Armageddon- tell me i'm wrong

james armstrong james36armstrong at
Thu Mar 31 22:31:07 BST 2011



       “ Banks ..are too big to fail  

        Rather , It may be 

        That Britain is too small.

Barclay’s gross
balance sheet is 100% of Britain’s GDP

        J P Morgan’s larger balance sheet 

        Is 24% of US GDP “

              …………………………Nils Pratley,   Guardian, 
30 March 2011



The reason why corporations should pay.

and the constitutional and legal arrangements  to bring this about. 


We are told the country is in debt and that government
services must be cut.

With what end in view?

Is it to pay off  the
debt?   Is it to reduce the short term government
spending ? 

Or is it to reduce long term government spending – in order
to avoid future crashes or, for a very different reason, to reduce the  size and role and spending power of
government, and if so who wants this and with what end in view? 



The occasion of the debt was bailing out Northern Rock and
Lloyds /Halifax/ Bank of Scotland.


Why bail them out? 
The conventional answer is to uphold the trust which we have in money (£
sterling) and UK banking  since without
that trust, money will lose value as it did in Germany 1945, in France after
the French Revolution and in US after the independence war. (see ‘Money’  JK Galbraith) 

Without money trade would stop, imports of food would  fall, savings would be valueless….

So we don’t want that 
, do we?

Who bailed them out? 
HMG . Why? This was convenient as the only body funded and  geared to act 
immediately.  But  should the cost be shifted to the


Given that it is right to 
preserve the monetary system (and the banks?)

We should ask :

1 WHO who can  pay to
prop up the money system 

2 WHO should pay 

3 WHO caused the crisis

4 WHO got us into 2009?

5WHO got us into debt in 1994?

6 WHO got us into debt sometime in 1960’s?


1 There are three estates . 
Not the traditional estates of the middle ages, which were Church,
Royalty and Aristocracy.  To-day, for
analysis only , it is still convenient to allocate power (and wealth)
between   three estates -  people , corporations ( both of which estates
have ‘bodies’ -that is where the ‘corp(us)’ 
of ‘corporations’ comes from) and government.

(I am including in government with a small ‘g’  all the agencies of government including 

police, justice, local government, regulatory bodies ,
parliament and HMG and Royalty (the ‘HM’ of HMG)

The estates we here characterize claim no exclusive or
absolute existence, but  this division
helps with the  analysis of  the present crisis.  


Consider the origins of 
the three estates.

  First the People,
don’t need to justify their origin. Deer and badgers have no government or registered
corporations.   These latter estates are
derivative of  people.(  Royalty are at best  dispensable more or less convenient but
certainly subsidiary to people.)

Second , Corporations- an  interesting phenomena worthy of some thought. .   They are an artificial creation,  by People (again) .   Corporations have been brought into
existence, granted the  privilege of
existence,  by courtesy of government
acting on behalf of the People. 

Finally there is government. 

Government has two valid roles.  The first is to facilitate the day to day life
of millions of people living in one area.  
Think of the chaos if there was no rule of the road, to drive on the
left.   We delegate education,  justice, law, health care , defense and
welfare  to government and to this end  (reluctantly) government gathers  taxes , funds services and disburses ‘welfare’.

It will be seen that People have primacy within the three



2 Which estate is to pay to prop up the money system? 

questions arise , 

is the money system at risk?  

                                           Who is best able to pay?

is the imbalance at present between the three estates?

 The answer is that the
corporations are able to pay,

they can  pay because
they have more money and resources than government

they should pay because they are subsidiary to the People
whose welfare is paramount

they should pay because corporations are the immediate
occasion of the crisis

they should pay because they are the source of the debt

they should pay because corporations have suborned

they should be made to pay because the tipping point is here
and now-

and if, alternatively as is proposed , People were  to agree to 
pay,  this will be one more  surrender by people before  the power of corporations

Corporations should pay because if government pays  that would involve reducing the wealth and
power of government and government is the 
People’s defence against malevolent, out of control,  predatory corporations

Corporations are an invention , made apparently  in a fit of amnesia, convenient in the past,
and in moderation  sometimes now , but as
evidenced by the crash , by their size and by their manic debt ideology and by
adopting predatory aims, , corporations threaten the welfare of People and have
subverted government and it is the subverted government which  unless we correct it, threatens to do
the  corporations’ work for them and pass
the bill for the crisis to the People. . 


Corporations should pay, not government which is the peoples’
servant, nor people because this will further disable People and, as we have
seen Corporations and government both are dependent on the welfare and wealth
of a sovereign People.

It is in corporations long term interests ,and to ensure
their own survival. 

Corporations should pay because it is in the interests of

It is in the interests of People and Corporations and
government s’ long term existence that corporations not people , not government
should pay. 


The essence of the  issue is
that  corporations should pay because
people, being sovereign ,  and holding
the welfare of people inviolable and above all else , choose that corporations
should pay for the reasons given.    A
democracy being the will of the People, it is fitting that not people ,but  corporations, should and are most able to
suffer the effects of paying off national debts.


Corporations , in the person of banks and the financial
sector, have by  anti social policies
forfeited any claim to equal  or even
fair treatment.   Passing on to People
the  consequences of corporate
misbehaviour  rewards the  malefactor and  privileges the already privileged.    


Corporations as a sector have forfeited the essence of  corporate life which is integrity and  service to the common good.  Since the existing  governance of corporations has proverd inadequate
there is a need to  amend the conditions
of their existence.  

Setting a variable termination date for each registered
corporation is indicated as a way of holding them to account.


Removing and outlawing lobbying opportunities of
corporations redresses the balance of political power now greatly loaded in
favour of  corporations v people- restoring
people power  is essential  for the required  improvement in 
our democratic system.  


Corporations by pursuit of their commercial aims have
demonstrated  malice and mal practice on
a world- shattering and nation – crippling, money system- threatening  scale. 

BP, Microsoft, Total , Morgan Stanley , for example have
incurred  multi £million fines

Railtrack have been found guilty of manslaughter.  Banks have 
directed their  commercial  aims to gambling massively  and irresponsibly and irrationally.   Wrongdoing on this scale tarnishes their  existence and calls for  revising the terms of their existence.        Regulatory authorities have found
multiple examples of  corporations acting
against  the public interest.   OFT in 2009 named 104 giant plc builders for
rigging bids for public contracts against  the public interest.


Corporations should pay because  individually their welfare can be harmed  without vitally affecting their
existence.  As we have seen , corporations
are subsidiary to People It can only be the last resort of government to  reduce the welfare of People as in war when  pursued 
for the greater good. .     


3  Who caused the

The occasion of the crisis in UK
was the imminent failure of Northern Rock.. This was caused when the
international market lost confidence in 
packages of mortgages sold on as tradable assets and Northern Rock had
over committed itself to this secondary mortgage market.  Few understood or cared to enquire as to the
nature of the assets.   

When traders stopped to question the value of the  debts behind the assets – the realizable
£worth of the mortgages, trade stopped .

  Confidence in US was
shaken first when Lehman brothers closed and in UK
when international  markets lost confidence
in Northern Rock. 


But behind the mortgages lie house values.

Corporations had an interest in inflating house prices to
increase individual  mortgages and associated
secondary debt-  and bank charges - and
fees.  Estate agents , land owners ,
national house builders, mortgage lenders, banks ,,,, all these corporations
had an interest in- and  actively and
fiercely stoked up- rising  house prices


Governments are complicit. Politically in UK
70 per cent of the population own a share in their house and can be persuaded
that increased house prices benefit them. 

Politically,  economic
booms  benefit governments in power.

Debt stimulates high street spending.  Government , Treasury and Bank of England all
were complicit.        


4 Who got us into debt in 2009 ?

As we have seen, The mortgage lenders with government and
corporate complicity.


5  Who got us into
debt in 1994 

In 1994 Gordon Brown 
and MPC of Bank of England explicitly adopted a policy of manipulating
house prices by  moderate inflation at
2.5% , to stimulate the economy through increased levels of debt. 

At a meeting, well before the  crash, 
of the Treasury Select Committee of the House of Commons, the Governor
of the Bank of England Eddie George explained the trade in assets and, aware of
the instability of the housing boom, 
formally passed the problem to his successor, Mervyn King.              “  


6 Who got us into debt in the 1960’s?

In post war Britain
debt was a national calamity caused by massive spending on armies, on  armaments and on reconstruction during and
after the war. People then considered debt as a moral lapse.

Most people had no bank accounts, no credit cards, no
overdraft and no debt, and many had no savings.    

Consumerism  was
the  invention of Madison Avenue . The
spread of tv ownership and national tv broadcasting ,  and the ending of BBC monopoly of radio
broadcasting and 

Allowing commercial channels funded by advertising
stimulated  consumerism. Rising house
prices were engineered by  the government
to support the City. The method was to remove the mortgage limits imposed
by  a prudent lending to income ratio.

Government selling off 
state assets (privatizing gas, steel, British Rail etc,) stimulated
corporations.    Corporations then were
in a stronger position to spread the ideology of debt.     Government explicitly encouraged share
ownership which is equivalent to arms length 
speculation in someone else’s labour and someone else’s  initiative. 



To repay student fees of 3years at £9,000 requires
repayments of some £50,000 over The life of the  loan. 
To repay a mortgage at the current 
average house price of  £220,000
requires repayments over the life of the loan of a further £470,000  (at 5.5% interest)   It cannot be done!   

New house supply at 125,000 in 2010  was at half the  (conservative) required  target of 240,000 to accommodate rising population
and family formation.

These  anomalies
(actually  death blows to  welfare and democracy) ensure self detonation
of the money  system. Forecasts of hyper-inflation
of deflation are just other ways of 
describing the  destruction of a
stable  money system   

Ending  insititutional
debt creation by putting the corporations in the dock is the way to avoid this –
that and  stablising  house prices.   Another way of describing rising house
prices is as falling money values.  We
have here graphic evidence of an imminent 
run- away currency crisis. 



Debt has been the tool of growth in power and wealth of the
corporations.  Personal wealth has also
grown but at the expense of massive increase of stress  caused by commuting, by overwork, by worries about
debt level and by a housing crisis which has left housepurchase outwith the
reach of many couples even those on good dual salaries. 


The debt ideology is the deliberate invention deployed by  the corporations. 

Acceptance of debt has subverted the ethical standards which
underlie a sound money system. The need is to 
punish debt and support personal money responsibility .

Government has been complicit in the corporate debt

Government no longer promotes the welfare of  People because it is compromised by the
corporate ideology of debt.  Government
has been subverted by corporations .

   Reducing debt of   massive proportions although important must
be subsidiary to an even greater threat,  reducing the cause and source of debt- the power
of the corporations. 

Reducing  the power of
corporations are an even greater requirement for the  road to  democracy and welfare than  reducing the debt itself, important though this


government is the Peoples’ will safeguarding their interest.  Individuals are powerless against malevolent
corporate tyrannies.  

Meeting the cost of the debt by reducing  government is a double triumph by

It penalizes the people once by reducing their welfare and
again by removing their sole defence against the machinatins of the predatory
corporations - democratic government. 

The prime task is to strengthen government by means of
control by a peoples’ assembly .

Only  this can  give a united front  against the corporations.


Setting a variable termination date for each  corporation and banning local and
parliamentary lobbying by corporations are two of the measures required.


Levying corporatins to pay national debt is required. 

The debt incurred by the 
malpractices of the corporations should be  laid entirely at their door to teach them the
lessons of money management. . 

James Armstrong    
March 2011   












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