SIGN THE PETITION!
Testimony of Stephen Consilvio, Wednesday Feb 23, 2010 To the the Joint Committee on State Administration and Regulatory Oversight (Bill H3973) relative to his Citizens Petition “A Bill for the Benefit of Wisdom and Virtue Through Economic Reform.”
It is the nature of civilization that great discoveries are always made in private. Then, the inventor or philosopher must bring his ideas to the greater public. Such is my journey. It is also the nature of civilization that the higher one rises, the more isolated they are from the majority of the masses. Those at the top are always the last to know, and suffer by being misinformed or uninformed by consensus and tradition. In that light, I am grateful to offer this testimony directly to you today.
A lot of history has passed since this spec of land was first named Beacon Hill. And I feel a personal connection to the State House since my uncle was one of the last goldbeaters in Boston, and his handiwork rests on the golden dome. Let us not forget the meaning behind the word beacon. It is a method for spreading light and chasing away the darkness. It is my hope that Massachusetts can lead the way for the other states, and other nations, in addressing what are common and repeating economic problems.
We live in troubled times, as many generations have before us. And like others, I went searching for a cause. That is what my Citizen’s Petition addresses. The thing I wish to impress upon you, however, is that it is not a political document, but a mathematical one. We are suffering from a mathematical problem which the greatest ideas of the last 400 years failed to address. Those three ideas were 1) the establishment of a large trading area by the Dutch West India Company in 1621, 2) the creation of paper money, which was advanced by Ben Franklin in 1729 (when he was just 23 years old) and came to fruition almost sixty years later in the US Constitution of 1787, and 3) Thomas Paine’s argument for the abolition of monarchy. These three ideas are still in place today, and all three have failed in their goal of providing peace, prosperity and stability to the peoples.
What I have submitted is limited in scope. It does not fix everything, but provides a basis for future reforms. While some may claim it is too much too fast, in comparison to the scale of our the problems it is conservative. It deals primarily with the greatest of the mathematical issues, which take place in what is called the FIRE Economy. (Finance, Insurance and Real Estate). The FIRE Economy is not new or modern, it has been around for thousands of years, and is both a symptom and a cause of the economic volatility.
With the fast pace of the modern world we have also accelerated the pace and scope of our problems. We live in a world of colossal waste. The landfills are brimming, families have two incomes and often second jobs, children are being forced into debt, we are at war with our trading partners, and anger, accusations and fear are rising on all sides. There are civil wars all around the globe, and we have had our share on our soil, too. It does not have to be this way, but it is the inevitable result of a cultural acceptance of certain ideas, particularly regarding the FIRE economy, but generically of how money is handled and value applied. I sometimes joke that the first lie ever told was to eat the apple, the second lie was to sell it for profit. We absolutely must have trade to survive, but the problem we suffer from is the cumulative summary of the application of small percentages.
The National Debt of $13 Trillion is the profit total of 230 years of private transactions. As it doubles every 5 or 8 years, the economic swells get wider and deeper. As Ben Franklin envisioned, there is no shortage of money, but there is still never enough of it. $13 Trillion represents $40,000 for every American alive today. We had all the same problems at $30,000 and we will still have these problems at $50,000 if we do not change course. The policy of stimulating economic activity will stimulate the problems as well.
It is important to appreciate the impact of a geometric progression. A single piece of paper, folded in half just fifty times, would be thick enough to reach the Sun. Folded once more, it would reach to the Sun and back to Earth.
Laissez Faire economics, and a faith in an ‘invisible hand’ is absurd. We reap what we sow, and are not isolated from cause and effect. Rather than abandoning reason and compassion for chance, we need to be forthright and use reason and compassion to battle the mathematical chaos which we have created by perpetually pursuing randomly projected percentages. Our own hands are the problem, and we must get our choices in sync with our heart and hopes.
In ancient times, the problem of compounding percentages was addressed by jubilee, which is something we must return to if we are going to have long-term success. God was, and is, a good mathematician. I also want to make something clear about the economic instruction and terms that are commonly used, and which is routinely taught in middle school and beyond: the GDP value, or GNP value, is completely bogus. The common explanations of inflation and business cycles are all false. Like the shadows on Plato’s cave, what economists and analysts are measuring are only the outlines of our own shadows. In the material attached, I show how easy it is for any object to have any value, void of supply and demand, or monetary policy. Taking a cumulative total of random values is meaningless for establishing public policy. It is the creation of the values themselves that needs to be the focus of public policy. How we count is more important than what we count.
The difference between the main modern economic theorists, Karl Marx and Adam Smith, was political, not mathematical. Marx called the Robber Baron Industrialists savages; Adam Smith called the Native Americans savages. Their understanding of trade and capital was exactly the same. The rising Islamist revolutions also share the same flawed economic theory, as has the Jewish state. The correct formula is C=M+L. (Capital equals Money plus labor) The creation of a central currency, combined with taxation, sets off a mathematical doomsday machine in the aftermath of every revolution, regardless of the political or religious traditions. Like the heat used to cook or to warm a house, it needs to be controlled and engineered properly. A debt-free and inflation-free economy is possible with a proper understanding of the underlying math.
Economics is the study of cause and effect. Misdiagnoses are easy. There are, unfortunately, an infinite number of wrong answers to any equation. There is only one right answer, and that is why the promise of political equality must have a mathematical underpinning between generations, and not just for us to be equals in a political process or economic savagery. As we were born collectively into the debts of our forefathers, we then leave behind an even greater burden for our children. We are the current adult generation. We can easily leave the world better than we found it. If we have the courage to do the right things, and embrace mathematical truths and new thinking in our political process, then we will earn the moniker of being a beacon of light.
A Bill for the betterment of wisdom and virtue through economic reform
Preamble
A Bill for the betterment and establishment of wisdom and virtue within the concept of commonwealth, for the benefit of citizens, visitors and future generations residing within the lands known as The Commonwealth of Massachusetts, to fulfill the promise of a city upon the hill and a beacon of light in a world clouded by a growing darkness.
The annals of mankind contain two common tragedies: doing the right thing for the wrong reasons, and doing the wrong thing for the right reasons. A virtuous society of peace and prosperity requires doing the right things for the right reasons. There is no margin of error, nor whim of the autocrat or of the plurality, that can overturn this principle. This single principle must precede all policies, and in equal balance between the two halves; right actions and right reasoning. Equality is correct, not a right or a rite. It represents, creates and sustains balance and harmony; person with person, and person with our natural environment.
Anything that elevates one person must diminish another person. This is true in financial transactions, social transactions, legal transactions, spiritual transactions, healthcare transactions, educational transactions, and housing transactions. The diminishment of one is the diminishment of all, and the gluttony of one is the shame of all, for neither the diminished nor the gluttonous can exist without the cooperation of the entire body.
This Bill restates known but ignored principles and offers new policies for the conduct of government, but transcendence can only be found in the hearts and souls of the people, and in what we teach by example to the next generation. We remain as we began, a city on the hill, and our choices will be magnified by history, for better or ill.
To know what is right, and to do what is right, requires a delicate balance which is not the role of government but of the people themselves. Nevertheless, the government is a common teacher. If it teaches avarice, then we will live in a state of avarice. If it teaches wisdom, then we will live in a state of wisdom. Government can only be guided by a single idea. Let that idea henceforth be Commonwealth in act, and not just in name.
Our lives and the Earth are gifts granted unto us by a power greater than ourselves. Our only challenge is to form a society of peace and love and plenty, as an extended family within our locale. Everything we survey is free for our taking under a common sky, if we have the wisdom to organize ourselves properly. Everything is connected; everything is commonwealth. There is no effect without a cause for which we collectively are not responsible. If we fail to fulfill our virtue, then we must fulfill our folly in its place.
There are two types of chains that shackle the world. One is a chain of steel clamped to the heel of mankind. This steel is found in prison walls, corporate cubicles, salesmen's automobiles, border security, numerical ledgers and computer screens. Fortunately, literal slavery is no longer a local condition. The other type of chain is false thinking. These two types of chains wrap themselves around the hands, hearts and minds of men. The steel chains are easily broken. Force meets metal and men are set free. The intellectual chains are stronger and more damaging, for we enslave ourselves. To be happy and free we must liberate our thinking about our actions.
To break the chains of false thinking it helps to understand why the steel shackles were ever forged. Why would tools be transformed into weapons? Every crime must have a motive. What was one man to gain by enslaving another? What was the crime to be punished, or the gain to be had by the deception of profits? Why are numbers our pursuit? Every thief seeks to get back what he lost previously; every victim seeks to keep what he has. Both are driven by fear. We were all once children, and remember a time of peace and plenty. We hunger for the security of innocence.
The slave-master and the slave share the same destiny; they exist clamped on opposite ends of the same chain. Neither is free. Their commonwealth is a common misery; one to punish and one to suffer; one to gain and the other to lose. This is the lowliest form of all association, yet it is specifically on this foundation that our current government and society rests. Our nation was founded by both law-breakers and slave-holders. The majority were of two groups. Those who did the wrong thing for the right reasons, and those who did the right things for the wrong reasons. These two groups of political opposites continue into this day.
The suffering slave lays claim to a historical contract that preserves one from punishment; the slave-master lays claim to a contract that gives the right to punish. Which contract should take precedence? Mercy or revenge? The claims of the slave or the claims of the slave-master? It is for this reason, that the highest principle must be to do the right things for the right reason. The Golden Rule is the best of rules. We fall into slavery by our own choices. The slave and the slave-master are the divided self. Every person is above one but below another. Equality is nowhere.
How do we unite thoughts and actions which are so easily separated? In truth, no law can do such a thing. It is for the people to act upon wisdom to make it come to life. If they fail to act with wisdom, then they must act without it, and reap the fury that they sow. Faith in law and habit cannot be a substitute for knowing the truth as an individual and having the courage to act in its defense both privately and publicly. Society is laid to waste by the small choices made in private, not by the grandiose decisions made by government. Government is a reflection of ourselves; it is wicked in the hands of the wicked, incompetent in the hands of the incompetent, and virtuous in the hands of the virtuous.
We have come upon a time when the people are unwise and the government with it. Though our woes are many, let me take one as symbolic of the grandeur of our error: high school students and their families must take on debt to educate the same youth to become a contributor of society. Once graduated from college, the youth becomes productive but is whipped by debt to pursue profit, which in turn becomes a burden to all who need his services. We see this phenomenon in every career path. The more professional the training, the greater the burden to demand a higher wage. The greater the numbers grow, the poorer we become; the whole of society is upside-down. Nature is just the opposite. That which we need most is in free abundance; land, air, food and water. Nature is a commonwealth, and man has imposed folly upon it.
All our problems are related to money. Unfortunately, money is not created under the direct control of the State of Massachusetts. We are under the tutelage of the Federal government. We are diminished and gluttonous, suffering and punishing. Such horrible conditions should not exist under a free commonwealth.
The competitive choice to win or lose is not as inevitable as some people claim. The pessimist has a pessimistic view of the nature of man. Nevertheless, the good he manages to see in himself also resides in others. A government’s monopoly on money casts a long shadow, and it drives men to desperation. Putting together the problems of thirteen colonies did not solve them, it just made a common problem bigger.
Under a properly managed commonwealth, one need not borrow nor lend, for the needs of the coming generation are settled before they are born. We are equal, and our needs for food, shelter, education, healthcare and productivity are universal. We all must contribute to production to enjoy consumption. Nobody is truly free without trade, but how we trade is vitally important. We fix the roof when the sun shines, but we do not anticipate the need for our neighbor’s children to have a roof. If government cannot organize labor and materials to accomplish the common good across generations, then it has no good purpose. As Paine wrote, we can suffer more with a government than we would without one, but in every case, we suffer by our own hand. We are government, and have always been.
It is not our neighbor that is being enslaved by our poor choices, but our own offspring. We are preying upon the next generation as we were preyed upon by the previous generation. We must stop this cycle of perpetual predation. Here, where we live, and today.
Our economy has three central problems: inflation, volatility and waste. These are all symptoms with a mathematical cause. We need a mathematical cure for a mathematical problem. We are creating our own misery, and our suffering will increase in all three areas proportionate to our persistence, and decrease in proportion to our adoption of the following proposals.
Proposals:
1. Abolish the paying and taking of Interest.
2. Abolish the selling of Insurance.
3. Abolish the State Lottery.
4. Abolish the levying of Property Taxes. (Town budgets will be set solely by revenue from the state, and the people of the town can contribute to the betterment of the town privately. Sales and income taxes will remain.)
5. Abolish all fees, tolls, permit costs and mini-taxes at the state and local level.
6. Abolish the Bottle Bill.
7. Abolish primary elections and declarations of political party and set-up general elections with preferential voting mechanisms.
8. Abolish collective bargaining and in its place establish a universal wage based on age, circumstances and job classification.
9. Abolish pricing fluctuations, sales, club discounts, coupons, etc. Manufacturers and wholesalers are required to sell the same good at the same price to all clients, regardless of volume. Retail stores must sell the same good at the same price to all customers. Prices in retail stores can only fluctuate once every 180 days for non-perishable goods. Government will not directly control the price or the discount rates, but pricing used by businesses must be uniformly applied and stable.
10. All towns are to assume by eminent domain all commercial space within their towns, except farmland and businesses that are used as housing owner-occupied. Commercial entities will operate rent-free with the town holding title to the land and building, but not to the contents. The town will continue to manage through permits what industries and services the town sites and help and encourage citizens to take on the necessary roles in the production of material wealth. The town will not evict or harm any existing business, rather it will be a partner in ensuring the success of every business instead of being a punisher of commerce. Violations of standards will be dealt with by remediation, not punishment. Henceforth, all new businesses will conform to universal wage standards.
11. All large-scale rented housing must be owned and managed by non-profit corporations subject to universal wage standards. For-profit ownership of housing is abolished. No consideration is made for investors.
12. Establish a non-profit housing mortgage bank that lends funds at 0% with no fees of any kind. Overhead of the bank is supported through general funds of the State. Mortgages should not exceed ten years. Local independent banks may participate in this program.
13. The endowments of nonprofit organizations are abolished and the funds are transferred to the non-profit housing bank.
14. Housing prices are to be set by the town assessor and confirmed by a majority vote of the townspeople. The price of any home is to be kept constant for a minimum period of fifteen years. All homes vacated are sold to the town, and the town will resell the home to new owners. Multi-family homes that are not owner-occupied will be sold to the town. The town may rent housing at a uniform rate, subject to the same fifteen year adjustment period. Private real estate brokering is abolished.
15. For profit hospitals are abolished and return to non-profit status. No consideration is made for investors.
16. Public services will be provided on a quota basis. Water, electricity, telephone, cable and internet are public utilities freely provided, like the roads, library and schools. These things should be maintained for the common good not for private profit. Fees only apply to usage beyond the quota.
These companies shall be converted to non-profits, subject to universal wage standards, and no consideration will be made for investors.
17. All farm-land is to be preserved. All mortgages on farmland, ranches or orchards that are involved in the commercial production of food are to be relieved of any mortgage and to remain forever free of a mortgage. Redirecting land for farmland use is to be encouraged by local authorities.
18. The expansion of cemeteries and memorials will cease. No new land is to be allocated for use by the dead.
Prologue:
It is to be observed that the laws of government fall into three categories; laws that control government, laws that control commerce, and laws that control people. The former and the later are designed to control madness, for the violent individual and the violent government act similarly. If there were no madness among men, then no laws would be necessary except the original commandments. It is because men do not act with self-restraint that governments have been formed, but governments that fail to act with self-restraint are the greatest burden of humanity. Fear breaks down all self-restraint, and drives all madness. Fear has an evil twin known as Pride. Every government ever formed has an original story of Pride and a baseline of Fear where a new madness overcame the old madness. This is the common tragedy of doing the right thing for the wrong reason or doing the wrong thing for the right reason. Victory is not the same as progress. The slave rises against the slave-master and becomes him. The chains remain, only who is the stronger changes.
The new start on a new land that John Winthrop attempted failed for common reasons; the new nation was a child of the old world and the old ways. The wise who acted with self-restraint were overwhelmed by the unwise who acted with none. The choice before us is a common one. Shall we pursue God’s wisdom through self-restraint or pursue madness through our lusts for money and power? We cannot serve two masters, and in truth, we cannot serve the false master, either.
We are a fortunate generation, for we have the benefit of hindsight that no other generation has enjoyed. We have the hands of millions, the minds of millions, and the skills of machines to contribute to our commonwealth. We have knowledge and discovery and communication abilities that allow men to be a neighbor of one another though they be thousands of miles apart. Nevertheless, truth thousands of years old remains the truth, and patterns of folly repeated after thousands of years remain folly. If we do not cooperate, then we struggle. If we do not act wisely, then we act unwisely. Ideas rule the world, not men. Ideas guide the hand.
Money is our invention. Money requires the application of ‘value’ to things and time. Inflation is a surge that lays waste to everything in its path. Numbers are infinite, and in our battle with numbers we have only one advantage: to do the right things for the right reason. If we must use money, then we must use it wisely.
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