In light of the recent Dr. Rand Paul discovery from the public that he (Dr. Paul) would have voted for the 1964 Civil Rights act, but would still allow private companies to determine (by their own criteria) who will patron their business, exists a certain type of duality that deserves some attention. Before I continue, lets look at the definition of duality:

being twofold; a classification into two opposed parts or subclasses; “the dichotomy between eastern and western culture”

So simply, you are straddling two views that oppose each other. so in Dr. Paul’s case he is against institutional racism, but would allow some form of it (he doesn’t realize he is doing this) to protect his “libertarian” (I’ll tell you shortly why this view is not libertarian) view that any involvement of the federal government negates the rights of private companies liberty. In one instance he strangely uses the 1st Amendment to support his view. Freedom of speech and freedom to act are two different things. We must realize that certain acts supersede other acts if the 1st act clashes with the 2nd act.

So now lets look at the definition of Libertarianism defined by David Boaz:

Libertarianism is the view that each person has the right to live his life in any way he chooses so long as he respects the equal rights of others. (Equal Rights of others…hmmm..sound familiar…oh that sounds awfully like the Civil Rights Act of 1964)

Hmm..can someone call Houston? Looks like we have a problem. Now regardless of how you feel about a particular person the key contradiction is allowing any company, individual or entity to discriminate against any well intentioned individual because they own a business, is in complete opposition to the underlying foundation of Libertarianism and the Civil Rights act of 1964. Am I missing something? Now we can have discussion on what “respect the rights” of other means, but denying someone their rights (to protect some ideological view of protecting the rights of private companies) so you can express your rights seems to be a contradiction.

Here’s another example:

In the Quran and related Hadiths it clearly states that all Muslims are prohibited from drinking alcohol. If I don’t drink alcohol, and participate in the production, marketing, distribution, and manufacturing of alcohol, am I still upholding my principles as a Muslim because I’m not literally drinking alcohol? For those suffering with the disease of duality, the answer would be Yes. And for those who don’t, the answer is NO.

Here lies the problem my friends. Dr. Paul and many of you out there…you can’t have it both ways my friend…although I know you want it like that.

This is going to be short (at least relatively shorter than most of my posts), but over the years I’ve had quite a few online and face-to-face discussions/debates/conversations with people from different walks of life on a lot of political topics. Recently, my boy sent me a Facebook thread on a political discussion that pretty much imploded from the start. Rather than engaging in a respectful discussion about the topic, the discussion exploded into character assassination, dehumanization, and parables of mere conjecture.

In many instances these conversations fall into the trap of incessant bickering about labels and empty political affiliations. We bicker about the minutiae then go back into our social corners and preach to our choirs. Is this not madness, how can we get things done with such behavior? From my perspective, we have mastered the art of condescension, egotism, and intellectual show boating at the expense of empathy and a mutual respect for those who have walked a different path than our own. We demonize each other for cheap political points.

While we divide our selves into oblivion the same political psychopaths from the Republican, Democratic party and various Poli-tocrats will walk away with the spoils. We are all naive for not realizing this. Recently, I’ve been digging deep into a new book, You Are Still Being Lied To: The Disinformation Guide to Media Distortion, Historical Whitewashes and Cultural Myths by Russ Kick and there are several passages that reinforce my point:

Intellectuals have a problem: they have to justify their existence
pg 60 —Normand Baillargeion

Hate has the annoying tendency to turn into hypocrisy. I laugh with glee when my side catches the other’s lies and follies. To a point, that’s healthy and cathartic.

But you don’t hear me laughing when the other side returns the favor. Then I discount the point and quietly fume at the attack itself. Don’t they understand our side is the good one?

And so it goes: They smear us; we uncover the truth about them. They have corrupt contributors; we’re creating a badly needed war chest. Their moral difficulties are untenable; ours, if any, are excusable.

Hate also kills thinking.
— Seth Freeman

So here are some basic conversational rules that can lead to more progress and less pomp

1. Stay focused on the topic at hand.
2. Being a blind ideologue just makes you look ignorant of the topic at hand and biased towards others.
3. DO NOT assassinate the other person(s) character. The conversation will turn into a personal screaming match
4. Do your research and source empirical data. Don’t just say something because it sounds good or it’s some talking point that has been regurgitated from the “choir”.
5. Before you speak, think your thoughts through. If you are getting angry or frustrated about a particular response, take the higher ground. Pause, then break down your response into smaller chunks.
6. “Snarkiness”, condescension, and belittling might make for some good comment entertainment, but it can derail a good conversation into the black abyss.
7. Show a bit of empathy, morals and understanding. Try your best to know who your audience is. It’s not what you say but how you say it
8. Now if all this fails and the person you are speaking to still remains ignorant, just walk away. Although very difficult to do because it’s always nice to get the last word, but sometimes you have to agree to disagree before feelings get hurt
9. As a last resort you can just punch the person in the face. It will make you feel good but the moment will be turned into to fisticuffs (just kidding)

Don’t forget good conversational etiquette and manners. We don’t have to agree on every point to get things done.

• Real change in campaign ‘08: Stop hating the other party By Seth Freeman
• You Are Still Being Lied To: The Disinformation Guide to Media Distortion, Historical Whitewashes and Cultural Myths by Russ Kick

In less than 1 billionth of a second after signing into law the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act, by Barak Obama on March 23rd, 2010 every political pundit and economist gave their two cents on what the impact is going to be on the economy and health care in America. I have heard such ludicrous responses that that healthcare will be “Armageddon” to Healthcare reform will fix all our problems. I wonder if a truck of DeLorean time machines were hijacked because apparently every single person knows the intricate details of how this bill will impact this country in the near and long term future. I mean, all I hear is speculation after speculation on what is going to happen and the reality is we don’t have the exact details of the outcome, good, bad or indifferent. We can assume, but that’s just about it. I would ask the “crystal ballerz” to tune down their flux capacitor‎s because your noise is inhibiting the process of people assessing the merits of the bill in an objective fashion.

It reminds me of all the real estate bubble speculators and past Dow Jones average will go up by ________ [insert unrealistic speculative number here] thousand predictors, that had every piece of data, including data from the Tooth Fairy and Santa Clause to let them know that they were right. I realize that most people suffer from Historic Economic Amnesia or in this case IFAA, “Incorrect Future Assessment Amnesia“. So being that we have a 24/7 news cycle and data goes in and out the “Internetis-sphere Data-verse” and just about anything that anyone says about healthcare a month from now, will be crowded out with new information, I’m going to list below all the articles I’ve seen that are for, against, and middle of the road opinions on new healthcare reform. The page is a work in progress (meaning I’ll be constantly updating it as I get new articles) but you can always refer to it years later to see if the speculators were right or wrong. If you have articles that you’d like to see posted just comment on this post and I’ll add them. It doesn’t matter if the opinion is in support or against the bill, or even in the middle.

Lets keep the health care reform speculators honest!

Against the new bill

1. Lew Rockwell on Healthcare with Judge Napolitano
   http://peterschiffchannel.blogspot.com/2010/03/lew-rockwell-healthcare-judge.html
2. Healthcare Intervention: The Bigger Picture by Doug French
   http://mises.org/daily/4213
3. YouTube: Peter Schiff healthcare bill is insanity makes America a fascist country and bankrupt it
   http://www.youtube.com/watch?v=0seaAV2oSh8
4. Wishful Thinking on Health Care by Sheldon Richman
   http://www.thefreemanonline.org/columns/tgif/wishful-thinking/
5. Health care reform too costly for critic by John R. Graham
   http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/03/27/BA801CLCMG.DTL
6. Concord Coalition Reacts To Health Care Bill Passage: Cost Control Vigilance is Now Crucial
   http://www.concordcoalition.org/press-releases/2010/0322/concord-coalition-reacts-health-care-bill-passage-cost-control-vigilance-no
7. Obamacare Dystopia by Mark Steyn
   http://article.nationalreview.com/429537/obamacare-dystopia/mark-steyn
8. Pricing Out Private Insurance by By John E. Calfee
   http://www.aei.org/article/101841

For the new bill

1. Obama Finally Toughens Up – About Time!
   http://www.huffingtonpost.com/chris-dalby/obama-finally-toughens-up_b_515333.html
2. You did it. We did it. Real health care reform for America! by Move on.org
   http://pol.moveon.org/wedidit/
3. Sanders’ Healthcare Revolution by KATRINA VANDEN HEUVEL
   http://www.concordcoalition.org/press-releases/2010/0322/concord-coalition-reacts-health-care-bill-passage-cost-control-vigilance-no
4. Health-care overhaul begins now By Ezra Klein
   http://www.washingtonpost.com/wp-dyn/content/article/2010/03/26/AR2010032605600.html?sub=AR
5. NPR: Rep. Lee: Health Bill Not Perfect, But A Good Start
   http://www.npr.org/templates/story/story.php?storyId=124731511

• A new chapter begins on health care by Bill Adair
  http://www.politifact.com/truth-o-meter/article/2010/mar/24/new-chapter-begins-health-care/
• Health Care Summit Squabbles by FactCheck.org
  http://factcheck.org/2010/02/health-care-summit-squabbles/
• Healthcare Costs and U.S. Competitivene by Toni Johnson
  http://www.cfr.org/publication/13325/healthcare_costs_and_us_competitiveness.html
• Health Reform by Kaiser Family
  http://healthreform.kff.org/
• Health Care and Insurance Law Amendments by Project Vote Smart
  http://votesmart.org/issue_keyvote_detail.php?cs_id=29181

IMPORTANT DISCLAIMER: In no way shape or form is this post aligning itself with any particular economic school, political party or ideology like the Austrian School of Economics, Keynesian(s), Saltwater/Freshwater Economist, Democrat, Libertarian, Republican, Left, Right, Socialist etc. The purpose of this post is a conversational starter about the questionable merits of interest. Although this topic is highly controversial and the world at large has accepted interest as the norm, it’s worth having a debate on the distortions that interest brings into the economy.

Shout out to Br. Halit for giving me the title for this post, originally titled The Case for NO Interest. I am no Islamic scholar or fancy economist. I’m a student of Islam and life. Although I don’t have the vast econ-textbook knowledge like many official economist, by the good graces of Allah, I do have common sense and a pragmatic mind. With all the thousands of economist around the world, only a few of them had the insight to foresee the recent 2008 financial crisis, not to mention past crises. Doesn’t mean that we don’t need economists, but I see a lot rear-view/hindsight economists out there. I wrote this post due to my interest, no pun intended, in understanding the Islamic law regarding the prohibition of Riba (interest). Many of the themes of this post are related to Islam. If you have a problem with that and topics that have to do with Allah (God) make you too uncomfortable, then you should go here:

Table of Contents

1. Allah’s (God) ruling on Interest
2. I’m NOT Interested
3. Economic Sophistry
4. A Fair Alternative to Interest
5. Conclusion

Allah’s (God) ruling on Interest

The purpose of this post is a conversational starter on the questionable merits of interest. In addition I’m doing a bit of education here for non-Muslims because they ask me question after question after I tell them that interest is prohibited in Islam. I will address some of their questions in this post. Regardless of your way of life, clearly there is room for discussion on abolishing interest based transactions. From an Islamic perspective, Riba (Interest) is prohibited. Taking interest or charging interest is prohibited. A transaction can be prohibited by adding money on top of money (giving or taking) or by overpricing assets that are sold to the public. In Islam, every financial action should be just. You can profit, but not at the gross expense of others. The whole point of Islamic finance is to create a proper balance between the basic needs of society and the profitability of those business transactions that impact that society. In today’s world of secular based ideology, a person in power can justify any act through legal sophistry, even if the act undermines the person and the surrounding community. In Islam, you don’t “Rob Peter to Pay Paul“, then wrap an act or law in some fancy legalese, while ignoring the financial imbalances and “moral hazard” that is inserted into the economic system.

In my view, this is the root of the problem. As long as their are lawyers, financiers, investors, and government regulators that can justify questionable financial acts with legal and economic sophistry, we could have continued systemic problems. It’s not just Islam that prohibits usury (interest), but every monotheistic religion has prohibited usury. Over time, with re-writing and revisions of theological law, the use of usury has been used as an acceptable mechanism for profit. Allah knows best, but I do believe that interest is 1 head of a 5 headed demon of what is wrong with the economy. In addition to interest, clearly we are suffering from a ethical problem, financial illiteracy problem, debt burden problem, regulatory reform problem and definitely a hubris problem.

I’m NOT interested

When I get into discussions on economics and Islam, while making it clear that Islam does NOT allow interest based transactions, many people ask “Well how do you make any money in Islam?”. That would be like me saying “Hey I don’t drink alcohol”. Then they ask me, “Well how do you quench your thirst”?

I find it strange that the same people who say “Hey, let the free and fair market take it’s due course”, are the same people that aren’t as excited to deal with the burden of all that “free market” activity when the economy collapses. I like to call these people “Fair Weather Market/Economy Capitalists”. All the interest in the world couldn’t even save two major investment firms in 2008, Bear Stearns and Lehman Brothers. What about AIG? Those are just the more recent victims and had other firms not been bailed out, many more would have gone under. Remember Long Term Capital Management in the 1990s? I thought interest was supposed to account for risk over time? Uh, what happened?

What is so interesting is if you talk to the so-called “interest specialists” about interest they will give you some economic sophistry on how interest is needed for true capitalism or interest is not responsible for our economic missteps. Being that interest is so tightly coupled to our economy how could anyone believe that interest isn’t part of the problem when many of the 140 financial crises we’ve had since 1978 had to do with debt or interest rates. Many times they will quote me some “classical theory of interest-esque or time preference theory” response or something similar to the Wiki definition below:

Definition

Compound interest is very similar to simple interest; however, with time, the difference becomes considerably larger. This difference is because unpaid interest is added to the balance due. Put another way, the borrower is charged interest on previous interest.

Did you folks just get what I just typed? Lets also keep in mind that these are “THEORIES“, not laws. Charging interest on previous interest. And this is what we call an equitable transaction? Says who? The gatekeepers of the economy? Or I should earn a return on money that I have not earned? I guess the supermarket should charge me double the “regular” price of milk because they built the supermarket, bought the trucks to deliver the milk, hired people to put the milk on the shelves, etc.

The typical response:

You see that’s how it works. It’s absurd to think that someone shouldn’t pay for money over time. Look, the consensus is clear, we smart people say so, and we have the theories (not laws) and dusty economic books to prove that interest is needed for capital markets, so get over it. Don’t let me quote Jeremy Bentham.

Absurd huh? I guess as long as we are using text book definitions, here is the text book definition of alcohol (Ethanol):

Any of a series of hydroxyl compounds, the simplest of which are derived from saturated hydrocarbons, have the general formula CnH2n+1OH, and include ethanol and methanol.

“Of course, there is nothing in that definition that seems harmful, right?” Just a bunch of hydroxyls and hydrocarbon atoms doing the bounding “two step”.

Lets just ignore the amount of murders, car accidents,alcoholism, addiction, rapes, drug abuse, broken families, bankruptcies, domestic violence, financial cost to the health care system, human cost to livelihood, brain damage, etc that this psychoactive drug contributes to and all is well. Nothing but a lipstick on a pig. As long as we dress it up with sophisticated language and words that only phds and so called “economists” can understand, we should be happy to deal with interest in the economy.

Economic Sophistry

What is even more perplexing, is you’ll have pro-interest individuals stating, “Hey, without interest we wouldn’t have the proper growth in the global economy” Really? Do these individuals realize how many times governments and monarchies around the world since the French Revolution have literally printed themselves out of an economic crisis (yes printing money out of thin air) while debasing the currency and sending inflation through the roof? [See A Free Nation Deep in Debt by James McDonald] Is this what free and fair market is? Whenever I get into deep trouble just print more money to fix the problem and still call the system a free and fair market? Fractional Reserve banking? We arbitrarily choose who the winners and losers (bailouts) are in the economy and then call it a “free and fair” market? Is this not hubris?

I’m curious what the economies around the world would look like if money wasn’t printed out of thin air to “fix” the economy? Oh, no problem, well just have deficits that we will never ever pay back. Can you imagine an American citizen telling the IRS, “Oh hey don’t worry about my debt, that is just a deficit and I’ll just carry it over for the remainder of my life while printing up money from my house to pay for new bills. See, I fixed the problem”. And this is what they call a “free and fair” market? With that being said I am not for the printing of money because this is just another form of interest, not to mention it is a economically flawed approach to monetary policy. With all the interest that is being charged, none of it was enough to account for risk over time. The current crisis is yet another indicator that the same Wall Street titans that profit off of interest based financial instruments are nothing but “welfare” corporations who got done in by the same interest they charged. In fancy econ-world talk they call this “over-leveraged”. This is just another word for “Hey I can’t pay this loan back with interest”. Every major bank/investment firm was almost insolvent, if not insolvent in 2008. You name it, Citibank, Lehman, UBS etc, and some banks like Washington Mutual have been banished to bankruptcy land, never to be seen again.

As Nassim Taleb states in Black Swan regarding the Savings and Loan Crisis:

The same happened in 1983 with money center banks losing cumulatively every penny ever made, and in 1991-1992 when the Savings and Loans industry became history.

Take a look at the “free and fair” market looks like with bailout after bailout since the 1970s:
http://www.propublica.org/special/government-bailouts

So what happened banks and investment firms? Wasn’t interest and your high returning investments supposed to dig you out of the hole when financial disruptions strike? Apparently not. So if interest is not even a mechanism that can properly account for risk over time, then why are we doing it in the first place? Don’t be fooled by the fancy language, “Re-capitalize” is just another fancy word for “Corporate Wic Check”. Instead of food, the tax payers are buying toxic assets. I would use the term “buying” lightly. “Off-Balance Sheet” has now become another word for “hiding risky assets that I know would completely deteriorate my companies net worth and possibly make my company insolvent”.

Fictitious Banker Convo:

Banker: Uh Mr. Oxford I noticed that you had 40K in credit card debt. I think this is going to be a problem with getting you that loan.
Me: Oh no problem, you see you actually weren’t supposed to see that. I have this thing called “off balanced sheet” which hides that 40K debt so my balance sheet looks better than it is.
Banker: Hmm, okay that makes sense, why would I want to get an accurate representation of the risk. That just preposterous. Ha ha ha (laughs nervously)
Me: Exactly, I kind of felt the same way, so can I get a “do over”?
Banker: Sure. You are approved.

The stalwart supporters of this farce economy are like the following story:
Let’s say a bunch of engineers (Bankers and Investment Firms) create a recycling water cleansing system (RWCS). They say that as long as you have 800,000 liters of water (cash) in the system, the system can maintain itself. Whatever run off (bad investments) and natural evaporation (risk) that happens will be replenished by natural rain fall (interest and fractional reserve banking) and the efficiency of the system extracting more water out of the system (profitable investments). Then over time, instead of 800,000 plus liters of water in the system, the amount decreases by 50,000 liters every 3 months. By year 3 the water system is struggling with only 200,000 liters. Even with natural rain fall subsidizing the system, they still can’t cut it. Now instead of admitting that the recycling water cleansing system is not working, the engineers siphon water from the Atlantic Ocean (Bailouts and printed money) into the RWCS to artificially bring back the system up to 800,000 liters of water while patting themselves on the back and stating “Hey look, our system works. All we need is the occasional water subsidy and we are in business”.

What a sad state of affairs. Are we so blind?

A Fair Alternative to Interest

Some might read this and think I’m some wacko dogmatic socialist. As if creating a profit mechanism that is an alternative to interest based profit makes you a socialist. Ha! I’m no “Capitalist” which means my motivation in life is not just profit. When I do business, I’m for making a profit but not at the expense of what Allah has intelligently decreed for society at large. In addition, equality and being just is more important than mere profit, and it’s not like that ideology has served ALL of society well, considering the current circumstances. A title I’ll steal from John Kim which is a Capital Anarchy. This is what we are dealing with in the 21st century. Many people outside of Islam might believe that people who believe in following the guidelines of Quran and the Shariah of Allah (SWT) are bunch of mindless drones that don’t actually reflect and ponder on those same rulings with proper intellect. This is far from the truth. When I found out that usury (interest) was prohibited in Islam, I spent a substantial amount of time researching the law and the mathematics behind the prohibition. Not to mention, that are many Islamic scholars who can elaborate even beyond my amateur approach to explains Riba and it’s consequences to the global economy. If you are interested in thinking outside of the box, hit me up on Facebook and I’ll give you the sources. There are some sources below too.

As I said earlier, there are lawful ways to profit that don’t involve interest. I’ll use the example of buying a house, which is a business transaction that most people can relate to. I touched on the Islamic Financing option in my the First Part of Economics Made Simple Renting vs Buying a Home.

As you can see the transaction is a equitable one that balances the risk. Each party owns their fair share of the investment, which brings me to my next point of Profit-Sharing also know as Mudarabah. You can read about more Islamic Financing options from here. There over 8 different options and all of these options cover various financing needs, whether a line of credit is needed, financing of large purchase items like a house, etc.

I don’t see how one of the main approaches from various venture capital firms is something that cannot be utilized in more areas of finance. If profit sharing was so inefficient why do multi-million dollar VC companies exist? Why don’t they charge interest on the money they lent you? It’s simple, what ever you put in is what ever you get out of the investment. If you own 25% of the investment you get 25% of the ROI (Return on Investment). If you own 66.6823% of the investment you get 66.6823% of the ROI. What is also very beneficial with this model is it allows people with smaller amounts of liquidity to get in on the ground floor of a particular investment. Very similar to how a fractional shares work.

Check this out:
Just imagine that a supermarket wanted to move into your neighborhood. Instead of going to a bank with interest, the locals of the community can become investors too. So the total start-up cost for the supermarket, let’s call it GroceryMart, Inc need 20 million dollars. The company has the first 10 million. So they go to an Islamic bank for the 7 million and that Bank now own 35% and the rest of the 3 million is financed by the local community giving them 15% of the business. If anyone wants to offload their shares, you find another buyer or negotiate with GroceryMart.

As income streams into the business, money is equally distributed based on the percentage of ownership or other contractually negotiated payment schedule. In the contract it is stipulated that at any point in time GroceryMart can put in a bid to buy out shares of the other share holders. No different than when a company on the stock market buys back shares. Now what is great about this scenario is the risk is evenly distributed. If the business does well, we all do well and if the business does bad we all do bad. Although I mentioned the stock market example, none of these shares can be traded or bid up in price. The only way the values of the shares go up, is if the company brings in more income.

There are couple things that are accomplished with this one tactic of Islamic Finance:

1. Risk is evenly distributed based on how much you put into the business
2. There is no compounding interest that is exponentially accruing on one side of the business transaction.
3. This will actually allow people who don’t have a lot of disposable income to become investors. No different than buying fractional shares. This will greatly contribute in upping the financial literacy of the community and create a starting point for non-wealthy individuals to invest in simple straight forward businesses.
4. No more winner take all.
5. No distortion of assets from speculation and interest. Because there is no interest we don’t have wild swings in asset valuations running away from the actual value of the asset. (Very similar to what happened to the housing market in 2008)

Now some may argue that this methodology is crude or inflexible and might not maximize the highest potential for profitability. I would ask, in comparison to what? To the current so-called “free and fair” market that gets the luxury of being bailed out with printed money out of thin air whenever an economic financial crisis happens? Since the 1900s we have never had a market that did NOT have the luxury of being bailed out. In just about every instance there was never enough interest earned to properly cover the inherent risk over time. So not only do the banks and investment houses get the luxury of charging interest which is supposed to account for risk over time, but when their risked based models fail miserably the tax-payers have to bail them out. If this is a “free and fair” market, then maybe we should go back to sharecropping because this is no different.

Conclusion

I would like to reiterate that this post is a conversational starter. I would like for pro-interest individuals to watch the movie Life and Debt, or read the history of how IMF and World Bank policies have “benefited” the countries that they have done business with, or read about PayDay loans, or the 1978 Marquette Decision, or The History of the Credit Card by Frontline or any financial crisis that has happened since the 1900s. In every circumstance interest was involved which distorted the true value of assets in the market or the interest rate that banks were charging were incorrectly pegged against the assets that they were holding. In many instances, the wealth was completely wiped out be taking on loans with interest. Also keep in mind if we had let the “free and fair market’ play out, there would be way more companies going under. What we are seeing today is a fraction of bank failures due to this fiat currency/interest/fractional reserve based system artificially propping up the system.

Some might argue about savings and not getting interest. In today’s fiat based economy a dollar today is not a dollar tomorrow. The amazing part is no one every asks the big word..Why? Well, if I’m a government and I keep printing money out of thin air and dumping it all over the economy, that’s is going to lead to inflation and that milk, beans, bread or whatever is going to keep going up in price. Reserve banking (not fractional reserve banking) and stopping the demonic practice of printing money out of thin air would dramatically help in keeping prices tame. There is no reason why prices shouldn’t go down if there is not enough savings and resources in the global economy to buy everything. It’s almost impossible to know what the true price is of anything because of all this tinkering with the money supply.

In addition to this, how on earth can we trust a practice that financially punishes the most vulnerable people on the planet with higher rates of interest? Is that just? To add insult to injury now these “Credit Card Banksters” want to charge annual fees on credit cards users who don’t use their card as revolvers. What type of nonsense is this? Should we just continue this practice because the so-called financial specialist in their ivory towers say so? I would also ask those same individuals that claim to adhere to any one of the monotheistic religions to re-read their religious doctrine and put the use of usury under a microscope.

Here are some links to get you started

Bible: Kings James Bible on Usury
Torah: Judaic Ruling on Usury
Quran: Quranic Ruling on Interest

Profit sharing is class independent. It’s fair, transparent and easy to implement. With true profit-sharing, there is no distortion of the money supply (whether through interest or printing money out of thin air). For the most part, every dollar can be accounted for.

Even Warrent Buffet had to admit the following:

But Mr Buffett argues that such highly complex financial instruments are time bombs and “financial weapons of mass destruction” that could harm not only their buyers and sellers, but the whole economic system.

He gave this warning in 2003.

How much financial carnage do we have to see to understand that interest distorts markets? Are we not tired of being thrown around like a rag doll in the economy by the so-called “financial czars” and “phd interest specialists” who act like they are the gate keepers of this economy? Do you actually feel like this market is fair or you actually feel that you have economic freedom in such a distorted market?

God willing, the root to proper economic prosperity is transparency, financial equality (ethical capitalism), efficient production, fair competition which is underscored by socially responsible driven economy. These 5 principles should underscore our financial decisions and destroy the 5 demons of the economy I mentioned earlier. Not speculation, wild gyration in interest rates, and corrupt laws that protect corporate malfeasance.

If you are going to live and die by the gun of “Russian Roulette” interest, I find it quite hypocritical for the same individuals to expect the bailout ambulances to come running to their rescue.

I refuse to sit as a back seat driver and go for the ride with “financial legalese that justifies interest, which no one can understand” driving and “economic sophistry” riding shot-gun. It’s time to pull over and get out the late model White Ivory Tower EX Edition sedan.

• Why Greece Matters
  http://www.npr.org/blogs/money/2010/02/podcast_yes_greece_could_defau.html
• Warning Against Riba Transactions
  http://abdurrahman.org/economics/ribaIbnBaz.doc
• Foreclosures Are More Profitable Than Loan Modifications, According To New Report
  http://www.huffingtonpost.com/2009/10/21/perverse-incentives-lead_n_328378.html
• How massive student loan debts are sinking American dreams and causing a national economic headache.
  http://www.pbs.org/now/shows/525/index.html
• Nassim Taleb
  http://rs.resalliance.org/2008/09/17/financial-resilience-taleb-and-mandelbrot-reflect-on-crisis/

So this morning I was watching John King from CNN grill White House budget director Peter Orszag, on the earmarks in the Omnibus Spending bill. I was somewhat annoyed by John King’s relentless questioning of the earmarks and asking for the impossible, which was for Omnibus stimulus to have zero earmarks A.K.A pork barrel spending. I just want to set the stage first, but what the heck is an earmark anyway?

Okay now that we know what earmarks are, why on earth are pundits and “Johnny-come-latelys‘” (JCL) in an uproar about these earmarks, which represent 1.7% of the Omnibus spending bill? Yes all 8500 to 9000 of these earmarks are about 5.5 billion (other sources have it at 7.7 billion) of the total 410 billion. Let’s be clear on this issue. All earmarks are not created equal and neither are lobbyists. I’m not a fan of “wasteful” earmarks and just because something is called an earmark, does not mean that it is wasteful. If I told you that someone shot a 9mm and killed someone, would you automatically call this person a murderer? Of course not, I would have to tell you the context first. Was it in self-defense? Did the person just shoot the gun to rob someone? etc.

Let’s also consider a couple things regarding these recent earmarks:

1. These are Republican and Democratic initiated earmarks
2. We are in one of the worst economic catastrophes this country has every seen. The administration is trying to revamp how business is done in Washington. One damn thing at a time and just a little bit of patience.
3. The Stimulus package had ZERO earmarks. That’s right, ZERO
4. Where were all the JCL’s for the last 8 years? They get off the hook because fiscal responsibility is now on their radar? If you ask me seems like selective fiscal responsibility. So now that you have an administration that is trying to initiate a new strategy on spending is now supposed to overhaul the entire government process in 7 weeks? Are you kidding me?

If was up to me I would eliminate earmarks completely but let’s not throw the baby out with the bath water. I’m not a big fan of $1,700,000 for Pig Odor research in Iowa, $819,000 for catfish research in Alabama, $238,000 in deep sea voyaging in Hawaii or the countless other earmarks that clearly go into the “Why the heck is this in the bill” category? I’m not happy about this, but shouldn’t we be spending time talking about 98% of the bill?

• Politifact.com: Democrats too low with $3.8 billion earmark estimate for Omnibus
• Taxpayers for Common Sense: $7.7 Billion In Earmarks In 2009 Omnibus Spending Bill
• Wall Street Journal: Orszag Urges Patience on Recovery
• CNN Orszag:Too Late on Earmarks
• Soapbox Derby: Earmarks