Wednesday, March 22, 2017

The Divided Deep State is a Symptom, Not the Disease

If we understand the profound political disunity fracturing the nation and its Imperial Project, we understand the Deep State must also fracture along the same fault lines.
I've been writing about the divided Deep State for a number of years, most recently in The Conflict within the Deep State Just Broke into Open Warfare. The topic appears to be one of widespread interest, as this essay drew over 300,000 views.
It's impossible to understand the divided Deep State unless we situate it in the larger context of profound political disunity, a concept I learned from historian Michael Grant, whose slim but insightful volume The Fall of the Roman Empire I have been recommending since 2009.
As I noted in my 2009 book Survival+, this was a key feature of the Roman Empire in its final slide to collapse. The shared values and consensus which had held the Empire's core together dissolved, leaving petty fiefdoms to war among themselves for what power and swag remained.
A funny thing happens when a nation allows itself to be ruled by Imperial kleptocrats: such rule is intrinsically destabilizing, as there is no longer any moral or political center to bind the nation together. The public sees the value system at the top is maximize my personal profit by whatever means are available, i.e. complicity, corruption, monopoly and rentier rackets, and they follow suit by pursuing whatever petty frauds and rackets are within reach: tax avoidance, cheating on entrance exams, gaming the disability system, lying on mortgage and job applications, and so on.
But the scope of the rentier rackets is so large, the bottom 95% cannot possibly keep up with the expanding wealth and income of the top .1% and their army of technocrats and enablers, so a rising sense of injustice widens the already yawning fissures in the body politic.
Meanwhile, diverting the national income into a few power centers is also destabilizing, as Central Planning and Market Manipulation (a.k.a. the Federal Reserve) are intrinsically unstable as price can no longer be discovered by unfettered markets. As a result, imbalances grow until some seemingly tiny incident or disruption triggers a cascading collapse, a.k.a. a phase shift or system re-set.
As the Power Elites squabble over the dwindling crumbs left by the various rentier rackets, there's no one left to fight for the national interest because the entire Status Quo of self-interested fiefdoms and cartels has been co-opted and is now wedded to the Imperial Oligarchy as their guarantor of financial security.
The divided Deep State is a symptom of this larger systemic political disunity. I have characterized the divide as between the Wall Street-Neocon-Globalist Neoliberal camp--currently the dominant public face of the Deep State, the one desperately attempting to exploit the "Russia hacked our elections and is trying to destroy us" narrative--and a much less public, less organized "rogue Progressive" camp, largely based in the military services and fringes of the Deep State, that sees the dangers of a runaway expansionist Empire and the resulting decay of the nation's moral/political center.
What few observers seem to understand is that concentrating power in centralized nodes is intrinsically unstable. Contrast a system in which power, control and wealth is extremely concentrated in a few nodes (the current U.S. Imperial Project) and a decentralized network of numerous dynamic nodes.
The disruption of any of the few centralized nodes quickly destabilizes the entire system because each centralized node is highly dependent on the others. This in effect what happened in the 2008-09 Financial Meltdown: the Wall Street node failed and that quickly imperiled the entire economy and thus the entire political order, up to and including the Global Imperial Project.
Historian Peter Turchin has proposed that the dynamics of profound political disunity (i.e. social, financial and political disintegration) can be quantified in a Political Stress Index, a concept he describes in his new book Ages of Discord.
If we understand the profound political disunity fracturing the nation and its Imperial Project, we understand the Deep State must also fracture along the same fault lines. There is no other possible output of a system of highly concentrated nodes of power, wealth and control and the competing rentier rackets of these dependent, increasingly fragile centralized nodes.
Of related interest:
Is the Deep State Fracturing into Disunity? (March 14, 2014)


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Tuesday, March 21, 2017

Our Hopelessly Dysfunctional Democracy

When the system is rigged, "democracy" is just another public-relations screen to mask the unsavory reality of Oligarchy.
Democracy in America has become a hollow shell. The conventional markers of democracy--elections and elected representatives--exist, but they are mere facades; the mechanisms of setting the course of the nation are corrupt, and the power lies outside the public's reach.
History has shown that democratic elections don't guarantee an uncorrupt, functional government. Rather, democracy has become the public-relations stamp of approval for corrupt governance that runs roughshod over individual liberty while centralizing the power to enforce consent, silence critics and maintain the status quo.
Consider Smith's Neofeudalism Principle #1: If the citizenry cannot replace a dysfunctional government and/or limit the power of the financial Aristocracy at the ballot box, the nation is a democracy in name only.
In other words, if the citizenry changes the elected representation but the financial Aristocracy and the Deep State remain in charge, then the democracy is nothing but a PR facade for an oppressive oligarchy.
If the erosion of civil liberties and rising inequality characterize the state of the nation, democracy is both dysfunctional and illiberal. A state that strips away the civil liberties of its citizens via civil forfeiture, a war-on-drugs Gulag and unlimited surveillance may be a democracy in name, but it is at heart an oppressive oligarchy.
If the super-wealthy continue to become ever wealthier while the bottom 95% of the citizenry struggle in various stages of debt-serfdom, the state may be a democracy in name, but it is at heart an oppressive oligarchy.
Author/commentator Fareed Zakaria recently addressed the illiberal aspects of America's faded democracy in an article America’s democracy has become illiberal.
Zakar's prettified critique avoided the real worm at the heart of our democracy:the state exists to enforce cartels. Some might be private, some might be state-run, and others might be hybrids, such as our failed Sickcare system and our military industrial complex.
The ultimate role of democracy isn't to "give the people a voice;" the only meaningful role of democracy is to protect the liberties of individuals from state encroachment, break up cartels and monopolies and limit the corruption of private/public money.
America's democracy has failed on all counts. Civil liberties in a nation of ubiquitous central-state surveillance, a quasi-political Gulag (that nickel bag will earn you a tenner in America's drug-war Gulag) and civil forfeiture (we suspect you're up to no good, so we have the right to steal your car and cash) are eroding fast.
In America, the central government's primary job is enforcing and funding cartels. As many of us have pointed out for years, a mere $10 million in lobbying, revolving-door graft (getting paid $250,000 for a speech or for a couple of board meetings) and bribes (cough-cough, I mean campaign contributions) can secure $100 million in profits--either by erecting regulatory/legal barriers or by direct federal funding of the cartel's racket (healthcare, defense, "National Security," etc.).
The fact that the corruption is veiled does not mean it isn't corruption. In the sort of nations Americans mock as fake democracies, the wealthy protect their wealth and incomes with bags of cash delivered at night to politicians.
Nothing so crass or obvious here, of course. Here, the government of Algiers gives $25 million to the Clinton Foundation for "favors," the Russian government gives hundreds of thousands to John Podesta's firm for "advice" (heh), the Koch Brothers fund an array of front-organizations that work on behalf of their agenda, K Street lobbying firms rake in tens of millions of dollars every year, and the first thing tech companies do when they realize some interest group might crimp their profits courtesy of lobbying the central state's politicos is set up their own lavish lobbying and "contribution" schemes.
In theory, democracy enables advocacy by a variety of groups in order to reach a consensual solution to problems shared by everyone. In practice, the advocacy is limited to a select group of insiders, donors and the various fronts of the wealthy: foundations, think-tanks, lobbyists, etc.
Does anyone think America's democracy is still capable of solving the truly major long-term problems threatening the nation? Based on what evidence? What we see is a corrupt machine of governance that kicks every can down the road rather than suffer the blowback of honestly facing problems that will require deep sacrifices and changes in the status quo.
We see a dysfunctional machine of governance that changes the name of legislation and proposes policy tweaks, while leaving the rapacious cartels untouched. (See the current sickcare "debate" for examples.)
We see an Imperial Project setting the state's agenda to suit its own desires, and a corporate media that is quivering with rage now that the public no longer believes its tainted swill of "news" and "reporting."
The divide between the haves and the have-nots is not limited to money--it's also widening between the few with political power and the teeming serfs with effectively zero political power. When the system is rigged, "democracy" is just another public-relations screen to mask the unsavory reality of oligarchy.



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Monday, March 20, 2017

Dear America: Better Read the Fine Print on Your Credit Card Statement

What will replace the current system after it self-destructs? That's the question.
You know those disclosures on your credit card statements? That it will take 27 years to pay off your balance if you only make the minimum payment each month, and so on?
You might not be aware of it, but America's "credit card"--our national debt--comes with its own disclosure statement:
Here's a chart of America's credit card: clearly, any credit line expanding this fast will bankrupt the borrower, regardless of their income.
I often refer to debt serfdom, the servitude debt enforces on borrowers. The mechanism of this servitude is interest, and today I turn to two knowledgeable correspondents for explanations of the consequences of interest.
Correspondent D.L.J. explains how debt/interest is the underlying engine of rising income/wealth disparity:
If we use $18 trillion as the approximate GDP and a growth rate of, say, 3.5%, the total of goods and services would increase one year to the next by about $600 billion.
Meanwhile, referencing the Grandfather national debt chart with the USDebtClock data, the annual interest bill is $3 trillion.
In other words, those receiving interest are getting 5 times more than the increase in gross economic activity.
Using your oft-referenced Pareto Principle, about 80% of the population are net payers of interest while the other 20% are net receivers of interest.
Also, keep in mind that one does not have to have an outstanding loan to be a net payer of interest. Whenever one buys a product that any part of its production was involving the cost of interest, the final product price included that interest cost. The purchase of that product had the interest cost paid by the purchaser.
Again using the Pareto concept, of the 20% who receive net interest, it can be further divided 80/20 to imply that 4% receive most (64%?) of the interest. This very fact can explain why/how the system (as it stands) produces a widening between the haves and the so-called 'have nots'.
Longtime correspondent Harun I. explains that the serfdom imposed by debt and interest is not merely financial servitude--it is political serfdom as well:
As both of us have stated, you can create all of the money you want, however, production of real things cannot be accomplished with a keystroke.
Then there is the issue of liberty. Each Federal Reserve Note is a liability of the Fed and gives the bearer the right but not the obligation to purchase — whatever the Fed deems appropriate. How much one can purchase keeps changing base on a theory-driven experiment that has never worked. Since the Fed is nothing more than an agent of the Central State, the ability to control what the wages of its workers will purchase, is a dangerous power for any government.
If a Federal Reserve Note is a liability of the central bank, then what is the asset? The only possible answer is the nations productivity. So, in essence, an agent of the government, the central bank, most of which are privately owned (ownership is cloaked in secrecy) owns the entire productive output of free and democratic nation-states.
People who speak of liberty and democracy in such a system only delude themselves.
Then there is the solution, default. That only resolves the books, the liability of human needs remain. Bankruptcy does not resolve the residue of social misery and suffering left behind for the masses who became dependent on lofty promises (debt). These promises (debts) were based on theories that have reappeared throughout human history under different guises but have never worked.
More debt will not resolve debt. The individual’s liberty is nonexistent if he does not own his labor. A people should consider carefully the viability (arithmetical consequences) of borrowing, at interest, to consume their own production. The asset of our labor cannot simultaneously be a liability we owe to ourselves at interest.
Thank you, D.L.J. and Harun. What is the alternative to the present system of debt serfdom and rising inequality? There is none in our financialized, Neofeudal-Neocolonial State-Cartel Rentier Economy that creates and distributes credit-money at the top of the wealth-power pyramid.
As Harun noted in another email, Governments cannot reduce their debt or deficits and central banks cannot taper. Equally, they cannot perpetually borrow exponentially more. This one last bubble cannot end (but it must).
What will replace the current system after it self-destructs? That's the question, and my answer is laid out in my book A Radically Beneficial World: a radically decentralized, transparent, opt-in system of creating money at the bottom of the wealth-power pyramid rather than at its apex.


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Sunday, March 19, 2017

Don't You Hate Spammy, Sensationalist Click-Bait Like this?

So what's the difference between "fake news," spammy sensationalist click-bait and so-called "mainstream news" that serves the interests of the corporate-state? It's getting hard to tell.
We're inundated with spammy sensationalist click-bait. You know what I mean--the little boxes containing eye-candy photos and headlines such as "you won't believe how badly these stars have aged," "7 tricks to losing weight during Thanksgiving," "These children of celebs are so good looking your jaw will drop," "9 surprising signs of dementia" and outre classics such as "Hitler's shocking final words."
The "news" is "shocking," "secrets are revealed," and "surprising facts" are promised. Authorities are always cited as unimpeachable sources, and the headlines are quasi-plausible. (Why wouldn't good-looking celebs have good-looking offspring?)
But the "authorities," "facts" and "secrets" are all dubious. The spammy click-bait is self-serving to those promoting the sensationalist content, and to the media sites that promote the spammy content.
According to The New York Times, unidentified sources in the spammy sensationalist click-bait industry report that “We have been told from major, major publishers that we have become their No. 1 revenue provider."
So the spammy sensationalist click-bait content serves the interests of those originating the bogus spam and the media that publishes it. Talk about a two-fer; no wonder this junk is everywhere in the Corporate Media.
Though the Corporate Media denies it, of course, the lines between propaganda, paid content and actual reporting have blurred. The C.I.A. has played a major role in the Corporate Media for decades. If you doubt this, please study the following:
The CIA and the Media by Carl Bernstein
The CIA and the Media: 50 Facts the World Needs to Know This article by Professor James Tracy first published in August 2015 is of particular relevance in relation to the “fake news” campaign directed against the alternative media.
So what's the difference between "fake news," spammy sensationalist click-bait and so-called "mainstream news" that serves the interests of the corporate-state? It's getting hard to tell, as these examples illustrate.
I just pulled these examples of spammy sensationalist click-bait garbage off the mainstream Corporate Media more or less at random.
     
Oh wait a minute--isn't this "Trump is a stooge of Russia" and "Russia is threatening our precious bodily fluids" what The New York TimesThe Washington Post, CNN et al. are presenting as "factual" "news"?
Given the media's insatiable appetite for spammy sensationalist click-bait "news," it wouldn't surprise me in the least to see these next in the Corporate Media.
     
The Old Media followed this nostrum: If it bleeds, it leads, meaning the gory airline crash or auto pile-up was the leading "news story." In an era in which fact-free, evidence-free accusations that just happen to align with CIA agendas are passed off as "news," and anyone who questions the "authorities" is slandered as "promoting fake news" (talk about doublespeak), that promotion of mere gore now seems quaint.


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Friday, March 17, 2017

When Money Is "Free," Discipline Evaporates; When Discipline Evaporates, Decisions Are Disastrous

The only possible output of a system lacking any discipline is self-destruction.
Whatever is free is squandered. When water is free, it's freely wasted. When electricity is free, there's no motivation to use it wisely.
The same principle holds true for money. If money is free, or nearly free, there is no motivation to invest it wisely, or consider the opportunity costs of spending it versus investing it or preserving it as savings.
Money that can be borrowed for next to nothing is essentially "free" because the costs of interest are negligible. Money that can be borrowed in virtually unlimited quantities is also "free," as whatever funds are squandered or lost to malinvestment can be easily replaced with more borrowed money.
Nothing enduringly productive can be built without discipline and a steady focus on the bottom line of production costs, revenues, overhead expenses and opportunity costs, i.e. what else could have been done with this capital and labor?
These dynamics are scale-invariant, meaning they apply to individuals and households as well as to companies, institutions and nation-states.
Thus we see the same poor results in trust-funders whose income is "free" (pouring in monthly whether the individual was productive or not) and national governments that can simply borrow another trillion dollars (or $10 trillion, hey why not?) when they've squandered all the tax revenues.
We intuitively grasp the necessity of discipline to corral impulses and desires that are self-destructive in the longer term. Eating chocolate cake and ice cream might appeal to our immediate cravings, but longer term the consequences of unbridled consumption of this kind of sweets are dire.
We also grasp the role discipline plays in learning difficult subjects/tasks and in accomplishing long-term, often arduous projects.
If there is any commonality to genius, it is a prodigious work ethic based on a highly disciplined schedule of daily productive effort.
All of which leads us to ask: what precisely have we accomplished by borrowing and blowing $9 trillion in additional national debt over the past eight years? With interest rates near-zero and the credit line of the nation essentially unlimited--recall that the central bank created $3.5 trillion of money out of thin air and used much of it to buy federal bonds--there was no need for any difficult choices or trade-offs--that is, discipline.
The trillions could be borrowed from future taxpayers painlessly, and squandered on propping up unaffordable entitlements and programs that were each immune to discipline.
So a pharmaceutical company raises the cost of a pinworm medication from $3 to $600. When money can be borrowed in endless quantities for "free," there's no need to ask if this predatory piracy is justified or necessary for the good of the nation; just borrow another trillion to pay for Medicare and Medicaid costs that are largely skims, scams, fraud or unproductive paper-shuffling.
As long as the money spigot is "free," there's no need to ask why the F-35 fighter aircraft is four times as costly as the aircraft it replaces.
As long as the money is "free," why should any politico risk telling a National Security agency such as the CIA "no more money for your agency until you can account for the tens of billions you're spending on gosh knows what."
Lowering interest rates to near-zero has reduced the need for fiscal-political discipline to near-zero. Politicos of all stripes are only too willing to borrow trillions from future generations--why not borrow and blow the money now to assure my re-election, and let future taxpayers figure out what to do about the crushing burden of debt we're leaving them?
High interest rates were basically the only mechanism of discipline imposed on short-term, free-spending politicos. Once the cost of interest was reduced to signal noise, politicos were freed of the burdens of discipline: of having to reckon the burdens of future interest, of opportunity costs, of trade-offs and the difference between productive investments and cronyist pork-barrel spending on marginal (but highly profitable) "infrastructure."
How disciplined will your gambling be in the casino when all your losses are covered by future taxpayers? Why hold back from risky gambles when any losses will be paid by others? Go head and gamble wildly--any lucky wins will be yours to keep, and all the losses will be covered by nameless others.
This is how "free money" leads to disastrous decisions. With the need for discipline eliminated, there's no motivation not to gamble wildly, fund every special interest group's demand, and grease the palms of every insider, every crony and every oligarch.
This is how a great nation will self-destruct. The only possible output of a system lacking any discipline is self-destruction.



If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.
Check out both of my new books, Inequality and the Collapse of Privilege($3.95 Kindle, $8.95 print) and Why Our Status Quo Failed and Is Beyond Reform($3.95 Kindle, $8.95 print). For more, please visit the OTM essentials website.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
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