Arianna Huffington reported from Davos the dark mood she encountered among a group of journalists about the failure of their reporting on the economy: “There was the sense that many had missed the boat, failing to ask the tough questions…”
And they STILL are failing to ask the right questions. How about these:
1. Don't both lending at interest and fractional reserve banking cause money to flow inexorably from the many to the few ("Them that has, gets"), inducing ever increasing inequality of wealth?
2. And don't both REQUIRE that total debt keep growing exponentially?
3. Can total debt increase forever? (Kenneth Boulding once said that anyone who thinks that exponential growth can continue forever in a finite world is either a fool or an economist.)
4. Could the bank failures and credit crunch we are seeing now be caused by an inability to find any more creditable borrowers? (In November, Hank Paulson called for making it easier for banks to issue credit cards, because increased credit card debt would "help". Help what?)
5. Once a critical mass of people enter "debt serfdom" with unpayable debts, isn't the only solution a massive reduction of debt?
6. And hasn't such massive debt reduction happened historically either by widespread debt forgiveness (see the O.T., Leviticus, and "Jubilee"), or by revolution?
7. Nowadays we can also reduce debt by inflation and by steeply progressive taxation and redistribution of wealth. Which one or more of the four possibilities do you think will happen this time: inflation, taxation and redistribution, massive debt foregiveness, or revolution?
8. Is fractional reserve banking finished? (It can easily be shown to be unsustainable, inexorably leading to the kind of meltdown we are seing now; why not replace it with something sustainable---like full reserve banking?)
9. At present, we fund federal deficits with money borrowed at interest. Why do we pay interest on money we let the banks create out of thin air? Why not print interest-free Greenbacks, as Lincoln did, to finance future deficits and even to retire the outstanding national debt?
10. Every major religion in the past (and still, for Islam) has forbidden Usury--the lending of money at interest. Why?
11. Should we consider moving to "Islamic Banking"? (i.e., lending with fees but no interest?
How else can we prevent compound interest leading to a few owning everything?)
12. A primary responsibility of the Fed is to prevent inflation. So why does a three cent stamp cost 42 cents? (This is a trick question, because the standard (and wrong) answer is that those pesky politicians keep incurring deficits, requiring the floating of new debt, which induces inflation bravely fought by the Fed. If so, why has the Fed, in the past, asked the government to float new debt, even though it was not needed for the budget?)
Each of these questions deserves comment. See future posts.