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V
Behind the Unholy Spiral
Money is the most important subject intellectual persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it is widely understood and its defects remedied very soon.
—Robert H. Hemphill, former Credit Manager,
Federal Reserve Bank of Atlanta.
Mr. Hemple's advice was never taken, and fulfillment of his prediction is bearing down upon us. Inflation is built into our money system; its rate must continually increase if the system is to survive. A saturation point is approaching where the disparity between its beneficiaries and its victims can no longer be tolerated. This can best be demonstrated by the astronomical appreciation of corporate common stock in the hands of those who can afford it.
An article from the Times Union of Rochester, New York (1972), will illustrate: "A person who got a share of Eastman Kodak in 1918 would have 647 shares today"—a clear profit of $78,405, without turning a hand. Evidently, that amount did not include dividends.
A concrete example cites a young secretary of modest circumstances. On the advice of her employer, she systematically invested her savings in Kodak stock. A few years ago, at an advanced age, she passed on, leaving a legacy of $17 million in [p. 28]
Kodak stock. She did not earn this fortune, and she certainly did not steal it. It was the product of a system that permits the earned wealth of the masses to be accumulated, unearned, in the hands of a few—more unjust than socialism ever thought of being, and equally as fatal to the life of a Republic. And Kodak stock is no exception; it is more the rule.
Such value appreciation—unearned and unwarranted—is invariably credited as success to the individual who amassed it, and as testimony to the strength and integrity of the issuing corporation. It is neither one. Rather, it is plunder garnered by a combination of inflation hedging and corporate profiteering. Together, they siphon lifeblood from the moral and economic climate, and shift the burden of inflation to the lower-income brackets— striking progressively harder as they move downward on the income scale.
A modest fortune wisely invested will often support its owner with little or no effort on his part. Inflation will increase it to do the same for his children and his children's children, while wages of honest labor often fail to provide adequate support for a small family. Such gross injustice is not possible in a truly free-enterprise economy, where ethical competition is permitted in industry, labor, and the professions.
Only where ethical competition exists are prices and wages controlled by supply and demand. In our economy, competition is not only unethical and ruthless, but it excludes a broad segment of our people as well. It is conceivable that if half of our nation were unemployed and hungry, the other half would still be striking for higher wages and better pensions—ostensibly, and mostly in truth, to compensate for inflation—rather than seeking out the cause of inflation and correcting it at the ballot box. Unfortunately, our present politico-economic debacle has even destroyed most incentive to vote—there is nothing to vote for.
Prices are not determined on the free-enterprise process of supply and demand, but on the available amount of inflated money in the hands of those whom inflation has blessed. Atop soaring wages and salaries, lush private pensions—not available to equally hard-working, second-class citizens—are available to the same people. [p. 29]
Industrial pensions are even exceeded by those paid to civil servants and elected representatives. Following are quotations from State Pensions: A Gravy Train by Arvis Chalmers of the Knickerbocker News—Union Star, Albany, New York: "Some pensions total as much as $45,000"; "death benefits up to half million"; "many pensions are in the $30,000 to $40,000 brackets"; "by next year [1971] the taxpayer's ante is expected to be $2.3 billion."
Both pension collosi, civil and industrial, are paid by the public at large: the one by taxation, the other by higher prices to the consumer. Both are "taxation without representation"; both are tyrannical and unconstitutional; both must be discontinued if any semblance of justice is to prevail. Social Security must be expanded to cover all working Americans of every profession, of every wage and salary bracket, the Armed Services included. Under the Constitution, the same standards of equity must apply alike to every American citizen. Such a plan would provide equal treatment for all. It is the only plan that would provide respectable retirement for all. By the same token, it would relieve the inflationary pressure engendered by the existing complex of private pensions. Under the present class plan, the privileged and politically powerful retire in luxury, while equally deserving citizens on Social Security are all too often relegated to public welfare— many reportedly eating dog food.
The most tragic aftermath of the price-wage-spiral is working mothers and delinquent children. What inflation doesn't steal from them, price-gouging does. To begin with, the wide range of wage scales is due more to power and/or privilege than to skill and application—with working mothers sorely affected all along the line. At the bottom, where wages are low, mothers must work to supplement their husbands' income for the support of their families. At the top, where money abounds, mothers work equally hard to maintain social status. In both cases, their efforts are nullified as prices rise to absorb the rising tide of income—leaving both right back where they started—except that, in all too many cases, their children have turned delinquent in the absence of a mother's guiding hand.
Wages and salaries should, indeed, vary with skill and application, [p. 30] but never to the extent where a responsible workman of sound body and mind is incapable of providing adequately for a small family. Under the influence of legalized counterfeit money, our nation has come to resemble a wolf pack rather than a normal Judeo-Christian society. Correction: wolves wouldn't "do unto each other" in such a manner.
The findings of this book are mainly based on a background of thirty-five years in union membership—five farm and thirty construction—with twelve more of retirement in which to observe and reflect. It is not critical of unions or banks, as such. Without unions, the laboring class would still be in peonage. Without banks, business, industry, and life itself would indeed be complicated. It is the modus operandi and irresponsibility of both that are criticized.
What the people of this great and would-be free country need most of all is a sound lesson in appreciation. Apparently, the only one capable of success—if it could be arranged—would be a six-month stretch under Joe Stalin. Incidently, that could solve the sticky population problem, too. Let this not be construed as a morbid jest; and don't say it couldn't happen here. It could happen here, and its first stages are well advanced. Just remember one thing, and remember it well: When it happens, it will not be a matter of six months, but more like six long and weary decades. And don't console yourself with the idea that a dictatorship of money is less obnoxious than any other kind, or that fascism— properly elected—would be any different either.
If we can believe half the reports circulated by the corps of newsmen who accompanied President Nixon on his famed China trip, we should hang our heads and cry. A cross section of their findings alleges that China has no slums, no hunger, no unemployment, no drug problems, and no crime. Its people are honest, friendly, and have a good sense of humor. Its cities are spotless, and the streets safe at all times.
If these claims are true, this "backward" giant of a nation has made more worthwhile progress with its bare hands in the past 20-odd years than the world's most modern country has achieved with all the latest in science and automation. No longer [p. 31] is it a nation with chronic famine; no longer is the wealth concentrated in a few hands while the rest remain destitute. All this despite a population density of three times our own.
But, we echo in unison, "China is not free." To repeat, "If half the reports are true," what third-class American wants to be "free"? Freedom without responsibility has every evil potential of the most vicious dictatorship.
True, life in China holds little for pleasure-seeking Americans; but, lest we misjudge the wisdom of this ancient race, the feeling is mutual. What matters most is that they are happy (so the newsmen say), and well they may be. They have purpose, incentive, and hope—all prime requisites for happiness and success. Millenniums of the simple life and austerity have made the Chinese the most rugged people on earth, as any veteran of the Korean conflict will readily testify. Their high moral standards (chastity in particular) augurs well for prolonged stability. By comparison, venereal disease has increased in the Rochester, New York, area from 560 cases in 1960, to 3370 in the decade ending in 1970. As estimated two cases out of every three remain unreported— making it a raging epidemic second only to the common cold.
With a 20-year head start, China's godless contemporary, Russia, has risen from the ashes of World War II to challenge our leadership in education, science, technology, and sophisticated weaponry—a typical hare and tortoise analogy. They worked while we played. Respected sources in business and journalism (if we can believe them) have glowing accounts of Russian progress and the well-being of the Russian people. Leisure and luxury that abounds in our own country are in short supply, but apparently the Russians don't mind. Perhaps the Iron Curtain serves a purpose we never suspected—a screen against the hucksters of junk and credit, against purveyors of commodities that are neither necessary nor salubrious (very often harmful) to the general welfare.
But again, like the Chinese, the Russians are not "free." And what is freedom when it scorns the precepts of God? Time will prove it commensurate with godless dictatorship.
As we observe the deterioration of morals and ethics, and [p. 32] watch the consequences unfold around us, an excerpt from the Apocalypse (2:3) seems appropriate: "... She has fallen, Babylon the great; and has become a habitation of demons, a stronghold of every unclean spirit, . . . because all the nations have drunk of the wrath of her immorality, . . . and by the power of her wantonness, the merchants of the earth have become rich."
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"Freedom is slavery," "True is false," "Right is left," "Philanthropy is robbery," etc. We have lived to see topsyturvy ideologies of godless Communism become facts in our own system. We have come to support them with weird conclusions of our own: "Debt is wealth," "freedom is libertinism," "theft is thrift," "criminals are heroes," "any semblance of law and order is tyranny," "defenders of life and property are pigs." [p. 33]
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