anything else and thus goes out of circulation as a form of raw material; i.e., real wealth. If money must be gold or silver or nickel, the expansion and distribution of vast wealth in the form of wheat, poultry, cotton, vegetables, butter, wine, fish, or coffee must wait upon the discovery of new gold mines before it can proceed. This obviously ludicrous predicament has, heretofore, been circumvented by increasing the national debt—a roundabout piece of semantic obscurantism—by which a nation issues itself credit or purchasing power based, not on holdings in precious metals, but on real wealth in the form of products and materials and mechanical energy. Because national debts far exceed anyone’s reserves of gold or silver, it is generally supposed that a country with a large national debt is spending beyond its income and is well on the road to poverty and ruin—no matter how enormous its supplies of energy and material resources. This is the basic confusion between symbol and reality, here involving the bad magic of the word “debt,” which is understood as in the phrase “going into debt.” But national debt should properly be called national credit. By issuing national (or general) credit, a given population gives itself purchasing power, a method of distribution for its actual goods and services, which are far more valuable than any amount of precious metal.

Mind you, I write of these things as a simple philosopher and not as a financial or economic expert bristling with facts and figures. But the role of the philosopher is to look at such matters from the standpoint of the child in Hans Andersen’s tale of The Emperor’s New Clothes. The philosopher tries to get down to the most basic, simple principles. He sees people wasting material wealth, or just letting it rot, or hoarding it uselessly for lack of purely abstract counters called dollars or pounds or francs.

From this very basic or, if you will, childish point of view, I see that we have created a marvelous technology for the supply of goods and services with a minimum of human drudgery. Isn’t it obvious that the whole purpose of machines is to get rid of work? When you get rid of the work required for producing basic necessities, you have leisure—time for fun or for new and creative explorations and adventures. But with the characteristic blindness of those who cannot distinguish symbol from reality, we allow our machinery to put people out of work—not in the sense of being at leisure but in the sense of having no money and of having shamefacedly to accept the miserable charity of public welfare. Thus—as the rationalization or automation of industry extends—we increasingly abolish human slavery; but in penalizing the displaced slaves, in depriving them of purchasing power, the manufacturers in turn deprive themselves of outlets and markets for their products. The machines produce more and more, humans produce less and less, but the products pile up undistributed and unconsumed, because too few can earn enough money and because even the hungriest, greediest, and most ruthless capitalist cannot consume ten pounds of butter per day.

Any child should understand that money is a convenience for eliminating barter, so that you don’t have to go to market with baskets of eggs or firkins of beer to swap them for meat and vegetables. But if all you had to barter with was your physical or mental energy in work that is now done by machines, the problem would then be: What will you do for a living and how will the manufacturer find customers for his tons of butter and sausages?

The sole rational solution would be for the community as a whole to issue itself credit—money—for the work done by the machines. This would enable their products to be fairly distributed and their owners and managers to be fairly paid, so that they could invest in bigger and better machines. And all the while, the increasing wealth would be coming from the energy of the machines and not from ritualistic manipulations with gold. In some ways, we are doing this already, but by the self-destructive expedient of issuing ourselves credit (now called debt) for engines of war. What the nations of the world have spent on war since 1914 could, with our technology, have supplied every person on earth with a comfortable independent income. But because we confuse wealth with money, we confuse issuing ourselves credit with going into debt. No one goes into debt except in emergency; and therefore, prosperity depends on maintaining the perpetual emergency of war. We are reduced, then, to the suicidal expedient of inventing wars when, instead, we could simply have invented money—provided that the amount invented was always proportionate to the real wealth being produced. We should replace the gold standard by the wealth standard. The difficulty is that, with our present superstitions about money, the issue of a guaranteed basic income of, say, $10,000 per annum per person would result in wild inflation. Prices would go sky–high to “catch” the vast amounts of new money in circulation and, in short order, everyone would be a pauper on $10,000 a year. The hapless, dollar–hypnotized sellers do not realize that whenever they raise prices, the money so gained has less and less purchasing power, which is the reason that as material wealth grows and grows, the value of the monetary unit (dollar or pound) goes down and down—so that you have to run faster and faster to stay where you are, instead of letting the machines run for you. If we shift from the gold standard to the wealth standard, prices must stay more or less where they are at the time of the shift and—miraculously—everyone will discover that he has enough or more than enough to wear, eat, drink, and otherwise survive with affluence and merriment.

It is not going to be at all easy to explain this to the world at large, because mankind has existed for perhaps one million years with relative material scarcity, and it is now roughly a mere one hundred years since the beginning of the industrial revolution. As it was once very difficult to persuade people that the earth is round and that it is in orbit around the sun, or to make it clear that the universe exists in a curved space–time continuum, it may be just as hard to get it through to “common sense” that the virtues of making and saving money are obsolete. It may have to be put across by the most skillfully prepared and simply presented TV programs, given by scientific–looking gentlemen in spectacles and white coats, and through millions of specially designed comic books.

It will always be possible, of course, for anyone so inclined to earn more than the guaranteed basic income; but as it becomes clearer and clearer that money is not wealth, people will realize that there are limits to the real wealth that any individual can consume. We may have to adopt some form of German economist Silvio Gessell’s suggestion that money not in circulation be made progressively perishable, declining in value from the date of issue. But the temptation to hoard either money or wealth will dwindle as it becomes obvious that technology will keep the supplies coming and that you cannot drive four cars at once, live simultaneously in six homes, take three tours at the same time, or devour twelve roasts of beef at one meal.

All this will involve a curious reversal of the Protestant ethic, which, at least in the United States, is one of the big obstacles to a future of wealth and leisure for all. The Devil, it is said, finds work for idle hands to do, and human energy cannot be trusted unless most of it is absorbed in hard, productive work—so that, on coming home, we are too tired to get into mischief. It is feared that affluence plus leisure will, as in times past, lead to routs and orgies and all the perversities that flow therefrom, and then on to satiation, debilitation, and decay— as in Hogarth’s depiction of A Rake’s Progress.

Indeed, there are reasonable grounds for such fears, and it may well be that our New England consciences, our chronic self–disapproval, will have to be maintained by an altogether new kind of sermonizing designed to inculcate a fully up–to–date sense of guilt. Preachers of the late twentieth century will have to insist that enjoyment of total luxury is a sacred and solemn duty. Penitents will be required to confess such sins as failing to give adequate satisfaction to one’s third concubine or lack of attention to some fine detail in serving a banquet to friends—such as forgetting to put enough marijuana in the turkey stuffing. Sure, I am talking with about one half of my tongue in my cheek, but I am trying to make the deadly serious point that, as of today, an economic utopia is not wishful thinking but, in some substantial degree, the necessary alternative to self–destruction.

The moral challenge and the grim problem we face is that the life of affluence and pleasure requires exact discipline and high imagination. Somewhat as metals deteriorate from “fatigue,” every constant stimulation of consciousness, however pleasant, tends to become boring and thus to be ignored. When physical comfort is permanent, it ceases to be noticed. If you have worried for years about lack of money and then become rich, the new sense of ease and security is short–lived, for you soon begin to worry as much as ever—about cancer or heart disease. Nature abhors a vacuum. For this reason, the life of pleasure cannot be maintained without a certain asceticism, as in the time and effort required for a woman to keep her hair and face in fine condition, for the weaving of exquisite textiles or for the preparation of superior food. Thus, the French distinguish between a gourmand and a gourmet, the former being a mere glutton, a trencherman who throws anything and everything down the hatch; and the latter, a fussy, subtle, and sophisticated devotee of the culinary arts.

Timothy Leary was not so wide of the mark when he said that we must go out of our minds (abstract values) to come to our senses (concrete values). For coming to our senses must, above all, be the experience of our own existence as living organisms rather than “personalities,” like characters in a play or a novel acting out some artificial plot in which the persons are simply masks for a conflict of abstract ideas or principles. Man as an organism is to the world outside like a whirlpool is to a river: man and world are a single natural process, but we are behaving as if we were invaders and plunderers in a foreign territory. For when the individual is defined and felt as the separate personality or ego, he remains unaware that his actual body is a dancing pattern of energy that simply does not happen by itself. It happens only in concert with myriads of other patterns—called animals, plants, insects, bacteria, minerals, liquids, and gases. The definition of a person and the normal feeling of “I” do not effectively include these relationships. You say, “I came into this world.” You didn’t; you came out of it, as a branch from a tree.

So long as we do not effectively feel this to be so, there is no motivation for forms of politics that recognize the interdependence of all peoples, nor for forms of technology that realize man’s inseparability from the entire network of natural patterns. How, then, is the sense of self to be changed? By scientific education? It convinces the intellect but not the emotions. By religion? The record is not hopeful. By psychotherapy? Much too slow. If anything is to be done about it, and done in time, I must agree with Aldous Huxley (and with the sober and scholarly Arthur Koestler in his Ghost in the Machine) that our only resort may be psychopharmacology—a chemical, a pill, that brings the mind to its senses.

Although I have experimented very sympathetically with such methods (LSD, etc.), I would be as reluctant to try to change the world with psychedelics as to dose everyone indiscriminately with antibiotics. We do not yet know what ecological damage the latter may have done, how profoundly they may have upset certain balances of nature. I have, therefore, another and perhaps equally unacceptable suggestion.

This is simply that nothing be done about it. Shortly before his death, Robert Oppenheimer is said to have remarked that the whole world is, quite obviously, going to hell—adding, however, that the one slim chance of its not going to hell is that we do absolutely nothing to stop it. For the greatest illusion of the abstract ego is that it can do anything to bring about radical improvement either in itself or in the world. This is as impossible, physically, as trying to lift yourself off the floor by your own bootstraps. Furthermore, the ego is (like money) a concept, a symbol, even a delusion—not a biological process or physical reality. Practically, this means that we stop crusading—that is, acting for such abstract causes as the good, righteousness, peace, universal love, freedom, and social justice, and stop fighting against such equally abstract bogeys as communism, fascism, racism, and the imaginary powers of darkness and evil. For most of the hell now being raised in the world is well intentioned. We justify our wars and revolutions as unfortunate means for good ends, as a general recently explained that he had destroyed a village in Vietnam for its own safety. This is also why we can reach no genuine agreement—only the most transitory and unsatisfactory compromises—at the conference tables, for each side believes itself to be acting for the best motives and for the ultimate benefit of the world. To be human, one must recognize and accept a certain element of irreducible rascality both in oneself and in one’s enemies. It is, therefore, an enormous relief to realize that these abstract ambitions are total nonsense and to see that we have been wasting untold psychic and physical energy in a fatuous enterprise. For when it is understood that trying to have good without evil is as absurd as trying to have white without black, all that energy is released for things that can be done. It can be diverted from abstract causes to specific, material undertakings—to farming and cooking, mining and engineering, making clothes and buildings, traveling and learning, art, music, dancing, and making love. Surely, these are excellent things to do for their own sake and not, please not, for one’s own or anyone else’s improvement.


Read more Alan Watts: Does It Matter?: Essays on Man’s Relation to Materiality

About Alan Watts

Working Together

Wednesday, August 13th, 2014

This article was forwarded to me this morning by good and wise friend. I realized it was an important read.  … Re-posted from the August 13, 2014 edition of THE INDEPENDENT.


Why does ISIS hate the West so much?

James Bloodworth

When it comes to the totalitarian rebellions against liberal societies throughout history, sophisticated people have very often failed to grasp what goes on in the minds of the fanatic.

Back in the 1930s, attempts to explain fascism famously tripped up many leading intellectuals of the time. Hitler’s demands to expand the Third Reich were taken by many otherwise sophisticated people as code for something else. Was it not true, after all, that the Treaty of Versailles had imposed punitive and unreasonable conditions on Germany? As Paul Berman noted in his book, Terror and Liberalism, despite the SS repeatedly reaffirming at its death camps that “here there is no why”, for much of the left there was always a “why”.

As he writes: “The anti-war socialists gazed across the Rhine and simply refused to believe that millions of upstanding Germans had enlisted in a political movement whose animating principles were paranoid conspiracy theories, blood-curdling hatreds, medieval superstitions and the lure of murder.”

It wasn’t just the French left that tied itself in mental knots over the rapid growth of militarist fascism. In an edition of the British pacifist newspaper Peace News, the Marquess of Tavistock, who sat on the national council for the Peace Pledge Union, blamed German aggression not on the lunacy of National Socialism, but instead on the “very serious provocation which many Jews have given by their avarice and arrogance when exploiting Germany’s financial difficulties, by their associations with commercialised vice, and by their monopolisation of certain professions”. In a letter written in 1942, the pacifist poet D. S. Savage also famously informed George Orwell that Hitler required “not condemnation, but understanding”.

More recently, a good portion of many column inches dedicated to “explaining” the 2001 attacks on New York similarly relied upon a straightforward inability to countenance the existence of al-Qaeda. Thoughtful people instinctively hunted for the so-called “root cause” of jihadist violence in the material world, largely ignoring the seriousness of the ideas held by the perpetrators.

The real spark of fascistic violence must always and everywhere be poverty and hardship, or so it was assumed; hence the multiple attempts to conflate the repression of the Palestinians with 9/11 – despite the fact that al-Qaeda was and remains ideologically opposed to the creation of a Palestinian state.

In reality the sheer irrationality of violent Islamism should have been obvious when in the years following 9/11 young fanatics started (sometimes successfully) trying to blow up nightclubs. The British-born Islamists who plotted in 2004 to murder clubbers in the Ministry of Sound nightclub in London did not after all cite Palestine or imperialism as their Casus belli, but instead gleefully talked about murdering “those slags, dancing around”.

In other words, it was our liberalism that the would-be bombers despised, rather than our inability to be sufficiently liberal.

Indeed, as with almost all fanatical religious movements, an obsession with the way women behave goes right to the heart of Islamism. Sayyid Qutb, the author of the Mein Kampf of Islamism, Milestones, embraced a fundamentalist interpretation of Islam on the back of a visit to the United States, where he found himself appalled at the freedom afforded to American women.

Yet all too often, rather than acknowledge the existence of pathological movements that reject the very premise of a free society, the default assumption among liberals has run something like this: fascist violence must be code for something else, probably despair. The fanatic is only fanatical because ‘we’ have driven him to it. If only Britain and America behaved properly, people would not hate us.

And of course, the West has certainly behaved in ways that have helped to swell the ranks of movements like Isis, just as they were atrocities committed by American armies during the previous century that provided ammunition for the communist cause. But let us be clear: the “root cause” of fascism (and what Isis is practicing us clerical fascism) is an absolute rejection of a plural and democratic society. It is our existence, rather than the subtleties of how we behave, that is intolerable to Isis, hence current attempts to exterminate “un-Islamic” religious minorities in Iraq – a genocide-in the making thankfully being thwarted by the United States.

Despite his many flaws, even the the consummate Marxist Leon Trotsky recognised the psychopathic element that underpins fascism, writing of the growth of Nazism in the 1930s that “Today, not only in the peasant homes, but also in the sky-scrapers, there lives alongside the twentieth century the tenth or thirteenth. A hundred million people use electricity and still believe in the magic power of signs and exorcism.”

In Iraq and Syria today, alongside the twenty-first century exists the seventh. To look for the “root cause” of Isis is to miss the point. The group represents all the subterranean barbarism that every so often is apt to crawl, blinking into the light, out from the depths of the human subconscious.

Intelligent people enjoy saying that “nothing exists in a vacuum”. In reality things very often do. Some outcomes are no more than the result of people having certain thoughts and as a consequence performing certain actions. Isis would see us all drop dead in an instant. And like their European predecessors, there really is no “why”.


James Bloodworth is a political journalist and editor of Left Foot Forward. He has previously written for the Observer, the Independent on Sunday, the Irish Independent, the Huffington Post, Red Pepper and Jacobin.

Working Together

Saturday, June 14th, 2014

I am reading a wonderful new book called Resurrecting Jesus by Adyashanti this morning. He was discussing the Zen koan: “What is the sound of one hand clapping? Curiosity led me to google the Koan bringing me to Serge’s delightful essay.


What is the Sound of One Person Loving?

Serge Kahili King

There is a famous Zen koan (philosophical riddle) which asks, “What is the sound of one hand clapping?” The student of Zen is supposed to meditate on this riddle until some degree of insight or enlightenment occurs. The tricky part is that there is no right answer. What you are, or what you know, or what you believe, is what you get.

Although no longer an active student of Zen, I was recently meditating of the riddle of one hand clapping when I got an answer that might be useful to share.

The sound of one hand clapping is the same as the sound of two hands clapping.

How could that be, you ask (for the sake of this article I am assuming that you do ask)? It’s simple, I reply. The concept of clapping implies that a sound is being produced by two surfaces coming into contact, even if only one of them is actually moving. No sound, no clapping; no second surface, no sound. Yet, the riddle definitely states that there is a sound and that there is clapping. Therefore, my answer follows logically. Yes, I know, the answer to a koan is supposed to be beyond logic, but rest assured that the answer came intuitively. The logic came after.

Before you dismiss this as simply a bit of cleverness or a waste of time, let me tell you about the rest of the meditation. After the revelation that the sound of one hand clapping must be the same as the sound of two hands clapping, it struck me that this was a nice metaphor for two of the corollaries of the Second Principle of Huna. The basic principle states that there are no limits, which implies that everything is in a relationship to everything else. And that implies that if you change one side of a relationship you change both sides. Even if only one hand changes its position relative to another, unmoving hand , a clapping sound will be produced. We don’t have to wait for both sides of a relationship to participate before bringing about beneficial change. Change one side of that relationship and the other side has to change because the relationship has changed.

We use this idea a lot in teaching Huna. For instance, in third-level healing work where we assume that everything is a dream and everything is dreaming, we say that if you change one dream you automatically change all related dreams. So you can go to an imaginary garden and make changes to symbols of your life experience, and your life experience will change. In second-level healing work where we assume that everything is telepathically linked, we say that if you begin to silently bless and forgive people with whom you are having difficulties, they will know it and they will begin to change their behavior toward you without a word being spoken. And in first level healing, where we assume that everything is separate but potentially interactive, we teach that if you smile and hug a lot you will tend to get a lot more smiles and hugs back, even from people who don’t normally smile or hug.

Now what do you think would happen if you applied this idea to the whole of your life?

In a strained personal relationship, for example, instead of waiting for the other person to make the first move toward reconciliation you could start the process in your own mind, either by purposely creating a better opinion of the other person, or by imagining the two of you getting along with all of your differences. Sorry, you can’t control with your imagination what the other person thinks or does (it simply doesn’t work), but you can use imagined persuasion just as you might in a face to face meeting. As in any form of persuasion, however, the more your persuasion is based on a benefit to the other person, the more successful it is likely to be.

In a strained global relationship, assuming our theory is valid (which means workable). we might be able to get together even in a smallish group and and rethink (or redream) our relationship with one or both countries involved. Theoretically, of course, it ought to take only one person to make a change. On the other hand, the change of one person’s relationship to a country might only produce a very small change, so the more people the better. The thing to remember, in this context, is that you are trying to change how you think or feel about the country, not trying to change the country. It’s a subtle but important difference, and it applies to people as well as countries.

If this idea catches on we can introduce a Huna koan (the actual Hawaiian phrase is “nane huna,” a hidden riddle or conundrum): “What is the sound of one person loving?”

Working Together

Monday, April 28th, 2014

As readers of this blog know, I think we need to evolve beyond money, but in the mean time there are better ways to live with money. Today’s author is one of the brightest mind’s in the money field and always make good sense.


 

Wall Street Greed: Not Too Big for a California Jury

Ellen Brown, JD

Sixteen of the world’s largest banks have been caught colluding to rig global interest rates.  Why are we doing business with a corrupt global banking cartel?

United States Attorney General Eric Holder has declared that the too-big-to-fail Wall Street banks are too big to prosecute.  But an outraged California jury might have different ideas. As noted in the California legal newspaper The Daily Journal:

California juries are not bashful – they have been known to render massive punitive damages awards that dwarf the award of compensatory (actual) damages.For example, in one securities fraud case jurors awarded $5.7 million in compensatory damages and $165 million in punitive damages. . . . And in a tobacco case with $5.5 million in compensatory damages, the jury awarded $3 billion in punitive damages . . . .

The question, then, is how to get Wall Street banks before a California jury. How about charging them with common law fraud and breach of contract?  That’s what the FDIC just did in its massive 24-count civil suit for damages for LIBOR manipulation, filed in March 2014 against sixteen of the world’s largest banks, including the three largest US banks – JP Morgan Chase, Bank of America and Citigroup.

LIBOR (the London Interbank Offering Rate) is the benchmark rate at which banks themselves can borrow. It is a crucial rate involved in over $400 trillion in derivatives called interest-rate swaps, and it is set by the sixteen private megabanks behind closed doors.

The biggest victims of interest-rate swaps have been local governments, universities, pension funds, and other public entities. The banks have made renegotiating these deals prohibitively expensive, and renegotiation itself is an inadequate remedy. It is the equivalent of the grocer giving you an extra potato when you catch him cheating on the scales. A legal action for fraud is a more fitting and effective remedy. Fraud is grounds both for rescission (calling off the deal) as well as restitution (damages), and in appropriate cases punitive damages.

Trapped in a Fraud

Nationally, municipalities and other large non-profits are thought to have as much as $300 billion in outstanding swap contracts based on LIBOR, deals in which they are trapped due to prohibitive termination fees. According to a 2010 report by the SEIU (Service Employees International Union):

The overall effect is staggering. Banks are estimated to have collected as much as $28 billion in termination fees alone from state and local governments over the past two years. This does not even begin to account for the outsized net payments that state and local governments are now making to the banks. . . .

While the press have reported numerous stories of cities like Detroit, caught with high termination payments, the reality is there are hundreds (maybe even thousands) more cities, counties, utility districts, school districts and state governments with swap agreements [that] are causing cash strapped local and city governments to pay millions of dollars in unneeded fees directly to Wall Street.

All of these entities could have damage claims for fraud, breach of contract and rescission; and that is true whether or not they negotiated directly with one of the LIBOR-rigging banks.

To understand why, it is necessary to understand how swaps work. As explained in my last article here, interest-rate swaps are sold to parties who have taken out loans at variable interest rates, as insurance against rising rates. The most common swap is one where counterparty A (a university, municipal government, etc.) pays a fixed rate to counterparty B (the bank), while receiving from B a floating rate indexed to a reference rate such as LIBOR. If interest rates go up, the municipality gets paid more on the swap contract, offsetting its rising borrowing costs. If interest rates go down, the municipality owes money to the bank on the swap, but that extra charge is offset by the falling interest rate on its variable rate loan. The result is to fix borrowing costs at the lower variable rate.

At least, that is how they are supposed to work. The catch is that the swap is a separate financial agreement – essentially an ongoing bet on interest rates. The borrower owes both the interest onits variable rate loan and what it must pay on its separate swap deal. And the benchmarks for the two rates don’t necessarily track each other. The rate owed on the debt is based on something called the SIFMA municipal bond index.  The rate owed by the bank is based on the privately-fixed LIBOR rate.

As noted by Stephen Gandel on CNNMoney, when the rate-setting banks started manipulating LIBOR, the two rates decoupled, sometimes radically. Public entities wound up paying substantially more than the fixed rate they had bargained for – a failure of consideration constituting breach of contract. Breach of contract is grounds for rescission and damages.

Pain and Suffering in California

The SEIU report noted that no one has yet completely categorized all the outstanding swap deals entered into by local and state governments.  But in a sampling of swaps within California, involving ten cities and counties (San Francisco, Corcoran, Los Angeles, Menlo Park, Oakland, Oxnard, Pittsburgh, Richmond, Riverside, and Sacramento), one community college district, one utility district, one transportation authority, and the state itself, the collective tab was $365 million in swap payments annually, with total termination fees exceeding $1 billion.

Omitted from the sample was the University of California system, which alone is reported to have lost tens of millions of dollars on interest-rate swaps. According to an article in the Orange County Register on February 24, 2014, the swaps now cost the university system an estimated $6 million a year. University accountants estimate that the 10-campus system will lose as much as $136 million over the next 34 years if it remains locked into the deals, losses that would be reduced only if interest rates started to rise. According to the article:

Already officials have been forced to unwind a contract at UC Davis, requiring the university to pay $9 million in termination fees and other costs to several banks. That sum would have covered the tuition and fees of 682 undergraduates for a year.

The university is facing the losses at a time when it is under tremendous financial stress. Administrators have tripled the cost of tuition and fees in the past 10 years, but still can’t cover escalating expenses. Class sizes have increased. Families have been angered by the rising price of attending the university, which has left students in deeper debt.

Peter Taylor, the university’s Chief Financial Officer, defended the swaps, saying he was confident that interest rates would rise in coming years, reversing what the deals have lost. But for that to be true, rates would have to rise by multiples that would drive interest on the soaring federal debt to prohibitive levels, something the Federal Reserve is not likely to allow.

The Revolving Door

The UC’s dilemma is explored in a report titled “Swapping Our Future: How Students and Taxpayers Are Funding Risky UC Borrowing and Wall Street Profits.” The authors, a group called Public Sociologists of Berkeley, say that two factors were responsible for the precipitous decline in interest rates that drove up UC’s relative borrowing costs. One was the move by the Federal Reserve to push interest rates to record lows in order to stabilize the largest banks. The other was the illegal effort by major banks to manipulate LIBOR, which indexes interest rates on most bonds issued by UC.

Why, asked the authors, has UC’s management not tried to renegotiate the deals? They pointed to the revolving door between management and Wall Street. Unlike in earlier years, current and former business and finance executives now play a prominent role on the UC Board of Regents.

They include Chief Financial Officer Taylor, who walked through the revolving door from Lehman Brothers, where he was a top banker in Lehman’s municipal finance business in 2007. That was when the bank sold the university a swap related to debt at UCLA that has now become the source of its biggest swap losses. The university hired Taylor for his $400,000-a-year position in 2009, and he has continued to sign contracts for swaps on its behalf since.

Investigative reporter Peter Byrne notes that the UC regent’s investment committee controls $53 billion in Wall Street investments, and that historically it has been plagued by self-dealing. Byrne writes:

Several very wealthy, politically powerful men are fixtures on the regent’s investment committee, including Richard C. Blum (Wall Streeter, war contractor, and husband of U.S. Senator Dianne Feinstein), and Paul Wachter (Gov. Arnold Schwarzenegger’s long-time business partner and financial advisor). The probability of conflicts of interest inside this committee—as it moves billions of dollars between public and private companies and investment banks—is enormous.

Blum’s firm Blum Capital is also an adviser to CalPERS, the California Public Employees’ Retirement System, which also got caught in the LIBOR-rigging scandal. “Once again,” said CalPERS Chief Investment Officer Joseph Dear of the LIBOR-rigging, “the financial services industry demonstrated that it cannot be trusted to make decisions in the long-term interests of investors.” If the financial services industry cannot be trusted, it needs to be replaced with something that can be.

Remedies

The Public Sociologists of Berkeley recommend renegotiation of the onerous interest rate swaps, which could save up to $200 million for the UC system; and evaluation of the university’s legal options concerning the manipulation of LIBOR. As demonstrated in the new FDIC suit, those options include not just renegotiating on better terms but rescission and damages for fraud and breach of contract. These are remedies that could be sought by local governments and public entities across the state and the nation.

The larger question is why our state and local governments continue to do business with a corrupt global banking cartel. There is an alternative. They could set up their own publicly-owned banks, on the model of the state-owned Bank of North Dakota. Fraud could be avoided, profits could be recaptured, and interest could become a much-needed source of public revenue. Credit could become a public utility, dispensed as needed to benefit local residents and local economies.

__________________

Ellen Brown is an attorney, founder of the Public Banking Institute, and a candidate for California State Treasurer running on a state bank platform. She is the author of twelve books, including the best-selling Web of Debt and her latest book, The Public Bank Solution, which explores successful public banking models historically and globally.

Working Together

Monday, January 20th, 2014

Malcom Jones writing in The Daily Beast today: Martin Luther King’s gifts were manifest. He was an inspired leader, a galvanizing orator, and a brilliant polemicist and prose writer. But more than anything, he knew how to rise to an occasion.

On December 10, 1964, when he received the Nobel Peace Prize, he knew the world was watching. He knew that he was the public face of the American civil rights movement, and that everything he said would be weighed and judged, sometimes harshly. Put in that position, almost any of us would tremble. But King just stepped up to the podium and delivered one of the finest speeches of his life. … King was already famous as an orator, having delivered his “I Have a Dream” speech before hundreds of thousands of people a year earlier (though hindsight has elevated that speech to a level of recognition that it did not receive in many news accounts of the 1963 March on Washington—the Washington Post story, for example, ignored it almost completely. …

If you watch a video tape  of the proceedings, you will be struck by the speaker’s somber reserve. There are no verbal crescendos; there is very little emotion and no drama at all. The template for most of King’s speeches was the sermon, but this is not a sermon. Quiet and reflective, it is more like a prayer.


 

1964 Nobel Peace Prize Acceptance Speech

Martin Luther King Jr.

Your Majesty, Your Royal Highness, Mr. President, Excellencies, Ladies and Gentlemen:

I accept the Nobel Prize for Peace at a moment when 22 million Negroes of the United States of America are engaged in a creative battle to end the long night of racial injustice. I accept this award on behalf of a civil rights movement which is moving with determination and a majestic scorn for risk and danger to establish a reign of freedom and a rule of justice. I am mindful that only yesterday in Birmingham, Alabama, our children, crying out for brotherhood, were answered with fire hoses, snarling dogs and even death. I am mindful that only yesterday in Philadelphia, Mississippi, young people seeking to secure the right to vote were brutalized and murdered. And only yesterday more than 40 houses of worship in the State of Mississippi alone were bombed or burned because they offered a sanctuary to those who would not accept segregation. I am mindful that debilitating and grinding poverty afflicts my people and chains them to the lowest rung of the economic ladder.

Therefore, I must ask why this prize is awarded to a movement which is beleaguered and committed to unrelenting struggle; to a movement which has not won the very peace and brotherhood which is the essence of the Nobel Prize.

After contemplation, I conclude that this award which I receive on behalf of that movement is a profound recognition that nonviolence is the answer to the crucial political and moral question of our time – the need for man to overcome oppression and violence without resorting to violence and oppression. Civilization and violence are antithetical concepts. Negroes of the United States, following the people of India, have demonstrated that nonviolence is not sterile passivity, but a powerful moral force which makes for social transformation. Sooner or later all the people of the world will have to discover a way to live together in peace, and thereby transform this pending cosmic elegy into a creative psalm of brotherhood. If this is to be achieved, man must evolve for all human conflict a method which rejects revenge, aggression and retaliation. The foundation of such a method is love.

The tortuous road which has led from Montgomery, Alabama to Oslo bears witness to this truth. This is a road over which millions of Negroes are travelling to find a new sense of dignity. This same road has opened for all Americans a new era of progress and hope. It has led to a new Civil Rights Bill, and it will, I am convinced, be widened and lengthened into a super highway of justice as Negro and white men in increasing numbers create alliances to overcome their common problems.

I accept this award today with an abiding faith in America and an audacious faith in the future of mankind. I refuse to accept despair as the final response to the ambiguities of history. I refuse to accept the idea that the “isness” of man’s present nature makes him morally incapable of reaching up for the eternal “oughtness” that forever confronts him. I refuse to accept the idea that man is mere flotsom and jetsom in the river of life, unable to influence the unfolding events which surround him. I refuse to accept the view that mankind is so tragically bound to the starless midnight of racism and war that the bright daybreak of peace and brotherhood can never become a reality.

I refuse to accept the cynical notion that nation after nation must spiral down a militaristic stairway into the hell of thermonuclear destruction. I believe that unarmed truth and unconditional love will have the final word in reality. This is why right temporarily defeated is stronger than evil triumphant. I believe that even amid today’s mortar bursts and whining bullets, there is still hope for a brighter tomorrow. I believe that wounded justice, lying prostrate on the blood-flowing streets of our nations, can be lifted from this dust of shame to reign supreme among the children of men. I have the audacity to believe that peoples everywhere can have three meals a day for their bodies, education and culture for their minds, and dignity, equality and freedom for their spirits. I believe that what self-centered men have torn down men other-centered can build up. I still believe that one day mankind will bow before the altars of God and be crowned triumphant over war and bloodshed, and nonviolent redemptive good will proclaim the rule of the land. “And the lion and the lamb shall lie down together and every man shall sit under his own vine and fig tree and none shall be afraid.” I still believe that We Shall overcome!

This faith can give us courage to face the uncertainties of the future. It will give our tired feet new strength as we continue our forward stride toward the city of freedom. When our days become dreary with low-hovering clouds and our nights become darker than a thousand midnights, we will know that we are living in the creative turmoil of a genuine civilization struggling to be born.

Today I come to Oslo as a trustee, inspired and with renewed dedication to humanity. I accept this prize on behalf of all men who love peace and brotherhood. I say I come as a trustee, for in the depths of my heart I am aware that this prize is much more than an honor to me personally.

Every time I take a flight, I am always mindful of the many people who make a successful journey possible – the known pilots and the unknown ground crew.

So you honor the dedicated pilots of our struggle who have sat at the controls as the freedom movement soared into orbit. You honor, once again, Chief Lutuli of South Africa, whose struggles with and for his people, are still met with the most brutal expression of man’s inhumanity to man. You honor the ground crew without whose labor and sacrifices the jet flights to freedom could never have left the earth. Most of these people will never make the headline and their names will not appear in Who’s Who. Yet when years have rolled past and when the blazing light of truth is focused on this marvellous age in which we live – men and women will know and children will be taught that we have a finer land, a better people, a more noble civilization – because these humble children of God were willing to suffer for righteousness’ sake.

I think Alfred Nobel would know what I mean when I say that I accept this award in the spirit of a curator of some precious heirloom which he holds in trust for its true owners – all those to whom beauty is truth and truth beauty – and in whose eyes the beauty of genuine brotherhood and peace is more precious than diamonds or silver or gold.

From Les Prix Nobel en 1964, Editor Göran Liljestrand, [Nobel Foundation], Stockholm, 1965