Sunday, August 19, 2018

The Telltale Signs of Imperial Decline

Nothing is as permanent as we imagine--especially super-complex, super-costly, super-asymmetric and super-debt-dependent systems.
Check which signs of Imperial decline you see around you: The hubris of an increasingly incestuous and out-of-touch leadership; dismaying extremes of wealth inequality; self-serving, avaricious Elites; rising dependency of the lower classes on free Bread and Circuses provided by a government careening toward insolvency due to stagnating tax revenues and vast over-reach--let's stop there to catch our breath. Check, check, check and check.
Sir John Glubb listed a few others in his seminal essay on the end of empires The Fate of Empires, what might be called the dynamics of decadence:
(a) A growing love of money as an end in itself: Check.
(b) A lengthy period of wealth and ease, which makes people complacent. They lose their edge; they forget the traits (confidence, energy, hard work) that built their civilization: Check.
(c) Selfishness and self-absorption: Check.
(d) Loss of any sense of duty to the common good: Check.
Glubb included the following in his list of the characteristics of decadence:
-- an increase in frivolity, hedonism, materialism and the worship of unproductive celebrity (paging any Kardashians in the venue...)
-- a loss of social cohesion
-- willingness of an increasing number to live at the expense of a bloated bureaucratic state
Historian Peter Turchin, whom I have often excerpted here, listed three disintegrative forces that gnaw away the fibers of an Imperial economy and social order:
1. Stagnating real wages due to oversupply of labor
2. overproduction of parasitic Elites
3. Deterioration of central state finances
To these lists I would add a few more that are especially visible in the current Global Empire of Debt that encircles the globe and encompasses nations of all sizes and political/cultural persuasions:
1. An absurdly heightened sense of refinement as the wealth of the top 5% has risen so mightily as a direct result of financialization and globalization that the top .1% has been forced to seek ever more extreme refinements to differentiate the Elite class (financial-political royalty) from financial nobility (top .5% or so), the technocrat class (top 5%), the aspirant class (next 15%) and everyone below (the bottom 80%).
Now that just about any technocrat/ member of the lower reaches of the financial nobility can afford a low-interest loan on a luxury auto, wealthy aspirants must own super-cars costing $250,000 and up.
A mere yacht no longer differentiates financial royalty from lower-caste financial Nobles, so super-yachts are de riguer, along with extremes such as private islands, private jets in the $80 million-each range, and so on.
Even mere technocrat aspirants routinely spend $150 per plate for refined dining out and take extreme vacations to ever more remote locales to advance their social status.
Examples abound of this hyper-inflation of refinement as the wealth of the top 5% has skyrocketed.
2. The belief in the permanence of the status quo has reached quasi-religious levels of faith. The possibility that the entire financialized, politicized circus of extremes might actually be nothing more than a sand castle that's dissolving in the rising tides of history is not just heresy--it doesn't enter the minds of those reveling in refinement or those demanding more Bread and Circuses (Universal Basic Income, etc.)
3. Luxury, not service, defines the financial-political Elites. As Turchin pointed out in his book on the decline of empires, in the expansionist, integrative eras of empires, Elites based their status on service to the Common Good and the defense (or expansion) of the Empire.
While there are still a few shreds of noblesse oblige in the tattered banners of the financial elites, the vast majority of the Elites classes are focused on scooping up as much wealth and power as they can in the shortest possible time, with the goal being not to serve society or the Common Good but to enter the status competition game with enough wealth to afford the refined dining, luxury travel to remote locales, second and third homes in exotic but safe hideaways, and so on.
4. An unquestioned faith in the unlimited power of the state and central bank.The idea that the mightiest governments and central banks might not be able to print their way of our harm's way, that is, create as much money and credit as is needed to paper over any spot of bother, is unthinkable for the vast majority of the populace, Elites and debt-serfs alike.
That all this newly issued currency and credit is nothing but claims on future production of goods and services and rising productivity never enters the minds of the believers in unlimited state/bank powers. We have been inculcated with the financial equivalent of the Divine Powers of the Emperor: the government and central bank possess essentially divine powers to overcome any problem, any crisis and any conflict simply by creating more money, in whatever quantities are deemed necessary.
If $1 trillion in fresh currency will do the trick--no problem! $10 trillion? No problem! $100 trillion? No problem! there is no upper limit on how much new currency/credit the government and central bank can create.
That there might be limits on the efficacy of this money-creation never enters the minds of the faithful. That pushing currency-credit creation above the limits of efficacy might actually trigger the unraveling of the state-central bank's vaunted powers never occurs to believers in the unlimited reach of central states/banks.
The possibility that the central state/bank's powers are actually quite limited is blasphemy in an era in which the majority of the Elites and commoners alike depend on the "free money" machinery of the central state/bank for their wealth and livelihoods.
It is instructive to ponder the excesses of private wealth and political dysfunction of the late Roman Empire with the present-day excesses of private wealth and political dysfunction. As Turchin and others have documented, where the average wealth of a Roman patrician in the Republic (the empire's expansionist, integrative phase) was perhaps 10-20 times the free-citizen commoner's wealth, by the disintegrative, decadent phase of imperial decay, the Elites held wealth on the scale of 10,000 times the wealth of the typical commoner. Elite villas were more like small villages centered around the excesses of luxury than mere homes for the wealthy and their household servants. Here is a commentary drawn from Turchin's work:
"An average Roman noble of senatorial class had property valued in the neighborhood of 20,000 Roman pounds of gold. There was no 'middle class' comparable to the small landholders of the third century B.C.; the huge majority of the population was made up of landless peasants working land that belonged to nobles. These peasants had hardly any property at all, but if we estimate it (very generously) at one tenth of a pound of gold, the wealth differential would be 200,000! Inequality grew both as a result of the rich getting richer (late imperial senators were 100 times wealthier than their Republican predecessors) and those of the middling wealth becoming poor."
We can be quite confident that these powerful elites reckoned the Empire was permanent and its power to secure their wealth and power was effectively unlimited. But alas, their fantastic wealth vanished along with the rest of the centralized, over-extended, complex and costly Imperial structures.
There is a peculiarly widespread belief that Elites are so smart and powerful that they always manage to evade the collapse of the empires that created and protected their wealth. But there is essentially no evidence for this belief when eras truly change.
Yes, Elites have proven to be adept at shifting with the political winds; thus the guestbooks of French chateaux were filled with the names of Nazi dignitaries during the German occupation of France, and with the names of Allied bigwigs after the war ended the 1,000-year Reich.
But the complete collapse of the financial system and centralized power is not a war or financial crisis--these are storm waters which the Elites have the wherewithal to survive. But when a tsunami disintegrates the entire structure and carries it out to a nameless sea as flotsam and jetsam, there is no transfer of wealth from the Old to the New.
The Roman Elites did not become Barbarian elites who just so happened to own the same villas and vast estates they did when they wore togas and dined on super-refined delicacies. They were pushed aside along with everything that supported their wealth and power.
Nothing is quite as permanent as we imagine--especially super-complex, super-costly, super-asymmetric and super-debt-dependent state/financial systems.



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Thursday, August 16, 2018

If You Want to Survive this Election with Your Mental Health Intact, Turn Off the "News" and Social Media Now

If you want to preserve your sanity and avoid unhappy derangement, turn off all corporate and social media from now to Thanksgiving.
Since elections are extremely profitable for traditional media / social media corporations, your sanity will gleefully be sacrificed in the upcoming election--if you are gullible enough to watch the "news" and tune into social media.Elections are extremely profitable because candidates spend scads of cash on media adverts.
The greater the discord and derangement, the higher the media profits. The more outraged you let yourself become, the more time you spend online, generating insane profits for the corporations that own whatever platforms you're addicted to.
Seeking an echo chamber of people who agree with you? We got you covered. Attracted like a junkie to emotionally corrosive "news"? That's our specialty! Want an outlet for your spleen? That's what we offer, because "we connect people" (haha).
In other words, if you have a self-destructive attraction to anger, helplessness, frustration, bitter unhappiness and derangement--then by all means, watch the "news" and soak up social media. But while you're destroying your mental health for zero positive gains, please recall that six corporations plus Amazon zillionaire Jeff Bezos own the vast majority of the mainstream media--a truly frightening concentration of power in the hands of a few whose sole purpose is to maximize profit.
This concentration of media control creates the illusion of choice-- the same elite-propaganda spin is everywhere you look; our "choice" of "approved" (i.e. corporate) media is roughly the same as that offered the Soviet citizenry in the old USSR.
Given the Corporate Media spews the same tired, Soviet-style narrative with increasing desperation, it's no wonder than public trust in the mainstream media is plummeting to all-time lows. The "news" isn't just "fake": it's designed to push narratives that benefit self-serving elites at the expense of non-elites.
Given the extreme profitability of divisiveness, it's also no wonder that political polarization is reaching extremes:
Here's a reality that you'll never see in the corporate media, because it's off message:
As entrenched interests compete to protect their profitable skims, scams, monopolies and fiefdoms, the bottom 95% are slipping into darkness. "The lifestyle you ordered" is not just currently out of stock--it's no longer being produced.
Propaganda doesn't have to change your mind to be effective-- all it has to do is disable your critical thinking by blinding you with rage, misdirecting your attention, generating an "Other" that acts as a target for projected frustration, creating either-or thinking, splinter the working / middle classes into divisive "tribes" supported by echo-chamber social media and addict you to constant drips of carefully tailored emotional derangement.
Welcome to the corporate / social media's gulag of the mind: We'll tell you what's "true" and what is correct to think and believe. Any deviation from the party line is a threat and must be discredited, marginalized or suppressed.
The greater your mental anguish and derangement, the more profit you generate for the corporate / social media, because the more time you spend "engaging" media and social media, the more money they make.
Nobody in the corporate / social media cares about your mental health--that's not what they're paid to care about. They're paid to sacrifice your mental health to increase their corporate profits. That's the election in a (heretical) nutshell.
If you want to preserve your sanity and avoid unhappy derangement, turn off all corporate and social media from now to Thanksgiving, and other than watching sports or nature programs, it's best to leave the corporate / social media off until Christmas--Christmas 2020.


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Tuesday, August 14, 2018

Our "Prosperity" Is Now Dependent on Predatory Globalization

Nowadays, trade and "prosperity" are dependent on currencies that are created out of thin air via borrowing or printing.
So here's the story explaining why "free" trade and globalization create so much wonderful prosperity for all of us: I find a nation with cheap labor and no environmental laws anxious to give me cheap land and tax credits, so I move my factory from my high-cost, highly regulated nation to the low-cost nation, and keep all the profits I reap from the move for myself. Yea for free trade, I'm now far wealthier than I was before.
That's the story. Feel better about "free" trade and globalization now? Oh wait a minute, there's something missing--the part about "prosperity for all of us." Here's labor's share of U.S. GDP, which includes imports and exports, i.e. trade:
Notice how labor's share of the economy tanked once globalization / offshoring kicked into high gear? Now let's see what happened to corporate profits at that same point in time:
Imagine that--corporate profits skyrocketed once globalization / offshoring kicked into high gear. Explain that part about "makes us all prosperous" again, because there's no data to support that narrative.
What's interesting about all this is the way that politicians are openly threatening voters with recession if they vote against globalization. In other words, whatever "prosperity" is still being distributed to the bottom 80% is now dependent on a predatory version of globalization.
Let's rewind to the era of truly free trade, from the late Bronze Age up to the Roman Era. In the late Bronze Age (circa 1800 to 1200 B.C.), vigorous trade tied together the ancient empires and states of the Mideast and the Mediterranean. In the Roman Era, trade in silk and other luxuries tied China, India, Africa, the Mideast and the Roman Mediterranean together in a vast trading network.
In the good old days, merchants paid for goods in gold or silver, as the value of the precious metals were known to all and relatively easy to transport and verify.
Nowadays, trade and "prosperity" are dependent on currencies that are created out of thin air via borrowing or printing. The problem with gold, in the view of predatory globalization, is that it can't be printed or conjured out of thin air. That won't do, because predatory globalization's primary export is newly printed currencies: dollars, euros, yen and yuan.
This puts every nation that can't print a global reserve currency at an extreme disadvantage. While the U.S. can conjure "money" out of thin air and trade it for goods, other nations must cough up resources and goods in exchange for the "money," and borrow it at hefty rates of interest if they want to use the global "money" for development or investment.
That leaves them highly vulnerable to foreign exchange fluctuations which can raise the cost of their interest due in dollars, etc. to punishing heights while devaluing whatever they built with the dollars, etc. they borrowed.
Then there's a financial crisis of loan defaults and those who created and loaned out their global reserve currency demand the debtor nation sell all its assets and resources at bargain prices. Being a member of the European Union didn't save Greece from this fate; no peripheral nation can protect itself from the predatory powers who can create currency at zero cost and send the value higher by restricting its issuance after other nations have loaded up on loans denominated in the reserve currency.
This is how "free" trade works in predatory globalization: The only thing that's free is the cost of issuing trillions in global reserve currency. Everything else will cost you dearly.


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Monday, August 13, 2018

Technocrats Rule: Democracy Is OK as Long as the People Rubberstamp Our Leadership

Technocrats rule the world, East and West alike.
We are in a very peculiar ideological and political place in which Democracy (oh sainted Democracy) is a very good thing, unless the voters reject the technocrat class's leadership. Then the velvet gloves come off. From the perspective of the elites and their technocrat apparatchiks, elections have only one purpose: to rubberstamp their leadership.
As a general rule, this is easily managed by spending hundreds of millions of dollars on advertising and bribes to the cartels and insider fiefdoms who pony up most of the cash.
This is why incumbents win the vast majority of elections. Once in power, they issue the bribes and payoffs needed to guarantee funding next election cycle.
The occasional incumbent who is voted out of office made one of two mistakes:
1. He/she showed a very troubling bit of independence from the technocrat status quo, so a more orthodox candidate is selected to eliminate him/her.
2. The incumbent forgot to put on a charade of "listening to my constituency" etc.
If restive voters can't be bamboozled into passively supporting the technocrat status quo with the usual propaganda, divide and conquer is the preferred strategy. Only voting for the technocrat class (of any party, it doesn't really matter) will save us from the evil Other: Deplorables, socialists, commies, fascists, etc.
In extreme cases where the masses confound the status quo by voting against the technocrat class (i.e. against globalization, financialization, Empire), then the elites/technocrats will punish them with austerity or a managed recession.The technocrat's core ideology boils down to this:
1. The masses are dangerously incapable of making wise decisions about anything, so we have to persuade them to do our bidding. Any dissent will be punished, marginalized, censored or shut down under some pretext of "protecting the public" or violation of some open-ended statute.
2. To insure this happy outcome, we must use all the powers of propaganda, up to and including rigged statistics, bogus "facts" (official fake news can't be fake news, etc.), divide and conquer, fear-mongering, misdirection and so on.
3. We must relentlessly centralize all power, wealth and authority so the masses have no escape or independence left to threaten us. We must control everything, for their own good of course.
4. Globalization must be presented not as a gargantuan fraud that has stripmined the planet and its inhabitants, but as the sole wellspring of endless, permanent prosperity.
5. If the masses refuse to rubberstamp our leadership, they will be punished and told the source of their punishment is their rejection of globalization, financialization and Empire.
Technocrats rule the world, East and West alike. My two favorite charts of the outcome of technocrats running things to suit their elite masters are:
The state-cartel-crony-capitalist version: the top .1% skim the vast majority of the gains in income and wealth. Globalization, financialization and Empire sure do rack up impressive gains. Too bad they're concentrated in the top 1.%.
The state-crony-socialist version: the currency is destroyed, impoverishing everyone but the top .1% who transferred their wealth to Miami, London and Zurich long ago. Hmm, do you discern a pattern here in the elite-technocrat regime?
Ideology is just a cover you slip over the machine to mask what's really going on.


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Friday, August 10, 2018

The Grand Irony of RussiaGate: The U.S. Becomes More Like the U.S.S.R. Every Day

When the Soviet regime exiled Sakharov in 1980, everybody assumed the USSR was permanent and impregnable to collapse.
There are many ironies in the RussiaGate drama, but none greater than this: The U.S. becomes more like the former U.S.S.R. every day. Longtime correspondent Bart D. sketches out the irony:
I look at the US economy and what I see in actual everyday life is that corrupted capitalism has resulted in the same problems for average citizens as what crony communism did for the citizens of the USSR.
Poor consumer choice. Poor resource allocation. Poor quality consumer products. Poor environmental management/outcomes. Hyper-vigilance and hyper-control of Government over its people. Dodgy Utilities. The difference is that the Soviet Union had a better healthcare system than USA currently has and better housing availability for common people.
How’s the irony! Capitalism and Communism ultimately end up with similar outcomes and for the same reason: Cartel behaviours and cronyism.
Exactly. When the system is rigged to benefit insiders, cartels, cronies and elites at the expense of the many "outsiders," the status quo must mask this reality with propaganda and Big Lies: that is, keep repeating the lie until people believe it due to its embrace by "experts" and authorities.
Case in point: inflation. The masses consuming the mainstream media apparently accept the Big Lie that inflation (i.e. loss of purchasing power of our money) is 2%, i.e. near zero.
But the reality is quite different: stagnant wages + soaring real-world inflation = lower standards of living, which is precisely what the bottom 80% of American households have been experiencing for the past decade of "growth" and "recovery."
The citizens of the old Soviet regime had a wry saying: they pretend to pay us and we pretend to work. I propose a variation for the hapless US citizenry:
They pretend inflation is low and we pretend to be prosperous.
The current clampdown on social media and alternative media in America is ripped right from the playbook of the Soviet regime. We must "protect" you from "fake news," lest you start questioning the official narratives of strong growth, prosperity, low inflation, etc.
Then there's the case of Julian Assange, in exile for releasing what everyone concedes is factual evidence on par with The Pentagon Papers in the 1970s which blew up the false (but convenient to the elites) narratives of the Vietnam War.
They can't paint Assange with the "fake news" brush, so they exile him just as the old Soviet regime exiled Andrei Sakharov in 1980, a hero of the Soviet Union and laureate of the Nobel Peace Prize in 1975.
Please note that the Soviet Union collapsed a decade after exiling Sakharov.Ramping up repression and official propaganda, strangling dissent and marginalizing independent skeptics are the desperate, last-ditch tactics of a doomed regime that only serves the interests of insiders and elites.
There are many pathways to collapse, with financial collapse being a favorite of regimes that print/borrow immense sums to buy off their populace and enrich the insiders/elites-- for example, Venezuela:
When the Soviet regime exiled Sakharov in 1980, everybody assumed the USSR was permanent and impregnable to collapse. In other words, "it can't happen here." But it did happen, and believing "it can't happen here" did nothing but hasten the collapse.


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