Tuesday, January 15, 2019

France's Ghosts of '68: General Strike vs. Macron and the Technocrat Elites

The Paris elites and their enablers may find that the next general strike won't immobilize Paris, it will strangle Paris from the periphery.
Eleven months ago, I posited in The Ghosts of 1968 (2/14/18) that the idealistic hope that mass demonstrations could trigger real reform had expired. The mass demonstrations of the gilets jaunes (yellow vests) in 2018 dramatically reinvigorated the topic.
I don't see the yellow vest uprising as idealistically fueled; it's fueled by desperation and what Francis Fukuyama termed the working classes' "perception of invisibility" in a recent essay (Against Identity Politics (Foreign Affairs, Sept/Oct. 2018), a view echoed by French geographer / author Christophe Guilluy who said that "the French people are using the gilets jaunes to say we exist."
Guilluy: "Not only does peripheral France fare badly in the modern economy, it is also culturally misunderstood by the elite. The yellow-vest movement is a truly 21st-century movement in that it is cultural as well as political. Cultural validation is extremely important in our era.
One illustration of this cultural divide is that most modern, progressive social movements and protests are quickly endorsed by celebrities, actors, the media and the intellectuals. But none of them approve of the gilets jaunes. Their emergence has caused a kind of psychological shock to the cultural establishment. It is exactly the same shock that the British elites experienced with the Brexit vote and that they are still experiencing now, three years later."
Interviewer: How have the working-classes come to be excluded?
Guilluy: "All the growth and dynamism is in the major cities, but people cannot just move there. The cities are inaccessible, particularly thanks to mounting housing costs. The big cities today are like medieval citadels. It is like we are going back to the city-states of the Middle Ages. Funnily enough, Paris is going to start charging people for entry, just like the excise duties you used to have to pay to enter a town in the Middle Ages.
The cities themselves have become very unequal, too. The Parisian economy needs executives and qualified professionals. It also needs workers, predominantly immigrants, for the construction industry and catering et cetera. Business relies on this very specific demographic mix. The problem is that ‘the people’ outside of this still exist. In fact, ‘Peripheral France’ actually encompasses the majority of French people."
Interviewer: What role has the liberal metropolitan elite played in this?
Guilluy: We have a new bourgeoisie, but because they are very cool and progressive, it creates the impression that there is no class conflict anymore. It is really difficult to oppose the hipsters when they say they care about the poor and about minorities.
But actually, they are very much complicit in relegating the working classes to the sidelines. Not only do they benefit enormously from the globalised economy, but they have also produced a dominant cultural discourse which ostracises working-class people.
The middle-class reaction to the yellow vests has been telling. Immediately, the protesters were denounced as xenophobes, anti-Semites and homophobes. The elites present themselves as anti-fascist and anti-racist but this is merely a way of defending their class interests. It is the only argument they can muster to defend their status, but it is not working anymore.
Now the elites are afraid. For the first time, there is a movement which cannot be controlled through the normal political mechanisms. The gilets jaunes didn’t emerge from the trade unions or the political parties. It cannot be stopped. There is no ‘off’ button. Either the intelligentsia will be forced to properly acknowledge the existence of these people, or they will have to opt for a kind of soft totalitarianism."
Mobilizing 80,000 heavily armed "security forces" is more like hard totalitarianism, justified, of course, by a fatuous claim of defending "the social order," i.e. the complete domination of elites.
But the French elites are discovering the disconcerting reality that it's impossible to defend every traffic-speed camera, every bank, etc. from sabotage.
The class analysis of the current crisis is now coming into focus: a reversal of polarity from the 1968 general strike of elite students and labor unions. Fifty years ago, the students of the elite Paris universities garnered the support of the labor unions and this combined force nearly toppled the government with a general strike.
Now, students of the elite Paris universities are complicit supporters of the technocrat elite, as the most fervent hope of most of these students is to nail down a position in the technocrat elite threatened by the yellow vest dissenters.
The labor unions are also missing in action, as they are now adjuncts of the ruling elites, feeding at the same trough of tax revenues and corporate globalization-financialization profits.
The gilets jaunes / yellow vests are a working class revolt against the elites and those who identify with the elites: the fake-progressive hipsters, the aspiring technocrats and the comfortably secure state unions, all of whom are now on the elite side of the barricades.
The Paris elites and their enablers may find that the next general strike won't immobilize Paris, it will strangle Paris from the periphery. The unions which were on the democratic side of the barricades 50 years ago may find their identification with the ruling elite challenged, and they'll be forced to either side with the authentic working class (yellow vests) in a general strike or throw their support behind the undemocratic technocrat elites that run France for their own benefit.
The coming general strike may not echo 1968: rather than a grand confrontation that invites the elites' brutal paramilitary suppression, the working class dissenters may wage a guerrilla / asymmetric warfare campaign of sabotage and fleeting demonstrations that exhausts the paramilitary "security forces" and increases the political and financial costs of the elites' suppression.
The fake-progressive hipsters claiming to be anti-fascist are themselves the anti-working class fascists, and they're finally being called out on their self-serving hypocrisy.
"On Tuesday, the person picked to lead the country's planned "great debate" on the issues resigned over her €14,666 monthly salary (£13,200; $16,800)" which is $200,000 annually, roughly seven or eight times the average worker's salary.
That's the class division in a nutshell. The fake-progressive technocrats are skimming $200,000 a year to defend an indefensible undemocratic neofeudal system of exploitation that handsomely benefits the few at the expense of the many.
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, January 14, 2019

As Germany and France Come Apart, So Too Will the EU

If we follow the logic and evidence presented in these seven points, we are forced to conclude that the fractures in France, Germany and the EU are widening by the day.
When is a nation-state no longer a functional state? It's an interesting question to ask of the European nation-states trapped in the devolving European Union. Longtime correspondent Mark G. recently posed seven indicators of dissolving national sovereignty; here's his commentary:
"RE: The Ghosts of 1968 (February 14, 2018):
In France the "Ghosts of 1968" have become the Poltergeists of 2018. This looks like another real watershed in European and world history. Once again Parisian mobs have appeared and have collectively realized they now hold the real power. And their issues are all anti-EU (European Union) and anti-NWO. (New World Order)
I'm honing my German Collapse Scenario as more data flows in, as it is in ever-faster and larger quantities. 'Germany' will implode in parallel with the EU.
So-called 'states' with:
1. no effective military forces
2. no control of their own borders
3. no control of their currency and banks
4. a government with a 'diverse' population in which the majority either has no loyalty to Berlin (recent 'refugee' immigrants) or has dropped its loyalty (large parts of Bavaria and Baden-Wurttemberg), and which is also losing the allegiance of the many eastern European immigrants in Germany. These people are among the most energized opponents of the 'refugee' influx.
5. Fast rising anarchy and lawlessness by the recent 'refugee' immigrants, and which is well known to the population, as are the official orders to the police to minimize crime statistics reporting by not opening official cases.
and
6. A mass media believed by no one due to the bald lies it broadcasts 24/7 daily about numbers 1-5.
...will soon cease to exist. This is confirmed by:
7. The continuing spiral of the ruling post WWII political parties into their own political black holes. CDU/CSU on the right and SDP on the left have all lost their hold on the modern German population.
The biggest joke of all is that Theresa May is negotiating the terms of "Brexit" from the EU with a political corpse and not a viable polity.
Another round or lap is coming soon. Personally I think the only thing staving off another eurozone banking crisis is the absolute certainty that no imaginable German government can currently agree to the slightest external concession without risking an internal political collapse.
Thus all the various Eurozone elites involved are refraining from provoking such a crisis for calculated narrow reasons. This leaves it to a European mob in some capital to initiate it by confronting a national government with either internal political collapse or re-entering EU-wide monetary and fiscal conflict with the ECB/EU gang.
And yes, I'm sure you spotted the next part. Poland and Hungary acting on behalf of the Phoenix Rising Ersatz Austro-Hungarian Empire will twist the EU's tail at that time as hard as they can for maximum regional advantage."
The fracturing of Germany is conventionally viewed as somewhere between implausible and impossible, and the same can be said of France and Germany drifting apart and the EU dissolving: the mainstream is committed to presenting Germany, the German-French alliance, the euro and the EU as rock-solid.
Yet if we follow the logic and evidence presented in these seven points, we are forced to conclude that the fractures in France, Germany and the EU are widening by the day, and that the ceaseless propaganda spewed by the ruling elites isn't mending the fractures or restoring the illusion of stability.
(Regarding the French yellow vest dissenters: the 80,000 mobilized security forces are intentionally seeking to incite violence to justify crushing the yellow vest dissenters with massive paramilitary force: French Democracy Dead or Alive?)
In the long run of history, the apparent solidity of 20 or 30 years can shatter very rapidly as populations under increasing financial and political stress default to much more enduring divisions and loyalties.
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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Sunday, January 13, 2019

The Decline and Fall of the European Union

This exhaustion of the neocolonial-neofeudal model was inevitable, and as a result, so too is the decline and fall of the European integration/exploitation project.
That a single currency, the euro, would fracture rather than unite Europe was understood long before the euro's introduction as legal tender on January 1, 2002. The euro, the currency of 19 of the 28 member states of the European Union, is only one of the various institutions tying the member nations of the European union together, but it is the linchpin of the financial integration touted as one of the primary benefits of EU membership.
Skepticism of the benefits of EU membership is rising, as citizens of the member nations are questioning the surrender of national sovereignty with renewed intensity.
The technocrat elite that holds power in the EU is attempting to marginalize critics as populists, nationalists or fascists, overlooking the untidy reality that the actual source of tyranny is arguably the unelected bureaucrats of the EU who have taken on extraordinary powers to strip the citizenry of member states of civil liberties (i.e. the right to dissent) and of meaningful political enfranchisement.
As I have patiently explained since 2012, the underlying structure of the EU is neocolonialism, specifically, neocolonial-financialization. Stripped of artifice, the financial institutions of the EU core have colonized the EU periphery via the euro and the EU and imposed a modernized system of extractive serfdom on the citizenry of the core and periphery alike.
To understand the neocolonial-financialization model, we must revisit the classic model of colonialism. In the old model of Colonialism, the colonizing power conquered or co-opted the Power Elites of the region, and proceeded to exploit the new colony's resources and labor to enrich the core or center, i.e. the Imperial nation and its ruling elites.
This traditional model of colonialism was forcibly dismantled in the 1940s-1960s. Former colonies established their political independence, a process that diminished the wealth and control of former colonial powers.
In response, global financial powers sought financial control rather than political control. This is the key dynamic of the Neocolonial-Financialization Model(May 24, 2012), which substitutes the economic power of financialization (debt, leverage and speculation) for the raw power of conquest and political control.
The main strategy of financialization is: extend cheap credit to those with limited access to capital. Those with limited access to capital will swallow the bait and willingly agree to onerous conditions.
Then, when the credit expansion reaches levels that cannot be supported, the lenders demand collateral and/or favorable trade and financial concessions.
These tactics have been well-documented in books such as The Shock Doctrine: The Rise of Disaster Capitalism and Confessions of an Economic Hit Man.
But the economic pillaging of former colonies has limits, and as a consequence the global financial powers developed the Neocolonial Model, which turns these same techniques on one's home region.
Thus Greece and other capital-poor European nations were recognized as the periphery that could be exploited by the core, and the euro was the ideal tool to exploit the economies of nations which could never have generated credit/housing bubbles without the wide-open spigots of cheap credit flooding their economies.
In Neocolonialism, the forces of financialization are used to indenture the local Elites and populace to the financial core: the peripheral "colonials" borrow money to buy the finished goods manufactured in the core economies, enriching the Imperial Elites with A) the profits made selling goods to the debtors B) interest on credit extended to the peripheral colonies to buy the core economies' goods and "live large", and C) the transactional skim of financializing peripheral assets such as real estate and State debt.
In essence, the French and German banks colonized Europe's periphery nations via the financializing euro, which enabled a massive expansion of debt and consumption in the periphery. The banks and exporters of the core extracted enormous profits from the periphery via this expansion of debt and consumption.
The assets and income of the periphery are flowing to the core as interest on the private and sovereign debts that are owed to the core's money-center private banks.
Note how little of the Greek "bailout" actually went to the citizenry of Greece and how much was interest paid to the financial powers. The core has stripped Greece of collateral and political independence, just as the colonial powers of the 19th century stripped the African and Indo-Asian regions of income, assets and political independence.
This is not just the perfection of neocolonialism but of neofeudalism as well.The peripheral nations of the EU are effectively neocolonial debtors of the core, and the taxpayers of the core nations are now feudal serfs whose labor is devoted to making good on any financialization schemes that go bad.
Neocolonialism benefits both the core's financial Aristocracy and the periphery's oligarchies. This is ably demonstrated in the essay Misrule of the Few: How the Oligarchs Ruined Greece.
The EU has finally reached the endgame of the Neocolonial-Financialization Model. There are no more markets to exploit with financialization, no more assets to strip, and the serfs (a.k.a. yellow vests) of the core are tiring of being stripmined in service of the EU kleptocracy.
At this point, the financial Aristocracy has an unsolvable dilemma: writing off defaulted debt also writes off assets and income streams, for every debt is the core's asset and income stream. When all those phantom assets are recognized as worthless, the system implodes.
This exhaustion of the neocolonial-neofeudal model was inevitable and as a result, so too is the decline and fall of the European integration/exploitation project.
Recent podcasts:
Jonathon Twombly and I discuss The Everything Bubble: Its Effect on The Current Market and Real Estate Investing
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, January 10, 2019

Where Will You Be Seated at the Banquet of Consequences?

To get a good seat at the banquet of consequences, the owner of capital has to shift his/her capital into scarce forms for which there is demand.
The Banquet of Consequences is being laid out, and so the question is: where will you be seated? The answer depends on two dynamics I've mentioned many times: what types of capital you own and the asymmetries of our economy.
One set of asymmetries is the result of the system isn't broken, it's fixed, i.e. rigged to favor the few at the expense of the many. There are many manifestations of neofeudal asymmetry that divides neatly into two classes and two systems, the nobility and the serfs.
A rich kid caught with drugs gets a wrist-slap, a poor kid gets a tenner in the Drug Gulag.
Upper-middle class households are tax-donkeys, paying high taxes and getting few deductions, while mega-wealthy corporations and financiers enjoy offshore tax shelters of the kind exposed by the Panama Papers.
The stock market operators use high-frequency trading to front-run the market and generate profits that are inaccessible to serfs with retail trading accounts.
And so on. Given that the nobility control the machinery of governance (so-called democracy), there's no way for commoners to influence the neofeudal cartel-state asymmetries short of shutting down the entire system.
Which leaves the asymmetries created by the dynamics of the 4th Industrial Revolution in which new technologies and business models are destabilizing every sector of the old economy.
The core dynamic here is value flows to what's scarce and in demand. The asymmetric returns on capital and labor are the direct result of what's scarce and what's not scarce and what's in demand and what's not in demand.
Ordinary labor and college diplomas are not scarce and therefore command very little premium. Ordinary capital is also not scarce, and hence the low yield on ordinary capital.
This is why your place at the banquet of consequences will depend on what kinds of capital you own, where you own it and when you own it, the size of your debt burden and the flexibility of your cost basis/structure.
Take a house as an example. A house is arguably a limited form of capital as it doesn't generate an income unless you rent part of it out or conduct a business from home. It's also very illiquid (costly to sell and the process takes months) and highly sensitive to conditions outside the owners' control--interest rates, real estate bubbles and downturns, etc.
Let's say the owner encloses the garage and rehabs the space into a rental studio. Now the house is a different form of capital as it has the potential to generate income.
Let's say there are identical houses, one in a white-hot market with high demand for housing and the other in a depressed region losing population and enterprises.
In the high-demand region, the studio fetches $1600. In the low demand region, it fetches $400, if the homeowner can find a tenant at all.
Let's say the owner of the house in the high-demand market decides to sell and take the capital gains that result from owning real estate in a high-demand market. Her neighbor hangs on and a year later valuations have declined 25% and buyers are scarce/nonexistent.
Where each owner gets seated depends on what kind of capital you own, where you own it and when you own it.
As I explain in my book Get a Job, Build a Real Career and Defy a Bewildering Economy, skills, experience and collaborative networks are also forms of capital. But like a house, the skills, experiences and networks can only generate high returns if there is a relative scarcity of these specific forms of capital and there is demand for them.
To get a good seat at the banquet of consequences, the owner of capital has to shift his/her capital into scarce forms for which there is demand. This is much easier to manage if the owner of capital has very little debt (and what debt they do have is fixed-rate and long-term), a very low fixed-cost basis/structure, willingness to learn, an appetite for risk and the flexibility to make radical changes to avoid declines in income, capital and control.
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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