Unanimously Agreeable True Masters

Sankarshan Acharya
Founder, Pro-Prosperity.Com and Citizens for Development

February 7, 2016

President Barack Obama, Mr. Donald J. Trump, Senator Bernie Sanders and every other leader contesting election

Please feel free to circulate.
This is also available and updated at http://pro-prosperity.com/Unanimously-agreeable-True-Masters.html

Sub:      Unanimously Agreeable True Masters

Date:     February 07, 2016

Bloviating about a regime for creating millions of jobs while suppressing the truth that the employed were surreptitiously robbed-through systemic lure for investment of net savings under a system of robbery fortified by the same regime-presumes stupidity of the enterprising public. It should be unanimously agreeable that the enterprising people are the true masters of humanity.[1] 

Mr. Bill Clinton publicly stated in 2008 that only his wife (not her Democratic primary opponents like President Obama) would be able to reestablish his glorious regime that created 34 million jobs.  At that time too, I had circulated a memo among Democratic and Republican leaders about inefficiency and fundamental unfairness of systemic robbery of the employed that ensued the repeal of the Glass-Steagall Act signed by Mr. Clinton in 1999. 

Now, Mrs. Hillary Clinton is extolling her husband's employment-generating regime without mentioning how the employed were deliberately robbed of their net savings through laws signed by Mr. Clinton with her tacit approval.  Mrs. Clinton obviously presupposes that the enterprising people that lost their hard-earned wealth as well as employment in the ensuing market crashes are stupid and forgetful.

Once upon a time, masters of physically bonded labor were also glorifying and bloviating their large-heartedness in mass employment of slaves without ever mentioning how they never allowed the slaves to own, let alone accrete, assets.  Depriving slaves of assets produced by their hard work  was a deliberate ploy of masters to perpetuate physical bondage. 

Freedom can be attained only through accumulation of assets, necessary for independent sustenance.[2]  Only if the employed are eviscerated of their net assets, would their posterity remain beholden to the masters to work for pittance and, thus, remain enslaved.  This is how the system of physical bondage was perpetuated for centuries.[3]

Physical bondage is now supplanted by a sophisticated system of financial bondage with government-ordained rules and elite academic brainwashing of the enterprising.  The enterprising is brainwashed to trust the markets.  Academic researchers are told to not question how the markets operate.  Any deviant researcher is threatened with unemployment and severe underemployment. Rules governing markets are foisted on people through vote of elected representatives.  These rules bestow only a few Too-Big-To-Fail (TBTF) banks controlled by Too-Big-To-be-Jailed (TBTJ) bankers with government-ordained privilege to (a) garner valuable information through their market making authority by requiring the unprivileged enterprising public to place their buy and sell orders to the authorized MMs for clearance[4], (b) use the publicly/federally guaranteed deposits and Fed funds to trade against the unprivileged enterprising wealth creators, and (c) have the Federal Reserve and Security Exchange Commission protect mega robbers.  This sophisticated financial system guarantees robbery of wealth created by the enterprising public at no risk to the privileged TBTF-TBTJ bankers, their academic gurus, and political sponsors.  The losses due to risk are socialized and profits from the game are privatized. The enterprising, financially enslaved by the time of their retirement, have no option but to feed their talented and skilled children for employment and robbery by the same masters. This system is designed for aggrandizement and empowerment of the kith, kin and cronies of those connected to the privileged establishment.

Mrs. Clinton's proclamation that she is not beholden to this established system of robbery is obviously fatuous and specious.  She misleads public by remaining silent about how the laws signed, voted or tacitly approved by her have robbed the enterprising of their hard-earned net savings:

  • Rampant robbery ensued the passage of the new 1999 law (that repealed the Glass Steagall Act's crucial elements) signed by Mr. Clinton and tacitly approved by Mrs. Clinton.
  • New Dodd-Frank Act of 2010 legalized (a) primacy of TBTF-TBTJ banks as systemically important to continue the systemic robbery, (b) protection of short-sellers by making the Security and Exchange Commission's shenanigans beyond judicial review. As an integral part of the current Administration, Mrs. Clinton tacitly approved of this law.
  • Mrs. Clinton voted for the Housing Economic Recovery Act passed in 2008. HERA states that it is beyond judicial purview.  It was passed after Fannie and Freddie refused to buy toxic MBS backed by no real loans from TBTF-TBTJ banks.  Some TBTF banks created the fictitious MBS by massive short-selling to pull down the home mortgage market to gain on their Credit Default Swaps and other financial instruments.  HERA forced Fannie and Freddie to come under conservatorship to transfer their equity and additional $187 billion of public funds as conduits to TBTF-TBTJ banks in lieu of acquisition of worthless MBS.  HERA thus made two good and crucially important financial institutions (Fannie and Freddie) bad banks and the truly bad and highly risky TBTF-TBTJ banks that rob the enterprising systemically important (to continue systemic robbery!).  Fannie and Freddie are necessary for stability, as shown in a model of general equilibrium among borrowers and lenders.[5] Elite journals have returned my submission fees without reviewing this paper!
  • Mrs. Clinton was an integral part of the Obama Administration in 2012 when her husband's trusted advisers embedded in this administration crafted a new rule (without Congressional mandate) to confiscate all (massive ensuing) profits of Fannie and Freddie to eviscerate the crucially important mortgage finance institutions (a) to transfer massively valued Fannie-Freddie mortgage loan portfolios freely to TBTF-TBTJ banks and (b) to allow TBTF-TBTJ banks to levy usurious interest rates to decimate the enterprising further. Fannie-Freddie equity and profits stem from higher interest rates paid by enterprising mortgage borrowers than costs of funds and operation including affordable home subsidies incurred by Fannie and Freddie.  This means all the Fannie-Freddie equity and profits, transferred to TBTF banks and Treasury, belong to the enterprising.  That the TBTF banks and their agents in government orchestrated a confiscation of Fannie and Freddie to loot the enterprising is obvious from the mortgage fraud penalties paid by these banks to the Treasury.  These mortgage fraud penalties and the $245 billion paid by Fannie and Freddie to Treasury belong to the enterprising as Fannie and Freddie equity. 
  • Whatever the TBTF banks have paid Mrs. Clinton and other political leaders to vote for laws to fortify the established system of robbery belong to the enterprising.  Politicians feigning ignorance about generous funds received from TBTF banks after passage of laws for robbery and for keeping such laws beyond judicial review to hide the evidence from robbery are erroneously assuming that they are smarter than the true masters.
  • If Mrs. Clinton presumes ignorance of the severe financial bondage of the enterprising people due to laws she and her husband signed and supported, then the enterprising should not and would probably not support her candidature.  

There is another part of the current system of slavery: the public/government has been made to protect patents created from publicly-funded research and by the financially enslaved enterprising.  The patent creators and fundamental researchers are not among the 62 who now command more wealth than the bottom half.  Very few of them, if at all, may be among the top 1% who control more wealth than the rest.  The blind system of review of academic research guarantees robbery of valuable ideas conceived by rookie unprivileged researchers.[6] I have observed some senior professors at the elite academy shamelessly copy my thesis ideas, that too with mathematical errors committed while copying; I have pointed out their errors in my publications much later.  So, the publicized 'top' researchers and patent holders are not necessarily the original innovators, discoverers or creators.  Most of them at least in my field (financial economics) are embedded in the financial system of robbery.  They and the journals they control have failed to publish any research on a fundamentally fair and unanimously agreeable system of governance necessary for efficient civilized coexistence and stability.  Their only major success is to suppress such fundamental research, lest it would strip them of their undue and unearned privilege.  Even the ideas in the Newtonian laws of physics, calculus and Taylor series, used in rocket science, have originated from India's Kerala Schools of Mathematics carried abroad by Christian missionaries, according to British researchers. 

When I observed such reckless robbery of others' ideas, I paused to find the true masters of the world.  I found them as the enterprising people who protect and support everyone else (rulers and the down-trodden), as opposed to the self-appointed Masters of Universe calling themselves as god's children whose only enterprise is to establish and fortify the system of robbery of true masters.  My research, thereafter, concentrated on defining and serving the best interest of the true masters: 

  • Minimizing the cost of not-for-profit government is specified as the best interest/mission of the true masters in a paper that I coauthored with an NYU colleague (J. F. Dreyfus) and published in the Journal of Finance in 1989 to obtain optimal foreclosure of banks by assuming continuance of federal deposit insurance.[7] 
  • Minimization of the cost of not-for-profit government should be the unique unanimously agreeable mission of governance.  This mission is not, however, achievable with federal deposit insurance.  I found in 1990 that federal/public deposit insurance of deposits under the custody of TBTF-TBTJ banks is the crux systemic robbery (moral hazard) which can be efficiently eliminated by a safe central banking rule which is unanimously agreeable and consistent with the unanimously agreeable mission of governance.[8]  A safe central banking rule does not include government-ordained federal deposit insurance or capital standards.  This policy gives an option to every household or enterprise to keep a part of the savings in a central bank account for absolute safety (to void the calamity of 2008 panic).  Safe central banking policy is attained in equilibrium within a comprehensive mathematical model of microeconomics that also accomplishes the unique unanimously agreeable government mission.  I mimeographed this model written in a paper at the Board of Governors of the Federal Reserve System, Washington, D.C., in 1991.  This research could not be copied by the established academic Pundits embedded in the established system of robbery, lest they and their disciples anointed as Masters of Universe and their established political sponsors would all be exposed to the true masters.  It was, however, natural for the established Pundits and Masters to block my research.  But they faced a serious risk of eventual exposure of their shenanigans: epistemic truth (e.g., on unanimously agreeable rules of governance) eventually triumphs.  They were all publicly exposed due to the 2008 financial catastrophe. 

It should be a day of reckoning (not denial) for those who have been indulgent in the established system of robbery, deliberately foisted on the true masters for unsustainable self-aggrandizement and self-entrenchment in power.  It is futile for the robber barons and their facilitators to continue to suppose that the true masters are stupid.  They should urgently support an urgent orderly resolution of systemic moral hazard.

With profound regards, 
Founder, Citizens for Development & Pro-Prosperity.Com
Director, Research Center on Finance and Governance

[1] Acharya, S. (2015), "Unanimously Agreeable Definitions of Country and Patriotism for Civilized Co-existence," http://pro-prosperity.com/country-and-patriotism.html

[2]Acharya, S. (2013), "Constitutional Capitalism for First-best Efficient Governance, Obtained in general equilibrium based on rational microeconomic analysis, devoid of parochial dogmas, politics or prejudice," http://pro-prosperity.com/Constitutional%20Capitalism.html

[3]Acharya, S. (2015), " Diktats of Unanimously Agreeable Governance, and of Universally Acceptable Religious Beliefs Necessary for Civilized Coexistence," http://pro-prosperity.com/triumphantphilosophy-two.pdf

[4]Acharya, S. (2012), "Economic Inefficiency and Unconstitutionality of Short-selling and Privileged Private Market Clearing," Journal of Investment Management and Financial Innovations, http://pro-prosperity.com/Research/Sub-Optimality%20of%20Short%20Selling.pdf

[5]Acharya, S. (2015), " Coalitions of Borrowers and Lenders,  Government-Regulated Lender, Interest Rate and  Safe Central Bank in Equilibrium "http://pro-prosperity.com/Research/Coalition%20of%20Borrowers.pdf

[6]Acharya, S. (2010), " Blind Review of Academic Papers Unconstitutional and Detrimental to National Competitiveness," http://pro-prosperity.com/Blind-Review-Academic-Papers-Unconstitutional-Uncompetitive.html

[7]Acharya, S. and J. F. Dreyfus (1989), "Optimal Bank Reorganization Policies and Pricing of Federal Deposit Insurance," Journal of Finance, http://pro-prosperity.com/Research/Bank-foreclosure-rule-paper-Acharya-Dreyfus-Journal-of-Finance-1989.pdf

[8]Acharya, S. (2013), "Arbitrage Pricing of Total Risk of Assets and First-best Governance of Financial Markets," http://pro-prosperity.com/Research/moralhazardliberty.pdf