THE DEAL:THE GREAT TREASURY HEIST: TRILLION DOLLAR TERROR EXPOSED
"The right wing U.S. Supreme Court’s 2010 landmark ruling on campaign finance has made it possible for wealthy individuals to influence elections". The ordinary citizen is left as a minor entity compared to the wealthy corporations. The politically incorrect truth is that what we call civilization in any epoch — music, literature, science, politics and other philosophy — have been the accomplishments of, or patronized by, a ruling class. Twenty-first Century America is ruled by psychopathic criminals and peopled by a gullible mob that doesn’t know or, worse, doesn’t want to know the truth about anything, especially 9/11, as long as there is gasoline at the pump, a working automobile, professional sports, beer, and television. We were wrong to think of basic needs being food, clothing, and shelter.
The GOP has convinced a sizable number of Americans that the desire to protect their own families from corporate abuse is due to the socialist influences in society.
And many of us are buying into that nonsense, hook-line-and-sinker, in spite if the fact, that the facts are clear. The GOP could care less about the well being of poor and middle-class Americans. In fact, it is their intention to destroy the middle class, because a vibrant and educated middle class is an obstacle in the way of total corporate control of America.
In the 50′s, 60′s, and 70′s, big business and labor had a symbiotic relationship. American corporations would hire the poor and middle class and provide a job with a living wage and good benefits for life. As a result the working class had the money to purchase the products that the corporations produced, and spread money throughout the economy by going on vacations, and buying homes, cars, and appliances, etc. Thus, business and labor had forged a perfect relationship, and America thrived.
Then under the Ronald Reagan era of reckless deregulation the corporatists became greedy and began to embrace a scheme hatched by U.S.C. Professor, Arthur Laffer, called supply-side Economics, or “trickle down,” if you will.The theory behind this scheme that came to be known as “Reaganomics,” was ostensibly, if you cut taxes for business and people in the upper tax brackets, then deregulated business of such nuisances as safety regulations and environmental safeguards, the beneficiaries would invest their savings into creating new jobs. As a result, business would prosper, and the money would eventually “trickle down” to the rest of us. In addition, the resulting broadened tax base would not only help to bring down the deficit, but also subsidize the tremendously high defense budget.
When the plan was first floated, even George Bush Sr, Reagan’s vice president to be, called it “voodoo economics.”And Bush Sr. was right. What actually happened was instead of taking the money and investing it into creating new jobs, the money was used in wild schemes and stock market speculation. One of these schemes, the leveraged buy out, involved buying up large companies with borrowed funds secured by the company’s assets, then paying off the loan by selling off the company one piece at a time. This practice was a major contributor to destroying our industrial base, and changed America from a producer nation with plenty of jobs, to a consumer nation with very few.
In addition, the bottom fell out of the stock market. On Monday, October 19, 1987 the Dow-Jones Average fell 508.32 points. It was the greatest one-day decline since 1914 – 15 years BEFORE the Great Depression (Isn’t it curious how these things always seem to happen under Republican presidents?).
Now our economy is no longer insular. We’re in a global economy. What’s left of formerly American corporations are now international, and spread out all over the world. That has brought about two major changes. First, corporations no longer have to depend on American workers to buy their goods. They now have markets all over the world, so they’re they’re much less concerned about the economic health of poor and middle class Americans. Our only value is as a piggy bank when they need to be bailed out, or to be squeezed - like now, by sending jobs overseas – when they want to manipulate our political system or want concessions from the government.
Secondly, corporations now have to compete with countries where workers make less a week than many American workers spend on lunch per day. So the standard of living of the American middle class has become a liability that must be corrected, and the GOP is being subsidized by the corporatists to do just that.
Thus, what Gov. Walker of Wisconsin is engaged in has absolutely nothing to do with the budget or the deficit. The public employee unions in Wisconsin had already agreed to make the necessary concessions to cover budgetary shortfalls. Gov. Walker is engaged in union busting in order to cut the legs from under middle class workers. That would serve two useful purposes – it would both bring down the standard of living of the middle class, and it would also leave the poor and middle class without an organized front to oppose the GOP in coming elections.
Politicians are the only people in the world who create problems and then campaign against them.
Have you ever wondered, if both the Democrats and the Republicans are against deficits, WHY do we have deficits?
Have you ever wondered, if all the politicians are against inflation and high taxes, WHY do we have inflation and high taxes?
You and I don’t propose a federal budget. The President does.
You and I don’t have the Constitutional authority to vote on appropriations. The House of Representatives does.
You and I don’t write the tax code, Congress does.
You and I don’t set fiscal policy, Congress does.
You and I don’t control monetary policy, the Federal Reserve Bank does.
One hundred senators, 435 congressmen, one President, and nine Supreme Court justices equates to 545 human beings out of the 300 million are directly, legally, morally, and individually responsible for the domestic problems that plague this country.
I excluded the members of the Federal Reserve Board because that problem was created by the Congress. In 1913, Congress delegated its Constitutional duty to provide a sound currency to a federally chartered, but private, central bank.
I excluded all the special interests and lobbyists for a sound reason. They have no legal authority. They have no ability to coerce a senator, a congressman, or a President to do one cotton-picking thing. I don’t care if they offer a politician $1 million dollars in cash. The politician has the power to accept or reject it. No matter what the lobbyist promises, it is the legislator’s responsibility to determine how he votes.
Those 545 human beings spend much of their energy convincing you that what they did is not their fault. They cooperate in this common con regardless of party.
What separates a politician from a normal human being is an excessive amount of gall. No normal human being would have the gall of a Speaker, who stood up and criticized the President for creating deficits. The President can only propose a budget. He cannot force the Congress to accept it.
The Constitution, which is the supreme law of the land, gives sole responsibility to the House of Representatives for originating and approving appropriations and taxes. Who is the speaker of the House? John Boehner. He is the leader of the majority party. He and fellow House members, not the President, can approve any budget they want. If the President vetoes it, they can pass it over his veto if they agree to.
It seems inconceivable to me that a nation of 300 million cannot replace 545 people who stand convicted — by present facts — of incompetence and irresponsibility. I can’t think of a single domestic problem that is not traceable directly to those 545 people. When you fully grasp the plain truth that 545 people exercise the power of the federal government, then it must follow that what exists is what they want to exist.
If the tax code is unfair, it’s because they want it unfair.
If the budget is in the red, it’s because they want it in the red.
If the Army & Marines are in Iraq and Afghanistan it’s because they want them in Iraq and Afghanistan …
If they do not receive social security but are on an elite retirement plan not available to the people, it’s because they want it that way.
There are no insoluble government problems.
Do not let these 545 people shift the blame to bureaucrats, whom they hire and whose jobs they can abolish; to lobbyists, whose gifts and advice they can reject; to regulators, to whom they give the power to regulate and from whom they can take this power. Above all, do not let them con you into the belief that there exists disembodied mystical forces like “the economy,” “inflation,” or “politics” that prevent them from doing what they take an oath to do.
Those 545 people, and they alone, are responsible.
They, and they alone, have the power.
They, and they alone, should be held accountable by the people who are their bosses.
Provided the voters have the gumption to manage their own employees…
We should vote all of them out of office and clean up their mess!
This might be funny if it weren’t so true.
As we enter the twilight of the American nation we have never been so overwhelmed by the servile incompetence of Congress and its entourage of bureaucrats. We call them team A and team B. As each administration changes the participants change, but their length of service lingers on for many years. They represent the same masters who control them from behind the scenes with the same mission, but with slightly different approaches in order to make it seem change is being made. A great many of these servants from academia although very bright, never had an original thought in their life, never have worked in the business world and all are disciples of John Maynard Keyes and his corporatist fascist philosophy. Is it any wonder our nation is in the state it is in?
These are the same geniuses who created massive increases of money and credit starting 11 years ago, only to cap it off with QE1 and QE2 and stimulus 1 and 2, that have only served to rescue an insolvent financial sector and a corrupt insolvent government, which is still in progress. Wall Street and banking have been treated to massive amounts of money supplied by American citizens, who have seen their life savings foreclosed on. They borrow from the Fed at almost zero percent interest rates to invest in higher yielding bets, and wild speculation in totally rigged, manipulated markets. Just to show you how Wall Street’s rigged game works a number of major firms go for months without having a losing trading day. That is impossible unless the game is rigged, which it is for certain elitist, Illuminist corporations. These profit centers are created to offset the massive losses sustained in bad loans, mortgagees and from other speculations. Banks were leveraged 70 to 1 on average. It is now 20 to 40 to one, up from a normal 9 to 1. As a result government sees only 20% of its debt offerings being bought by Americans and foreigners. The remainder is being bought by the Federal Reserve, which for the most part creates money and credit out of thin air to meet these needs.
Economic 'frenemies': Barack and Michelle Obama welcome Chinese President Hu Jintao (C) to the White House January 20, 2011. China is buying less U.S. debt
That number grew rapidly until May 2009, when China started to reduce its holdings in short-term Treasury bills, by as much as 97 per cent by March 2011.
Treasury bills are securities that mature in one year or less. They are sold by the U.S. Treasury Department to fund the nation’s debt.
Until October, the total amount of U.S. debt China held continued to rise, as they 'made up' for decreasing purchases of short-term debt with longer-term instruments, according to CNSNews,
After October, their overall U.S. debt holdings began a decline, as they also started to decrease holdings of longer-term securities.
China’s ownership of U.S. national debt has dropped each of the last months for which records are complete, starting in November.
Before the bailouts, CNSNews reports that China had held only $19.8billion in short-term Treasury bills.
By December 2008, that figure had ballooned to $165.2billion. It hit $191.1billion by March 2009 and $210.4billion by May 2009.
After that high point in May 2009, China decreased its ownership of the short-term U.S. government securities, down to $5.69billion in March 2011, the most recent month reported by the U.S. Treasury.
Besides Treasury bills, much of the rest of the U.S. debt is held in Treasury notes, which mature in terms of 2 to 10 years; Treasury Inflation-Protected Securities (TIPS), which mature in terms of 5, 10 and 30 years; and Treasury bonds, which mature in terms of 30 years.
New buyers? The Treasury department will soon have to find new buyers of short-term bonds, possibly like this trader in Moscow
Most of the remainder is in the form of 'intragovernmental' bonds that the Treasury has given to others parts of the government - like Social Security - as 'I.O.U.s' after raiding their accounts.
At the end of March 2011, the publicly marketable part of the national debt had nearly doubled from August 2008, to $9.11trillion. Of that, $5.8trillion was in Treasury notes, $1.7trillion was in Treasury bills, $931.5billion was in long-term Treasury bonds, and $640.7billion was in TIPS.
Before the end of March 2012, the Treasury must redeem all of the $1.7trillion in Treasury bills that were extant as of March 2011.
What this all means is that the government is going to have to find new buyers for that debt, since China seems less interested than before.
It means the government could end up having to pay higher interest rates to finance our growing debt, which is now estimated at a whopping $14.34trillion.
That could cost taxpayers even more money.
Meanwhile, the International Monetary Fund recently predicted that the size of China's economy would overtake that of the U.S. in terms of purchasing power parity (PPP) by 2016.
Further, a recent study co-authored by Robert Feenstra, an economist at the University of California, Davis, predicted that 'global economic leadership' would pass from the U.S. to China in 2014.
Arvind Subramanian of the Peterson Institute of International Economics claims China already passed the U.S. in PPP in 2010.
In any case, it's clear that China's economy is on the upswing. But what about America?
It seems to me that somewhere down the line, when our forefathers instituted the documentation known as our Constitution, to current day Washington DC politics, our politicians has deemed themselves the power to use federal dollars on benevolent manners. This “Object of benevolence” spending now accounts for approximately 2/3 of our federal budget.
These “entitlement” programs such as welfare, medicare, medcaid, aid to higher education, farm subsidies, business subsidies and the latest ObamaCare, to name a few, make up nearly 70% of our federal budget. James Madison, the father or our Constitution, once stood on the floor of the House, declaring
"I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents."
We need to ask this question, has our Constitution been amended to authorize federal spending on "objects of benevolence"?
Thomas Jefferson was clear and concise when he said “Congress has not unlimited powers to provide for the general welfare, but only those specifically enumerated.”
Charity has no part of the legislative duty of our federal government. It seems to me that our hard earned income is now, being confiscated and redistributed unconstitutionally. Our federal government’s number one reason for its existence is to Defend our way of life! Not to constrain it, Not to provide for it, and surely not to redistribute it!! They are sworn to “defend, preserve and protect” this way of life, according to our Constitution.
Ben Franklin said it best, “The Constitution only gives people the right to pursue happiness. You have to catch it yourself.”
It is my personal belief that if our government would restore this nation as it was intended; allowing all of its citizens to pursue happiness, in the tradition of free enterprise, in the conservative capitalistic sense, these so called “objects of benevolence” would be taken care of by these industrious, God-fearing, hard working folks known as Americans. We have proved in the past days of this nation that we (U.S.A) are the most generous and giving, benevolent group of people on the planet. To make this a slightly more “religious hub”, I will take it one step further, that most of this country’s citizens are Bible believing folks, who take words such as "Give generously to him and do so without a grudging heart; then because of this the LORD your God will bless you in all your work and in everything you put your hand to." As our “good book” has taught us.
I think the mere corruption of today’s politicians find it a great way to assure themselves votes to stay in power, by being a rescuer of those who are down and out, by using this "Object of Benevolence” as a means of spending taxpayers dollars.
I say, it is time for this to end, and honor our Constitution.
The most melancholy of human reflections, perhaps, is that, on the whole, it is a question whether the benevolence of mankind does most good or harm. Great good, no doubt, philanthropy does, but then it also does great evil. It augments so much vice, it multiplies so much suffering, it brings to life such great populations to suffer and to be vicious, that it is open to argument whether it be or be not an evil to the world, and this is entirely because excellent people fancy they can do much by rapid action—that they will most benefit the world when they most relieve their own feelings.
Any discussion of “The Wisdom of the Founders” and the ideal of limited government has to begin by acknowledging a certain irony.  There is no doubt that the Founders were deeply concerned to protect individual and states’ rights against the prerogatives of the federal government. For example, James Madison, in Federalist 45, explicitly declared that the powers delegated by the Constitution to the federal government were “few and defined,” having to do mostly with “external objects” like war, peace, and foreign commerce. The powers delegated to the individual states, however, were “numerous and indefinite,” extending, said Madison, to “all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people, and the internal order, improvement, and prosperity of the State.” Think about that the next time you try to start a business, choose (or refuse) health care insurance, plan for your retirement, or, indeed, buy an incandescent light bulb. The insinuation of the federal government into the interstices of everyday life over the last several decades is something that would have appalled the Founders and confirmed Alexis de Tocqueville in his famous analysis of democratic despotism.
Still, it is worth acknowledging that the Founders, although deeply concerned with limiting the sphere of government power, were also determined to forge a strong and effective federal government. The Federalist, after all, took aim at the abundant anti-Federalist commentary that opposed the proposed U.S. Constitution precisely because, so thought the anti-Federalists, it arrogated too much power to a central authority at the expense of the states. But just this, the Founders argued, was the price of creating and maintaining that “more perfect union” of which the Constitution speaks in its Preamble. “The vigor of government,” Alexander Hamilton wrote in the very first of The Federalist Papers, “is essential to the security of liberty.” The goal, he put it later on in The Federalist, is “a happy mean” which combines “the energy of government with the security of private rights.” As the legal scholar Jeremy Rabkin reminds us in his response below, that energy is particularly critical when it comes to issues of national security and defense. The Manhattan Project was not, and could not have been, a local initiative.
Nevertheless, there is widespread, if hardly universal, acknowledgment that our problem today is not to assure the “energy of government,” but quite the opposite, to redress the balance, to re-establish that “happy mean” Hamilton spoke of, by asserting the legitimate jurisdiction of private rights against a rampant and engorging bureaucratic Leviathan.
As I thought about this essay, a couple of lines kept recurring to me. One line came towards the end of October 2008 when the then-Presidential candidate Barack Obama addressed a throng of supporters and told them they were only a few days away from “fundamentally transforming the United States of America.”
“Fundamentally transforming the United States of America.” What could that mean? At the moment he spoke, the United States was the mightiest, richest, most secure, and most freedom-welcoming republic in the history of the world. If someone were to come along and effect a fundamental transformation of this country, could he succeed without impinging on one or more of these achievements? Of course, people say a lot of things on the campaign trail that they do not really mean. So one question would be, how serious was Barack Obama when he spoke about “fundamentally transforming” this country? I believe that the last two years demonstrate beyond cavil that he was utterly in earnest.
What the Indiana Governor Mitch Daniels calls Obama’s “shock and awe” statism has gone a long way towards transforming this country: towards changing its status as a world power, its economic vibrancy, its hospitableness towards business and entrepreneurship, and above all, perhaps, its commitment to limited government and individual freedom, to what the Preamble to the Constitution of the United States called “the blessings of liberty.” How astonishing, for example, that the state should propose to fine you if you do not choose to purchase a health insurance policy deemed suitable by the state. How amazing that the state in America should oust the head of a private corporation, that it should tell banks how much they may pay their employees, or use the taxpayers’ money to reward people for buying certain brands of automobiles produced by companies of which the state is part owner. These are extraordinary innovations, dangerous to the ideal of limited government and dangerous, too, to the life of freedom.
The critical issue—and the primary spur to the discussion that underlay our deliberations in “The Wisdom of the Founders”—revolves around the proper relationship between the individual and the state in a modern democracy. That relationship is now up for fundamental renegotiation. How the negotiation between individual liberty and state power is resolved will determine the sort of polity we bequeath to posterity.
Rahm Emmanuel, President Obama’s former chief of staff, made headlines when he declared, in the midst of the recent economic meltdown, that, “You never want a serious crisis to go to waste.” What he meant was that a crisis makes people anxious and vulnerable and that it is easier in periods of crisis to exploit that vulnerability and push through initiatives to enlarge government. Which is why in periods of crisis one should, if one is prudent, exercise double diligence about acting hastily. As the British politician and journalist Daniel Hannan recently observed in The New Road to Serfdom: A Letter of Warning to America, “most disastrous policies have been introduced at times of emergency.”
Consider the precipitate actions of New Deal Democrats under FDR. Today, many commentators acknowledge that the sudden expansion of the government and proliferation of burdensome new business regulations hampered business, retarded new hiring, and prolonged the Depression. FDR and his minions, Hannan notes, were in the grip of “one of the most dangerous of political fallacies: the idea that, at a time of crisis, the government’s response must be proportionate to the degree of public anxiety.”
A prudent government, on the contrary, ought to temper that anxiety with dispassionate judgment. How often have you heard a politician or government bureaucrat tell you that “Doing nothing is not an option”? In fact, as Hannan rightly observes, “Doing nothing is always an option, and often it is the best option.” This was something that Calvin Coolidge—perhaps America’s most underrated president—acknowledged when he said to a busybody aide: “Don’t just do something; stand there!” Amity Shlaes has more to say about Coolidge below.
The point is that it is far, far easier to establish than to rid oneself of any bureaucracy, and, of all mankind’s bureaucracies, the hardest to kill are government bureaucracies. When the economic crisis broke in the fall of 2008, the United States was quick off the mark to spend more, borrow more, intervene more in business, and impose a raft of paralyzing new regulations. In the past year and a half, President Obama has greatly expanded the size and intrusiveness of the federal government, has spent trillions of dollars—trillions—and has, under the rubric of health care “reform,” put another nearly 20 percent of the American economy under the control of Washington. I think ruefully of Thomas Jefferson’s advice: “To preserve our independence, we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude.” Which will it be?
In the aftermath of November’s election, President Obama several times pleaded with opponents to “put politics aside.” I know there is a cynical interpretation according to which this admonition was merely Chicago-style political hypocrisy. Perhaps that is part of the story. But I think there was something more or other than hypocrisy involved. I think that President Obama was sincere. Like many friends of humanity, Barack Obama believes that politics are what his opponents—those whom he in an unguarded moment recently referred to as “enemies”—engage in. His occupation is less politics than benevolence. Essentially, he believes, he has already “put politics aside.” Sure, it might be necessary to indulge in politics occasionally to get things done, but his goals, he believes, transcend that grubby, partisan business. They occupy, he thinks, a realm of virtue that may guide politics but is not subject to politics’ selfish imperatives.
Thus when it comes to tax policy, President Obama has said that the chief issue is not raising revenue, but “fairness.” He just wants, as he famously told Joe the Plumber, “to spread the wealth around,” never mind that the wealth in question is not his to spread.
Let me return to that word “benevolence.” It is critical to an understanding of the assault on limited government we have witnessed in recent decades. Barack Obama is a type of the benevolent ruler. Not the most thorough-
It’s not that benevolence is a bad thing per se. On the contrary, it’s just that, like charity, it works best the more local are its aims. Enlarged, it becomes like that “telescopic philanthropy” Dickens attributes to Mrs. Jellyby in Bleak House. Like other such benefactors, Mrs. Jellyby’s philanthropy is more ardent the more abstract and distant its objects. Africa excites her benevolence. When it comes to her own family, however, she is indifferent to the point of callousness.
The sad truth is that theoretical benevolence is compatible with any amount of practical indifference or even cruelty. You feel kindly towards others. That is what matters: your feelings. The effects of your benevolent feelings in the real world are secondary. Rousseau was a philosopher of benevolence. So was Karl Marx. Yet everywhere that Marx’s ideas have been put into practice, the result has been universal immiseration. His intention was the benevolent one of forging a more equitable society by abolishing private property and, to adapt President Obama’s famous phrase, by “spreading the wealth around.” Every Marxist society has spread it wide and spread it thin. Hence Ronald Reagan’s observation that the nine most terrifying words in the English language are “I’m from the government, and I’m here to help.”
An absolute commitment to benevolence, like the road that is paved with good intentions, typically leads to an unprofitable destination. My epigraph from the great nineteenth-century English essayist Walter Bagehot underscores the point: it is a melancholy occupation, observed Bagehot, to ask whether the benevolence of mankind actually does more good than ill. It makes the purveyor of benevolence feel better—where by better I mean more smug and self-righteous. But it is unclear whether the objects of benevolence are any better off.
Just so with the modern Welfare State: a sterling incarnation of the sort of abstract benevolence Stove anatomizes. It doesn’t matter that the welfare state actually creates more of the poverty and dependence it was instituted to abolish: the intentions behind it are benevolent. Which is one of the reasons it is so seductive. It flatters the vanity of those who espouse it even as it nourishes the egalitarian ambitions that have always been at the center of Enlightened thought. This is why Stove describes benevolence as “the heroin of the Enlightened.” It is intoxicating, addictive, expensive, and ultimately ruinous.
The intoxicating effects of benevolence help to explain the growing appeal of politically correct attitudes about everything from “the environment” to the fate of the Third World. Why does the consistent failure of statist policies not disabuse their advocates of the statist agenda? One reason is that statist polices have the sanction of benevolence. They are “against poverty,” “against war,” “against oppression,” “for the environment.” And why shouldn’t they be? Where else are the pleasures of smug self-righteousness to be had at so little cost?
The intoxicating effects of benevolence also help to explain why unanchored benevolence is inherently expansionist. The party of benevolence is always the party of big government. The imperatives of benevolence are intrinsically opposed to the pragmatism that underlies the allegiance to limited government.
Stove’s argument is that the union of abstract benevolence, which takes mankind as a whole for its object, with unbridled moralism is a toxic, misery-producing brew. “It is only the combination of these two elements,” Stove observes in a powerful essay called “Why You Should Be a Conservative,”
Of course, as Stove goes on to note, this “lethal combination” is by no means peculiar to Communists. It provides the emotional fuel for utopians from Robespierre to the politically correct bureaucrats who preside over more and more of life in Western societies today. They mean well. They seek to boost all mankind up to their own plane of enlightenment. Inequality outrages their sense of justice. They see tradition as the enemy of innovation, which they embrace as a lifeline to moral progress. They cannot encounter a wrong without seeking to right it. The idea that some evils may be ineradicable is anathema. The notion that the best is the enemy of the good, that many choices are to some extent choices among evils—such proverbial wisdom seems quaintly out of date. The result is a campaign to legislate virtue, to curtail eccentricity, to smother individuality, to barter truth for the current moral or political enthusiasm.
For centuries, political philosophers have understood that the lust for equality is the enemy of freedom. That species of benevolence underwrote the tragedy of Communist tyranny. The rise of political correctness has redistributed that lust over a new roster of issues: not the proletariat, but the environment; not the struggling masses, but “reproductive freedom,” gay rights, the Third World, diversity training, and an end to racism and xenophobia. It looks, in Marx’s famous mot, like history repeating itself as farce. It would be a rash man, however, who made no provision for a reprise of tragedy.
The attitude of abstract benevolence is all but ubiquitous in modern Democratic societies. Although of relatively recent vintage, it has insinuated itself deeply into the tissues of the body politic. The modern Welfare State is one result of the triumph of abstract benevolence. Its chief effects are to institutionalize dependence on the state while also assuring the steady growth of the bureaucracy charged with managing government largess. Both help to explain why the Welfare State has proved so difficult to dismantle.
Is there an alternative? Stove quotes Thomas Malthus’s observation, from his famous Essay on Population, that “we are indebted for all the noblest exertions of human genius, for everything that distinguishes the civilized from the savage state,” to “the laws of property and marriage, and to the apparently narrow principle of self-interest which prompts each individual to exert himself in bettering his condition” (my emphasis). Stove observes that Malthus’s arguments (one might quote Adam Smith to the same effect) for the genuinely beneficent effects of “the apparently narrow” principle of self-interest “cannot be too often repeated.”
In Utilitarianism, John Stuart Mill argued that “justice” required everyone to be “as strictly impartial as a disinterested and benevolent spectator” about his own happiness. But Mill’s great critic, James Fitzjames Stephen, is the wiser psychologist: “If this be so, I can only say that nearly the whole of nearly every human creature is one continued course of injustice, for nearly everyone passes his life in providing the means of happiness for himself and those who are closely connected with him, leaving others all but entirely out of account.” And this, Stephen argues, is as it should be, not merely for prudential but for moral reasons:
The partisans of limited government are suspicious of moral Don Quixotes. They want to preserve a space for private initiative. But private initiative is by its nature inequitable. Some individuals will succeed better than others. That indeed is the point: to encourage innovation and hard work by crowning it with success. Writing in 1800, Thomas Jefferson extolled that “wise and frugal Government, which shall restrain men from injuring one another, [but] shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned.” A benevolent government, on the contrary, would impose its own restrictions on the “pursuits of industry and improvement,” sacrificing the rights of freedom to the demands of equality.
The larger the stage upon which the melodrama of benevolence operates, the more dangerous its potential. This is something that Henry Kissinger ackowledged when, writing about the new tendency to subject national politics to international tribunals, he warned about the “risk [of] substituting the tyranny of judges for that of governments.” “Historically,” he noted, “the dictatorship of the virtuous has often led to inquistions and even witch-hunts.” The “dictatorship of the virtuous” is a reign created by and supported by benevolence.
I said above that candidate Obama’s promise to set about “fundamentally transforming the United States of America” was one line that often recurred to me when thinking about this essay. Another is an observation from David Hume that Friedrich von Hayek used as an epigraph to The Road to Serfdom. “It is seldom,” Hume wrote, “that liberty of any kind is lost all at once.” America’s drift away from the ideal of limited government as envisioned by the Founders has been gathering force for decades. The fate of limited government and the fate of liberty are deeply intertwined: as one fares, so fares the other. And it is a melancholy fact that the loss of freedom is not only something that is visited upon us from outside: it is something we visit upon ourselves.
Hayek said that one of the “main points” of his argument in The Road to Serfdom concerned “the psychological change,” the “alteration of the character of the people” that extensive government control brought in its wake. The alteration involves a process of softening, enervation, infantilization even: an exchange of the challenges of liberty and self-reliance for the coddling pleasures of dependence. Breaking with that drift becomes more and more difficult the more habituated to dependence a people becomes.
Difficult, but not impossible. It is too early to say for certain, but I like to think there are signs that more and more people are waking up to the wisdom of Madison’s observation, in Federalist 44, that “in the last resort a remedy must be obtained from the people who can, by the election of more faithful representatives, annul the acts of the usurpers.”
“The Wisdom of the Founders: The Fate of Limited
Government in an Age of Uncertainty,” a conference organized by The New Criterion, took place in New York on November 9, 2010. The essays and responses that follow are revised versions of the papers presented at that conference. The editors are deeply grateful to the Thomas W. Smith Foundation for its critical support and also to the Hon. Bruce Gelb, Kenneth Gilman, and Lionel Goldfrank for their support of this conference and the publication of these reflections.
1945-1994: Vietnam: "Remember! Only you can prevent forests."
The Supreme Court's First Amendment opinions result not from interpreting the First Amendment but from deliberately and insidiously changing its diction in ways that make the Amendment unrecognizable. The Court's arguments in these opinions are pure cant and do nothing but turn the Justices' personal opinions into law. This practice has enabled the Court to act as an oligarchy that has usurped the Constitution and ruled the nation without ever have been elected or given the authority to do so.
"Congress shall make no law . . . abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."
The writers of the Constitution did not use the words “expression,” “association,” “affiliation,” or “common political goals.” What they did do was name different kinds of things using ordinary diction—speech, press, assemble, petition, and grievance. In ordinary parlance, speech means talk and in the Eighteenth century, press meant print. The press as we know it today did not then exist. Assemble means to get together in the same place, petition means a written request, and a grievance is a perceived injustice. How much plainer could the framers have written this amendment?
Yet, in Buckley Et Al. v. Valeo, the Court writes:
”(b) The First Amendment requires the invalidation of the Act's independent expenditure ceiling, its limitation on a candidate's expenditures from his own personal funds, and its ceilings on overall campaign expenditures, since those provisions place substantial and direct restrictions on the ability of candidates, citizens, and associations to engage in protected political expression, restrictions that the First Amendment cannot tolerate.”
In support of this interpretation, the Court cites Mills v. Alabama; yet that decision clearly dealt only with printed matters. “The Constitution specifically selected the press, which includes not only newspapers, books, and magazines, but also humble leaflets and circulars, see Lovell v. Griffin.” The other decisions cited in the section on General Principles all also relate solely to printed matters. So how do speech and press come to mean expression, a far more generic term, and how did the court use this embellishment to make unlimited campaign expenditures a First Amendment right?
The court writes, ”The Act's contribution and expenditure limitations also impinge on protected associational freedoms. Making a contribution, like joining a political party, serves to affiliate a person with a candidate. In addition, it enables like-minded persons to pool their resources in furtherance of common political goals. The Act's contribution ceilings thus limit one important means of associating with a candidate or committee, but leave the contributor free to become a member of any political association and to assist personally in the association's efforts on behalf of candidates. And the Act's contribution limitations permit associations and candidates to aggregate large sums of money to promote effective advocacy. By contrast, the Act's $1,000 limitation on independent expenditures "relative to a clearly identified candidate" precludes most associations from effectively amplifying the voice of their adherents, the original basis for the recognition of First Amendment protection of the freedom of association. See NAACP v. Alabama. The Act's constraints on the ability of independent associations and candidate campaign organizations to expend resources on political expression "is simultaneously an interference with the freedom of [their] adherents," Sweezy v. New Hampshire (plurality opinion).
Notice how the diction has changed. "Assemble" has become associate and affiliate. "Grievance" has become political goals. So this decision is not based on the text of the Constitution; rather it results from replacing that text. To the Supreme Court, the Constitution reads something like this:
Congress shall make no law . . . abridging the freedom of political expression, or of the press; or the right of the people peaceably to associate and affiliate with candidates, and to petition the Government for the furtherance of political goals.
This paragraph is pure poppycock when compared to the Constitution's clear and unambiguous diction.
Sweezy v. New Hampshire makes identical substitutions: “Equally manifest as a fundamental principle of a democratic society is political freedom of the individual. Our form of government is built on the premise that every citizen shall have the right to engage in political expression and association. This right was enshrined in the First Amendment of the Bill of Rights. Exercise of these basic freedoms in America has traditionally been through the media of political associations. Any interference with the freedom of a party is simultaneously an interference with the freedom of its adherents."
The mistaken result then goes something like this: A person expresses his preferences by the way in which he spends his money. Freedom of expression is guaranteed by the First Amendment. So to limit a person’s expenditures on a political campaign infringes his First Amendment rights. More simply put, freedom of speech (read talk) is guaranteed by the First Amendment. Money talks; therefore spending money is speech protected by the First Amendment. But the First Amendments doesn't guarantee anyone's freedom to spend money.
Some would claim that political expression is a form of speech. But it isn't. The bombing of the Alfred P. Murrah Federal Building in Oklahoma City was a political expression but it was not speech and no court would have released the bomber because arresting him violated his First Amendment rights. Throwing a shoe at a President would be an act of political expression, but it is not speech and no court would excuse it. In fact, the Court has turned the concept of free speech into bought speech which the constitution never mentions. Likewise, the American Automobile Association never assembles, and those who attended the Super Bowl in Arlington Texas assembled there but did not associate. Allowing the bankers who brought down the economy to receive their bonuses while requiring automobile workers to relinquish their pensions which the automobile companies were contractually obliged to provide is a perceived injustice, not a political goal, and campaigning on a platform advocating smaller government is a political goal but not a grievance.
The court, while claiming to be involved in a process of interpretation is in fact involved in a process of rewriting by replacement. But there is no logical relationship between interpretation and replacement. The sentence, "he claimed that Iraq has weapons of mass destruction" cannot be interpreted to mean, "he claimed that Iran has weapons of mass destruction." Yet that's the kind of thing the Supreme Court does all the time.
Sure metaphorically, money can be said to talk. So can many other things, as for instance, scant or revealing attire, expectorating in the face of an official, turning your back on a judge in a courtroom, refusing to pay taxes on the grounds that they support unjust governmental activity, and more.
Isn't it strange that spending money on political campaigns in ways that at least foster the appearance of governmental corruption is ruled to be protected speech, but that more honest ways of speaking metaphorically or symbolically, that is, expressing ourselves metaphorically, are not? How can anyone justify these substitutions? Is it merely incidental that the Justices have described American political campaigns as "a marketplace of ideas"? A marketplace it certainly has become but no ideas are ever marketed there.
The argument presented in any judicial decision is almost impossible to ferret out because of citations to previous cases. A decision includes a quotation from a previous case and appends its citation. When one goes to the cited case, one finds the same practice, and the chain of previous cases is lengthy and following it is cumbersome. At times a reader gets the feeling that the citations are circular; the beginning of the chain can’t be found. And if any court in the chain commits an error of equivocation or amphiboly or a fallacy, as in the cases cited above, it is perpetuated throughout all the other cases that cite it. So the exact reasoning is obfuscated, and bad decisions are the result. The judicial system does not use a rational process while issuing opinions; in fact, it uses a long discarded system known as arguing from authority which was used by medieval Church Fathers in arguing matters of faith. And, in reality, judicial opinions are merely matters of faith, mere beliefs that the justices have an overzealous faith in.
The Supreme Court's First Amendment opinions result not from interpreting the First Amendment but from deliberately and insidiously changing its diction in ways that make the Amendment unrecognizable. The Court's arguments in these opinions are pure cant and do nothing but turn the Justices' personal opinions into law. This practice has enabled the Court to act as an oligarchy that has usurped the Constitution and ruled the nation without ever have been elected or given the authority to do so. And what is most distressing about all of this is that the American legal community lacks a voice in opposition.
A recent study of several thousand undergraduates through four years of college found that "large numbers didn't learn . . . critical thinking, complex reasoning and written communication skills. . . . Many . . . graduated without knowing how to sift fact from opinion, make a clear written argument or objectively review conflicting reports of a situation or event. The students . . . couldn't determine the cause of an increase in neighborhood crime or how best to respond without being swayed by emotional testimony and political spin." Forty-five percent of students made no significant improvement in their critical thinking, reasoning or writing skills during the first two years of college, and after four years, 36 percent showed no significant gains. The only thing surprising about this study is that people were surprised by its results. How many members of Congress, most with at least one earned college degree, have demonstrated these abilities, especially the ability to keep from being swayed by emotional testimony and political spin.?
But what is most bothersome is America's legal community, including its academics. What keeps the legal community from vociferously refuting and mocking the logically absurd opinions of the nefarious nine? Is it cowardice within the legal community or a demonstration that lawyers are merely hired guns for the their clients without brains or values of their own? Do they, in fact, comprise the 36% of gradates who fail to learn these skills in college? The plethora of law reviews regularly published should be replete with analyses of the Court's opinions, but they are not, which is why, perhaps, lawyers have for centuries had reputations as jackals (read Erasmus) and are even today the butt of unending deprecating jokes; yet our nation is, in fact, run by nine of them.
This is how empires fall: complacency joins hands with self-aggrandizement. There are four other subtle processes at work in the dissolution/erosion of the system's intellectual foundation:
1. As we shall see in the following chapters, Elites and underclass alike respond to the visible crumbling of the empire with a sublime complacency grounded in vague appeals to some mythical past spirit which will magically arise to enthuse a torpid, self-absorbed Elite and populace. In the U.S., appeals are made to "the can-do spirit" which powered America's past confidence and resolve.
Unfortunately for both the Elite and the underclass (both of whom depend on State largesse and a vibrant middle class paying high taxes), rousing but ultimately empty appeals are no substitute for difficult choices, trade-offs and sacrifices.
2. Even as interconnected crises afflict the empire, the Elite moves deeper into an increasingly visible self-aggrandizement marked by pervasive over-reaching. Having mastered its influence over the State, the Plutocracy finds few limits or obstacles to its over-reach.
This over-reach has the characteristics of a positive feedback loop: the more wealth the Elite controls, the greater its influence, which then enables even more wealth acquisition and ever greater influence, and so on.
3. As a result, the interests of the Plutocracy and thus the State diverge from the common interests of the citizenry as a whole. This widening structural imbalance of power creates a profound cynicism and political disunity which cripples any attempt at structural solutions.
Given that any real solution would reduce the Plutocracy and State's share of the national income, both the Plutocracy and the State (including all those dependent on its various fiefdoms) resist all structural change, preferring stagnation and eventual collapse to any reduction in their income and power.
One of the single most powerful mechanisms at play is windfall exploitation. Windfalls in Nature are rare, and thus all organisms are selected to exploit them as fully as possible--gorging, to the speak, on the newfound riches. The Plutocracy's influence enables it to suppress or weaken various counterforces (such as regulatory systems) and thus open up windfalls designed to be exploited by the Elites. Having dispensed with troublesome barriers between finance and banking and nettlesome limitations on securities ratings and off-balance sheet assets, investment bankers opened up stupendous windfalls to be exploited.
A second, related mechanism is over-reach. As barriers to Plutocratic expansion fall and its share of national income rises, then a positive feedback loop forms: the more the Plutocracy expands, the greater the profits, which then fuels greater political influence, and so on. At a critical (and largely invisible) juncture the Plutocracy inevitably over-reaches. Over-reach takes many forms; it might be an unparalleled expansion into highly risky derivatives, or a domestic Plutocracy reaching into international speculations. The key point is that over-reach pushes the Plutocracy's financial speculations beyond a level of known, controllable risk into uncharted territory, a territory which promises stupendous profits along with equally stupendous but often obscured risk.
Over-reach inevitably pushes a stable system into instability. Once the Plutocracy's income, power and influence are threatened by the rising instability caused by over-reach, then the Elite resorts to propaganda, simulacrum and other mechanisms to mask the structural instability from the populace. The hope is that the system which so greatly benefits the Plutocracy can be restored to health, but the mechanisms of "recovery" are essentially inauthentic: simulacrums of reform, propagandistic manipulations of financial and economic data to mask the structural instability, and outright fraud/looting of State resources (bailouts, loans, etc.)--that is, publicly-funded exemptions from risk and free market forces that would otherwise require the Plutocracy to absorb the catastrophic consequences of its over-reaching leveraged gambles.
This failure to address the underlying cause--systemic over-reach and Plutocratic domination of the economy and political system--insures the instability will only worsen. As ever-more frantic attempts to protect the interests of the Plutocracy fail, then another feedback loop forms: the more sham reforms and State bailouts fail to restore stability, the more desperate and transparent the Plutocracy's attempts to retain power.
It is worth recalling that the average compensation for the 10 top hedge fund managers during the go-go years of the 2000s was $600 million each. That is not a typo. This is an excellent (if extreme) example of over-reach and the resulting windfall exploitation.
As it enriches itself via quasi-protected, semi-legal or simply officially sanctioned looting, fraud, deception, embezzlement, collusion, "sweetheart" State contracts, tax avoidance, environmental loopholes and a hundred other mechanisms of over-reach and windfall exploitation, the Elite inadvertently provides the lower classes with a compelling example of increasing wealth via fraud and manipulation rather than production.
Both the high-caste technocrats (who keep the State and economy running smoothly for their Plutocratic overlords) and the underclass sense their shares of the national income and wealth are diminishing as the Plutocracy redistributes both to their own pockets, and quite naturally they seek some way to maintain or grow their own declining purchasing power/wealth.
As they watch the Plutocrats in action, they learn the most effective ways to increase one's share of the income/wealth are looting ("gaming the system" of pensions, benefits, State entitlements, etc.), deception, fraud and embezzlement (accounting trickery, collusion, sweetheart contracts, etc.) and influence-peddling, known in the Third World as corruption, baksheesh, etc.
As the middle class increasingly runs afoul of the byzantine, Kafkesque regulations imposed by an ever-expanding State, they find that financial leverage and legerdemain is far more lucrative than actually producing goods and services.
(Unsurprisingly, the Plutocracy finds ways to gain exemptions, loopholes and special dispensations which greatly reduce the reach of troublesome regulations and taxes.)
As the middle class abandons thrift and production for financial speculation and highly leveraged debt (following the example of their Plutocratic overlords), tax revenues soar as leveraged speculation pyramids into bubbles, enabling vast expansions of a State which is inherently seeking constant expansion of its income and powers.
When these financial bubbles eventually deflate, then tax revenues plummet, as productive work and investment have declined. Why bother working hard when the big, easy money is made via leveraged speculation? Only fools would tolerate all the regulatory costs and high taxes imposed on producing goods and services; far easier to speculate in bubbling assets like housing, stocks, energy, etc.
The State responds to this drop in tax revenues by raising taxes on the remaining productive middle class, creating a positive feedback loop which reinforces the incentives to either drop out, move to speculation or game the system.
Though heavily marginalized, the underclass also copies the Plutocrats' lead by gaming whatever entitlements the State offers to buy the underclasses' silence, passivity and compliance. Thus petty corruption and fraud increases in all State entitlement programs as every sector of society seeks to suck off the maximum benefits while contributing the least possible to the public coffers.
Thus does a nation or empire built on the sacrifices and communal spirit of its citizenry degrade into a doomed culture of self-aggrandizement in which sacrifice is for suckers and looting, manipulation, fraud, embezzlement, exploitation of position/influence, debauchery of credit, maximization of leverage and the pursuit of speculative riches are the order of the day from the Plutocracy on down through the technocratic upper caste to the underclass.
4. In a society with what we might term an adult understanding of the world, it is understood that difficult trade-offs are a necessary part of life. One cannot pursue every path at once, acquire every desired object at once or learn every skill at once. Priorities must be established via vigorous, open-minded debate (either within oneself for one's own decisions or within the nation-State for larger issues) and a painful triage laid down in which some wants are set aside in favor of actual needs.
Broadly speaking, this is the result of a cost-benefit analysis. Items with increasingly higher marginal costs and increasingly lower marginal returns (a topic covered later) are sacrificed in favor of projects with low costs and high returns. This is, after all, mere common sense.
This painful "adult" process has been replaced in the U.S. by a permanent adolescence in which difficult trade-offs have been banished by stupendous borrowing. Infantile tantrums and various states of psychological denial have crowded out open-minded discussion; every want has been funded by breathtakingly massive borrowing by the State, private enterprise and households alike.
A pernicious, largely unexamined system of laws creates tremendous incentives for unnecessary actions designed to ward off lawsuits, feeding vast armies of high-caste technocratic parasites who produce nothing in the way of wealth-producing goods and services even as they burden the remaining productive sector with make-work rules and costly strategies to avoid potentially ruinous lawsuits.
In true Orwellian fashion, much of this parasitism is described by its practitioners as protecting the "little guy" from the oppressive Elite and State. But as the Plutocracy and State increase their share of the national wealth at the expense of the citizenry, this claim rings increasingly hollow.
Thus we have seniors covered by Medicare receiving multiple costly (and often useless) tests designed less to identify the active causes of disease than to shield the practioners from lawsuits and to enrich those administering the tests.
Meanwhile, millions of non-elderly citizens cannot obtain even a single test as they lack the benefits provided to the upper-caste technocrats in the State and upper tiers of the corporate economy.
Rather than face the impossibility of funding such a morally and fiscally bankrupt system of parasitism and profiteering, we as a nation have simply borrowed trillions of dollars to stave off any painful prioritizing or trade-offs.
Very few weapons systems are ever cancelled for the same reasons; the profiteering by a few enterprises and the contributions they make to lawmakers insure that every weapons system will receive funding, even if that requires borrowing gargantuan sums year after year.
This evasion of hard choices (and free market forces) via endlessly rising debt will eventually bring down the nation's currency and its debt-ridden State. The irony is that this seemingly care-free self-indulgent adolescent avoidance of cost-benefit analysis guarantees systemic collapse.
1. The great postwar income convergence (i.e the rise of the great middle class, the reduction of poverty and the relative reduction of the Plutocracy's share of national income) reverses in the early 1970s as the "true prosperity" of the postwar era ends and is replaced by income flowing increasingly to the top as stagflation, globalization and the decline of the dollar gut the purchasing power of the middle class.
2. The rising productivity of the 50s and 60s slips to the flatline through the 70s and early 80s, only picking up again as computer software and hardware revolutionize the back office, sales, manufacturing, just-in-time shipping/production, etc.
3. Concurrent with this gradual return to increasing productivity is the rise of finance as the key profit-center of corporate America. As income skews ever more heavily to the top 1%/5%, then capital (productive assets) become ever more heavily concentrated in the hands of the rentier-financial Plutocracy. The top 1% now owns some 2/3 of the nation's entire productive wealth.
4. As profits rise (from rising productivity) then the profits flow not to wages (which remain flat to down 1975-2009 for all but the top 10% upper-caste professional class) but to those who own the capital.
5. As the middle class experiences a decline in their income and purchasing power (for reasons cited above: declining dollar, rising income disparity, and wages falling due to global wage arbitrage) then they turn more and more to borrowing and ever greater debt to fund what they have been brainwashed by the media to believe is "the American dream" of imported luxury goods, bloated homes, vacuous cruises, etc.
The only other mechanism available to the middle class to increase household income is for Mom/Aunt/Grandmom to enter the workforce, which she does in the tens of millions, with sociological consequences which are still unfolding.
6. This advert/media-driven desire to borrow to fund the "good life" is hugely profitable to the money-center and investment banks, which expand rapidly into mortgage securitization, derivatives and consumer credit to the point that they come to dominate corporate profits.
7. The financial Plutocracy, observing that actually producing goods is not very profitable unless you can fix prices as per ADM (Archer Daniels Midland) or gain government subsidies and tax giveaways (oil lease depreciation, etc.) sinks its capital into the FIRE economy (finance, insurance and real estate), eschewing real-world investments as comparatively unprofitable.
Though rarely noted, this is a longstanding trait of capitalism stretching back to 1400-era Venice. When trade became less profitable than mainland farmimg, the Venetian Elite stopped funding trade and bought farms on the mainland. As a side effect, Venice ceased to be a military and trading power. But the Elite remained immensely wealthy.
8. As the tech bubble expands, middle-class investors see the Plutocracy (those with enough capital to qualify as angel investors and vulture, oops, I mean venture capitalists) reaping huge gains, and they enter the dot-com stock bubble buildup with a vengeance.
9. In a happy accident, the Soviet Empire collapses just as productivity begins its computer-fueled rise in the U.S. In a so-called Unipolar World in which U.S. military, political and financial influence is unrivaled, non-U.S. investors seek the relative safety and high returns (based on appreciation of the dollar) of U.S. financial instruments.
10. The dot-com bubble implodes in a speculative meltdown, and retail investors (a.k.a. the middle class 401K investors) are devastated. The ephemeral wealth they once possessed, however briefly, fuels their speculative desire to get into the next get-rich-quick game, which just so happens to be "something everyone understands:" real estate and housing.
11. Having exhausted the dot-com play, Plutocratic capital is seeking a new high-profit home. The miracles of derivatives (CDOs, credit default swaps, etc.) and securitized debt (mortgage tranches, etc.) open up vast new opportunities for leverage, off-balance sheet shenanigans and outright fraud/debauchery of credit. As chip wafer plants disappear from Silicon Valley (too dirty, too costly, etc.) then they're replaced with paper: mortgage-backed securities. (Over-reach and windfall exploitation writ large.)
12. Sniffing gold in them thar exurban hills, the under-capitalized and over-indebted U.S. working class and middle class reach for the chalice of easy-money gold: leveraged real estate. (Over-reach and windfall exploitation writ small.)
13. With the Federal financial regulatory agencies in a Republican/Democrat-enforced somnambulance, the coast is clear for brigands, shysters, fraudsters, con artists, liars, cheats, and assorted riff-raff in the realty, mortgage and appraisal businesses, who all feed the ravenous maw of the money-center banks' apparently limitless appetite for real estate assets to securitize and leverage in exotic and stupendously profitable ways.
14. For a wonderful five years circa 2001-2006, the game is afoot and no-down-payment Jill and $100 million bonus Jack are immensely enriched. Meanwhile, the underlying real economy is becoming ever more imbalanced and ever more fragile as real production and real productivity plummet as everyone rushes to the speculative riches of exurban McMansions and malls.
15. Elite and middle-class interests seem to converge during this speculative mania: everyone is benefitting from the real estate bubble except the poor, who are bought off with minimal social welfare programs and endless entertainment (via TV) then safely ignored, as they don't vote or spend.
But this convergence was illusory; while the Plutocracy and State functionaries benefitted (via stupendous capital gains for the former and vastly richer pension promises for the latter), the private-sector middle class is in essence the bag-holder: when the newfound 'wealth" in housing and stock market gains vanish, it is the middle class wealth which is destroyed en masse.
16. This last best speculative leveraged credit bubble pops (alas, exponential expansion of credit cannot go on forever), gutting the stock market which had grown utterly dependent on leverage, debt, gamed/fraudulent accounting and asset bubbles for its rising profits.
17. Doubly devastated by the implosion of housing and their stock investments (mostly in 401K and IRA retirement funds), the middle class faces the terrible consequences of its 26-year stupor of ever-rising debt and leverage. Alas, the Emperor's clothes are revealed as remarkably transparent.
18. Having borrowed and squandered trillions of dollars since 1981 on unaffordable entitlements, military misadventures and assorted bridges-to-nowhere pork spending, the Federal government (The Fed and the Treasury) finds that its ability to borrow its way out of its current debt hole somewhat annoyingly limited. The rest of the world has finally caught on to the con, and Chinese university students are openly mocking Treasury Secretary Geithner's Orwellian claim of "we support a strong dollar." The rest of the world shuns Treasury debt and works to create an alternative reserve currency, shutting down the "dollar con" (we take your tangible goods and give you paper in return.)
19. With the global media concentrated in a scant few corporate hands (less than 10), this pulling away of the curtain is deleted/excised from media coverage in a ruthless campaign of pure propaganda.
20. As the wheels fall off the U.S. economy and the bubbles cannot be re-inflated, fruitless attempts at holding back the tide with incantations (stop, tide, I speak for the U.S. Treasury!) and loopy sand castles (the bottom is in, buy now!) abound. Unresponsive to propaganda, the real world grinds down into a global Depression without visible end.
If we do nothing, we will be swept along with the Great Descent. Alternatively, if we want to prosper, then we must first gain an integrated understanding of all the interlocking crises we face.
cui bono (to whose benefit?)
self-organizing networks and groups
high-caste, upper-caste (technocrat/government employee class)
when belief in the system fades
Chapter Two: Contexts and Causes
Any guide claiming to be practical must first present all the contexts and causes of the interlocking challenges we now face. Without such an integrated understanding, all response planning is like building a house on shifting sand.
If we are indeed entering a multi-decade Great Transformation, then as prudent as it is to stockpile a few months of food and supplies, that will obviously not get us through the Transformation, either as individuals or as communities. We need a thoroughly integrated understanding before we can fashion a response that will make the Transformation a positive one. Our goal is a sustainable, productive economy and a full appreciation of the fundamental rights to life, liberty and the pursuit of happiness.
I know it is tempting to skip ahead to the list of proposed responses, but they won't make sense unless we ground ourselves in the contexts of our planet, era, society and economy.
First, we must identify the fundamental contexts; second, critique the status-quo understanding of the "problems" and "solutions," and then third, present solutions which flow directly from our critique.
Our goal is a critique so incisive that the solutions become "obvious," that is, they are implicit in the critique itself. Not all critiques manage this; the grandfather of cul-de-sac critiques was Marx, whose profound critique of capitalism did not produce any coherent alternative system.
It is also important to understand that every "solution" benefits someone, and the key to establishing that "solution" is to frame the "problem" in such a manner that the self-serving "solution" becomes essentially inevitable. This is why we constantly ask: cui bono, to whose benefit?, and why we take such care in analyzing how "problems" are being framed by the status quo.
It is my thesis that the standard (status quo) understanding of our "problems" is heavily promoted precisely because it benefits an elite at the top of the income/asset pyramid which I call the Plutocracy.
This carefully designed and marketed understanding of the "problem" is presented in ways which can only be described as artful propaganda. The chief goal of this relentless marketing is to convince you that the "solutions" being presented are in your self-interest; that is, that they will benefit the entire nation (if not the entire planet, too), including you.
The possibility that these "solutions" exclusively serve the interests of a small Elite is rarely considered, for the obvious reason that the question itself threatens the entire understanding of what constitutes our "problems" and the Elite's "solutions."
A key feature of the current era of interlocking crises is that the interests of the Plutocracy are increasingly diverging from the interests of the society as a whole. This divergence must be masked by simulacra and propaganda, lest the citizenry become aware of the widening split and start demanding that the Plutocracy and the State relinquish some of their ever-growing share of the national income.
By way of example of such divergence, consider globalization as a catch-phrase. We are constantly bombarded with shrill warnings that any limits on globalization will cause a worldwide Depression akin to the 1930s. Yet this is disengenuous for a number of reasons.
To the degree that trade is globalization, then the world has been globalized for thousands of years; Imperial Rome, India and China were trading partners. But "globalization" covers not just wealth-creating trade but also the most one-sided exploitation of materials and labor. The one catch-phrase conveniently covers both beneficial commerce of the sort which has gone on for thousands of years and exploitive looting of local resources by global forces.
So when hardwood forests are leveled and the seas poisoned, do the local people really benefit as much as promoters of "globalization" insist? Do all the workers displaced --not just in advanced industrial economies but in Africa as well--really benefit? Or is the entire intellectual framework of "globalization" essentially a front to provide cover for the enrichment of the few at the expense of the many?
The intellectual framework which supports the Elite's dominance and makes it apparently "natural" or "beneficial" is the Plutocracy's key defense; and the limits of human language and thought make it relatively easy to undermine reasoned skepticism.
Thus a defense of "capitalism" turns out not to be an appeal for open markets but the exact opposite, an enabling of crony capitalism. The defense of globalization is not a promotion of the exchange-of-surplus-production that characterized trade for millennia but of a targeted grab-and-run exploitation of vulnerable resources and peoples.
Regulations to curb the Plutocracy are undermined by the Plutocracy pursuading the State that "these are the regulations we want," that is, a simulacrum of regulation that imposes virtually no limits on Elites but effectively strangles the middle class and keeps it "in its place."
Given the enormous benefits to be gained by this relentless obfuscation, mystification and superficially appealing framing of contexts and problems, we must prepare ourselves for a difficult analysis. Our first step is to ask cui bono, to whose benefit? Our second step is to tease apart the intellectual defenses of over-reach and income redistribution, and consider how the status quo dismisses our actual "problems" as mere bumps in the technocratically maintained road to consumerist Nirvana, i.e. "prosperity."
One often effective technique deployed to quell questions about Elites' dominance or self-interest is reduction: that is, reduce the situation to "us versus them" or an "all or nothing" conflict, or frame it as an extension of a current situation which can be addressed by modest tweaks of current policies.
Thus Peak Oil is not a problem as we have 400 years of coal, etc. Those in charge of the machinery have a huge stake in technocratic "solutions" which leave power, profit and consumption structures firmly in place.
Identity itself can be reduced; thus a once-active citizenry is reduced to "consumers." As long as "consumers" benefit in any way, then what might be lost to workers, voters, citizens, etc. can be cast aside as meaningless.
Since profits are made by selling something to consumers, it's extremely handy for all other roles and identities to be extinguished, diminished or marginalized.
The key point here is that dominance flows directly from an intellectual framework which constructs and justifies that dominance as natural and beneficial to all believers. In this sense consumerism is in effect the de facto state religion of the U.S.A., and it directly benefits the Elites who own or control the vast majority of the nation's financial wealth, income, law-making machinery and productive assets.
The second point is that it is impossible to make a clear-eyed assessment of the actual problems and challenges we face when our understanding of those realities is constantly being massaged, manipulated and "framed" out of existence by an elite-dominated media. (Most of the world's broadcast, Internet and print media is controlled by a few global companies.)
It is important to understand that the low-level conflict, confusion and anxiety created by the media (blatantly rabble-rousing entertainment such as Rush Limbaugh being passed off as political commentary, for instance) are directly in the interests of the Plutocracy.
While every era of crisis is unique, authors such as David Fischer (The Great Wave: Price Revolutions and the Rhythm of History), Jared Diamond ( Collapse: How Societies Choose to Fail or Succeed ) and Joseph Tainter ( The Collapse of Complex Societies) have carefully researched how cycles of price, conflict and resource depletion/exhaustion tend to repeat as human populations rise beyond the carrying capacity of their environment.
I address these cycles in Food Shortages, Rising Prices, Stagnant Wages:
As we seek to understand long-wave cycles, we must also recognize that the crises of our era are unique even as they are manifesting within historical cycles.
A number of recent books have described the unique set of challenges we face: for instance The Long Emergency: Surviving the End of Oil, Climate Change, and Other Converging Catastrophes of the Twenty-First Century (James Howard Kunstler) and Financial Armageddon: Protecting Your Future from Four Impending Catastrophes (Michael Panzner). Other books have addressed critical environmental, energy and demographic issues: The Future of Life, Beyond Oil: The View from Hubbert's Peak, Fewer: How the New Demography of Depopulation Will Shape Our Future, The Coming Generational Storm: What You Need to Know about America's Economic Future, The Rhythm of War and The Fourth Turning.
Given this wealth of material, I hesitate to even attempt a short summary of all the interwoven structural challenges of our era. But the key context is this: financial and resource crises are not new; they are recurring features of human civilization. But many aspects of our era's crises are unique in all of human history: never before have we faced depletion of fossil fuels and the population pressures of over 6.5 billion humans to feed, house, clothe, transport, heal and care for in their old age. Never before have we as a species been so dependent on fragile supply chains and fast-depleting global resources.
Consider the overfishing of the world's oceans; what once seemed inexhaustible—the supply of fish—is now heading to near-zero.
Ironically, this cyclical nature of crisis lends itself to the emotional power of complacency: if we managed to get through those crises, then we can do it again, the power of human innovation will save us, etc. Unfortunately, there have been many times when the human populace did not "get through" the crisis; populations collapsed to mere shadows of their levels reached in the years of rising abundance.
Current structural challenges include:
1. demographics (promised retirement benefits are unaffordable)
2. global financial deleveraging (renunciation/write-off of debt)
3. high-cost advanced economies, "Planet of Slums" developing economies
4. rising interest rates (shortage of surplus capital)
5. de-scaling/disruption of entrenched industries/State fiefdoms by the Web
6. scalability traps/structural job losses in all economies
7. crippling regulation and overhead burdens on small entrepreneurs
8. fossil fuel depletion (Peak Oil)
9. "head-fake" drop in energy costs removes incentives for alternative energy
10. political disunity; elites' interests diverge from those of the society as a whole
11. rising income disparity
12. depletion of fresh water, ocean and soil resources
13. climate change (weather extremes, rising sea levels, etc.)
14. increasingly drug-resistant bacteria and viruses
15. rising chemical and industrial pollution levels (air, water, soil, etc.)
16. increasing availability of bioweapons and nuclear weapons
I summarize the four primary cycles in my book Weblogs & New Media: Marketing in Crisis:
1. Peak oil, or the depletion cycle/end-game of the global economy's complete dependence on inexpensive, readily available petroleum/fossil fuels.
2. The cycle of credit expansion and contraction (approximately 60-70 years), which is now beginning the transition from unsustainable credit expansion (bubble) to renunciation of debt (credit collapse) and global depression.
3. The generational cycle (4 generations or approximately 80 years) of American history which leads to nation-changing social, political and economic upheaval. (The American Revolution: 1781 +80 years = Civil War, 1861 +80 years = 1941, World War II + 80 years = 2021)
4. The 100+ year cycle of price inflation and stagnation of wages' purchasing power which began around 1901 is now reaching the final stage of widespread turmoil, shortages, famine, war, conflict and crisis.
Without a firm understanding of the cyclical nature of human history and the unique challenges of our era, we are hard-pressed to escape the comforting illusions of complacency and fatalism.
A key point is that the above crises (or potential crises) are not discrete phenomena which can be solved in piecemeal fashion but rather interlocking, overlapping and in some cases reinforcing problems which range from long-term depletions to volatile geopolitical tensions which could burst into conflict. Over an intermediate time scale, a weather crisis such as extended drought could cause a food shortage which might then put a match to a smouldering geopolitical tenderbox.
The complacency and misplaced confidence of the status quo render these unpredictable interactions all the more combustible because so little has been done to anticipate the potential domino effect of these global crises.
One of the factors which renders the intersecting crises of the next 15-25 years so difficult to predict is the multiple time scales at work. A global petroleum shortage, for example, could stagger the developed world in a very short time span as hoarding and govermental rationing would quickly magnify the disruptions.
Food shortages might develop over a longer period of months as drought, energy shortages and geopolitical issues caused a sharp decline in grain production and/or shipping.
A nuclear war between two long-standing adversaries such as India and Pakistan could erupt in a matter of weeks should internal crises trigger border tensions. China might suddenly deem the moment ripe to conquer Taiwan with military force, loosing a cascading crisis which could lead to limited or even nuclear war between the U.S. and China.
Any war involving the Mideast, East Asia or the U.S. might dramatically effect oil, currencies and trade which would quickly impact economies, food supplies and the psychology of instability/fear/hoarding.
Ironically, the great benefits of globalization--long oil-dependent supply chains leading from distant factories to free-spending debt-fueled Western consumers--can reverse with extraordinary speed as these very same fragile supply chains degrade or shatter in moments of energy, finance or geopolitical crisis.
Very long-wave crises are only visible to historians and those willing to root around obscure data. Thus the slow, steady redistribution of national wealth away from the middle class into the pockets of the State and Plutocracy is barely discernable. Yet just because this movement of wealth, capital and income appears glacial does not mean the effects are insignificant; on the contrary, this over-reach by the State and Plutocracy at the expense of the tax-paying middle class is in some ways as important a cause of collapse as more immediate crises such as Peak Oil and the depletion of fresh water acquifers.
That crises unfolding in different time scales will overlap is easily predictable, but the precise intersection or overlay of various crises is entirely unpredictable. Some geopolitical tension might close the Straits of Hormuz or Malacca, and the resulting restriction of sealanes and oil tankers might trigger some other unstable crisis.
It is also easily predictable that any one nation and its citizenry will have limited control or influence over a truly global crisis. We can also safely predict the complacent and/or fatalistic nations and citizens will suffer more than those who proactively anticipated the likelihood of interlocking, reinforcing crises occurring within the next decade or two.
Ideally, such proactive anticipation should involve households, communities and the nation at large. But if the State (government at all levels) is in denial or deadlock, or crippled by debt or otherwise insolvent, then households and communities will also have to prepare themselves for dwindling State aid.
Even if the State does set aside prudent reserves, these are designed to smooth short-term crises, not semi-permanent declines in the FEW essentials (food, energy, water). For instance, the 600-million barrel U.S. Strategic Petroleum Reserve holds about one month's supply of oil (20 million barrels a day consumed in the U.S. X 30 days). While this is certainly a reassuring number in a short-term crisis, it would be foolhardy to think a one-month's supply will prove to be anything more than a stopgap should oil imports plummet over the long-term.
As we shall see later, various feedback loops (both positive and negative) are at work as each crisis erupts; in some scenarios negative feedback might stem the crisis; in others, a domino effect could transpire, toppling vulnerabilities which encircle the globe.
This is why time-sensitive predictions are foolhardy, both those predicting "the end of the world as we know it" and those spouting the "it will all work out just fine" complacency favored by the mass media and Plutocracy.
What we can predict is that fragile systems without redundancy are vulnerable to disruptions which could then freeze up or degrade the entire supply chain. If these impact the critical FEW resources (food, energy, water) then the disruption can quickly expand to other systems which were previously thought secure/safe.
System prone to positive feedback (the runaway self-reinforcing crisis) are inherently more vulnerable to collapse than those with multiple negative feedbacks--forces which counteract the trend.
The problem for the complacent is that time scales, vulnerabilities, overlap and interactions differ for each crisis. Thus a fast-moving crisis with slow negative feedback (correctives) could race beyond the reach of corrective action, triggering other fast-spreading crises in its wake.
In a world so deeply dependent on cheap, abundant liquid fossil fuels for everything from transportation to food, the vulnerability and interdependency of all energy-dependent systems to shortage or disruption is acute and works across all time scales.
Standard-issue economists tend to treat oil/fossil fuels as a commodity like any other; when demand rises, new or alternative supplies will emerge once they become profitable. But this model is utterly misleading, for liquid hydrocarbons are special in three distinctive ways: they contain very high energy densities, they are stable at normal temperatures and they are readily transportable via pipeline, ship, train or vehicle. No other energy source possesses all these traits, and those that get close (lithium ion batteries, for instance) are very costly to manufacture and are dependent on dwindling metals/ores (in this case, lithium).
Supposedly "renewable" sources like biofuels and "unlimited" sources like shale oil require so much energy to produce, process and transport (when calculated in equivalent energy densities) that the net energy (useful energy produced minus energy used in production) is actually rather paltry.
Until very recently, oil had the distinct advantage of being cheap to extract. Super-giant fields under pressure gushed oil for as little as $1 per barrel in raw costs. But the super-giant fields which supply much of the world's oil now require costly extraction technologies such as water or gas pressurization. New production has been located offshore, in deep water or in extreme climates like the Arctic Circle. It is no longer cheap to locate, extract or process oil or oil equivalents like shale oil.
Oil's most unique charcateristic is that every other industry in the global economy depends on oil or oil equivalents: transportation, military, agriculture, tourism, and on and on. Thus a global shortage or disruption will quickly cascade into every corner of the global economy, for new supplies of oil cannot be brought on line quickly (five years would be incredibly quick, ten years would be average). Even worse, new production is not even replacing fields in decline; that is the essence of Peak Oil.
As for alternatives: currently, all alternative energy production, including both "old technology" like hydropower and new wind, solar, biofuel and tidal technologies, account for considerably less than 5% of the world's energy consumption. Thus a ten-fold increase in alternative energy--a scaling up which is not yet even technoloigically feasible, and one that in any event would cost trillions of dollars to accomplish--would leave the global economy totally dependent on petroleum for 2/3 of energy consumption.
Thus any model which views energy/petroleum/fossil fuels as subject to the same forces as other commodities such as copper is fatally flawed. Every industry and financial sector ultimately rests on cheap, abundant petroleum. Once petroleum is no longer cheap or available in sufficient quantity to meet demand, then the energy domino will topple all the rest in rapid succession.
The unique commodity petroleum is thus the very foundation of interlocking/reinforcing crises on a global scale.
For more on these topics, please read John Michael Greer's two books, The Long Descent: A User's Guide to the End of the Industrial Age and The Ecotechnic Future: Envisioning a Post-Peak World.
Within each context, various forces are at work to resist and accelerate trends. These forces include feedback loops (both positive and negative), marginal returns and the illusion of incremental change. Negative feedback can be understood as systems with built-in stabilizers, while positive feedback can be understood as self-reinforcing.
I will cover ontological forces and analytic tools in Chapter Seven.
It is tempting to hope that all the structural environmental challenges will "sort themselves out" or be solved by some new technology that magically scales from the lab table to global ubiquity. But the realities do not lend themselves to either benign neglect (that is, just leave everything alone and it will rebalance itself naturally) or technological "fixes."
The human population has exploded in a geological eyeblink from several hundred million to 6.5 billion. In terms of energy and resource consumption, each resident of the First World (Europe, North America, Japan) has an environmental impact up to 100 times larger than that of a Third World person. As 2 billion people in China, India and elsewhere aspire to an energy-intensive consumerist First World lifestyle, the reality that the planet does not have the resources to support 3 billion middle-class consumers is readily visible.
The list of global environmental ills is well-known. Overfishing driven by insatiable demand and politically popular subsidies of national fishing industries has driven the world's fisheries to the point of collapse. The technological "fix" is aquaculture/aqua-farming, but artificial fisheries spawn another entire host of their own challenges to long-term sustainability.
The depletion of cheap, easy to reach oil is also well-known; less well-known is that all the alternative energy sources in the entire world—geothermal, hydro, solar, wind, tidal, etc.--make up less than 5% of global energy supply. While natural gas and coal can fill some of the gaps as oil supply falls, neither of those fuels is endless, either— and "clean coal" is yet another technology that is promising in the lab but not scalable globally without horrendous cost.
Fresh water aquifers are being drained everywhere from the American southwest to China, and there are no sustainable ways to compensate for this drawdown of irreplaceable fresh-water resources.
Schemes to desalinate vast quantities of seawater requires stupendous amounts of energy; a recent plan by Saudi Arabia would burn fully 1 million barrels of oil a day—1 million barrels that could no longer be exported to the U.S.
Regardless of what we believe the causes might be, glaciers are melting at increasing rates. Once the Himalayan and Andean glaciers vanish or recede to mere patches of ice, the rivers 2 billion people rely on for irrigation water will become seasonal.
Add in massive soil erosion in China and elsewhere, extended droughts in Australia, etc., and you get a picture of global resources stretched to the breaking point.
The more you know about the technical details of supposedly miraculous technological "fixes" like desalination, tidal energy, algae-based fuels, etc. etc., the more you understand that very few if any of these emerging technologies may "scale up" to global applications.
In other words, algae-based fuels can work just fine on the rooftop of a university lab, but the hard part is scaling it up to produce 1.7 billion gallons of gasoline-equivalent liquid fuel a day—which is only half of the world's current consumption of oil. (Total global consumption of oil, 80 million barrels a day, so 40 million barrels a day X 42 gallons/barrel.)
Add these realities up and the context is a potential crash of global food and fresh water supplies, exacerbated by energy shortages. As authors such as Jared Diamond have explained, eras of resource depletion/drought often trigger unending war/conflict between competing groups and nations.
In essence there are four interlocking crises: environmental, energy, financial and geopolitical. Excellent sources abound on these topics: The Future of Life, Beyond Oil: The View from Hubbert's Peak, and The Long Emergency: Surviving the End of Oil, Climate Change, and Other Converging Catastrophes of the Twenty-First Century come to mind of the many useful texts in print.
The "prosperity" of the past two decades was based not on savings, investment and productivity, as the mainstream financial media and think-tank punditry maintain, but by extremes of speculative credit, leverage, debt and risk-taking, all enabled by a financial system based on obfuscation, deception, embezzlement, fraud, abuse of credit and grossly inflated asset valuations, a.k.a. bubbles.
This debt binge was fed by a marketing-based consumerist culture in which shopping and acquisition became recreation, therapy, self-fulfillment and status all in one profit-driven package.
Compounding the collapse of this debt-based bogus "prosperity" are two long-term trends: the end of cheap, abundant fossil fuels which enabled inexpensive global supply chains and tourism, and the "end of work," a global contraction of paid labor.
The intersection of various long-term political and financial trends is effectively squeezing the middle class, which the State (government) depends on to pay most of the taxes. Caught between the over-reach of both the state and its elites (the Plutocracy) and the end of debt-based, cheap-oil "prosperity" which enabled it to maintain an illusion of wealth, the middle class is being squeezed to the breaking point.
I address this topic in a later chapter.
The U.S. Declaration of Independence recognizes the inalienable rights to "life, liberty and the pursuit of happiness." Oddly enough, happiness turns out to be a slippery concept, and much of what Americans spend their lives pursuing does not actually increase their happiness. Indeed, it is self-evident that the stress levels, medication usage and miseries of the "American lifestyle" even in times of prosperity are far higher than one would expect were happiness as abundant as cheap consumer goods.
And even prosperity itself turns out to be rather more slippery than rising GDP or other metrics would suggest. It seems that much of what passes for "essential accoutrements of prosperity" such as large suburban homes, multiple vehicles and closets crammed with clothing do not bring happiness to their owners. Rather, they are largely the mirage-like results of marketing propaganda conjured up to generate profits, not life satisfaction or happiness.
Indeed, were we to travel back in time to 1870s San Francisco, for example, we would find people feeling quite prosperous even though they lived in what we would now consider relatively primitive poverty: no electricity, no vehicles except public streetcars, (On August 2, 1873, the inventor of the San Francisco cable car, Andrew Hallidie, was the system's first passenger), trains and horse-drawn wagons, primitive healthcare, costly consumer goods, etc.
Thus the entire notions of prosperity and happiness must be examined objectively before we can even say with any reliability what the words actually mean.
Our responses to these interwoven, reinforcing challenges of our era can be organized into three inter-related levels:
Each level requires different skills, resources, inputs and solutions. I will cover these topics in the second section.
politics of experience
simulacrum of thinking
FEW resources (food, energy, water)
Chapter Four: Complacency and Fatalism
Let's begin by considering Context One: Human Nature in more depth. Entire libraries have been written on the subject of human nature, but for our practical purposes those which probe humanity's "default settings" such as Jared Diamond's The Third Chimpanzee: The Evolution and Future of the Human Animal and E.O. Wilson's Sociobiology: The New Synthesis are the most useful.
Although we can slice and dice complex human responses in hundreds of ways (for instance, Who am I? The 16 Basic Desires that Motivate Our Actions and Define Our Personalities), for the purposes of a stripped-down practical analysis we can group our "default responses" into four basic categories: inertia, fear/panic, casting our lot with a "Big Man"/leader or fatalism/giving up.
While we can collectively sacrifice short-term gain for long-term security, as Jared Diamond describes in his book Collapse: How Societies Choose to Fail or Succeed, it is equally likely that a society will continue down the path to complete collapse. One of the key conditions Diamond identifies is a society's understanding of its primary challenges and dilemmas. Those which did not grasp the limitations and restricted options failed. So our first step must be to adequately understand the limitations and options we face while avoiding the denial, apathy and complacency which will doom our economy to collapse.
Since we cannot sustain the emotionally charged state of fear/panic ("fight or flight") for long, decisions made in this instinctive mode tend to be rash, hasty, impulsive and poorly planned. Thus the key is to recognize this mode and consciously avoid making decisions with long-term consequences while in the grip of this "instant response" survival-mode.
Humans, like our relatives the chimpanzees, are social animals. Like chimps, we are "wired" to form groups and select/follow leaders who reach their high status by offering something back to the community: protection, "potlatch" type sharing of wealth, etc. We will examine this political/social response to crisis in a later section.
But humans also have the capacity to be alone, like our other primate relatives the orangutans. Thus withdrawing from the community has deep roots in human nature and history.
Being creatures of habit—and habits are a survival mechanism, for why change anything when "everything's working"?-- humans prefer the status quo until crisis forces us to change. This inertia/attachment to the status quo is complacency, which acts as a cognitive and emotional attractor or trap, as does fatalism/withdrawal.
Complacency and Fatalism
Complacency and fatalism are both seductive cognitive traps and emotional attractors which we have to avoid if we are to think clearly. Each is an attractor because each is highly appealing for several fundamental reasons.
1. Human nature veers between these basic social/anti-social emotions: complacency/status quo (inertia) and fatalism/resignation (withdrawal).
2. History reveals these attractors (complacency and fatalism) were active in previous great declines/collapses, such as the Roman Empire circa 400-576 C.E. (see below)
3. Humans prefer simplistic "answers" to challenges/problems, and a blind faith in the status quo or resignation both fit the bill.
Complacency is best understood as what's expressed in the phrase, "Don't worry, it wil l sort itself out on its own." In stable "normal" times, this complacency is usually rewarded; various corrective feedback loops within complex systems kick in and problems are met with countermeasures that act to restabilize the system.
But in very dynamic eras, destabilizing factors overwhelm the usual corrective feedback mechanisms, and things do not sort themselves out. Dramatic, even radical action must be taken. In these times, complacency is not a practical or helpful strategy: it is a soothing but dangerous cognitive trap which guarantees the believer will be unprepared for the challenges just ahead.
In the cognitive trap of fatalism, we recognize the risks/dangers of the situation but feel helpless to correct or solve the problems. In this trap, we remove ourselves from action and give up, dooming ourselves to being swept up by whatever passing winds arise.
The goal here is to avoid these traps, analyze the challenges we face clearly, and then plan out a simple but interconnected three-part strategy for not just survival but prosperity and security.
Complacency can take many forms. For instance, a person who has prepared themselves for a doomsday collapse of civilization, i.e. "The end of the world as we know it" (TEOTWAWKI) may well find themselves ill-prepared for an equally probable slow decline in social cohesion and living standards. That is, living conditions in highly developed nations may descend not to a Collapse of Civilization into Chaos but to Third World levels of stable impoverishment.
Stable impoverishment describes a system which produces little national surplus but which produces the necessities of life in enough abundance that the instabilities of famine are generally stayed. Radios and TVs are in sufficient supply to offer the populace modest entertainment, and the State is neither burdensome nor repressive, as taxation cannot exceed what little surplus remains after minimally feeding, clothing and transporting the populace.
The key feature of stable impoverishment is the lack of incentives to any class to disrupt the status quo. The Elites dare not risk insurrection and the citizenry below dares not risk famine or turmoil which might lead to famine. Another way of describing stable impoverishment is that the ruling Elites do not over-reach but remain respectful of maintaining a stable division of national income.
These divergent but equally undesirable options, TEOTWAWKI and stable impoverishment, highlight the need to ground our analyses and expectations in history-- not because it repeats, but because it rhymes. No one can know the future, so we must be cautious about putting all our eggs in one basket/scenario. Prudence suggests always maintaining a skeptical point of view: what if we're wrong? What's our Plan B/alternative strategy?
Fatalism is similarly devious. People who withdraw from society are certainly taking action, but they have surrendered the opportunity to influence the outcome positively: that is fatalism of the first order.
If you're reading this, then you have already advanced beyond the naïve complacency of "don't worry, everything will work itself out" which is mesmerizing large segments of our citizenry. You may well be a member of The Remnant—more on that later.
The Politics of Complacency and Fatalism
In Greek mythology, two sea monsters Scylla and Charybdis forced sailors into an unsavory choice of facing one or the other when navigating the Strait of Messina. In modern vernacular, we might say the sailors were "between a rock and a hard place."
Our "default mode" responses were selected for a hunting-gathering lifestyle; humanity has pursued agriculture for perhaps 5% of its long history as homo sapiens sapiens and dealt with advanced technology for perhaps 1% of its history.
The consequences of these unconstructive responses can be seen in the advanced civilizations (Mayans, Rome, etc.) that collapsed despite a wealth of experience and knowledge.
As a result, even as we work at devising rational, long-range solutions, we will be fending off the "monsters" of complacency and fatalism every inch of the way.
Analyzing challenges and then plotting out practical solutions is arduous, precarious work, as the answers are rarely clear and painful trial-and-error attempts are often the only way forward. Rather than engage in this difficult process, many find doing nothing (complacency) or withdrawing (fatalism) much less risky and demanding. This inaction feeds on itself, setting up a point-of-no-return that could have been avoided by bold action when the problems were first visible.
Humans cannot remain in the high-stress "fight or flight" status for long; we seek a resolution or equilibrium, both intellectual and social. Thus the most constructive approach is to assess the challenges in a clear-eyed fashion, hashing out the strengths and weaknesses of each major strategy. Then make a decision, and commit the time, resources and unity the strategy needs to succeed—or fail conclusively, perhaps, at which point make a reassessment based on what's been learned from the experience.
At every point in this process, two new temptations arise: to either leap erratically from strategy to strategy as a short-term desire ("fight or flight" mode) for instant results sabotages any long-term effort, or to tire of the process of negotiation and analysis and give up any sustained effort.
Many who do engage the challenges will do so out of raw self-interest and thus they will base their solutions on inflexible ideological (political and/or religious) worldviews that are too rigid to be practical/realistic. Rather than face the problems with an eye on actual solutions, these players seek to protect their own fiefdoms, privileges and benefits under the guise of emotionally appealing ideologies. Faced with the loss of their sacrosanct (to them) privileges and benefits, they view the battle for diminishing resources as a "fight to the death." In a real sense, their status and advantages are definitely at risk; but ironically, by focusing on their ideological opponents instead of the actual problems, they seal their own destruction by insuring the collapse of the entire system.
Paulson of Treasury, Bush of Turkeyland, The Men Who Looted America
Intel Exclusive: Trillion Dollar Terror Exposed
LORD JAMES OF BLACKHEATH, EXPOSING "TRILLION DOLLAR TERROR"
Bush, Fed, Europe Banks in $15 Trillion Fraud, All Documented
By Gordon Duff, Senior Editor
Below is one of the strangest stories in financial history, one involving the US government lying about hundreds of thousands of tons of imaginary gold, illegal wire transfers and loans totalling $15 trillion. The video, from the House of Lords, is amazing in itself.
What it doesn’t express is where the money came from though Lord James of Blackheath proves conclusively that an effort was made to say it came from a gold reserve in Brunei that, in fact, never existed.
At surface, it appears we have stumbled upon the largest terrorist organization in the world and have found original documents tracing its funding to the Secretary of the Treasury and the Chairman of the Federal Reserve, two of the top financial officers in the US. A cursory review of terrorism statues in the US indicate that all transactions we will learn about are, in fact, to be assumed “terrorist money laundering” and that the only thing preventing the immediate arrest of hundreds of top financial officials is their political connections alone.
We will be able to offer an alternative, more insights, some hard intelligence and some very valuable background that we hope will offer insightful and realistic perspectives on this amazing story.
On February 16, 2012, Lord James of Blackheath, member of Britain’s House of Lords presented evidence of an illegal scheme begun, he has thus discovered, in 2009. His documents including originals signed by Alan Greenspan and Timothy Geithner, show the illegal “off the books” transfer by the Federal Reserve Bank of New York of $15 trillion to, initially, HSBC (Hong Kong Shanghai Banking Corporation) London and then to the Bank of Scotland.
The Bank of Scotland, under royal charter but restricted from involvement in any such transactions, simply “gave” the money to 20 European banks to use in a highly profitable scheme of co-trading “fresh cut” MTN’s (mid-term notes), generating trillions of dollars in profits over 3 years, none of which is shown on books, none has been taxed or has benefited shareholders in those banks.
As Blackheath outlines, the “deception and cover” for this transfer is the imaginary seizure of 750,000 tons of gold by agents of an unspoken entity (confirmed by the highest official sources as the Bush family and CIA), the listed “source” of the money.
The government of Indonesia confirms this to be an utter fabrication and that the individual named had 700 tons of gold (about half of what Gaddafi was holding), not 750,000. It is noted that only 1,500 tons of gold have ever been traded in world history, as stated in the House of Lords.
The issues that are initially brought out, issues inconsistent with international convention and starting the reader on what is only the surface discovery of two decades of crimes involving dozens of governments are as follows:
WHERE DID THE MONEY COME FROM
There is no record of the Federal Reserve being authorized to “create” $15 trillion, equal to the entire national debt of the United States. There is, however, proof that funds that totalled, at one time, $27 trillion had been earned surreptitiously, disposed of as part of an intelligence operation against the Soviet Union and then later stolen with accusations made against George H. W. Bush as being the perpetrator.
I have spoken with two individuals, one President Reagan’s intelligence coordinator and the other Chief Legal Cousel for the Central Intelligence Agency regarding these funds. Both have indicated that former President Bush had asked that these funds, totalling $27 trillion, be transferred to his control, that threats were made by Bush and that many involved in this operation suffered, issues including murder, illegal arrest, torture and detention among them.
The individuals I am speaking of repeatedly met with President Bush over these funds, disputed his claim to them, and indicate that the majority of the funds are the property of the people of the United States.
These funds are the mysterious “Wanta” funds, monies earned through years of currency trading aimed at collapsing the Soviet Union, a plan originated by President Ronald Reagan, then White House Intelligence Coordinator Lee Wanta and CIA Director William Casey. I have been told that, while this operation went forward under President Reagan, he had ordered that his successor, George H. W. Bush not be “briefed” out of “mistrust” for Bush.
The funds themselves were earned through a scheme of trading Soviet roubles at enormous profit, a practice that eventually collapsed their government. A portion of the profits are subject to current litigation in the Federal Court of the Eastern District of Virginia, Judge Lee presiding. I have over 2,000 pages of documents on this case which shows a remainder of the original funds had been transferred to the Federal Reserve Bank of Richmond by the Bank of China, a party to the rouble trading practice, in 2006 and is claimed as totally owned by Ameritrust Corporation. That amount was $4.5 trillion of which we hold the SWIFT transfer documents.
The other monies, which “likely” make up from the unspent portion of the missing $27 trillion, may well constitute all that is recoverable.
Wanta, sole shareholder in Ameritrust, has offered his companies share, valued by the court now at $7.2 trillion, entirely to the American people as intended by President Reagan.
The origin of the additional funds, issued by the Federal Reserve during the 80s and 90s, totalling nearly $8 trillion is unknown. High ranking sources within the US government indicate that this can only be either the remainder of funds Wanta raised or profits made from them after the majority of funds were stolen.
Stories, some quite good actually, and personal interviews plus my own review of documents would place the theft or conversion of these funds initially with:
What is lacking is a source for half of these funds. Technically, they don’t exist as there is no record of them being originated by nor transferred to the Federal Reserve Bank of New York though there are clear and discernible records of them being transferred out of that institution which never possessed them, according to their 2010 audit, in the first place.
The transfer of Wanta funds, they can be assumed to have no other origin as they track into the Federal Reserve banking system while in escrow and are currently awaiting payment based on the orders of President Obama in accordance with findings of the federal court, is complicated by the Scottish transfer.
Either Wanta has claim to the entire amount or it is the property of the US government. That no effort has been made to secure the funds or enforce criminal and civil remedies to recover enough money to pay the entire US national debt and more, as with earnings, we are nearing well over $30 trillion by this time, is an indication that a criminal conspiracy with enough influence to overrule our own government is involved. Whether that “conspiracy is, as noted, the Bush family, rouge sections of the CIA or a secret society such as P2, one we can prove or others we only suspect exist, is another story.
The lack of action, here or as requested by Lord James in Britain, is, in itself, proof of both the seriousness and actuality of these events and the powers that can prevent any inquiry when irrefutable documents such as SWIFT transfers are available. In fact, Lord James has offered a wealth of documents which, when combined with the 2000 pages of Wanta “discovery” from the Federal Court, constitutes more than prima facia evidence of money laundering, conversion, terrorism or worse.
Thus, the inaction in the face of overwhelming and unquestioned proof is inexplicable.
FLOOD OF WANTA LITIGATION AND INDICTMENTS COMING
Currently, Wanta’s legal status is as technical conservator and owner of $7.2 trillion. However, as nearly half that is owed in taxes and the court settlement required Wanta to purchase $1 trillion in treasury bonds, the federal government should show positive interest other than President Obama and a few others. More are being obstructionist with the payout and exercise of $3 trillion in US debt reduction.
This is, not only illegal but an indication of conspiracy.
In addition, Russian Prime Minister Putin has communicated that he awaits the agreed upon 3% payment of Russian taxes, initially on the $7.2 trillion. Will Putin want to be paid on the entire $15 trillion plus interest and will Russia and/or the US have interest in why the Bank of Scotland transferred these funds to 20 European banks to trade in MTN’s (mid term notes) without any authorization or agreement, any participation or sharing of profits.
As the funds, at least the half which the US government can claim ownership of, combined with the interest and earnings of, would quickly put the US “in the black,” again we look at, not just the press blackout on the Wanta litigation of the last 6 years but the press blackout on Lord James of Blackheath and the wealth of damning documentation he submitted to Parliament.
Nothing has been done since, it is as though the proof submitted was so dangerous that those moments in time have been erased by a mysterious g-dlike power.
What makes Wanta dangerous is that he has begun to distribute funds, some to government entities, counties and states, law enforcement agencies, giving them standing, not just in recovering funds intended for their use but in helping prosecute anyone involved in interfering with or attempting to divert funds.
One grand jury is being formed to investigate diversion of Wanta funds even at this early date. It is likely that Wanta/Ameritrust funds earmarked for border protection could lead to the indictment of high ranking US officials. This is only the beginning.
If the Royal Bank of Scotland doesn’t think it should be expecting the biggest chargeback in the history of the world, they are in for a shock.