Is democracy dying? Such a question is easily dismissed out of hand. Of course Democracy isn't dying, far from it, in fact it's spreading to every corner of the world and being seeded in places where such an egalitarian form of governance has never taken root before. How could this not be proof that democracy is thriving and that it is without question the most superior form of government that the world has ever known?

And yet, what Abraham Lincoln decried during his shortened presidency and what Justice Brandeis observed some seventy years ago should give us all pause to consider if our assumptions about our beloved system of government are as correct as they appear to be. To be sure, the distribution of wealth in the United States today is more heavily weighted towards the very wealthy than at any time since the Great Depression, and concurrently we are witnessing the corruption of our government via lobbying, high stakes campaign funding, and the ubiquitous "revolving door" where former members of government take jobs with the corporations they aided with generous legislation, where banking executives are hired by the Treasury Department and who then end up giving billions to their former firms, and where industry insiders are appointed to be regulators, and very lax ones at that over the industries for which they used to work. However, in his quote, Justice Brandeis mixes two different forms of power, that of the political and that of the economic, and seems to jump to the conclusion that imbalances in one will automatically disrupt the balances in the other. Are the two not separate and distinct? The answer is that the two forms of power are very similar in nature and very tightly connected, and thus as goes economic equality, so goes political equality.

Democracy is based on the idea that everyone is equally represented. Everyone is allowed to cast one and only one vote, thus distributing the political power in a democracy evenly among all of its people. Ideally this ensures that nothing occurs politically without the support of a majority of the people and that the will of a majority will inevitably be expressed as action undertaken by the country's leaders. However, if political power is not evenly distributed throughout a society, then the will of the majority can be thwarted by a powerful minority which can effectively enslave the rest of the population to do its bidding. In practice, democracy is not perfectly egalitarian as it is not efficient to gain the consensus of a majority every time an initiative is put forth by the legislature and thus the political power of the people is generally exercised only occasionally, usually in a general election every few years, with the elected representatives left relatively free to make decisions for the people as they see fit. This keeps the decision- making process efficient while still allowing the people to influence the overall process. However, if a democracy's representatives are allowed to wield too much power, or they become relatively immune from popular influence, the efficiency gained through easier decision making will be offset by the fact that those decisions will inevitably benefit only a relatively small number of people, such as the legislators themselves, the lobbyists who influence them, their friends, relatives, and cronies, and whichever part of society whom they relate to the most. When power is concentrated within a small number of individuals, that power is generally used to benefit those individuals in a disproportionate way, and if their power is not checked, those individuals will be prone to seize even more power for themselves, concentrating it further, and use it in even more disproportionate ways to benefit their own particular interest groups at the expense of all others. The concentration of political power is inherently undemocratic.

Economics and the distribution of wealth works in a similar fashion, and here I will quote more from Justice Brandeis:

"We learned long ago that liberty could be preserved only by
limiting in some way the freedom of action of individuals; that
otherwise liberty would necessarily yield to absolutism; and in
the same way we have learned that unless there be regulation
of competition, its excesses will lead to the destruction of
competition, and monopoly will take its place."

"A large part of our people have also learned that efficiency in
business does not grow indefinitely with the size of business.
Very often, a business grows in efficiency as it grows from a
small business to a large business; but there is a unit of greatest
efficiency in every business, at any time, and a business may be
too large to be efficient, as well as too small. Our people have
also learned to understand the true reason for a large part of
those huge profits which have made certain trusts conspicuous.
They have learned that these profits are not due in the main
to efficiency, but are due to the control of the market, to the
exercise by a small body of men of the sovereign taxing power."

Wealth, and economic power, works best when it is allowed to concentrate, but like political power, it is only efficient when that concentration is kept within certain limits. If power is too spread out, it cannot coalesce to form structures which maximize efficiency, but if power is too concentrated it becomes tyrannical and survives not by being the best but by crushing all rivals with brute force. As we have seen over the last few decades, by deregulating the markets and allowing economic power to concentrate via mergers, globalization, and financial leverage, we have lost our economic efficiency as well as our financial stability and we now face the dilemma of how to deal with institutions which have been dubbed "too big to fail" but which by all rights should have been allowed to fail years ago. Instead of shutting them down, liquidating their assets, and dispersing their economic power to create more balance, our government, led by former employees of those very institutions, either props them up at the people's expense or merges them into other massive institutions, further concentrating economic power and exacerbating the problem. Indeed, these "failed" institutions continue to make huge profits while the masses struggle or go bankrupt and yet we are no closer to a solution to the problems which became visible two years ago. And thus, the concentration of economic power, greatly aided by concentrated political power, in a few institutions and individuals has created something akin to a black hole in the financial universe, drawing in all our wealth and hard work and giving us nothing in return.

Our leaders tell us that if we surrender more power and wealth to them that they can solve all of our problems. That is exactly the opposite of what needs to be done.

The powers that be have done all that they can to preserve the current economic system, but the system is dysfunctional and serves mainly to exacerbate the existing mal-distribution of wealth. Capitalism only works when profits are redirected back into the system in ways that make it more productive, but in the current system the profits are drained out of the system and into the bank accounts of the very wealthy. Productivity is slashed in pursuit of short term profitability and long term profitability is made possible only through ever increasing amounts of debt. For example, take the case of a company which manufactures goods in the United States. The CEO notices that high wages for American workers are cutting into the bottom line and decides to move the company's factories overseas to save on labor costs. So they fire their American workers, who end up getting jobs at the local department store selling the same products that they used to make, only now they are making $8 an hour instead of $24 an hour. The executives get richer and award themselves bonuses, which they invest in, say, financial institutions who loan that money to the former factory workers. In essence what used to be the workers' salaries are now being given to them in the form of loans.

Now, let's say that half of the workers borrow money to make up for what they no longer get in salary and half cut back on their spending and live within their means. The half that cuts back will cause a drop in demand for the things that they used to buy, such as the goods they used to manufacture, which will result in less profits for the company which may have to lay people off. However, the half that runs up debts will keep up the demand for things, and if they are allowed to borrow more money than they used to make they can also do such things as buy bigger houses or speculate on the markets. This debt-based buying causes an increase in demand which drives up prices on houses and stocks. That in turn allows the debtors to borrow even more money against their houses and stocks, which are worth more now, allowing them to buy an even bigger house and yet more stock. This is called asset inflation and is a driving force behind credit bubbles which are highly destructive when they burst. The more that people buy the more they can borrow and the economy appears to be booming, but it is all an illusion. The increases in the prices aren't due to any increase in productivity, which has remained relatively constant, they are due only to the increase in the amount of money which can be borrowed, money that has to be paid back, and with interest. For a while everything works wonderfully: the wealthy executives make a good return on their investments, the banks turn a tidy profit, and the borrowers get to live the high life. But loaning money which serves unproductive purposes such as the inflating of asset bubbles is not Capitalism, it is wealth extraction, and the more that it goes on the more wealth will slip through the fingers of the working class and concentrate into the hands of the rich. As time moves forward, one by one the debtors will reach the point where they can no longer borrow more money nor make their interest payments and they end up bankrupt. Slowly but surely demand for houses, stocks, and everything else fades away to nothing, the bubble bursts, and the economy seizes up. At this point the wealthy executives have plenty of money, and the banks have plenty of capital to back new loans, but the general public is insolvent and so little borrowing happens. A recession sets in.

Furthermore, in a shrinking economy, most new business ventures are going to end up losing money or failing, and so those with money will be unwilling to invest in any new start-ups. The problem is not a lack of capital, the problem is the concentration of that capital in the hands of a few along with the demand by those few to always make a return on their investment, and make as large a return as they possibly can. The wealthy did not get that way by accident, and they will generally not spend money unless they can make more money in return, which will result in the further concentration of wealth and the further enfeeblement of the economy at large. In other words, the rich get richer and the poor get poorer, but one doesn't have to be a Marxist to understand that the mal-distribution of wealth is a problem not just for the poor, but for the entire economy. Being rich is not a problem in and of itself, and in fact the desire to become wealthy is one of the driving forces behind Capitalism, but when too many people become too rich, money no longer flows through the entire economy and the opportunities available to others evaporate. When one can't get ahead one stops trying, and the rest of us are deprived of their contributions.

Political power suffers from a similar malady. Those in power tend to be those who can assemble power: drawing money, influence, favors, and leverage from a variety of sources; and thus concentrating power in themselves is what they become quite good at. Whether they gather power for altruistic purposes or whether they do so for their own selfish reasons matters not because in either case the successful ones will be the ones who accumulate power and do not let it go. Furthermore, like wealth, the more political power you have, the easier it is to gather more, and so the tendency is for power to concentrate in individuals and in institutions. As a case in point, many of us in the United States are very disappointed that the current president, as well as his political party, has not reversed the rather large number of laws, signing statements, and questionable programs which the previous administration enacted during its reign that usurped power and rights from the people. We made our demands, we received promises, and we voted, but once they got elected our leaders stopped listening. The lesson is clear: once the government seizes power, it is very reluctant to give it back.

So, what does the future hold? Well, we've now entered what is likely to be the last stage of a terminally ill economic system. With the collapse of the residential real estate market and the growing instability in the commercial real estate market, the borrowing required to support an insanely unstable bubble has ground to a halt. Most of us either don't want to borrow, don't need to borrow, or can't get a loan. Without more debt, the credit bubble will burst, so in steps the government to borrow for us, using its triple A credit rating to take out the necessary two trillion dollars in loans needed to keep the financial system afloat. So far it has worked, in as much as we've staved off a total collapse, but it appears that we will need to borrow that much or more every year into the foreseeable future or else the greatest bubble in history will explode. It seems inevitable that a major catastrophe will occur in the near future, and all the while our debts grow larger while the bottom lines of the banks grow fatter. This is no longer democracy, this is Kleptocracy.

This is the system that we in the west are really exporting around the world. It is democracy in appearance, but behind the scenes one can find the movements of wealth which guide the hands of the policymakers regardless of their nationality and political leanings. Yes, there are two or more rival political parties vying for power in most democratic nations, but more and more their battles are becoming a feud between groups of wealthy people while the rest of us are left to struggle, suffer, and hope. And as global wealth continues to concentrate into the hands of a few we can expect things to get less and less democratic no matter which party is in power. Democracy may not yet be dead, but it is growing weaker with every compounding of the interest that We The People owe.

Speaking of dead, every nasty organism that decided to set up shop in my intestines over the years, or perhaps even decades, has been thoroughly obliterated. My latest tests show that my treatment program is working. Candida Albicans...dead. Salmonella...dead. Dientamoeba Fragilis...dead. And now, finally free of infections and inflammation, my guts can be reloaded with beneficial organisms that will help me get back to being healthy again, or so the theory goes. I'm optimistic about my future, and eager to find out if all the hard work and sacrifice I've gone through over the last year and a half will at last pay off. I'm also eager to get my life back on track. On the Fireaxe front, all of my studying and practicing is paying off and I'm getting awfully good with this guitar. Now I'm itching to show you all what I can do with it, well, without showing off or making an ass out of myself. Should the next phase of my treatment ratchet up my strength and energy I'll probably feel inclined to crank out that Manowar cover I've been wanting to do and that would seriously rock. Hail and Kill!

A big ‘Hello’ to anyone receiving the Burning Blade for the first time. This is the Fireaxe newsletter.