Annual Reading of the Declaration of Independence: Renewal

As I conducted my annual reading of the Declaration of Independence, I was struck by the thought, “What would Thomas Jefferson write today if he were revising this document?”

Well, I have no idea. So I worked on what I can- how would I revise it? So I did. Before you read it there are a few caveats:

  • I focused on what I know- finance and economics. There is scant technology in the original so this is largely not discussed. The current document gives voice to my concerns regarding the current global economic condition.
  • I sought to edit the original document and insert/excerpt as little language as possible.
  • I avoided the issues related to the current public dialog on security, privacy and surveillance. I deeply believe these are very important, but I wanted an undiluted message communicating a critical issue of our time.

Dedicated to the economic well-being and abundance of people everywhere.

 

IN CYBERSPACE, July 4, 2014 (238 Years after the Political Declaration of Independence of the United States.)

The unanimous Declaration of the collection of Economically Independent Agents across the planet

When in the Course of human events, it becomes necessary for people everywhere to dissolve the economic bands which have connected them with another, and to assume among the powers of the earth, the separate and equal economic station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of humankind requires that they should declare the causes which impel them to the economic separation.

We hold these truths to be self-evident, that all humans are created equal, that they are endowed by their Creator with certain unalienable Economic Rights, that among these are Equal Access to Economic Entrepreneurship, An Unbiased Economic Landscape and the pursuit of Economic Well Being.–That to secure these rights, Governments and Economic Systems are instituted among People, deriving their just powers from the consent of the governed, –That whenever any Form of Government or Economic system becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government or Economic system, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Economic Well Being and Economic Growth.

Prudence, indeed, will dictate that Governments and Economic Systems long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses including concentration of wealth in the hands of a select few, legislation and politics dominated by economic funding and special interests, unchecked power of corporate interests and economic access to those in positions of political or economic privilege, pursuing invariably the same Object evinces a design to reduce them under absolute Economic Despotism, it is their right, it is their duty, to throw off such Government and Economic System, and to provide new Guards for their future security.–Such has been the patient sufferance of these global citizens; and such is now the necessity which constrains them to alter their former Economic Systems including global transactions of trade and state controlled currencies. The history of the present Economic system such as was crafted and evolved since after World War 2 is a history of repeated economic injuries, economic injustice and economic control, all having in direct object the establishment of an absolute Economic Tyranny by a minority controlling Wealth over these people of the world. To prove this, let Facts be submitted to a candid world.

  • The current Government and Economic System has evolved into one of highly centralized control over the majority of the Earth’s Wealth and Resources and Capital flows. This is universally acknowledged to increase economic risk and stifle economic activity and growth.
  • The current Economic System has evolved into one of strict control of capital flows and economic activity through state controlled currencies.
  • The current Economic System has evolved into one whereby Economic Resources are concentrated at unprecedented levels such that economic activity for society at large is at risk. Wealth concentration at current levels is an unsustainable economic system for pursuit of Economic Well Being and is completely unpredictable under stress.
  • The current Economic System has Centralization of Economic Resources thereby creating an unprecedented Economic Risk to the economy of the world.
  • The current Economic System has evolved into one of centralized control of capital among a small cartel of banking and corporate interests thereby subjecting the world to unprecedented economic risk through contagion during times of economic stress.
  • The current Economic System has evolved into one of riskless (arbitrage) profits for those controlling capital. This is a fundamental violation of free market principles. Whereby those controlling capital have profited from a highly advantaged economic position and taken unreasonable risks resulting in their economic ruin being averted solely through extraordinary use of public capital. There have been no legal or economic costs associated with this economic abuse.
  • The current Economic System has evolved into one whereby those controlling capital have been found to perpetrate economic abuse through market manipulation of key economic resources and metrics such as LIBOR, Gold and others. For this, there are no legal or economically relevant consequences.
  • The current Economic System has evolved to grant even more economic privilege to those currently holding it most. Access to Economic opportunity is fundamental and necessary for a vibrant global economy.
  • The current Economic System has evolved into a symbiotic relationship between legislators and their economic donors resulting in the passing of Laws of immediate and pressing importance to donors to economic detriment of broader society. This stifles economic competition and stilts the emergence of innovation in businesses, entrepreneurship and technology.
  • The current Economic System has evolved into one of privilege for the privileged and has neglected to pass other Laws for the accommodation of large districts of people seeking economic growth and well-being. The current donor-patron system of legislation fails to address the economic interests of the greater majority of people in the world. These people of the world often have either never been granted the right of Representation in Legislature or have lost it, a right inestimable to them and formidable to economic tyrants only.
  • The current Economic System has called together bodies of Economic Privilege at places unusual, uncomfortable, and distant from the depository of their public Records, for the sole purpose of forging these bodies of Economic Privilege into informal systems of political and economic influence that maintain their economic dominance.
  • The current Economic System has leveraged the unequal economic access to legal representation repeatedly, for opposing with manly firmness any legal challenges to the Economically Privileged invasions on the rights of the people.
  • The current Government and Economic System has evolved for a long time, to cause others to not be elected that represent the economic interests of the lower economic strata; whereby the Legislative powers, incapable of Annihilation, have returned to the People at large for their exercise; the vast majority of people of the world remaining in the mean time exposed to all the dangers of economic distress from without, and continued economic erosion within.
  • The current Government and Economic System has endeavored to prevent immigration reform, except for the interests of Corporate patrons. Resulting in the obstructing of Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and thus limiting access to economic opportunity.
  • The current Government and Economic System has erected a multitude of New “Security” Offices, Policies, Secret Legislation, and aggressively conducts active, deep surveillance, and sent hither swarms of Security Officers to harass and surveil our people, and erode our economic competitiveness.
  • The current Government and Economic System has kept among us, in times of peace, Standing Armies of Governmental, Private and Corporate Intelligence without the Consent of our legislatures.

 

In every stage of these Oppressions We have as a whole failed to adequately Petition for Redress in the most humble terms: Our failure to Petition Effectively have been answered only by repeated injury. A People that bear up under Economic Tyranny without refusal, become thus marked by every act which may be inflicted by an Economic Tyrant, is unfit to be a free people.

We are this day called to Petition Effectively by economic activism in line with the principles of:

  • Equal Access to Economic Entrepreneurship
  • An Unbiased Economic Landscape
  • Economic Well Being
  • Liberation for Control via State Owned and Controlled Currencies

Nor have we been wanting in attentions to the current Government and Economic System. We have warned them from time to time of attempts by their neglect of legislature that they extend an unsustainable economic risk over us. We have reminded them of the circumstances of our emigration and settlement here. We have appealed to their oaths to the Constitution of the United States, or native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these acts of Economic Tyranny. They too have been deaf to the voice of economic justice and of consanguinity.

We, therefore, the Citizens of the Global Economic Community of Humankind, Decentralized, Unassembled, appealing to the Economic and Political Leaders of the world for the rectitude of our intentions, do, in the Name, and by Authority of the good People of this World, solemnly publish and declare, That these Citizens of the Global Economic Community of Humankind are, and of Right ought to be Economically Free and Independent Economic Agents; that we are Absolved from all Allegiance to trade strictly by State Controlled Currencies, and that Economic Repression via Control of Currency and Capital, is and ought to be totally dissolved; and that as Free and Independent Economic Agents, they have full Power to conduct Commerce, conduct Trade of Goods and Services. Make Contracts, establish Commerce, and to do all other Acts of Economic Activity, Growth and Entrepreneurship, and Things which Economically Independent Agents may of right do. And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.

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The End of the Beginning

“When I was a child, I spoke like a child, thought like a child, reasoned and acted like a child. But when I matured, I actively stopped behaving and being treated like a child. Currently we see an enigma, but eventually there will be complete transparency. At this time, I only see pieces of the whole, but inevitably I will be able to fully understand what is going on, exactly as I have been fully understood.”

(1Co 13:11-12 paraphrased by Chris Montaño)

Stage 1. “Childhood’s End (1973 – 2013)”

In a recent Harvard Business Review post, Bruce Schneier compares the current state of security on the Internet to a feudal system. I have always liked Schneier’s take on security and privacy. He is a thought leader as well as facile “synthesizer” and communicator. He also has been a rare civilian cryptographer/cryptanalyst that has published several books on cryptography and is respected for his technical work. He recently joined the board of Electronic Frontier Foundation.

In equating the Internet to feudalism, Schneier is talking mostly about IT security and privacy. However, whether intentional or not, I think he is making a broader statement in a quiet manner. I think he has identified an IT reality, but also touched a raw nerve of the realities of a globally, internetworked society. We live with the Internet like serfs lived with feudal lords- in a state where we are viewed as “resources” rather than regarded as individuals with intrinsic human rights.

Imperial, unaccountable, idiosyncratic, personality-driven; feudalism is a system where the masses have little to no legal rights, little to no due process, and virtually no formal institution of political or economic power. Society’s resources may be diverted to the ruling elite and vassals roles are to serve up any and all resources required of us by the imperial. Feudalism is very simple – the masses trade our autonomy for civil structure and protection against chaos.

However, I think that the time is ripe for the next era in the use of the Internet. I think that we are either near or at a tipping point where we will demand that our fundamental human rights be recognized, honored and legally regarded on the Internet. While I consider Ed Snowden’s actions as criminal espionage, the resonance of his claims regarding privacy violations was a “weak signal” indicating forthcoming change in how we are treated as individuals on the Internet.

I surmise that this change is inevitable, because feudalism failed to maintain the social contract in an era of growing knowledge and maturing world views. It resulted in major social problems and was consequently dispatched to the dustbin of history as a rudimentary form of government because it simply didn’t work anymore.

Similarly, over the past 40 years we have been led by companies and the government into an international network of information access. The change was so significant, that it necessitated strong controls to help the world understand what the Internet is, how to use it and become part of the information explosion we are amidst. This was a necessary stage so that we could all reap the benefits of the instant knowledge available for the first time in history.

But we are more mature now. And the current system of surveillance business models which spy on us, repackage and productize and sell the results for outrageous profits will increasingly, not work. The detrimental impacts of concentration of income and wealth in the richest 1% of society cannot be overstated. Simply put, our current model of Internet usage and business no longer works for society. And similar to monarch rule, is destined to change significantly in the next 10-20 years.

Figure 1. Income Growth now Exclusively for 95-99.99 Percentile

Income Inequality

Source: NYT: Our Broken Economy, In One Simple Chart

Stage 2. “In the course of human events…” (2013 – ?)

I have a personal tradition that on the 4th of July, I renew my view of our state by reading the Declaration of Independence. It is a short document and a welcome opportunity to refresh my ideals so that I can face the often times cynical news flow throughout the year. This year, as I read the Declaration of Independence, I was gripped with the perspective that the state of the individual on the Internet is in a near identical situation as the 13 colonies were in 1776. We receive no hearing by the “rulers”, laws are made without authentic consideration of users, we are treated like an information resource to be bought or sold, rather than as persons and given little respect for dignity, privacy, personal information property – let alone legal rights. The colonists found themselves under a form of leadership that wasn’t sustainable. And in response, they worked for several years to develop something completely new.

With clarity and simplicity the signatories stated, “We have grown up. We require you to treat us not only as adults but equals on completely new terms. We are not asking permission but notifying you and everyone else what we are doing.”

There are several points in the Declaration that I wish to emphasize that are relevant to the Internet and our what I believe is our changing role as individuals:

1. Autonomy is a natural evolutionary process that results from maturation.

While we assail feudalism, we need to recognize that for a time, it worked. It served a purpose. But “When in the course of human events…” we grow, we evolve, we understand ourselves and our roles in the world in a more mature manner and wish to exert our autonomy and power. I believe that we have reached the point in the evolution of the Internet where we as individuals will begin to reclaim and assert our rights and autonomy as individuals.

I think this is true, not because of any political or philosophical view I hold. It is based upon the current generation that is dominating the Internet globally. This current generation holds a richly textured, sophisticated technological and societal perspective of the Internet. Having been in the middle of the Internet’s explosion into the public consciousness during the late 1990s, I am truly wowed by their intuitive understanding of how the mechanics of the Internet interact societally. An example of this is the role played by Wael Ghonim in Egypt’s revolution. This generation is truly remarkable and deserves to be recognized as the pioneers they have proven to be in their actions. They are leading this transition into this next era. And as Egypt demonstrates, it won’t be easy. But this transition is part of the natural evolution of society. I believe it is unstoppable. However, I don’t for a moment think it is beyond being repressed and it will certainly be opposed by those who will lose economic and political power.

2. Assertion of the unarguable legality of autonomy, equality, dignity and respect for the individual- you either get this or you don’t.

Our fundamental human rights are not a debatable point; it is how we view ourselves. It is THE super-ordinate value and consequent world view we possess. All that we are as a society and government rests upon this fundamental assumption. We have built our nation on the premise that individuals have unquestionable legal rights of dignity, autonomy and reasonable freedom to pursue our personal growth and maturity [life, liberty and the pursuit of happiness].

The next era won’t discuss whether human rights will be extended to the Internet, it will be about the struggle to assert the human rights we intrinsically hold. There will be no dialog about the fact that we are bestowed with “… certain unalienable Rights, among these are Life, Liberty and the pursuit of Happiness. …” (Please note that this is not an exhaustive list, it is a call-out of some important rights among others.)

It is my view that a mature governmental and business perspective must understand this basis of our society in order to have a long-term, viable government or business. Governments that deny this fundamental truth will eventually be rebelled against as the Founders did against their taskmasters. And companies that are not able to grasp and honor this fundamental truth of customers’ rights and dignity will eventually crash, crumble or decay. The best they can do is control the trajectory of the transition and so maintain a legitimate role.

3. It is harder to change than to suffer, but a tipping point is eventually reached.

It is fascinating to read the 18th century equivalent statement that I expect to find in a contemporary self-help book. Apparently, it has always held true that if the data demonstrate a consistent pattern of abuse without recourse or adequate response, there is no other choice but radical change. Companies and governments love our current system. In it, they hold all the cards and all the money, they make all the laws, and they get most of the benefits. I won’t belabor the 99% arguments that others have made so much more eloquently than I could, but I will point out that we are hurtling toward an unsustainable economic and political imbalance. As circumstances continue concentrating economic and political power, societal pressure is building and will eventually drive change. The combination of non-sustainable economic profits and unabated surveillance by governments and companies is driving us toward this tipping point.

It is not only the U.S. government that is grappling with changes foisted by the Internet, Egypt demonstrates that any educated population requires a measure of freedom, order and autonomy. While repression is real and can persist for a long time, ultimately, an open Internet will lead to big changes. Hence, non-progressive governments are scrambling to erect Internet firewalls that edit content that could potentially instill ideas of individual freedom. In absence of active, aggressive repression, the Internet offers an unprecedented channel for knowledge, education and freedom of press. If governmental power is rampantly abused, there will come a tipping point where a rigged legality is trumped by broadly recognized lack of legitimacy. This is a dangerous place to go and I hope we don’t.

What I haven’t seen yet, is the commercial equivalent where individuals begin actively rebelling against their corporate feudal lords. Examples of this could be an anticipated wave of privacy based companies or some form of information co-op whereby individuals band together for network economics and control the flow and payment of personal information assets. There could also be legislation explicitly declaring that content we naturally generate from of our lives is personal intellectual property and therefore covered underneath IP law. That we own it and it may not be stolen or used without our consent. It may be the case where legally, individuals are given special protections to compensate for the resource imbalances between corporations and people. I personally believe that the golden era of personal information arbitrage is over- not because of political or philosophical ideology, but because all economic profits eventually trend to zero. Smart companies, entrepreneurs and investors recognize this and may already be starting companies and adjusting their strategies, expectations and business trajectories.

4. Autonomy is hard and requires commitment, focused attention and our resources.

As serfs maturing into responsible adults, we have a lot to learn and it is going to be hard. It will require our efforts and resources. This is the weight on the other end of the individualism and rights- they are costly and weighty.

Some will rise to the challenge more effectively than others. Some will be able to develop and lead, and others will cling to what they know because it is easy. But I think that history shows that as we mature and grow individually and collectively, our structures and forms of society must either evolve with us or be swept away. Our choices have never been easy. But a reading of that magnificent document that is the Declaration of Independence, reminds me that that growth and maturity is the struggle that builds strength enabling us to move yet further again.

I am not calling for anything other than recognition and legal enforcement of the fundamental human rights we recognized in our Declaration of Independence, United States Constitution and Bill of Rights. I say this because it is who we are and how we defined our society to be when our nation was created. I think that the founding fathers got it right on the human rights ideal. As we have for the past 237 years, we practice our ideals imperfectly, but guided by the ideal of respect for each person and their unquestioned value. I am simply pointing out that I think that this ideal will eventually embody itself in how we are treated on the Internet and that this change is inexorable and inevitable.

Is this True? If so, then ya gotta wonder…

Latest news on Sunday afternoon. Politico is stating that President Obama has expedited the exit of GM CEO as a precondition to the aid package to be unveiled tomorrow. (see Politico article here…). If so, then it raises a really interesting question with respect to the other gaping singularity of taxpayer charity once known as the U.S. banking system.

With Secretary of Treasury Geithner saying that we will need a refresher banker bonus retirement act bailout package for banks, (see the Audaucity of hopelessness here…), then will there be reciprocity for those CEOs/leadership cabals that receive aid here too? Or will the “quiet coup” of Simon Johnson related in my prior post prevail and confirm our greatest fears? That the government for the people, of the people and by the people has now become the government for the bankers, of the bankers and by the bankers?

This is starting to get really interesting…

Perhaps Another Sort of Intervention is Required…

Just read the details on the Fed’s most recent intervention in the capital markets. Another trillion dollars + thrown after bad money. All in the name of “preserving the bonuses of fat cats capital markets.” (read the excellent Bloomberg piece here…) I especially like the image invoked by the writer of Ben Bernanke playing the financial equivalent of fictional renegade special operations warrior, Rambo. I bet he gets an even better hedge fund job after he leaves his post than his predecessor did. (See article on how Greenspan joins the  hedge fund that made billions shorting the bubble Alan denies he created here…) It seems that the news just keeps flowing and so do bonuses… and the person on Main Street that has been raised with the concept of “fairness” and manners and trying to be reasonably well behaved is mystified and left asking, “How is all this happening and why doesn’t our government stop it?”

Simply put, the government and financial services are caught up in their mutual addiction to each other in the form of government enabled liquidity. While many rationalizations can be made, a free market requires the government to ensure stable regulations, reasonable controls against unfair practices and a strong legal foundation for business.  In the current scenario, it appears to me that what has happened is that the financial services industry and government have gotten caught in a symbiotic relationship that prevents these real solutions from unfolding.

How has this happened? The markets are reasonably efficient. Therefore it is very difficult to make money in the market by investing prowess. So investors seek to change the market efficient landscape so that they can make money. The easiest way for that to happen is to lobby the government to make increasingly favorable policy actions that enable continued outrageous profits.

Government leadership seems to have an incentive that once they leave office, wealth awaits them by joining the financial community. Cases in point, much of the early leadership of the Carlyle Group, one of the world’s largest private equity funds, consisted of former government officials such as former President Bush, James Baker and John Major (former British Prime Minister). In fairness, many of these former politicians have retired from active service, but they nevertheless were there and current roles (if any) are non-public. Robert Rubin, former Secretary of Investment Banking Treasury in the Clinton administration joined the board of Citigroup for the years prior to its fall in stock price, Alan Greenspan, former Chairman of the Fed during the period the housing bubble occurred has joined a hedge fund that has profited billions in trading the housing bubble correctly. And according to the previously linked Reuters article dated in January 2008, former Treasury Secretaries Lawrence Summers and John Snow have been advisors to D.E. Shaw hedge fund and Cerberus.

I have concluded that intervention is exactly what is needed. However, it may not be the type that Ben Bernanke and the cabal of government, hedge fund, banking and high finance want.  When an addict is in denial, there is a tool that can be used to help them break that denial– it is called intervention. It is a process whereby an addict’s friends and family gather around them and confront them with the facts of their addiction in the hopes that they will come to their senses and realize the truth of their dire situation. Who should do it and how or even if such a thing could happen are all doubtful from where I sit. But one thing that is certain, without an intervention, an addict must hit bottom and then decide to get better. Let’s hope that we can avoid this path.

Ocean’s $11T

Reuters reports that US households lost $11.2T in wealth… correct me if I am wrong but isn’t that roughly the same amount that we are now on tap for in the bailout? (read the Reuters article here) Now this is probably coincidence… but the symmetry is startling.

Nevertheless… when $11T is in play, one cannot be too careful. I just find it odd that the very same amount that we had to inject into the financial system winds up being the amount we lost. What’s more, we paid up with future dollars in the form of taxes so we can essentially double the amount.

I know that in the capital markets, there is a loser for every winner.  Perhaps, just perhaps, we – the American taxpayer/consumer have just been taken in the greatest robbery trade in the history of the world?

Nope, this is not a depression…

… unless you happen to be one of the newly poor or homeless. Once middle-class, now on the streets. wow.

I read this article on Bloomberg today (article here) about the newly poor overwhelming social safety nets in Contra Costa Country. For those not familiar with the SF Bay area, this is ‘the burbs’ (east of San Francisco across the Bay Bridge.) Only now, things are getting very difficult for many.

How quickly our world has changed. How much more change is yet to come?