[1] www.youtube.com/watch?v=A7wKHIYysjY
[2] Professor Joseph Schumpeter (1883-1950) was a famed innovations cycle theorist.
[3] Groundhog Day is a bizarre, but charming, movie in which the days and their events repeat endlessly with only slight variations, imparting reflections on the rhythm of life and even a little wisdom.
[4] https://en.wikipedia.org/wiki/Decolonization
[5] The International Monetary Fund report is based on purchasing power parity.
[6] Many of these comments concerning Western economies also apply to Japan.
[7] Throughout, the terms business cycle and economic cycle are used interchangeably.
[8] Although 1979 marked the start of the parting with Keynesian economics and the progressive adoption of neoclassical economics, for convenience the text refers to the 1980s as the start of this process.
[9] BRICS is short for Brazil, Russia, India, China, and South Africa. The G-7 was established in 1973 as five countries; it evolved into the Group of Seven, or G-7, by 1975. These seven countries represented the largest and wealthiest nations at the time-namely, the United States, Japan, Germany, France, Britain, Italy, and Canada.
[10] The West here and henceforth refers primarily to the advanced economies of Western Europe, North America, Australia and New Zealand. Occasionally, it implies Japan and South Korea as well.
[11] The economic contraction began in 2007, but very few felt any pain before 2008; hence, we will adhere to the public's perception.
[12] http://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%9308#Role_of_economic_forecasting Wikipedia, Financial crisis of 2007-08, Bezemer, Dirk J (June 2009). "No One Saw This Coming: Understanding Financial Crisis Through Accounting Models." Munich Personal RePEc Archive. Retrieved October 23, 2009.
[13] Plutocracy is the rule of the wealthy, as defined by Merriam Webster's Internet dictionary.
[14] www.brainyquote.com/quotes/authors/l/leonardo_da_vinci.html#WcrI0DF4mEoyVFTz.99
[15] Chapter by Noble laureate Joseph E. Stiglitz, p. 376-377, Lives of the Laureates, sixth edition, edited by Roger W. Spencer and David A. Macpherson, The MIT Press, 2014.
[16] www.brainyquote.com/search_results.html?q=Voltaire
[17] Refer to Chapter 4, the section titled "Viscount Takahashi's Macroeconomic Revolution."
[18] This is discussed further in Chapter 5 in the section titled "MPT versus Dynamic Portfolio Theory."
[19] Refer to Chapter 6.
[20] www.sanders.senate.gov/newsroom/press-releases/the-fed-audit
[21] All references to $, dollar, or dollars implies the US dollar, throughout.
[22] http://en.wikipedia.org/wiki/2008%E2%80%9311_Icelandic_financial_crisis
[23] Refer to Chapter 9, the section titled "Usurious Capitalism."
[24] "Charlie Rose Show" (Bloomberg TV, July 27, 2012).
[25] https://en.wikiquote.org/wiki/John_Maynard_Keynes#Quotes
[26] www.brainyquote.com/search_results.html?q=truth
[27] Unless indicated otherwise, the term monopolies here and subsequently refers to all forms of restriction of trade, including monopoly, duopoly, oligopoly, cartels, and trusts on the demand side, and monopsony on the supply side.
[28] The publication of The Wealth of Nations, in 1776, marks the start of classical economics; 1873 was the year that John Stuart Mill, the last of the classical economists, passed away.
1. Classical Economic Theory
[30] In his book, Economic Thought of Islam: Ibn Khaldun (1964), Joseph J. Spengler suggested that the Father of Economics is Ibn Khaldun (1332-1406).
[31] https://en.wikipedia.org/wiki/David_Ricardo#Parliamentary_record
[32] https://en.wikipedia.org/wiki/Jean-Baptiste_Say
[33] This is discussed in Chapter 4.
[34] https://en.wikipedia.org/wiki/John_Stuart_Mill
[35] https://en.wikipedia.org/wiki/Thomas_Robert_Malthus
[36] Refer to Chapter 4, the section titled "Jean Charles Léonard de Sismondi."
[37] Other similar concepts that border on instinct include intuition, inspiration, creativity, hunches, super-consciousness, and insight. See the super-conscious mind at www.youtube.com/watch?v=vYz0eREf9f0
[38] For brevity, man is referenced here, though women are implied as well.
[39] www.brainyquote.com/search_results.html?q=intelligence&pg=2
[40] Given his undoubted intelligence, reflected by his excellent investment performance, and moral positions on critical economic issues, we shall use Warren Buffet repeatedly as one benchmark for intelligent and moral economic behavior.
[41] Its slope is positive because progressively larger amounts of wealth accumulation are necessary to provide the same utility. For example, an additional hundred thousand dollars in wealth hardly provides the same satisfaction when the wealth accumulator has $100 million as when he or she had just one million.
[42] Robert Skidelsy, "Keynes and the Ethics of Capitalism," https://en.wikiquote.org/wiki/John_Maynard_Keynes#Quotes.
[43] Bertrand Russell, "Power," www.amazon.com/Power-Bertrand-Russell/dp/0415094569/ref=sr_1_2?s=books&ie=UTF8&qid=1411370548&sr=1-2&keywords=bertrand+russell+power.
[44] Czarist Russia only abolished serfdom, the selling of peasants along with the lands they cultivated, in 1861. The French Revolution formally abolished the remnants of feudalism on August 4, 1789. By 1793, there had been a major transfer of wealth and income from large landowners and the church to the peasants. See http://en.wikipedia.org/wiki/Feudalism.
[45] Prime examples are the Opium Wars.
[46] Denis Nowell Pritt, The Labour Government, 1945-1951 (pub. 1963).
[47] The Holy Bible (Mark 8:36, KJV).
[48] The English Poor Laws were codified in 1587-98 for the relief of the poor.
[49] See http://en.wikipedia.org/wiki/Corn_Laws.
[50] John Kenneth Galbraith: "Age of Uncertainty, Episode I" (BBC video series).
[51] Reverend Desmond Tutu explained the imperialist hold over the church well in stating, "When the missionaries came to Africa they had the Bible and we had the land. They said, Let us pray and we closed our eyes. When we opened our eyes, we had the Bible and they had the land."
[52] https://en.wikipedia.org/wiki/Collective_unconscious.
[53] See www.brainyquote.com/quotes/quotes/a/abrahamlin110340.html.
[54] Refer to Chapter 6.
[55] Nassim Talib, The Black Swan: The Impact of the Highly Improbable (Random House, 2007).
[56] See www.brainyquote.com/quotes/topics/topic_war.html#CdwbGwZMwOHH8WxD.99.
2. The Rise and Fall of Marxist Economics
[57] The Communist Manifesto was published in 1848. In 1988, Mikhail Sergeyevich Gorbachyov launched glasnost, the start of the dissolution of the Soviet Union; this led to the Soviet Union's formal termination in 1991.
[58] www.brainyquote.com/search_results.html?q=Religion+is+what+keeps+the+poor+from+murdering+the+rich.
[59] http://en.wikipedia.org/wiki/Black_Death.
[60] "Masters of Money - Karl Marx" (BBC documentary).
[61] An import tax.
[62] The aristocracy owned most of the land.
[63] https://en.wikipedia.org/wiki/Winston_Churchill
[64] Trattato di Sociologia Generale, 1916, and published in English as The Mind and Society by Harcourt, Brace and edited by Arthur Livingston, 1935.
[65] Ian Adams and R. W. Dayson, chapter on Karl Marx in Fifty Major Political Thinkers (Routledge, 2007).
[66] The causes of an increase in demand for a normal good include a change in tastes, an increase in incomes, a rise in the price of a substitute, and a decline in the price of a complementary good.
[67] E. Carroll pointed out in An Introduction to Economics with Emphasis on Innovation (2006) that "Joseph Schumpeter argued that technological innovation created transient monopolies with abnormal profits, a necessary incentive for innovation, until imitators drove down profit."
[68] Similarly, a century earlier, famine in the British Isles and fear of revolution had prompted the British parliament to repeal the Corn Laws, thereby scrapping the tariff on the import of grains.
[69] More precisely, the condition of labor already began improving following the Russian Revolution in 1917. The New Deal in the 1930s partly reflected this, however it was minor compared to the major social reforms after World War II.
[70] Andrew Mack, Why Big Nations Lose Small Wars: The Politics of Asymmetric Conflict, page 181. http://web.stanford.edu/class/polisci211z/2.2/Mack%20WP%201975%20Asymm%20Conf.pdf
[71] https://en.wikipedia.org/wiki/Wind_of_Change_(speech)#Background.
[72] https://en.wikipedia.org/wiki/Wind_of_Change_(speech)#Cold_War_politics_and_.the_fear_of_communism.
[73] Georg Wilhelm Friedrich Hegel (1770-1831) was a German philosopher. Hegel used "dialectic" speculative logic and "absolute idealism" to influence both his admirers and his critics. One French philosopher, Paul-Michel Foucault (1926-1984), asserted that philosophers were "doomed to find Hegel waiting patiently at the end of whatever road we travel."
[74] The rich enjoyed personal income tax cuts, while the poor suffered higher indirect taxes, such as value-added tax (VAT).
3. Keynesian Cyclical Stabilization
[75] The year 1819 marked the publication of de Sismondi's Nouveaux principes d'économie politique. In 1979, 160 years later, Great Britain, under Thatcher, reverted to neoclassical macroeconomics and discarded Keynesianism.
[76] See www.brainyquote.com/search_results.html?q=truth.
[77] This topic is explored further in Chapter 11, section titled "Stages of a Business Cycle."
[78] For more details, refer to Chapter 10.
[79] Ambrose Evans-Pritchard, "Japan's economic revolution rocks the world," Sydney Morning Herald, Jan. 22, 2013, www.smh.com.au/business/world-business/japans-economic-revolution-rocks-the-world-20130122-2d3w2.html.
[80] The cobweb supply-demand model was proposed by Nicholas Kaldor.
[81] For example, Keynes was a successful investor who did not think markets were rational. Moreover, some investors have outperformed markets over long periods, which is inconsistent with the market's efficiency and rationality. A more crucial issue is that there is no assurance that those charged with economic management are good investors and, therefore, good predicators of the market's future direction. This seems to have been one of the problems facing Federal Reserve Chairman Ben Bernanke in the years leading up to the 2008 crisis.
[82] The multiplier effect refers to a ripple effect in the economy, where an increase (or decrease) in spending triggers a cycle of increases (decreases) in spending. The multiplier tends to be greater in relatively closed economies where international trade is smaller relative to GDP and, therefore, represents a smaller leakage. For the US economy, the total economic stimulus (or dampening), after a time lag, exceeds the original amount spent (or withheld) by a factor of about 0.75 times. In other words, the US multiplier is about 1.75.
[83] John Maynard Keynes, The General Theory of Employment, Interest and Money, February 1936.
This chapter also makes use of some of the concepts contained in The Return of the Master by Robert Skidelsky, Penguin Books, 2010.
[84] Pursuant to the 1973 oil crisis, the author's 1975 MSc. Dissertation, "A Proposed Scheme for Recycling Surplus Oil Funds," suggested a means of increasing capital absorption in the Middle East region to speed up the process of recycling surplus funds.
[85] See http://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States.
[86] In his 1975 MSc. dissertation in financial economics at the University of Wales (Bangor), this author proposed solving the stagnation side of the problem by accelerating the global recycling of surplus Arab petro-dollars by reducing the risk of nationalization in capital-deficient Arab countries and increasing investments there. The dissertation was titled "A Proposed Scheme for Recycling Surplus Oil Funds."
[87] Myung Soo Cha, "Did Takahashi Korekiyo Rescue Japan from the Great Depression?" Journal of Economic History, Vol. 63/No. 1 (Mar. 2003): 127-44. Also see http://en.wikipedia.org/wiki/Great_Depression#cite_note-74
[88] Part V discusses these issues at length.
[89] In this chapter and elsewhere, criticisms of neoclassical economics imply neoclassical macroeconomics.
4. The Fall and Rise of Neoclassical Macroeconomics
[90] William Stanley Jevons's Theory of Political Economy and Carl Menger's Principles of Economics were both published in 1871. By 1931, the severity of the Great Depression made it plain that neoclassical macroeconomics was inadequate. However, it was revived starting in 1979 and continues, at present, despite growing uncertainty about its relevance.
[91] See www.goodreads.com/quotes/tag/monopoly.
[92] Throughout, reference to Western countries or simply the West implies the twenty-eight member countries of the European Union, the United States, Canada, and European countries generally considered part of the West although not members of the European Union, most notably Norway, Switzerland, and Iceland. Moreover, many of the economic arguments herein apply to the present state of the Japanese economy as well.
[93] "On Friedrich Hayek's Prices and Production," in Collected Writings, Vol. XII, p. 252, https://en.wikiquote.org/wiki/John_Maynard_Keynes#Quotes.
[94] J. Bradford De Long, "Liquidation" Cycles: Old Fashioned Real Business Cycle Theory and the Great Depression, National Bureau of Economic Research, Working Paper No. 3546, p. 1, https://en.wikipedia.org/wiki/Great_Depression#cite_ref-nber.org_28-0.
[95] Lawrence White, "Did Hayek and Robbins Deepen the Great Depression?" Journal of Money, Credit and Banking, Vol. 40/No. 4 (June 2008): 751-768, http://en.wikipedia.org/
wiki/Great_Depression#cite_ref-nber.org_28-0.
[96] The Sherman Act 1890, the Clayton Act 1914, and the Federal Trade Commission Act 1914, http://en.wikipedia.org/wiki/United_States_antitrust_law.
[97] Milton Friedman's prize in 1976 resulted in international protests accusing him and the University of Chicago of supporting the military dictatorship in Chile. Moreover, four Nobel Prize laureates-George Wald, Linus Pauling, David Baltimore, and Salvador Luria-made similar protests to the New York Times in October 1976.
[98] See http://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States.
[99] Chapter 10 discusses these problems further.
[100] The efficient market hypothesis (EMH), where markets are efficient with securities prices reflecting all available information, is consistent with the rational expectations hypothesis (REH).
[101] https://en.wikipedia.org/wiki/Modern_portfolio_theory#Criticisms.
[102] www.thetao.info/quote/tao5395.htm
[103] The efficient market hypothesis is part of the modern portfolio theory.
[104] In the 1920s, Charles Ponzi (1882-1949) became famous as a con artist in the US. His "Ponzi scheme" promised a high return and used pyramiding-that is to say, taking money from new investors to pay earlier ones. The scheme worked for a few years, but was exposed when new money dried up.
[105] For further elaboration on this point, refer to Chapter 12's section titled "Corporate Reporting."
[106] Chapter 12 discusses this progressive deterioration in market efficiency.
[107] See Ross Ashcroft's interview of Prof. Steve Keen on the occasion of Keen's newly published book Debunking Economics: The Emperor Dethroned? (Zed Books, 2011). Ashcroft is with the "Renegade Economist Show." See www.youtube.com/watch?v=7F2FKxxN_IE.
[108] Refer to Chapter 9's section titled "The Banking Model."
[109] Refer to Chapter 6.
[110] www.brainyquote.com/quotes/quotes/v/voltaire118641
[111] Refer to Chapter 11, which deals with economic cycles.
[112] Refer to Chapter 2.
[113] See www.brainyquote.com/quotes/authors/a/albert_einstein.html.
5. The Unified Theory of Macroeconomic Failure
[114] www.brainyquote.com/quotes/quotes/j/johnmaynar385471
[115] Gresham's Law applies mostly to gold and silver coinage and, to a lesser extent, to copper coins. When some part of society scraps coins, in effect, stealing a little from the legal tender, the currency in circulation is debased. Once some debased coins are accepted as legal tender then, soon, all coins become debased; hence, bad money drives out good money. Forty years earlier in Poland, Nicolaus Copernicus made similar assertions. Earlier still, Al-Maqrizi (1364-1442), a Muslim jurist and historian, developed a similar concept in his work Study of the Monetary System. See http://en.wikipedia.org/wiki/Gresham%27s_law.
[116] Luke 6:3.
[117] See http://en.wikipedia.org/wiki/Golden_Rule#Christianity.
[118] Regrettably, the author is not sufficiently familiar with other religions to include them in the discussion.
[119] The New Testament.
[120] Theodore Roosevelt, Theodore Roosevelt: an autobiography (New York: Macmillan, 1913).
[121] Al-Hussein ibn 'Alī ibn Abī Ṭālib, http://en.wikipedia.org/wiki/Husayn_ibn_Ali.
[122] See http://en.wikipedia.org/wiki/Psychopathy.
[123] Don Fitz, "Inside the Psyche of the 1%," Truth-Out, November 3, 2013, http://truth-out.org/opinion/item/19776-inside-the-psyche-of-the-1.
[124] See http://en.wikipedia.org/wiki/Technological_dualism.
[125] On Feb. 18, 2015, Al-Mayadeen TV reported that the Iraqi ambassador to the United Nations informed the Security Council that ISIS was financing its activities in part by selling human organs.
[126] The economics literature recognizes the Protestant work ethic as a significant factor in promoting economic development. The focus here is broader.
[127] See http://en.wikipedia.org/wiki/Sophism.
[128] https://en.wikipedia.org/wiki/Bertrand_Russell#First_World_War.
[129] https://en.wikipedia.org/wiki/Galileo_Galilei.
[130] In 1918, the British authorities imprisoned Bertrand Russell for his opinions. Refer to Bertrand Russell's Power (Routledge, 1995), introduction by Kirk Willis, www.amazon.com/Power-Bertrand-Russell/dp/0415094569/ref=sr_1_2?s=books&ie=UTF8&qid=1411370548&sr=1-2&keywords=bertrand+russell+power
[131] See www.brainyquote.com/quotes/topics/topic_power.html#lfitBch5KHm3AYCC.99.
[132] https://en.wikipedia.org/wiki/Classical_conditioning.
[133] Chapter 1's section titled "In Search of Reliable Signposts."
[134] For those unfamiliar with the concepts involved, consult any standard public finance textbook for a detailed explanation.
[135] In what follows, where appropriate, consumption will mean production also and goods include services.
[136] Public cost equals private cost plus the externality, if any.
[137] In some instances, the estimated total benefit compared to the cost of reducing pollution from coal-burning utilities was ten to one or higher.
[138] A somewhat similar concept that refers to the confusion of battle is the fog of war.
[139] See www.brainyquote.com/quotes/authors/w/winston_churchill.html.
[140] Chapter 4, section titled "The Golden Age of Keynesianism."
[141] Henri Bergson, The Meaning of War (London: T. Fisher Unwin Ltd., 1915), p. 45. Also see https://books.google.ae/books?id=0LcKAwAAQBAJ&pg=PA45&lpg=PA45&dq=Bismarck+might+is+right&source=bl&ots=Lq5_l7SXJC&sig=WedvPLNjibKDn6MbkG_imsoqd3Y&hl=en&sa=X&ved=0ahUKEwi3-5KakKLKAhUEKw8KHZYaAgQQ6AEIQDAH#v=onepage&q=Bismarck%20might%20is%20right&f=false.
[142] David Olusoga and Casper W. Erichsen, The Kaiser's Holocaust (Faber and Faber Ltd., 2011), p. 55.
[143] Adam Hochschildthat, King Leopold's Ghost (Mariner Books, 1998). This bestseller exposes the atrocities committed under the rule of Belgium's King Leopold II in the Congo. Even a century or longer after those crimes, the truth is not widely known, or is twisted or suppressed. Nine of the first ten publishers who saw the manuscript refused to publish it. See also http://en.wikipedia.org/wiki/King_Leopold%27s_Ghost.
[144] Chapter 3, section titled "Nineteenth-Century Poverty and Plutocracy in Europe."
6. Usury: Conquest by Stealth
[145] www.brainyquote.com/search_results.html?q=Man+is+born+free%2C+and+everywhere+he+is+in+chains
[146] Usury is lending for interest, the mainstay of the banking business.
[147] Supplementary Convention on the Abolition of Slavery, the Slave Trade, and Institutions and Practices Similar to Slavery, 226 U.N.T.S. 3, entered into force April 30, 1957, Human Rights Library, University of Minnesota. See www1.umn.edu/humanrts/instree/f3scas.htm.
[148] Under Islam, a charitable loan is a loan to Allah. See Surat Al-Muzzammil, 73:20, Holy Qur'an.
[149] Regrettably, the author is not sufficiently familiar with other religions, although some might also hold usury in contempt.
[150] Refer to Chapter 6.
[151] The Renaissance was from the 14th to the 17th century, a period in which major cultural and religious transformations took place in Europe.
[152] Chapter 15 presents examples of equity alternatives to usurious lending.
7. The Ascent of Banking
[153] www.brainyquote.com/search_results.html?q=We+cannot+solve+our+problems+with+the+same+thinking+we+used+when+we+created+them
[154] Monopsony is a market situation in which there is a single buyer for a product or service and many sellers. Unlike a monopoly, which exploits the buyers, a monopsony exploits the sellers, typically, labor.
[155] This brings the total immoralities of banking to four: (1) usury itself, (2) the dishonesty of lending nonexistent funds, (3) the betrayal of the public trust by putting depositors' funds at risk, and (4) unloading sub-par credit onto their clients. In reality, the moral violations associated with usury, its products and institutions are innumerable, as will become clear in due course.
[156] Short selling and margin lending are covered in Chapters 10 and 11, respectively.
[157] See Chapter 11.
[158] Hyman P. Minsky, "The Financial Instability Hypothesis" (Working Paper No. 74), the Jerome Levy Economics Institute of Bard College, May 1992.
[159] The term "counterrevolution" was used earlier by Naomi Klein with reference to Milton Friedman's free market experiments in Chile and elsewhere in her penetrating book "The Shock Doctrine: The Rise of Disaster Capitalism," Henry Holt and Company, 2008.
[160] Robert Luongo (b. 1949) astutely draws similarities between Shakespeare's portrayal of plutocracy in ancient times and recent trends. See The Power Template: Shakespeare's Political Plays, www.amazon.com/Power-Template-Shakespeares-Political-Plays/dp/1463659520/ref=sr_1_1_title_0_main?s=books&ie=UTF8&qid=1313339020&sr=1-1.
[161] In 1913, the Federal Reserve Act was passed. In 1932, the first "Glass-Steagall Act" was passed. In 1979, Margaret Thatcher became the British prime minister. In 1981, Ronald Reagan was elected US president. The British Conservative Party and the American Republican Party share a similar ideology.
8. Bank Instability, Products, and Economics
[162] See www.brainyquote.com/.
[163] For an interesting history of financial crises, see "Financial crisis" in Wikipedia, http://en.wikipedia.org/wiki/Financial_crisis.
[164] This section draws heavily on the extensive documentation of economic and financial crises in Carmen M. Reinhart and Kenneth S. Rogoff's seminal work, This Time Is Different: Eight Centuries of Financial Folly (Princeton University Press, 2011).
[165] Table 13.1, This Time Is Different.
[166] This Time Is Different: Eight Centuries of Financial Folly.
[167] See Chapter 11's section titled "Stages of a Business Cycle."
[168] Ibid.
[169] Rising interest rates tend to lower the prices of fixed-interest loans and bonds and vice versa.
[170] Roger Lowenstein, When Genius Failed: The Rise and Fall of Long-Term Capital Management (New York: Random House Trade Paperback, 2000).
[171] The first round was following the first oil crisis in 1973.
[172] For more on the problems of Citigroup, see the chapter titled "Steel's Turn" in Roger Lowenstein's The End of Wall Street (Penguin Press, 2010).
[173] F. William Engdahl, "Oil Wars: Pop! Goes the Weasel," Jan. 27, 2015, New Eastern Outlook, http://journal-neo.org/2015/01/27/pop-goes-the-weasel.
[174] The London interbank offered rate (LIBOR) is the reference rate used by borrowers and lenders (worldwide) to set the interest rate on international currencies that they should pay or receive. Barclays's LIBOR fiddling and fixing illustrates that the concept of a free money market is a myth, encouraged by its beneficiaries because, under a free market, participants cannot fix LIBOR to suit their interests.
[175] Japan has one of the highest ratios of debt to GDP, and its serious consequences will surface more visibly in future.
[176] Fortune Magazine, Europe Edition, June 7, 2012, p. 44.
[177] Foreign Affairs, March/April 2010 issue.
[178] See www.TheFinancialCoach.com.
[179] Alexander Nahum Sack (or Aleksandr Naumovich Zak) (1890-1955) formalized the odious debt doctrine (unjust national debt) through his work Effects of the Transformations of the States in Their Public Debts and Other Financial Obligations (Les effets des transformations des Etats sur leurs dettes publiques et autres obligations financières: traité juridique et financier), Recueil Sirey, Paris, 1927.
[180] Patricia Adams, "Odious Debts: Loose Lending, Corruption, and the Third World's Environmental Legacy."
[181] Seema Jayachandran and Michael Kremer, "Odious Debt," American Economic Review, March 2006.
[182] John-Perkins, Confessions of an Economic Hit Man (Penguin Group, 2004), www.amazon.com/Confessions-Economic-Hit-John-Perkins/dp/0452287081.
Also see http://en.wikipedia.org/wiki/Confessions_of_an_Economic_Hit_Man
[183] See http://en.wikipedia.org/wiki/Conspiracy_theory.
[184] See http://en.wikipedia.org/wiki/Plausible_deniability.
[185] See Watching the Hawks, RT, April 7, 2016, for recent accusations of USAID participating in funding turmoil and regime change in several countries, including former Yugoslavia, Georgia and Ukraine.
[186] Seewww.brettonwoodsproject.org/2014/10/impact-brics-contingent-reserve-arrangement-cra-new-development-bank-ndb.
[187] This is sometimes referred to as frictional inflation.
[188] Refer to Chapter 10's section titled "Democracy and the Federal Reserve."
[189] For an interesting exposé of how derivatives bankrupted the Long-Term Capital Management hedge fund, see Roger Lowenstein's When Genius Failed (New York: Random House Trade Paperbacks, 2000).
[190] Nassim Nicholas Taleb discusses the problem posed by outliers at length in his book The Black Swan: The Impact of the Highly Improbable.
[191] For an inside story of the rise and fall of Countrywide Home Loans and the mortgage crisis, see Adam Michaelson's The Foreclosure of America (Penguin Group, 2009).
[192] The term Machiavellian derives from Niccolò di Bernardo dei Machiavelli (1469-1527), a Florentine political philosopher best known for his book The Prince, which many consider the final authority in real politique.
[193] Vilfredo Pareto (1848-1923), an Italian economist, first introduced the concept. One of the arguments for banking deregulation was that free and competitive markets would improve economic efficiency, edging closer to a Pareto optimal resource allocation.
9. The Federal Reserve as an Extension of Banking Power
[194] www.brainyquote.com/search_results.html?q=We+the+people+are+the+rightful+masters+of+both+Congress+and+the+courts
[195] Refer to Chapter 9's section titled "Usurious Capitalism."
[196] "Who owns the Federal Reserve?" (November 2, 2014), see www.federalreserve.gov/faqs/about_14986.htm
[197] "Income and Expenses of the Federal Reserve Banks, 1914-2013," Table 11, pp. 300-302, www.federalreserve.gov/publications/annual-report/files/2013-annual-report.pdf
[198] Chapter 5's section titled "The Monetarist School."
[199] Criticism of the Federal Reserve, Wikipedia, http://en.wikipedia.org/wiki/Criticism_of_the_Federal_Reserve#Private_ownership_or_control.
[200] Wikipedia, History of Banking: http://en.wikipedia.org/wiki/History_of_banking# Great_Depression.
[201] For a more detailed discussion, refer to the section titled "Misdiagnosis of Stagflation (1979-1982)" in Chapter 5.
[202] See http://en.wikipedia.org/wiki/Paul_Volcker.
[203] See http://en.wikipedia.org/wiki/Regulation_Q.
[204] Table A.4.1 "Banking Crises: Historical Summaries, 1800-2008," This Time Is Different.
[205] Abraham Lincoln's Gettysburg Address, http://en.wikipedia.org/wiki/Gettysburg_Address.
[206] "Who owns the Federal Reserve?" www.federalreserve.gov/faqs/about_14986.htm.
[207] Business Insider, www.businessinsider.com/fed-is-unconstitutional-2010-11.
[208] Business Insider, www.businessinsider.com/fed-is-unconstitutional-2010-11.
[209] The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into federal law by President Barack Obama on July 21, 2010.
[210] See www.sanders.senate.gov/newsroom/press-releases/the-fed-audit.
[211] See www.sanders.senate.gov/imo/media/doc/GAO%20Fed%20Investigation.pdf.
[212] Russia Today, February 25, 2015.
10. Amplified Business Cycles
[213] BrainyQuote www.brainyquote.com/quotes/topics/topic_war. html#CdwbGwZMw OHH 8WxD.99
[214] Allowing for the complex effects of shorter and longer cycles, this is not far from the estimate of a cycle's duration of seven to eleven years by French economist Clement Juglar. Refer to Chapter 4, the Section titled "Durations and Stages of Economic Cycles."
[215] See http://en.wikipedia.org/wiki/Year_Without_a_Summer.
[216] I first heard of a link between sunspots and the weather in 1986 from the ingenious American climatologist, the late Dr. Iben Browning (1918-1991). Presenting a paper at a conference organized by the National Committee for Monetary Reform and Wealth Magazine in Montreal, Canada, he explained how severe droughts preceded many momentous conflicts and population movements in history, including the Mongol expansion.
[217] Refer to Chapter 6's section titled "Chronic Negative Externalities."
[218] Robert Lenzner, "The Recessions of 1973, 1980, 1991, 2001, 2008 Were Caused by High Oil Prices," Forbes, Sept. 1, 2013.
[219] Irving Fisher, "The Debt-Deflation Theory of Great Depressions," Econometrica, 1(4), pp. 337-357.
[220] Steve Keen, "Finance and Economic Breakdown: Modelling Minsky's Financial Instability Hypothesis," Journal of Post Keynesian Economics, Vol. 17, No. 4, 607-635,1995.
[221] For a country that imports 6 million barrels of crude oil per day, a $30/barrel fall in the price of crude oil stimulates the economy to the tune of $65.7 billion/year, excluding the secondary effects via the multiplier. However, a sharp fall in the price of oil also carries a negative impact on the domestic oil industry, if any.
11. Private Sector Inefficiency: Competition and Information Quality
[222] See www.brainyquote.com/quotes/keywords/monopoly.html#mp5ZlIQ3XfD0ul1I.99.
[223] Ernest Ezra Mandel (1923-1995), in his book Late Capitalism, takes a similar view.
[224] See http://en.wikipedia.org/wiki/Rent_seeking.
[225] President Barack Obama, 2016 State of the Union Address.
[226] See http://en.wikipedia.org/wiki/Health_system#International_comparisons.
[227] See www.forbes.com/sites/dandiamond/2015/09/22/greedy-pharma-executive-cancels-5000-price-hike-but-he-didnt-fix-the-real-problem.
[228] For a broader discussion of tax issues and their effect on employment, refer to Chapters 19, 20, and 21.
[229] https://en.wikipedia.org/wiki/History_of_union_busting_in_the_United_States#cite_ note-Smith_88-89-17.
[230] "Breaking the Set," Russia Today, October 16, 2014.
[231] See http://en.wikipedia.org/wiki/Underconsumption.
[232] Refer to Chapter 1's section titled "In Search of Reliable Signposts."
[233] See www.brainyquote.com/search_results.html?q=market+information.
[234] Interview on "Russia Today," April 11, 2012.
[235] See Chapter 10.
[236] https://en.wikipedia.org/wiki/Credit_rating_agency#Explanations_of_flaws.
[237] https://en.wikipedia.org/wiki/Enron.
[238] Since then, WorldCom in 2002, and Lehman Brothers in 2008, have broken Enron's record bankruptcy.
[239] The archaic governing rules permit companies to submit different accounts to the IRS, the SEC, and the shareholders.
[240] Maggie Mahar, Bull: A History of the Boom and Bust, 1982-2004 (Harper Business, 2004), Chapter 16, "Fully Deluded Earnings."
[241] Mitch Feierstein, Planet Ponzi (Bantam Press, 2012), p. 17.
12. Public Sector Inefficiency: Plutocracy vs Democracy
[242] www.brainyquote.com/search_results.html?q=America+will+never+be+destroyed+from+the+outside.+If+we+falter+and+lose+our+freedoms%2C+it+will+be+because+we+destroyed
[243] www.brainyquote.com/quotes/authors/l/leonardo_da_vinci.html#EIEQkE8ifuC0Q7cK.99
[244] https://en.wikipedia.org/wiki/Fairness_Doctrine
[245] Six corporations are said to control the bulk of US news media: Rupert Murdoch's News Corp., Time Warner, Viacom, Walt Disney, CBS Corporation, and NBC Universal.
[246] "Breaking the Set," Russia Today television program on July 8, 2014.
[247] For example, the media blocked news of the Occupy Movement for a long time.
[248] The Big Picture with Thom Hartman, RT, March 30, 2016
[249] https://en.wikipedia.org/wiki/File:FDR%27s_1941_State_of_the_Union_(Four_Freedoms_speech)_Edit_1.ogg
[250] https://en.wikipedia.org/wiki/Oxfam
[251] https://en.wikipedia.org/wiki/Poverty#Wealth_concentration
[252] The US Bureau of Justice Statistics and http://en.wikipedia.org/wiki/Incarceration_in_the_United_States.
[253] www.brainyquote.com/search_results.html?q=crime.
[254] https://en.wikipedia.org/wiki/Economic_inequality#cite_ref-119. Jerome L. Neapolitana, "A comparative analysis of nations with low and high levels of violent crime," Journal of Criminal Justice, Vol. 27, Issue 3, May-June 1999, p. 260. Also "Political structure, economic inequality, and homicide: a cross-national analysis," Deviant Behavior, Vol. 20, Issue 1, 1999, p. 50.
[255] "Rough Justice," The Economist, July 24, 2010 and "Too Many Laws, Too Many Prisoners," July 30, 2010.
[256] See www.leaderu.com/orgs/probe/docs/crime.html#.
[257] Fareed Zakaria, on CNN, March 30, 2012 (quotation appearing in Wikipedia, "Incarceration in the United States").
[258] Andrew D. Leipold, "Why Grand Juries Do Not (and Cannot) Protect the Accused," Cornell Law Review, Vol. 80, Issue 2, January 1995, Article 10, p. 274.
[259] For firsthand commentary on US prisons, see the interview with ex-CIA officer and Associate Fellow at the Institute of Policy Studies, John Kiriakou: http://rt.com/shows/watching-the-hawks/259861-shooting-cia-whistleblower-prison.
[260] www.brainyquote.com/quotes/topics/topic_war.html#CdwbGwZMwOHH8WxD. 99.
[261] Maj. Gen. Smedley Butler, War Is a Racket (Round Table Press, 1935), https://archive.org/details/WarIsARacket.
[262] American Airlines Flight 11, crashed in the of the North Tower of the World Trade Center at 8:46:40 Eastern Time (https://en.wikipedia.org/wiki/American_Airlines_Flight_11). Fifty one minutes later, American Airlines Flight 77 crashed in the Pentagon at 9:37 a.m. Eastern Time (https://en.wikipedia.org/wiki/American_Airlines_Flight_77).
[263] http://en.wikipedia.org/wiki/Colin_Powell#Secretary_of_State.
[264] Joseph Stiglitz and Linda Bilmes, The Three Trillion Dollar War (W.W. Norton, 2008).
[265] Riverbend, Baghdad Burning: Girl Blog from Iraq (The Feminist Press at the City University of New York,2005)
[266] For example, although a convicted bank thief was sentenced in Jordan to a 22-year jail term for ingeniously plundering his own bank there, the Anglo-American occupation entrusted him with running Iraq's financial affairs.
[267] Certainly, they also hold Iraqi citizenships to permit them to rule Iraq, whereas no self-respecting country, to protect itself against conflict of interest, permits dual nationals to hold the leading positions of the state such as that of president, prime minster, key ministries, etc.
[268] For a glimpse of the ongoing American confusion that has resulted from the unintended consequences of the War on Iraq, refer to: www.youtube.com/watch?v=DFph7-L-Jug.
[269] www.brainyquote.com/quotes/quotes/n/napoleonbo103585
[270] https://en.wikipedia.org/wiki/Suez_Crisis
[271] Curiously, two events that proved disastrous in Iraq's history, the coup in 1958 and the Mongol ravaging of Baghdad in 1258, are precisely seven centuries apart.
[272] The original quotation by Abraham Lincoln was: better to remain silent and be thought a fool than to speak and to remove all doubt.
[273] The American volunteer army is one of the unintended consequences of the Vietnam War.
[274] https://en.wikipedia.org/wiki/Vietnam_War#Impact_on_the_U.S._military.
[275] The Baker-Hamilton Report (Vintage Books, 2006).
[276] On May 14, 2013, CNN reported a video showing a well-known rebel leader eating the heart of a dead Syrian soldier. Human Rights Watch commented, "…the atrocious act in the video is inexcusable." See http://edition.cnn.com2013/05/14/world/meast/syria-eaten-heart/
[277] https://en.wikipedia.org/wiki/Abu_Ghraib_torture_and_prisoner_abuse.
[278] Rebecca Gordon in her recent book, American Nuremberg: The U.S. Officials Who Should Stand Trial for Post-9/11 War Crimes, Skyhorse Publishing, 2016, makes a persuasive case for putting key figures in the Bush administration on trial.
[279] Robert Fisk, "Why is David Cameron so silent on the recapture of Palmyra from the clutches of Isis?" The Independent, March 27, 2016.
[280] See ISIS is Us: The Shocking Truth Behind the Army of Terror, ProgressivePress.com, San Diego, California, 2016
[281] Financial Times, April 15, 2016
[282] Francis Fukuyama, The End of History & Last Man, First Avon Books, 1993.
[283] https://en.wikipedia.org/wiki/Muslim_world.
[284] www.brainyquote.com/quotes/keywords/stupidity.html#9A2gAv1CstQOll3X.99.
[285] For a thorough discussion, refer to Chapter 6's section titled "The Unified Theory of Macroeconomic Failure."
[286] NATO, the North Atlantic Treaty Organization, is a military alliance established in the wake of World War II to check the communist military power in Europe, but since the collapse of communism it has evolved into an instrument for imposing Western hegemony on the rest of the world.
[287] www.brainyquote.com/quotes/quotes/n/napoleonbo124809
[288] Although the wars on Vietnam, Laos, and Cambodia preceded the formal emergence of the neocons, nevertheless Henry Kissinger, who had a senior role in the conduct of those wars, was a neocon in everything but name.
[289] On June 28, 1914, the assassination of Austria's Archduke Franz Ferdinand in Sarajevo had a butterfly effect, setting off a chain of events that culminated in World War I.
https://en.wikipedia.org/wiki/Assassination_of_Archduke_Franz_Ferdinand_of_Austria.
[290] Turkey's shooting down of a Russian bomber in late 2015 was hardly the first salvo fired by Turkey.
[291] "The Big Picture with Tom Hartman," Russia Today, October 10, 2014.
[292] Refer to Chapter 6's section titled "Psychopathic Plutocracies."
13. Measuring Democracy
[293] www.brainyquote.com/search_results.html?q=The+people+who+cast+the+votes+decide+nothing.+The+people+who+count+the+votes
[294] See http://en.wikipedia.org/wiki/List_of_United_States_political_party_platforms.
[295] For an alternative definition of democracy, see Wikipedia: http://en.wikipedia.org/wiki/Democracy.
[296] See http://en.wikipedia.org/wiki/List_of_freedom_indexes.
[297] Bundestag: http://en.wikipedia.org/wiki/Bundestag
Also, German Politics: http://en.wikipedia.org/wiki/German_politics
[298] See http://en.wikipedia.org/wiki/List_of_political_parties_in_the_United_States#Parties_with_federal_representation
[299] www.brainyquote.com/quotes/quotes/n/napoleonbo110029
[300] See http://en.wikipedia.org/wiki/United_States_elections,_2014#Turnout.
[301] See "Who Owns the Federal Reserve?," www.federalreserve.gov/faqs/about_14986.htm.
[302] Refer to Chapter 13's section titled "Wars of Aggression."
[303] Refer to Chapter 13's section titled "The Crime Externality."
[304] This is the number of political parties represented in the latest federal election in 2013. German voter participation is based on the same reference. See http://en.wikipedia.org/wiki/German_ federal_election,_2013.
[305] Credit Suisse Research Institute, Global Wealth Data Book 2014, p. 16.
[306] Professor William Blum estimated that the United States has engaged in more than seventy wars since 1945.
[307] See http://news.bbc.co.uk/2/shared/spl/hi/uk/06/prisons/html/nn2page1.stm.
14. The Next Revolution in Equity Finance
[308] Keynes was referring to the British economy after World War I. https://en.wikiquote.org/wiki/John_Maynard_Keynes#Quotes.
[309] Refer to Chapter 7's section titled "Religion and Usury."
[310] For full ownership of the property in thirty years, a lesser initial percentage ownership is financially feasible if rental yields are sufficiently high or if additional principal periodic repayments are possible.
[311] Refer this chapter's section titled "Remodeling Banking."
[312] Conceivably, the cost saving could pass fully or partially to the owner-occupier, depending on market conditions.
[313] See www.thesimpledollar.com/best-home-insurance/#choosing-the-best-homeowners-insurance-company.
[314] Rental payment in arrears makes the timing of cash flows easier to compare with mortgage payments.
[315] Common shares are also referred to as common stock and common equity.
[316] https://en.wikipedia.org/wiki/The_Emperor%27s_New_Clothes.
[317] For further details, refer to Chapter 16's section titled "The Case for a Pigovian Tax on Financial Pollution."
[318] A bank management fee of 5 percent of revenue is equivalent to 0.20 percent of the assets under management at the inception of an EPF portfolio, using their original cost, rising to 0.232 percent after ten years and 0.51 percent after twenty years. Accordingly, 0.23 percent is a reasonable approximation of the bank management fee as a percent of EPF assets under management.
[319] See www.dividendyieldhunter.com/preferred-stocks-sorted-yield.
[320] This is calculated as follows: 13.2 percent return on common equity + 21.6 percent net return on preferred shares (7.2 percent X 3) = 34.8 percent.
[321] Chapter 7's section titled "The Evolution of a Ponzi Scheme."
[322] In an interview on April 4, 2014, on "Boom Bust," Russia Today, Dr. Ann Pettifor stated that all noted economists, including Keynes, have recognized that private banks created money.
15. Public Finance and Indirect Taxes
[323] See www.brainyquote.com/search_results?q=taxes.
[324] See http://freedomandprosperity.org/2010/videos/the-rahn-curve-and-the-growth-maximizing-level-of-government.
[325] "Infant Mortality Rate," CIA: The World Factbook, archived from the original on December 18, 2012. "OECD Health Data 2009: Frequently Requested Data," Oecd.org. https://en.wikipedia.org/wiki/Health_system#cite_note-datasource-38
[326] For a comprehensive look at the progressive privatization of government services and the dismantling of competitive bidding and related topics, an informative reference is Janine R. Wedel's Shadow Elite: How The World's New Power Brokers Undermine Democracy, Government, and the Free Market (Basic Books, 2009).
[327] Refer to Chapter 13 for a detailed discussion.
[328] A good here implies a good or service.
[329] https://en.wikipedia.org/wiki/Poverty#Financial_services
[330] Refer to Chapter 15's section titled "Preferred Shares."
[331] See www.theamericanconservative.com/articles/how-to-lose-an-empire.
[332] Depending on the elasticity of supply and demand for a good or service, a tax, including a corporate income tax, could be partly or fully shifted to lower income groups as consumers of that good or service or workers engaged in its supply.
[333] Indirect taxes include sales taxes, local surtaxes, plus import duties, excise taxes, user fees, etc. In several European countries, VAT is 20 percent or higher.
[334] The purchases of Mr. Rich before the 15 percent tax are $200,000/1.15 = $173,913. Accordingly, a 15 percent tax amounts to $26,087. Thus, the cost of his purchases, including the tax, amount to $173,913 + $26,087=$200,000. On the other hand, the purchases of Mr. Average before the 15% tax are $35,000/1.15 = $30,435. Accordingly, a 15 percent tax amounts to $4,465. Thus, the cost of his purchases, including the tax, amount to $30,435+ $4,465=$35,000.
[335] Refer to Chapter 6's section titled "The Unified Theory of Macroeconomic Failure."
[336] A fraud tax at 1,000 percent of fraudulent gains and a detection rate of 10 percent would reduce the total expected fraud payoff significantly. For detected fraud: -1000 percent (fraud tax) X 10 percent (probability of discovery) = -100 percent (of the value of fraud). For undetected fraud: 100 percent (in fraudulent gains) X 90 percent (probability of non-discovery) = 90 percent (of the value of fraud). Thus, the total expected fraud payoff becomes negative: -100 percent + 90 percent = -10 percent
[337] See www.brainyquote.com/search_results?q=taxes.
16. Corporate Taxation
[338] This chapter draws heavily on an article by this author: "Growth, Unemployment, Inflation and Some Aspects of Islamic Economics," Oil and Arab Cooperation, Vol. 7/No. 4, 1981, Organization of Arab Petroleum Exporting Countries.
[339] For a discussion of the effect of debt on the business cycle, refer to Chapter 11.
[340] A cross-default clause makes the default of a borrower on any loan an event of default on the present loan as well, thereby greatly magnifying the financial risk to the borrower. A negative pledge clause requires a borrower not to pledge any of its assets to a third party, thereby greatly restricting a borrower's room for maneuvering in a financial emergency.
[341] Robert Skidelsky, Keynes: The Return of the Master, (Penguin, 2010), page xix.
[342] In 2005, Ben Bernanke attributed the low US interest rates to what he described as a savings glut. See http://en.wikipedia.org/wiki/Ben_Bernanke.
[343] https://en.wikipedia.org/wiki/Social_Security_(United_States).
[344] This section draws on a 1979 article in Arabic published by the author in the Economic Journal of OAPEC (Organization for Arab Petroleum Exporting Countries) titled "Growth, Inflation, Unemployment and Some Aspects of Islamic Economics."
[345] In 2010, the marginal US federal corporate income tax was 34 percent at $75,000 rising to 35 percent at $100,000. In addition, states, on average, levied another 6.5 percent on corporate income, bringing the top tax bracket to 41.5 percent of pretax income.
[346] The equivalent corporate capital tax rate shown here is calculated as follows:
Corporate Capital Tax Rate = Total Corporate Income Tax Revenue/ (Total Capital of A + B) = $9.6 million/$200 million = 4.8 percent
[347] Since the greater the profitability, the greater the tax burden, the tax base, in effect, is economic efficiency.
[348] Don Fullerton and Gilbert E. Metcalf, "Environmental Taxes and the Double-Dividend Hypothesis: Did You Really Expect Something for Nothing?" NBER Working Papers (w6199): 42, Sept. 1997.
[349] More precisely, the numerator should include all direct corporate taxes, including those at the federal, state, and local levels to permit their apportionment accordingly.
[350] Moody's Corporation annual reports for the years 2000-2003 and 2007-2009.
17. Regressive Personal Taxation
[351] See www.brainyquote.com/quotes/quotes/d/davidrocke164629.html?src=t_income_ tax.
[352] The Forbes 2015 wealth survey estimated the wealth of David Rockefeller, Sr., at $3 billion. See www.forbes.com/forbes-400/list/#version:static_tab:oldest_sortreverse:true.
[353] Some economists have proposed, without success, replacing the personal income tax with an expenditure tax; this is potentially the most regressive tax because the rich would substantially escape it given that they save a higher percentage of their income than the rest of society.
[354] Arthur Laffer, "The Laffer Curve: Past, Present and Future," The Heritage Foundation, June 1, 2004. Arthur Laffer was a member of President Ronald Reagan's Economic Policy Advisory Board (1981-1989). Laffer points out that the concept first appeared in The Muqaddimah by Ibn Khaldun (1332-1406), a Tunisian philosopher and one of the founding fathers of modern sociology, historiography, and economics. Arthur Laffer did not refer to his Laffer curve as the Laffer principle; however, the author finds this terminology appropriate for the present purpose.
[355] See http://en.wikipedia.org/wiki/John_F._Kennedy#Economy
[356] See Chapter 18's section titled "Principles of Personal Taxation."
[357] Refer to Chapter 12's section titled "Monopsony and Chronic Underconsumption."
[358] "The Big Picture with Tom Hartman," Russia Today, October 10, 2014.
[359] Robert Reich, Aftershock (Penguin Random House, 2010).
[360] https://en.wikipedia.org/wiki/Social_Security_(United_States)
[361] https://en.wikipedia.org/wiki/Federal_Insurance_Contributions_Act_tax#Social_Security_regressivity_debate
[362] In the United States, the poverty level for 2014 was set at $23,850 (total yearly income) for a family of four. See http://en.wikipedia.org/wiki/Poverty_in_the_United_States.
[363] Refer to Chapter 16's section titled "Repeal of Taxation of Essentials."
18. Progressive Personal Taxation
[364] See www.brainyquote.com/search_results?q=taxes.
[365] Thomas Piketty, Capital in Twenty-First Century, translated by Arthur Goldhammer (Belknap Press of Harvard University Press, 2014).
[366] Refer to Chapter 3's section titled "19th-Century Poverty and Plutocracy in Europe."
[367] Refer to Chapter 8.
[368] This pattern has repeated many times since, most recently in Syria, even though it is not a threat to Western plutocratic wealth.
[369] This French term is often used to refer to reestablishing the old status quo once the monarchy was reintroduced in France following the battle of Waterloo and the defeat of Napoleon Bonaparte, the last vestige of the French Revolution.
[370] For a broader discussion of the subject, refer to Chapter 13's section titled "The Negative Externality of Excessive Plutocratic Wealth."
[371] See http://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Century.
[372] See http://talkingpointsmemo.com/livewire/princeton-experts-say-us-no-longer-democracy.
[373] See www.bbc.com/news/blogs-echochambers-27074746.
[374] Capital in the Twenty-First Century, Chapter XVI, The Question of Public Debt.
[375] Refer to Chapter 2's section titled "Wealth, Power, and Insecurity."
[376] See http://en.wikipedia.org/wiki/Estate_tax_in_the_United_States#cite_note-Tax_ Foundation-52.
[377] During the presidency of George W. Bush, the estate tax was set to 0 percent, while during Obama's administration the exemption was set at $5 million.
[378] For tax purposes, it is convenient to treat land as a form of capital since one is easily convertible into the other.
[379] Refer to Chapter 16's section titled "Repeal of the Taxation on Essentials."
[380] A full contribution would make the tax regressive, because labor has fewer resources than the wealthy and does not earn a profit from government contracts.
[381] Refer to the discussion on the corporate capital tax in Chapter 17, particularly the section titled "The Relative Economic Efficiency of a Corporate Capital Tax."
[382] Credit Suisse Research Institute, Global Wealth Data Book 2014, p.145. See http://publications.credit-suisse.com/tasks/render/file/index.cfm?fileid=5521F296-D460-2B88-081889DB12817E02.
[383] Ibid, p.16.
[384] Capital in the Twenty-First Century.
[385] Refer to Chapter 16.
[386] The total rate of return includes the total of capital appreciation, dividends, rent, and interest per annum divided by the amount of capital employed.
[387] Islam requires the payment of Zakat at the rate of 2.5 percent of total personal wealth per lunar year, with exemptions covering a reasonable dwelling, transport, a wife's jewelry, and personal effects.
[388] The author first learned about this concept from the late sociology professor, Khaldun Al-Nakeeb, whose PhD dissertation researched vertical social mobility in the United States.
[389] Refer to Chapter 4's section titled "Durations and Stages of Economic Cycles."
[390] John Maynard Keynes.
[391] Henry George, Progress and Poverty: An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of Wealth…the Remedy (1879). This book sold over three million copies.
19. The Gathering Storms
20. Introduction
[392] www.brainyquote.com/search_results.html?q=intelligence&pg=2
[393] See www.brainyquote.com/search_results.html?q=foolishness.
[394] https://en.wikiquote.org/wiki/John_Maynard_Keynes#Quotes.
[395] Seema Jayachandran and Michael Kremer, "Odious Debt," The American Economic Review, March 2006.
[396] John Kenneth Galbraith, The Age of Uncertainty (Episode I, BBC video series).
[397] See www.indcatholicnews.com/news.php?viewStory=7626.
[398] See www.catholicnews.com/services/englishnews/2014/jubilee-campaign-for-debt-relief-gains-momentum-allies-in-the-vatican.cfm.
[399] The irony here refers to Carmen M. Reinhart and Kenneth S. Rogoff's This Time Is Different: Eight Centuries of Financial Folly (Princeton University Press, 2011).
[400] Mindtools.com claims that the author of this popular investment proverb is Mary Kay Ash, an American businesswoman.
[401] For some noncash transactions like trade sales and rentals, nonpayment can still trigger repossession and damage claims.
[402] Preferred stock is equity, but the adoption of certain features can make it more akin to debt.
[403] An event of default could precipitate the seizure of assets and the dissolution of an enterprise.