Sunday, March 24, 2019

The Media, Mueller, the Big Con and the Democratization of Narrative

Falling for a con is painful. The first reaction is to deny being conned, of course. The second is to blame skeptics for being correct in their skepticism.
Here's the fundamental "story" of the Mueller Investigation: elites don't like "the little people" democratizing public narratives. The elites--who reckon their right to rule is self-evident--want to set the narrative and the context, because that's the foundation of power: once you get the citizenry to agree on your narrative and context, you secure two valuable things: 1) political legitimacy and 2) their obedience.
Elite anxiety over the "the little people" democratizing narratives is not a new phenomenon. Elites have demanded control of any media outlet that doesn't parrot their line and have tried to declare skeptical inquiry sedition for generations, stretching back to the founding of the Republic.
The elite interest in controlling the narrative and context long predates the era of "fake news." Please read this excerpt from the 1991 book The Radicalism of the American Revolution about the democratization of everyday life in post-Revolutionary War America (1790 - 1830):
"The result of all these assaults on elite opinion and celebrations of common ordinary judgment was a dispersion of authority and ultimately a diffusion of truth itself to a degree the world had never seen. With every ordinary person being told his ideas and tastes, on everything from medicine to art to government, were as good as, if not better than, those of "connoisseurs" and "speculative men" who had college degrees, it is not surprising that truth and knowledge became elusive and difficult to pin down."
This democratization deeply unsettled the elites, who were accustomed to leading by setting the "acceptable" narrative and context. Democracy, they discovered to their chagrin, isn't a force that one can bottle up and dispense in measured doses around election time; it spreads throughout every sphere of the society.
This reliance on one's own judgment depreciated the power not only of self-appointed elites but of those claiming superiority based on credentials. As novelist Herman Melville understood so acutely, this democratization of everything made everyone, pundit and commoner alike, a potential mark for a con and a potential chump for a compelling pitch that appealed to vanity, social aspirations and what we now call virtue-signaling.
Melville laid all this out in one of my favorite novels, The Confidence-Man, ostensibly a collection of stories about a motley cast of characters on a Mississippi riverboat but actually a meditation on the nature of trust, confidence and cons.
This puts Melville's 1857 novel at the very heart of the Mueller Investigation as various elite-promoted narratives are revealed as cons. Authority, of course, is well-placed to push The Big Con; declaring "the truth of the matter" as an article of faith is the acme of The Big Con.
Democracy requires all Americans take responsibility for sorting the wheat from the chaff. We're all potential marks, so we have to remain skeptical of every context and every narrative being pushed by authorities, elites, self-appointed experts, etc., all of whom are of course as self-serving as anyone else trying to advance their interests with a compelling story.
Here are a few paragraphs from my Amazon review of Melville's novel:
What ties the book together is not a story but a theme: the nature of trust and confidence. In a very sly way, Melville shows how a variety of cons are worked, as the absolutely distrustful are slowly but surely convinced to do exactly what they vowed not to do: buy the "herbal" patent medicine, buy shares in a bogus stock venture, or donate cash to a suspect "charity."
In other chapters, it seems like the con artist is either stopped in his tracks or is conned himself. Since the book is mostly conversations, we are left to our own conclusions; there is no authorial voice wrapping up each chapter with a neatly stated ending. This elliptical structure conveys the ambiguous nature of trust; we don't want to be taken, but confidence is also necessary for any business to be transacted. To trust no one is to be entirely isolated.
Melville also raises the question: is it always a bad thing to be conned? The sickly man seems to be improved by his purchase of the worthless herbal remedy, and the donor conned out of his cash for the bogus charity also seems to feel better about himself and life. The ornery frontiersman who's been conned by lazy helpers softens up enough to trust the smooth-talking employment agency owner. Is that a terrible thing, to trust despite a history of being burned?
The ambiguous nature of the bonds of trust is also explored. We think the Cosmopolitan is a con-man, but when he convinces a fellow passenger to part with a heavy sum, he returns it, just to prove a point. Is that a continuance of the con, or is he actually trustworthy?
The book is also an exploration of a peculiarly American task: sorting out who to trust in a multicultural non-traditional society of highly diverse and highly mobile citizens. In a traditional society, things operate in rote ways; young people follow in their parents' traditional roles, money is made and lent according to unchanging standards, and faith/tradition guides transactions such as marriage and business along well-worn pathways.
But in America, none of this structure is available. Even in Melville's day, America was a polyglot culture on the move; you had to decide who to trust based on their dress, manner and speech/pitch. The con, of course, works on precisely this necessity to rely on one's senses and rationality rather than a traditional network of trusted people and methods. So the con man dresses well and has a good story, and an answer for every doubt.
Much of the corporate media pushed a narrative that careful investigation has not confirmed. If there is one thing we can agree upon, it's that Mueller played it by the book and used all the resources available to him to follow every potential lead.
Various elites were counting on a conclusion that justified their dogged promotion of a specific agenda (impeachment), and now the backpedaling, air-brushing, convoluted explanations for why they fell for the con, etc. begins.
Every con depends on the mark wanting to believe the con is true.
Falling for a con is painful. The first reaction is to deny being conned, of course. The second is to blame skeptics for being correct in their skepticism.
My book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition. Read the first section for free in PDF format.


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Thursday, March 21, 2019

Politics Has Failed, Now Central Banks Are Failing

With each passing day, we get closer to the shift in the tide that will sweep away this self-serving delusion of the ruling elites like a crumbling sand castle.
Those living in revolutionary times are rarely aware of the tumult ahead: in 1766, a mere decade before the Declaration of Independence, virtually no one was calling for American independence. Indeed, in 1771, a mere 5 years before the rebellion was declared, the voices promoting independence were few and far between.
The shift from a pre-revolutionary era to a revolutionary era took less than a year. Perhaps no one exemplified the rapidity and totality of radicalization more than Benjamin Franklin, who went from an avowed Loyalist bent on reform to a dedicated, zealous revolutionary at the tender age of 70. (Old dogs can learn new tricks, at least in revolutionary eras.)
Recall that news could only travel as fast as a ship between seaports or a horse on the colonies' minimalist roads, and it took days to travel between Boston, Philadelphia and New York, and much longer to reach Williamsburg and Charleston and points west. Communications were slow and limited, and this makes the rapid change of the political tide even more extraordinary.
Are we in a pre-revolutionary era? Here's clue #1: politics has failed. When the political process can no longer fix what's broken, politics has failed. When entire classes of citizenry no longer feel represented, politics has failed. When the system delivers a steadily declining standard of living to the bottom 80% of households, politics has failed.
Clue #2: having failed, the political machinery passed the baton to the central bank, which attempted to fix what's broken by creating money out of thin air."Free" money and low-cost credit has always been viewed as the go-to fix for whatever's broken, because it's, well, free to the issuing central state and politically popular (everybody loves free money, free bread and free circuses).
This political expediency works for a time--hence it's popularity throughout history-- but eventually the asymmetries, perverse incentives and unintended consequences pile up and the entire financial system capsizes.
Clue #3: America's monetary substitute for political process has failed. The failure isn't visible to those paid not to look at centralized failure, but it's visible to objective observers. Glance at the chart below: the Federal Reserve has announced it will end reducing its "emergency response to save the world" balance sheet in September 2019, leaving it roughly $3 trillion larger than it was a decade ago in the pre-crisis definition of "normal."
This exceedingly modest reduction has been called "normalization," and so the end of "normalization" means we're back to normal, right?
Calling the extraordinarily abnormal balance sheet "normal" doesn't magically render it normal.
The magic trick of substituting monetary policy for the political process has failed. Creating credit and currency out of thin air is not a substitute for the loss of representation, soaring inequality, the dominance of parasitic elites or for responding to the changing realities of finance, economics, demographics or resources.
Central banks only have a few levers, and when they lower interest rates and buy assets, they're only temporarily propping up a failing system: they've fixed nothing. Huge swaths of the populace are still unrepresented; parasitic elites still dominate the financial and political systems; wealth and income inequality has been greatly accelerated; the majority of people are still losing ground and their wealth/income are increasingly precarious.
Revolutions are manifestations of dynamics that have been festering beneath the surface for decades. Those benefiting from a failing status quo--the top 5% that dominate finance, government, the media, think tanks, philanthro-capitalist foundations, higher education and the national defense/healthcare cartels--all reckon that since the system works great for me, it works great for everyone.
With each passing day, we get closer to the shift in the tide that will sweep away this self-serving delusion of the ruling elites like a crumbling sand castle.
My book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition. Read the first section for free in PDF format.


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Wednesday, March 20, 2019

Which Nations Will Crumble and Which Few Will Prosper in the Next 25 Years?

Adaptability and flexibility will be the core survival traits going forward.
What will separate the many nations that will crumble in the next 25 years and those few that will survive and even prosper while the status quo dissolves around them? As I explain in my recent book Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic, the factors that will matter are not necessarily cultural or financial; being hard-working and wealthy won't be enough to save nations from coming apart at the seams.
Here are the factors that will matter in the next 25 years:
1. The ability to engage and survive non-linear change, which is rapid, unpredictable and systemic, as opposed to linear change which is gradual, predictable and limited in nature.
None of the current political systems are decentralized enough and adaptable enough to survive the non-linear era we're entering. As I explained in What If Politics Can't Fix What's Broken?, the politics of centralized compromise and incremental, top-down adjustments are wholly inadequate to dealing with non-linear disruptions.
2. The nations that cannot jettison their parasitic elites will fall; the few that find the political will to jettison their parasitic elites will have the wherewithal to survive and possibly even prosper as the global status quo collapses around them.
The problem, as we all know, is the parasitic elites rule the centralized hierarchies of wealth and political power, and they will cling to power even as the nation they rule crumbles around them. The hubris, complacency and greed of the ruling parasitic elites is near-infinite; the idea that the political and financial structures that they dominate will not survive simply doesn't exist in the parasitic elites, with the exception of a few outliers who are constructing remote bugout compounds with landing strips etc.
Unfortunately for these outliers, they can't escape satellite and drone imagery, or the loose tongues of employees, contractors, etc.
By the time the populace awakens to the precariousness of the entire status quo, it will be too late to effect meaningful change via removing the parasitic elites from power. Just as Rome was too hollowed out to survive by the end, the status quo structures will be too enfeebled to adapt quickly enough to survive.
3. Centralization of wealth, power and control has been the "solution" for hundreds or even thousands of years. We're approaching Peak Centralization and the systemic failure of centralization as the "solution" to anything.
The only sustainable solution going forward is radical decentralization of capital, political power and control of resources. The parasitic elites rule solely because wealth and power are so highly concentrated in the hands of the few. As the financial and political systems unravel and fail, solutions that are completely outside these centralized hierarchies will arise--if the populace is free to embrace them.
4. Solutions will obsolete the existing centralized financial and political structures. Reforms will all fail, as the parasitic elites will never relinquish their control or power. The "solution" will be the total collapse of the centralized financial and political structures and the parasitic elites that control them.
5. Adaptability and flexibility will be the core survival traits going forward. The only structures adaptable and flexible enough to respond quickly and effectively enough to survive are decentralized networks-- non-hierarchical, distributed rather than centralized, self-organizing rather than top-down.
Few if any of the "leading citizens" of Rome anticipated its collapse 20 years prior to the implosion. That is as true of the parasitic elites now as it was then. Collapse is truly "impossible" in the current mindset; it isn't even conceivable that what works now will stop working. But complacent belief in the permanence of the status quo doesn't stop friction or rust, nor will it stop collapse.
As an American, I hope the citizenry comes to understand the choice is simple and profound: either tolerate the dominance of our numerous parasitic elites and watch the nation come apart and fail or jettison the centralized structures the parasitic elites need to enforce their dominance.


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My book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition. Read the first section for free in PDF format.


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Tuesday, March 19, 2019

The Neutered Fed Is Politically Trapped

Everyone now knows that the only meaningful goal of Fed policy is propping up the world's greatest credit-asset bubble.
In this era of fake news and deep-fake digital recordings and images, it's important to use unedited images. With this firmly in mind, here is an unedited photo of Federal Reserve Chair Jay Powell and former Fed Chairs Janet Yellen and Ben Bernanke from their recent unprecedented appearance on 60 Minutes:
The purpose of the Fed chiefs' dog-and-pony show was to promote the notion that the Fed really really really (try not to laugh out loud) "cares" about the average American, even though 85% of the $30 trillion in gains generated by the Fed's policies flowed to the top 10% and roughly two-thirds of the gains flowed to the top few percent.
The bottom 80% got essentially nothing except a drastic reduction in the purchasing power of their stagnating wages. If this is how the Fed "cares" about average Americans, I wonder what they'd do if they chose to impoverish average Americans. Oh wait a minute, they already did.
I've covered this in recent essays:
What triggered the unprecedented propaganda-fest of the three Fed monkeys? The realization that the Fed is evil is seeping into public awareness, and the Fed honchos are awakening to the reality I've spoken to here many times: the Fed is now constrained politically in terms of how far it can go to bail out the banks and the super-wealthy again.
Speak no evil (Jay Powell), see no evil (Janet Yellen) and hear no evil ("I saved the fortunes of the super-rich, oops I mean the world" Ben Bernanke) were trotted out to deny the Fed is evil, which only confirms that the Fed is in fact evil. Why else line up the Fed Chairs like school kids giving their book reports?
The Fed is now trapped by three dynamics:
1. It has been neutered by the stock market--nobody believes the Fed is "independent" or that it "cares" about anything but the market and the financial aristocracy who own it.
2. It can't force people to borrow and spend or lenders to lend to poor credit risks.
3. It is finally being recognized as the key driver of widening wealth and income inequality.
Some may claim the December stock market swoon "tutored" the Fed, but it was actually neutered: Fed credibility is a bad joke as everyone now knows the Fed is the stock market's slave. And since the top 10% own the vast majority of stocks, the Fed is the slave of the financial aristocracy. Everything else is fancy footwork, obfuscation and propaganda.
Everyone now knows that the only meaningful goal of Fed policy is propping up the world's greatest credit-asset bubble because the Fed has elevated the stock market to the benchmark for the entire economy. Nothing else matters, and oh, by the way, the trillions created out of thin air by the bubble belong to the already wealthy.
As noted in The Coming Crisis the Fed Can't Fix: Credit Exhaustion, the Fed can't force households or corporations to further burden themselves with additional debt, nor can it force lenders to give "free money" to borrowers who are guaranteed to default. Rather than possessing godlike powers, the Fed is toothless. The only power it has is to inflate asset bubbles that benefit the few at the expense of the many.
This chart shows the precise effect of Fed policies since 2008: a vast, unprecedented expansion in the wealth and income of the financial aristocracy at the expense of everyone below.
Any questions about why the Fed is politically trapped? How much more of this will the American public be able to stomach before a populist from the left or right or heck, even the center, publicly call out the Fed's backstopping of the stock market as the driver of soaring wealth-income inequality and demands the Fed be stripped of its power to protect and reward the banks, financiers and the super-wealthy?
My book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition. Read the first section for free in PDF format.


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Monday, March 18, 2019

While the Nation Fragments Socially, the Financial Aristocracy Rules Unimpeded

America's aristocracy is not formalized, and that's the secret of its success.
If there is one central irony in American history, it is this: the citizenry that broke free of the chains of British Monarchy, the citizenry that reckoned everyone was equal before the law, the citizenry that vowed never to be ruled by an aristocracy that controlled the government and finance as a means of self-enrichment, is now so distracted by social fragmentation that the citizenry is blind to their servitude to a new and formidably informal financial aristocracy.
From this juncture, ironies abound: the so-called Socialist demands for Medicare for All, "free" college for all and Universal Basic Income (UBI) are encouraged (or perhaps orchestrated) by the financial aristocracy, which rakes in tens of billions of dollars in profits from its banking, healthcare, national defense and higher education cartels: throwing more trillions down the ratholes of Medicare and higher education will only further enrich and empower the financial elites.
As for Universal Basic Income (UBI), the financial aristocracy is cheering loudly for UBI, which would enable debt-serfs to keep servicing their debts. (Is anyone so naive to think that UBI won't have a clause which enables the deduction of debt payments from the monthly "free money"? Does anyone think the financial aristocracy is going to give $1,000 a month to debt-serfs and then let them default on their debt? Get real!)
The demands for social justice, i.e. that everyone be allowed to be treated the same before the law and enjoy the same rights as other citizens, is a core tenet of American culture. Long before the Constitution was even ratified, the calls to end slavery were becoming louder. Long before women won the the right to vote, the calls to treat women equally before the law were gaining ground.
In the long sweep of U.S. history, the rights of gays to marry and other contemporary social justice issues are of a piece with all previous drives to eliminate disparities between the way individuals are treated before the law. This is of course as it should be: this was a core value of the revolutionaries, as limited as it was in that era, and this drive is largely what makes America America.
Equally important was the cultural drive to never be ruled by a neofeudal aristocracy or let an aristocracy form in America. Yet this is precisely what has come to pass: we are ruled by an informal but oh-so neofeudal aristocracy.
As social justice controversies fragment the increasingly economically precarious populace, a financial aristocracy has arisen that rules the nation behind the screens of "meritocracy" and "equal rights." No one is more in favor of equal rights and the abolition of social privilege that the members of the financial aristocracy, who have no need for social privilege since they control the real source of power in America: proximity to credit and newly issued money.
(Look at the liberal leanings of the Silicon Valley, L.A., Boston and NYC elites. They all love whatever distracts everyone from scrutinizing their power, and love recruiting fresh talent to slave away for their private empires.)
With this wealth, the financial aristocracy buys political influence for piddling sums and scoops up most of the low-risk productive assets of the private sector.
The core structure of the financial aristocracy is the state-cartel, the cartels that are funded and enforced by the central state: higher education, healthcare, national defense, banking, mortgages, student loans, etc.
For the financial aristocracy, the federal government is their personal enrichment machine, collecting trillions in taxes and borrowing additional trillions which are funneled through the state-cartels.
The number of seats in the American aristocracy is extremely limited, and so the top 5% are willing to go to extreme lengths to get in the first class lifeboat as the Titanic takes on water. This manifests in all sorts of ways, including the elite college admissions scandal.
While social justice proponents focus on divisive distractions, the financial aristocracy is tightening its control of the nation's economy and political order.As everyday life, civil liberties and economic security all become increasingly precarious for the bottom 90%, the divisive focus on social privilege becomes a useful distraction for the financial aristocracy, which also controls the mainstream media.
America's aristocracy is chuckling with great amusement as society is torn to pieces by media-circus sideshows. America's aristocracy doesn't need any titles or overt class distinctions as the aristocracy of old had; this would only call attention to their dominance. The ideal arrangement is a society shredded by social-media-driven fabricated divisions and a profound apathy to the actual structures of power, wealth and control.
America's aristocracy is not formalized, and that's the secret of its success.The power and control are exercised behind the formal machinery of governance and finance, and this structure protects the aristocracy from scrutiny.
So by all means demand Medicare for All and UBI: the aristocracy is heavily promoting these expansions of its wealth and power. Just as the Roman elites favored distributing free bread to the disenfranchised masses and the staging of Netflix binge TV watching--oops, I mean circuses-- so too does America's aristocracy favor UBI, Medicare for All and a fragmented society in thrall to disunity.
My book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition. Read the first section for free in PDF format.


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