Let Them Eat Cake!
In the late 1700s famine spread across the land in France. The monarchy of the time seemed to have little tolerance or sympathy for the starving poor. The story goes that the people of France were starving following a poor harvest and a rodent crisis that led to a shortage of the staple of the time, flour, and consequently bread.
Allegedly upon hearing the news, Marie Antoinette, the wife of King Louis XVI, uttered this now famous phrase “let them each cake.” As cake (really brioche when properly translated) was more expensive than bread, the anecdote was clear evidence of just how out of touch she was with the lives of her subjects.
Although we are lucky enough today to not be in the middle of a famine in the U.S., we have the same kind of unrest today that must have been present in France at the time. One would guess a desperate peasant class was up in arms with the royal aristocracy and starvation was a powerful catalyst for their unrest.
Today, we have the Black Lives Matter movement front and center. The catalyst for this movement was the viral video of police brutality against George Floyd in Minneapolis. This group, and others that have infiltrated their ranks, are today locked in what seems like a never-ending struggle with the ruling class of our time, the government at all levels and their enforcers, the police.
I am not going to take a side in this ongoing dispute but to say that the 2016 Netflix film, 13th, was an eye opener for me. One I would not have seen if not for the insistence of my 20 years old daughter. I would highly recommend it. Not as absolute truth, but as a film that broadens the thinking and at least allows one to look at the protests with greater objectivity.
If we go back in time even further, the children of Israel in the book of Samuel in the bible, were complaining that they wanted a King just like all the other peoples on the earth at the time. In Samuel 8:11-20, Samuel warns the people about what a King would do to his subjects.
He said, “This is what the king who will reign over you will claim as his rights: He will take your sons and make them serve with his chariots and horses, and they will run in front of his chariots. 12 Some he will assign to be commanders of thousands and commanders of fifties, and others to plow his ground and reap his harvest, and still others to make weapons of war and equipment for his chariots. 13 He will take your daughters to be perfumers and cooks and bakers. 14 He will take the best of your fields and vineyards and olive groves and give them to his attendants. 15 He will take a tenth of your grain and of your vintage and give it to his officials and attendants. 16 Your male and female servants and the best of your cattle and donkeys he will take for his own use. 17 He will take a tenth of your flocks, and you yourselves will become his slaves. 18 When that day comes, you will cry out for relief from the king you have chosen, but the LORD will not answer you in that day.” 19 But the people refused to listen to Samuel. “No!” they said. “We want a king over us. 20 Then we will be like all the other nations, with a king to lead us and to go out before us and fight our battles.”
Today we are under the thumb of a government and its monetary system. Like the kings of the times past, our system does many the same things as in Samuel’s time and a couple things that they did not have to deal with including a Central Bank over its money supply.
I mention the Central Bank because I believe much of the class war, we have today is due to this one non-government organization. The Central Bank is a relatively new concept that was brought to the U.S. from Europe in the early 1900s.
Our founding fathers were against the idea of such an institution. They reasoned that there was no reason for an organization to issue and control the money supply on behalf of the U.S. government and its depository institutions. However, enough palms were greased that the U.S. Federal Reserve was finally born of out of the Federal Reserve Act of 1913.
Why were our founding fathers against a Central Bank? I think Mayer Amschel Rothchild said it best, “permit me to issue and control the money of a nation, an I care not who makes the laws!
The Central Bank and our government have been integrally aligned ever since. The problem with a Central Bank, as we have seen in recent years, is that they don’t work for us. It may appear that they do, but they don’t. Their programs and intervention in markets many times serve a purpose that does not align with the 99% but the 1%.
How do these programs lead to inequality?
Central banks pull several levers in their management of the economy including interest rates, bank reserve requirements and money supply. In recent years, to spur growth and allow its member banks to repair their balance sheets post the Great Recession, they have kept rates very low and been highly accommodative with their stimulus programs. This has benefited the wealthy, while hurting the saver, who has received very little interest on their excess savings while “stealth inflation” has squeezed the 99% amid an extended period of wage stagnation.
I say stealth inflation because the government changed the methodology in 1980 by which inflation is measured in the Consumer Price Index (CPA). Thereby understating the effects of inflation on the economy. Since CPI is used to determine annual adjustments to social security to the increase in employer wages, this has resulted in stagnation of wages while the real level of inflation has been much greater thereby squeezing our cost of living.
You can see this spread in the chart below courtesy of Shadowstats.com.
Likewise, the Central Bank has promoted lending programs that make colleges and universities affordable to the masses. The problem is that their buddies at those same colleges and universities have used the plentiful loan programs to boost tuition and fees, enrich their tenured professors and embark on massive expansion programs. We are already seeing a backlash here as students are taking legal action against those same universities for fees paid them during the pandemic without the receipt of proper classroom learning.
In other words, they have stacked the deck against us. Is it any wonder that the masses are rioting?
If you look at the pictures of those rioting, it is not just black Americans. It is Millennials and Generation Z who lost their jobs during the pandemic.
Why are they there? My theory is that it is not just black Americans that feel their government have abused their responsibilities towards them, but it is much of our younger generations that feel the squeeze of rising inequality, while being saddled with student debts they will have a hard time ever repaying in this low growth economy. This economic squeeze inevitably leads to a cycle of unrest just like in Marie Antoinette’s day until the tide is turned and the inequality is addressed.
What do think? Leave me your comments below.