War On the Weak and Different: Eugenics In the US, UK, and Germany

A war on the weak and the different often takes on a bipartisan flavor, and is at its most virulent at the extremes of the right and of the left.   Ideology trumps morality.

As you may recall, many of our neo-cons came from the far left, making an almost seamless migration to the far right.

Unless one understands the nature of such extremism as being essentially statist, and antithetical to individual life, one cannot see the nature of their otherwise strange interconnectedness and convergence.

The extremes of the left and right can sometimes be kindred spirits, particularly in their disdain for the merely human, in light of the needs of the policies of the State and its models of perfection.

Gold Daily and Silver Weekly Charts - Statism is Relativism With Reference Only To Itself

"If relativism signifies contempt for fixed categories and those who claim to be the bearers of objective immortal truth, then there is nothing more relativistic than Fascist attitudes and activity.

From the fact that all ideologies are of equal value, we Fascists conclude that we have the right to create our own ideology and to enforce it with all the energy of which we are capable. ”

Benito Mussolini, Diuturna

That philosophy described by Benito is fiat with a capital 'F.'  

In a fascist or more properly statist regime, the state is above all else.  All values, including money, are whatever we say that they are, to the extent that the state can back them up with whatever amount of fraud and force that are required.  Everything that a tyrant or tyrant state does is legal, because they hold their power as the ultimate source of the law, without the appeal to reasonableness or recourse to equanimity.

This is directly opposed to the principle of a higher justice that is embodied in the rule of law.   There can be no real independent justice if there is no value transcending human power.  If there is no standard of truth, then all ideas are equally meaningless and without inherent value unless backed by power and the will to decree 'let it be done.'  

A trillion dollars may be represented by market tested legal debt, by a finite store of gold, a single platinum coin, or the stalk of a rotting turnip, if we say that it is so.  All of these ideas are equally true says the sophist, and all value is arbitrary, to be decided by the will of the state.

This is the very blueprint for abuse from the extremes of both the left and the right, the statists of the Socio-Political Continuum who see power as the greatest good, whether their perspective is from the left or the right.

The great American innovation was to claim that certain values are self-evident, true without contingency to a counterparty, because they have been endowed as a part of nature by a transcendent power.   They may have made sometimes strong distinctions between human religions and that transcendent power, but the acknowledgement of the subordination of the law to certain higher values is unmistakable.  And because those values did not come from the state, they are 'inalienable' even by the state.

Yes, we can argue about the implications, dimensions and definitions of rights and freedoms.  But we can never cynically dismiss them as did the statists of the 20th century, most of whom also by necessity adopted a state religion, from state atheism to a vague neo-pagan mythology of the blood or some other state sponsored belief that was a tool of their official will.

I know this should be obvious, but it is remarkable how easily people can forget the basis for the great American experiment and the principles that inspired it.  It is the philosophical notion of the legal restraint of power and accountability of government to its source in the people themselves endowed with values and privileged by a power above the state.

Now, one can certainly argue how those standards will be incorporated into the law, and what those standards ought to be in practice.  But it is undeniable that there must be non-arbitrary standards, and that the law is not in any way sufficient to itself.  This is no form of legalism or a religion of the law. 

 

The law itself is answerable to those standards of authority granted by the consent of the governed with the bounds of recognizing that which exists transcendently.

"If there's no God and no life beyond the grave, doesn't that mean that men will be allowed to do whatever they want?'  

'Didn't you know that already?' he said and laughed again. 'An intelligent man can do anything he likes as long as he's clever enough to get away with it."

Fyodor Dostoevsky, The Brothers Karamazov

And once again, I am not saying that there ought to be a gold standard per se. Not at all. There are many ways to set standards and maintain them, with gold having many of the key characteristics of a good external standard.  And so it can inform us by its historical example.

 

All things can be turned to evil, even inherently good things.  Our system is capable of corrupting almost anything including the word of God itself, and our own Constitution if we allow it.   Our hypocrisy knows few bounds, and our law has too often descended into a mere ritual of legality with little enough reference to justice.

But those things that are transcendent of human power and our pride at least remind us that we are doing evil, and that we are not sufficient unto ourselves as the arbiters of the universe. 

But I will go so far to say that virtually every would-be statist who wishes to set themselves up as an authority by fiat will almost certainly find gold to be troublesome, an impediment, and something to be feared and if possible, controlled.  

Like private conscience, and a belief in a power greater than the power of the state, gold whispers in the silence to us, that something is terribly wrong.

It was a quiet option expiration on the Comex today.  More on that tomorrow.

Have a pleasant evening.

Sheldon Wolin: Inverted Totalitarianism and the Rise of the Corporatist Neo-Cons

“The enormous gap between what US leaders do in the world and what Americans think their leaders are doing is one of the great propaganda accomplishments of the dominant political mythology.”

Michael Parenti

Note that Sheldon Wolin wrote his essay and book referenced below long before the revelations about the surveillance state, and the bailout and ongoing subsidy of the corporate financial sector by the Treasury and Federal Reserve, with the proposed counterbalance being the imposition of austerity on the greater public, and the confiscation of private savings first through monetary inflation with carefully targeted distribution, preferential immunities, and then through ongoing subsidies and bail-ins.

Although I enjoy Parenti's insight, I think an even greater propaganda accomplishment has been to distort and twist the dissident impulse of a free people into the ironically named libertarian support for dominance of the many by a powerful few, and the subservience of the individual to the corporate State, totalitarianism by another name and shape, but to essentially the same effect. Orwell or Bernays could have not imagined it any better.

And of course, the far left is no better in its elevation of the central power over the rights and integrity of the individual.  Human beings are always an endangered species in times of great change and political polarization.

The Nation
Inverted Totalitarianism
By Sheldon Wolin
May 1, 2003

The war on Iraq has so monopolized public attention as to obscure the regime change taking place in the Homeland. We may have invaded Iraq to bring in democracy and bring down a totalitarian regime, but in the process our own system may be moving closer to the latter and further weakening the former.

The change has been intimated by the sudden popularity of two political terms rarely applied earlier to the American political system. "Empire" and "superpower" both suggest that a new system of power, concentrated and expansive, has come into existence and supplanted the old terms. "Empire" and "superpower" accurately symbolize the projection of American power abroad, but for that reason they obscure the internal consequences.

Consider how odd it would sound if we were to refer to "the Constitution of the American Empire" or "superpower democracy." The reason they ring false is that "constitution" signifies limitations on power, while "democracy" commonly refers to the active involvement of citizens with their government and the responsiveness of government to its citizens. For their part, "empire" and "superpower" stand for the surpassing of limits and the dwarfing of the citizenry.

The increasing power of the state and the declining power of institutions intended to control it has been in the making for some time. The party system is a notorious example. The Republicans have emerged as a unique phenomenon in American history of a fervently doctrinal party, zealous, ruthless, antidemocratic and boasting a near majority. As Republicans have become more ideologically intolerant, the Democrats have shrugged off the liberal label and their critical reform-minded constituencies to embrace centrism and footnote the end of ideology.

In ceasing to be a genuine opposition party the Democrats have smoothed the road to power of a party more than eager to use it to promote empire abroad and corporate power at home. Bear in mind that a ruthless, ideologically driven party with a mass base was a crucial element in all of the twentieth-century regimes seeking total power.

Representative institutions no longer represent voters. Instead, they have been short-circuited, steadily corrupted by an institutionalized system of bribery that renders them responsive to powerful interest groups whose constituencies are the major corporations and wealthiest Americans. The courts, in turn, when they are not increasingly handmaidens of corporate power, are consistently deferential to the claims of national security.

Elections have become heavily subsidized non-events that typically attract at best merely half of an electorate whose information about foreign and domestic politics is filtered through corporate-dominated media. Citizens are manipulated into a nervous state by the media's reports of rampant crime and terrorist networks, by thinly veiled threats of the Attorney General and by their own fears about unemployment. What is crucially important here is not only the expansion of governmental power but the inevitable discrediting of constitutional limitations and institutional processes that discourages the citizenry and leaves them politically apathetic.

No doubt these remarks will be dismissed by some as alarmist, but I want to go further and name the emergent political system "inverted totalitarianism." By inverted I mean that while the current system and its operatives share with Nazism the aspiration toward unlimited power and aggressive expansionism, their methods and actions seem upside down. For example, in Weimar Germany, before the Nazis took power, the "streets" were dominated by totalitarian-oriented gangs of toughs, and whatever there was of democracy was confined to the government. In the United States, however, it is the streets where democracy is most alive--while the real danger lies with an increasingly unbridled government.

Or another example of the inversion: Under Nazi rule there was never any doubt about "big business" being subordinated to the political regime. In the United States, however, it has been apparent for decades that corporate power has become so predominant in the political establishment, particularly in the Republican Party, and so dominant in its influence over policy, as to suggest a role inversion the exact opposite of the Nazis'. At the same time, it is corporate power, as the representative of the dynamic of capitalism and of the ever-expanding power made available by the integration of science and technology with the structure of capitalism, that produces the totalizing drive that, under the Nazis, was supplied by ideological notions such as Lebensraum.

In rebuttal it will be said that there is no domestic equivalent to the Nazi regime of torture, concentration camps or other instruments of terror. But we should remember that for the most part, Nazi terror was not applied to the population generally; rather, the aim was to promote a certain type of shadowy fear--rumors of torture--that would aid in managing and manipulating the populace. Stated positively, the Nazis wanted a mobilized society eager to support endless warfare, expansion and sacrifice for the nation.

While the Nazi totalitarianism strove to give the masses a sense of collective power and strength, Kraft durch Freude ("Strength through joy"), inverted totalitarianism promotes a sense of weakness, of collective futility. While the Nazis wanted a continuously mobilized society that would not only support the regime without complaint and enthusiastically vote "yes" at the periodic plebiscites, inverted totalitarianism wants a politically demobilized society that hardly votes at all. Recall the President's words immediately after the horrendous events of September 11: "Unite, consume and fly," he told the anxious citizenry. Having assimilated terrorism to a "war," he avoided doing what democratic leaders customarily do during wartime: mobilize the citizenry, warn it of impending sacrifices and exhort all citizens to join the "war effort."

Instead, inverted totalitarianism has its own means of promoting generalized fear; not only by sudden "alerts" and periodic announcements about recently discovered terrorist cells or the arrest of shadowy figures or the publicized heavy-handed treatment of aliens and the Devil's Island that is Guantánamo Bay or the sudden fascination with interrogation methods that employ or border on torture, but by a pervasive atmosphere of fear abetted by a corporate economy of ruthless downsizing, withdrawal or reduction of pension and health benefits; a corporate political system that relentlessly threatens to privatize Social Security and the modest health benefits available, especially to the poor. With such instrumentalities for promoting uncertainty and dependence, it is almost overkill for inverted totalitarianism to employ a system of criminal justice that is punitive in the extreme, relishes the death penalty and is consistently biased against the powerless.

Thus the elements are in place: a weak legislative body, a legal system that is both compliant and repressive, a party system in which one party, whether in opposition or in the majority, is bent upon reconstituting the existing system so as to permanently favor a ruling class of the wealthy, the well-connected and the corporate, while leaving the poorer citizens with a sense of helplessness and political despair, and, at the same time, keeping the middle classes dangling between fear of unemployment and expectations of fantastic rewards once the new economy recovers. That scheme is abetted by a sycophantic and increasingly concentrated media; by the integration of universities with their corporate benefactors; by a propaganda machine institutionalized in well-funded think tanks and conservative foundations; by the increasingly closer cooperation between local police and national law enforcement agencies aimed at identifying terrorists, suspicious aliens and domestic dissidents.

What is at stake, then, is nothing less than the attempted transformation of a tolerably free society into a variant of the extreme regimes of the past century. In that context, the national elections of 2004 represent a crisis in its original meaning, a turning point. The question for citizens is: Which way?

Sheldon Wolin is the author of Alexis de Tocqueville: Man Between Two Worlds and Democracy Incorporated: Managed Democracy and the Specter of Inverted Totalitarianism.

Here is a review of Wolin's book 'Democracy Incorporated' by Chalmers Johnson

Inverted Totalitarianism: A New Way of Understanding How the U.S. Is Controlled.

Ochberg: Citizens Living with a Disordered Overclass in Business and Government

As you may know I enjoy listening to Frank Ochberg.  I find his speaking style and his explanations to be very enjoyable, and relaxing.

And I am taking quite a bit of liberty in applying his thoughts to the idea expressed in the title. 

He is primarily known as an expert in Post Traumatic Stress Disorder, and I have been watching his videos in order to be a more effective caregiver, and a better friend to others.   We are all wounded and imperfect in our own ways, and progressing hopefully towards something better.

How do you define better?  Well, that is where morality and ethics come in.  And unfortunately they are quickly chucked overboard as an impediment by a narcissistic culture, much to its own eventual detriment.

He speaks on a wide range of behavioural topics. He has had some interesting things to say about psychopathy which I have shown here in the past.  But Robert Hare is the most prominent name in that area.

He is a cognitive behavioural therapist, and I have a passing knowledge of this only from courses I took as an undergrad, and some work I did for a professor in a related field of 'social styles.'  I don't pretend to be any subject matter expert in this, except for what I have read and seen first hand.

I came across a few new videos from Ochberg's series last night that I thought it would be useful to share.

One new thing did occur to me this time in watching, most likely in light of my having read the book This Town, by Mark Leibovich.  It was an update on the Beltway I had been seeking, since my own involvement there ended about fifteen to twenty years ago.  It was a little worse than I expected.  In many ways London, New York, and Washington have come to resemble The Capitol in The Hunger Games.

Large organizations can take on various characters and personalities that can change with time. They are often referred to as corporate 'cultures.'   If you change companies, you can often see the change in environment, how employees are viewed, how incentives and disincentives are given, and how problems are approached.

Narcissism, and its corrosive effects, first became evident to me in my corporate career, and it was an eye opener.

I believe that today in the US and UK at least, we have seen the rise of a political class dominated by a spirit of narcissism and Darwinistic privilege. It started with the Reagan and Thatcher administrations, but has carried through every one since then to greater or lesser degrees.  Clinton certainly made his own unique contribution in marrying the Democratic party to Big Money.

This is not to say that everyone becomes that way who happens to be in government, but rather, the 'tone' of the organization and its incentives tend to promote and reward that sort of behaviour, making it more acceptable and predominant than it might have been in the past.

And this is certainly no perfect analogy, because adult citizens are not children, just as adult employees are not children. But there is the kind of 'power imbalance' between boss and employee, and Congressman and citizen, that brings some validity into a comparison of responsibility and caring and attendance to oaths and duties that quite frankly I think have been discarded in this age of narcissism.

So, here are a few thoughts on some of these personality types, for your viewing enjoyment.

I have also included an unrelated piece on how men might best support their companions in the recovery from stressful situation. I found it to be very insightful.

So what are we to do about our crazy aunts and uncles, faux moms and dads in government who have taken oaths to 'serve, protect, and defend?'   And the serially abusive Big Daddy Warbucks who seek to bend the law and the country to the service of their personal whimsies and wills. 

Luckily in the intermediate term we can do what children have been doing throughout history.  We can bid them adieu, shun them as best we can, and in the meantime encourage the adults to speak up and bring some goodness and positive qualities to our society.   This is not easy because it is not as personally enriching for them as a corruption fueled by selfish greed.  

Sometimes the 99 percent seem to take on the character of a battered spouse these days: lied to, manipulated, and abused.  And there are enough who fall victim to the Stockholm syndrome and the corporatist propaganda, and allow their anger to be channeled towards their 'own children,' among them the weak.

It may be good to remember that many of those urging us to cut down government and the law are speaking from the very heart of the corruption and narcissism in our society. And once the laws are all cut down, who will be able to stand alone against the cold winds of corporate power that will blow across the land?

Enjoy.

Chris Hedges On the Real News

The Real News is featuring Chris Hedges to inaugurate a new series called Reality Asserts Itself.

Here is part two of a seven part series. Part one is an introduction to Hedges himself.

I don't always agree with Chris Hedges of course. If we did, one of us would probably be superfluous.

I find his ideas and observations to be thought provoking, even where I might not agree because I prefer different approaches or methods of achieving what could be similar objectives.

There is nothing wrong with that sort of divergence. Indeed, I find a diversity of thought and methods, within some fairly well established historical bounds of human decency, albeit too often violated for the sake of a false necessity or expediency, to be the most successful ways of achieving significant results in the real world.

But difference is anathema to the minds of the ideologues and true believers of whatever position on the political and social spectrum, left or right.    And this is why they almost always resort to involuntary conformity of thought, and become increasingly intolerant of the other.

Remembering the Forgotten: the Weak, the Infirm, the Dispossessed, the Elderly, the Other

"The greed of gain has no time or limit to its capaciousness. Its one object is to produce and consume. It has pity neither for beautiful nature nor for living human beings.

It is ruthlessly ready without a moment's hesitation to crush beauty and life."

Rabindranath Tagore


“The vast majority of the race, whether savage or civilized, are secretly kind-hearted and shrink from inflicting pain, but in the presence of the aggressive and pitiless minority, they don't dare to assert themselves.”

Mark Twain

The Case of Carrie Buck

“It is worth remembering one of the important lessons of the Buck story: a small number of zealous advocates can have an impact on the law that defies both science and conventional wisdom.”

Paul A. Lombardo, Three Generations, No Imbeciles: Eugenics, the Supreme Court, and Buck v. Bell


“I have studied with great interest the laws of several American states concerning prevention of reproduction by people whose progeny would, in all probability, be of no value or be injurious to the racial stock.”

Adolf Hitler

Übermenschen: The One Percent

"The essential characteristic of a good and healthy ruling elite, however, is that it views itself not as a function of the monarchy or the commonwealth, but as its very meaning and highest justification, and that it therefore accepts with a good conscience the sacrifice of untold human beings who, for its sake, must be reduced and lowered to incomplete human beings, to slaves, to instruments.

Their fundamental belief simply has to be that society must not exist for society's sake, but only as the foundation and scaffolding on which the best type of being is able to raise itself to its higher task and to a higher state of being..."

Friedrich Nietzsche

“The notion that persons should be safe from extermination as long as they do not commit willful murder, or levy war against the Crown, or kidnap, or throw vitriol, is not only to limit social responsibility unnecessarily, and to privilege the large range of intolerable misconduct that lies outside them, but to divert attention from the essential justification for extermination, which is always incorrigible social incompatibility and nothing else."

George Bernard Shaw

“Of all the problems which will have to be faced in the future, in my opinion, the most difficult will be those concerning the treatment of the inferior races of mankind.”

Leonard Darwin


"On Wall Street he and a few others—how many?—three hundred, four hundred, five hundred?—had become precisely that ... Masters of the Universe."

Tom Wolfe, The Bonfire of the Vanities


"As flies to wanton boys are we to the gods.
They kill us for their sport."

William Shakespeare, King Lear

"If you pour yourself out for the hungry, and satisfy the needs of the afflicted, then your light will rise in the darkness, and your gloom will become like the noon day sun."

Is 58:10


"Gentleness is everywhere in daily life, a sign that faith rules through ordinary things...

Even in a time of elephantine vanity and greed, one never has to look far to see the campfires of gentle people. Lacking any other purpose in life, it would be good enough to live for their sake."

Garrison Keillor

Note:  This marks the 5,000th post on this site.

The Political and Social Continuum - What About the Outliers? Does Sin Exist?

As you may recall I have constructed this model to help me conceptualize the 'continuum' of political and social thought.

One of the motivations for this particular form was to help me to understand why those at the extremes can 'cross over' so easily from one to the other.

And in practice, the two extremes seem identical in many ways.

But I have struggled for some time where a sociopath or psychopath might fit in this scheme of things.

Today it struck me that sociopaths and psychopaths can fit anywhere they like, although given their attraction to power and control over others they would be mostly found at the extremes.

They can move about most easily because they are 'outside the continuum'  and by definition  are exceptionally under-socialized.   For whatever reason, they do not 'fit' within a social structure, but are essentially outliers because of their pathology, the way in which they have rationalized themselves.

They are a mutated form of the self-actualizing person. They may seem quite personally powerful, but inside they are hollow, almost histrionic. They would be products of broken homes, and have marriages of convenience, mostly their own.

The narcissists are often highly verbally acute and talented at using speech, with high IQs.  But the tell is their lack of consistency.  And they thrive in places of upper management where performance and personal responsibility can be rationalized and diffused.  They are corrosive for the long term.

And the same off model status might be said to apply to misanthropes and hermits, the extreme form of self-imposed isolationism. At some point their social maturity has failed. And then there are the many socially immature who have never progressed beyond adolescence most likely because of some trauma or lack of support for their development. They lash out in anger because they know something is missing in their lives.

Politicians and certain types of public figures can be tough to place on this model because they are often poseurs, in that they are motivated primarily by power, and will assume various modes and guises to obtain it. They are most notable for the lack of consistency between their public and private lives, their very disingenuousness.

Indeed their private lives can often be quite distinct from their public reputations, and remarkably so.

I have known many 'driven' figures who from a public face would seem to be quite successful, and often remarkably so. But almost invariably they are unhappy to the point of being miserable, and they spread their misery to their family and all that come close to them. They are broken but functional and for some their obsession gives them a remarkable focus. They are not distracted by sincere feelings and abstract principles such as 'justice.' People are at best trophies to be collected and more often objects to be used and discarded.

Do not get me wrong.  No one is perfect, and the definition of normal is broad given the natural diversity of creation.  And at the end of the day, we are all imperfect and often broken people.  It is how we react to these things that makes us what we are.  Some must struggle more valiantly than others.

I cannot give you a precise definition of 'sin' without reference to personal belief, along with the usual classical references, although I do believe it objectively exists.   I think the best way to explore this is to ask a higher power, sincerely and with some persistence, to show our own sins to us.  And that might prove to be interesting, especially among those who think they are without it and beyond it.

And although I cannot define what normality and sin are, I think I know what hell is.  To paraphrase Dostoevsky, hell is the inability to love and to be loved, even when it is true and freely offered.  That is the terrible curse of Tantalus, and the source of much anger and discontent and oppression in the world.

So there is my slight modification to this model, and my pass at practical psychology for today.

It's Official. Krugman Does Not Understand the Value of Money

Well I did say that Mr. Krugman should proceed, and like Mitt Romney, he did, and doubled down.

I am not quite sure I have the words.  Chris Hedges was right.

Like other progressives and independents, I have been discouraged that many old school liberal economists have had so little to say about financial reform, and the frauds in the banking system, even as they blindly pressed their case for more stimulus to be distributed without repairing a broken financial system that taxes the real economy with fraud.   It is 'whatever works' as they define and measure it. Justice and equity have no part in their calculations. They learned part of the lesson from FDR, but not the part that really matters, and that made him memorable.

They make themselves and their models willfully blind to the crony capitalism that exists between the Fed and Wall Street, and the manipulation in the markets, and the lack of any credible prosecutions for some of the most egregious financial crimes since the 1920's.  How many more scandals will have to be revealed before they end their denial?

But in grabbing this whacko platinum gimmick of overt monetization which typifies almost everything that is wrong about modern economics, and in stubbornly claiming that it can do no harm, while dismissing anyone who expresses concern as some economic Luddite, Krugman and too many others have shown the purblind ignorance of the ideologue who does not understand what is wrong, and why the people are becoming restless. 

And they answer them with sophistry and derisive baby talk.  No wonder that economics is a disgraced profession. 

The greatest irony is when we become what we hate.

This is another example of the credibility trap, and a failure in leadership.  The Emperor is naked, and the people do not quite know what to do about it except to mill about in restless and embarrassed silence.

...For many people on the right, value is something handed down from on high It should be measured in terms of eternal standards, mainly gold; [Because something is not purely arbitrary does not require that it be divine - Jesse] I have, for example, often seen people claiming that stocks are actually down, not up, over the past couple of generations because the Dow hasn’t kept up with the gold price, never mind what it buys in terms of the goods and services people actually consume. 

And given that the laws of value are basically divine, not human, any human meddling in the process is not just foolish but immoral. Printing money that isn’t tied to gold is a kind of theft, not to mention blasphemy.  [Again, the intolerance of the ideologue, who is so far over on the continuum that they can only look across and see their other extreme, entirely overlooking the middle - Jesse]

For people like me, on the other hand, the economy is a social system, created by and for people. Money is a social contrivance and convenience that makes this social system work better — and should be adjusted, both in quantity and in characteristics, whenever there is compelling evidence that this would lead to better outcomes.  [Money is just another tool, a cool toy, to the financial engineers who govern the economy like a benevolent elite.  They do not understand value and consequences as they tinker and experiment, hoping for better luck next time.  And amongst financial engineers, Greenspan was Dr. Frankenstein. - Jesse]

It often makes sense to put constraints on our actions, e.g. by pegging to another currency or granting the central bank a high degree of independence, but these are things done for operational convenience or to improve policy credibility, not moral commitments — and they are always up for reconsideration when circumstances change.  [The ruling übermenschen are above conventional morality in their arcane knowledge. And how does one measure 'better outcomes?' For at the end of the day, economics is no pure science, but a social science of a certain class of policies, and policy has its roots in 'justice.' This is why the financiers must operate in secret, like the great Wizard of Oz. Because they have no science, but do not wish to be encumbered by anything, and especially something as inconvenient as justice, as they conduct their experiments. - Jesse]

Now, the money morality types try to have it both ways; they want us to believe that monetary blasphemy will produce disastrous results in practical terms too. But events have proved them wrong. [Yes that's right. The credit bubble, tech bubble, and housing bubbles have been benign and not based on policy errors. All of them were facilitated by economic quackery from both sides.  But the would be elite can admit no error. - Jesse]

And I do find myself thinking a lot about Keynes’s description of the gold standard as a “barbarous relic”; it applies perfectly to this discussion. The money morality people are basically adopting a pre-Enlightenment attitude toward monetary and fiscal policy — and why not? After all, they hate the Enlightenment on all fronts.  [As he cries for more leeches to bleed the patient... - Jesse]

The bottom line is that we aren’t really having a rational argument here. Nor can we: rationality has a well-known liberal bias. [The hubris of an ideology or a professional class in failure knows no bounds. - Jesse]

Paul Krugman, Barbarous Relics

Gold Daily And Silver Weekly Charts - Orwell's Final Warning

The endgame of deception continues.

Have a pleasant weekend.

See you Sunday evening.

Social Classes in 1984
The Theory and Practice of Oligarchical Collectivism
by Emmanuel Goldstein (George Orwell)

"...if leisure and security were enjoyed by all alike, the great mass of human beings who are normally stupefied by poverty would learn to think for themselves, become politically conscious and so depose the ruling oligarchy; therefore, in the long run, a hierarchical society is only possible on a basis of poverty and ignorance.

Given that large-scale, mechanised production could not be eliminated once invented, the Party arranges the destruction of surplus goods, before that makes the masses too comfortable, and hence, in the long run, too intelligent.

Hence perpetual war is always so planned as to eat up any surplus that might exist after meeting the bare needs of the population. It is a deliberate policy to keep even the favoured groups somewhere near the brink of hardship, because a general state of scarcity increases the importance of small privileges and thus magnifies the distinction between one group and another...

The essence of oligarchical rule is not father-to-son inheritance, but the persistence of a certain world-view and a certain way of life... A ruling group is a ruling group so long as it can nominate its successors...

Who wields power is not important, provided that the hierarchical structure remains always the same.”

The Socio-Political Continuum
By Jesse

A credibility trap is when the regulatory, political and informational functions of a society have been compromised by corruption and fraud, so that the leadership cannot effectively reform or even honestly address the situation without impairing and implicating, at least incidentally, a broad swath of the power structure, including themselves.

The status quo tolerates the corruption and the fraud because they have profited at least indirectly from it, and would like to continue to do so. Even relatively honest reformers within the power structure become susceptible to various forms of soft blackmail and coercion.

And so a failed policy and its support system become almost self-sustaining, long after it is seen by the people to have failed, and in failing become counterproductive.  Admitting failure is not an option for those who receive their power from that system.

The continuity of the structural hierarchy must therefore be maintained at all costs, even to the point of becoming a blatant hypocrisy.





Point Zero of Systemic Collapse
By Chris Hedges

"...We stand on the cusp of one of the bleakest periods in human history when the bright lights of a civilization blink out and we will descend for decades, if not centuries, into barbarity.

The elites have successfully convinced us that we no longer have the capacity to understand the revealed truths presented before us or to fight back against the chaos caused by economic and environmental catastrophe. As long as the mass of bewildered and frightened people, fed images that permit them to perpetually hallucinate, exist in this state of barbarism, they may periodically strike out with a blind fury against increased state repression, widespread poverty and food shortages.

But they will lack the ability and self-confidence to challenge in big and small ways the structures of control. The fantasy of widespread popular revolts and mass movements breaking the hegemony of the corporate state is just that – a fantasy."

Taibbi: The True Story of Mitt Romney and Bain Capital

For a related story read The Federal Bailout That Saved Mitt Romney also from Rolling Stone.

Greed and Debt: The True Story of Mitt Romney and Bain Capital
By Matt Taibbi
August 29, 2012

The great criticism of Mitt Romney, from both sides of the aisle, has always been that he doesn't stand for anything. He's a flip-flopper, they say, a lightweight, a cardboard opportunist who'll say anything to get elected.

The critics couldn't be more wrong. Mitt Romney is no tissue-paper man. He's closer to being a revolutionary, a backward-world version of Che or Trotsky, with tweezed nostrils instead of a beard, a half-Windsor instead of a leather jerkin. His legendary flip-flops aren't the lies of a bumbling opportunist – they're the confident prevarications of a man untroubled by misleading the nonbeliever in pursuit of a single, all-consuming goal. Romney has a vision, and he's trying for something big: We've just been too slow to sort out what it is, just as we've been slow to grasp the roots of the radical economic changes that have swept the country in the last generation.

The incredible untold story of the 2012 election so far is that Romney's run has been a shimmering pearl of perfect political hypocrisy, which he's somehow managed to keep hidden, even with thousands of cameras following his every move. And the drama of this rhetorical high-wire act was ratcheted up even further when Romney chose his running mate, Rep. Paul Ryan of Wisconsin – like himself, a self-righteously anal, thin-lipped, Whitest Kids U Know penny pincher who'd be honored to tell Oliver Twist there's no more soup left. By selecting Ryan, Romney, the hard-charging, chameleonic champion of a disgraced-yet-defiant Wall Street, officially succeeded in moving the battle lines in the 2012 presidential race...

Read the rest here.

Michael Parenti: Functions of Fascism and Capitalism's Self Inflicted Wounds

One thing that Parenti does not discuss is the similarity between state communism and fascism in their anti-humanism, central planning, and self-destructive fanaticism.

Many thinkers distinguish between fascism and communism in their attitude toward globalization: the fascists are nationalists and the communists are internationalists.

I believe that my model of the socio-political continuum bridges that gap by referencing the extremes against a measure of their attitude towards the individual as a reference, and not in their approach to how they might organize a world government to which they all seem to aspire.

It also helps to explain how easily parties can cross the divide between the extremes. A Hitler can take a workers party like the NSDAP and turn it into a fascist dictatorship. The neo-cons can morph from far left to far right.

Extremes call out to their opposite extremes. Communism breeds fascism, and vice versa.  Extremes breed extremes, and crowd out the balanced approach to life of the mind, body, and spirit. 

And those on the extremes can no longer see the middle ground;  everything becomes 'the other.'  And so they first fail by avoiding all compromise as a sign of weakness in their increasing ideological rigidity, and then compound error upon extreme error as they silence their critics.  Their errors compounded, they finally take themselves and their followers into the abyss of their own excess.

Parenti is certainly further to the left of my own views.  He seems to be a progressive by much more comfortable with the role of government.   And yet government has a role.

One may not make the poor better off by destroying the rich, but one can certainly help the greater part of the public from becoming poor by restraining the rich and the powerful with the rule of law, transparency and enforcement,  and equal justice for all.  And that requires a good government with the power and willingness to enforce the law.

Great wealth unexplained is often the accumulation of a series of crimes and illegalities undiscovered, from insider trading to market manipulation, monopolies and official corruption, occasionally mixed in with sheer dumb luck and ruthless disregard for the law.

That is why the wealthy are rarely the great artists, athletes, or inventors who they hold up as the example of excellence to which they can hardly presume. They modern wealthy generally create nothing except a climate of injustice, fraud, and corruption.

"Le secret des grandes fortunes sans cause apparente est un crime
oublié, parce qu' il a été proprement fait."

"The secret of a great success for which you are at a loss to account
is a crime that has never been found out, because it was well executed."

Honoré de Balzac, Le Père Goriot

Chris Hedges On the Current State Of Journalism and Post-Literate Society - The Age of Spectacle

"In our age, the idea of intellectual liberty is under attack from two directions. On the one side are its theoretical enemies, the apologists of totalitarianism, and on the other its immediate, practical enemies, monopoly and bureaucracy. Any writer or journalist who wants to retain his integrity finds himself thwarted by the general drift of society rather than by active persecution. The sort of things that are working against him are the concentration of the press in the hands of a few rich men, the grip of monopoly on radio and the films, the unwillingness of the public to spend money on books...

Wherever there is an enforced orthodoxy — or even two orthodoxies, as often happens — good writing stops. This was well illustrated by the Spanish civil war. To many English intellectuals the war was a deeply moving experience, but not an experience about which they could write sincerely. There were only two things that you were allowed to say, and both of them were palpable lies: as a result, the war produced acres of print but almost nothing worth reading...

The enemies of intellectual liberty always try to present their case as a plea for discipline versus individualism. The issue truth-versus-untruth is as far as possible kept in the background...

The organized lying practiced by totalitarian states is not, as is sometimes claimed, a temporary expedient of the same nature as military deception. It is something integral to totalitarianism, something that would still continue even if concentration camps and secret police forces had ceased to be necessary...

Totalitarianism, however, does not so much promise an age of faith as an age of schizophrenia. A society becomes totalitarian when its structure becomes flagrantly artificial: that is, when its ruling class has lost its function but succeeds in clinging to power by force or fraud. Such a society, no matter how long it persists, can never afford to become either tolerant or intellectually stable.

It can never permit either the truthful recording of facts or the emotional sincerity that literary creation demands. But to be corrupted by totalitarianism one does not have to live in a totalitarian country. The mere prevalence of certain ideas can spread a kind of poison that makes one subject after another impossible for literary purposes.

Totalitarianism demands, in fact, the continuous alteration of the past, and in the long run probably demands a disbelief in the very existence of objective truth. (cf. truthiness - Jesse)

Meanwhile, totalitarianism has not fully triumphed everywhere. Our own society is still, broadly speaking, liberal. To exercise your right of free speech you have to fight against economic pressure and against strong sections of public opinion, but not, as yet, against a secret police force. You can say or print almost anything so long as you are willing to do it in a hole-and-corner way.

But what is sinister, as I said at the beginning of this essay, is that the conscious enemies of liberty are those to whom liberty ought to mean most. The big public do not care about the matter one way or the other. They are not in favour of persecuting the heretic, and they will not exert themselves to defend him. They are at once too sane and too stupid to acquire the totalitarian outlook. The direct, conscious attack on intellectual decency comes from the intellectuals themselves."

George Orwell, The Prevention of Literature, 1946

I feel compelled to say an explanatory word or two about Chris Hedges at this point, about what it is that I 'like' about him, and to answer a couple of inquiries about why some others prefer to ignore him, besides the usual suspects as they say.

As I have said previously, politically I am almost a perfect centrist, in the classical sense of the term. I say this after having taken yet another 'objective test' to place myself on the political spectrum. I do not hold this out as anything of significance other than to say, this is pretty much where I come out, where I am in my thinking at this stage in my life. It is a hard place to be, because one sees the world in shades of grays, in all its complexity, without the comfort of easy forms in black and white. It requires quite a bit more thought and effort than most can afford.

Hedges is a socialist, self-admittedly. And I am not. I am a believer in markets, but in sound regulation of them by an objective, publicly controlled organization, much like a referee or umpire, who transparently enforces the rules which are clear and fair to all. Why? Because people always and everywhere will cheat, some much more readily than others. The meme of naturally efficient markets is a classic 'big lie.'

I believe that widely dispersed, practical rules of organization and decision making within a greater context of general principles are far superior in their effectiveness in the distribution of resources that any sort of central planning, of the right or of the left. As Acton once said, 'no class is fit to govern.' So I like decision making that is broadly based, and subject to compromise. I think the rewards and punishments of the market are an effective stimulus to productive behaviour, provided that the rules do not become slanted by the power of an inequality propagated by cheating.

But I also see that rules alone cannot embody wisdom. There is a need for the conscious hand of humanity to guide the legendary 'invisible hand of the market.'

So I like Hedges, because what he says brings me back to center, even though he is further left. That is how bad things have become in this age of austerity, the willfully immature, and the false bravado of the destructively greedy and ideologically irrational. The western nations have moved and are still moving to the Right, as they did in the 1930's. As corruption enervates the old order, as empires once again crumble, we are re-entering the Age of Spectacle, the time of fire.

And if you stay in place, at the center, you have the false feeling of 'moving left,' relatively speaking. It has become noticeable especially when one compares the Right to their forbears of even ten years ago.

Hedges irritates some of the sacred orthodoxies of the Right without a doubt and to say the least since they are the epitome of intolerance. But he also disturbs the Left, who can be as inflexible and censorious as the Right which they hold in utter disdain for those very qualities. And he tweaks their nose on it, which is doubly irritating for those who are currently not in power.

Hedges has an absolutely wonderful description of this phenomenon of the unseeable center in describing the debates he had with both the new religious right, and the irreligious neo-atheists. The relativity of their extreme views distorts all of their perceptions, so that to both groups, Hedges the religious moderate becomes anathema, for similar reasons of intolerance and vanity.

I think that western society has gone off the tracks, in a loosely cyclical manner, by adopting an unsustainable set of priorities. Rather than forming policies to support the general good of the people, they have instead adopted the objective of the 'greatest good' where that implies the maximization of profit, but for a select few. That was a fateful decision, and I mark it somewhat loosely from 1987 for a number of reasons, not the least of which was the bailout of Wall Street by Alan Greenspan. It had its cultural resonance in the theaters.

"The richest one percent of this country owns half our country's wealth, five trillion dollars. One third of that comes from hard work, two thirds comes from inheritance, interest on interest accumulating to widows and idiot sons and what I do, stock and real estate speculation. It's bullshit. You got ninety percent of the American public out there with little or no net worth.

I create nothing. I own. We make the rules, pal. The news, war, peace, famine, upheaval, the price per paper clip. We pick that rabbit out of the hat while everybody sits out there wondering how the hell we did it. Now you're not naive enough to think we're living in a democracy, are you buddy? It's the free market. And you're a part of it. You've got that killer instinct. Stick around pal, I've still got a lot to teach you."

Gordon Gekko, Wall Street, 1987

This situation, and history, has a lot to teach us indeed, and I think those lessons have only just begun in earnest.

This historically recurrent principle of the greatest greed rather than the greatest good is killing us. There should be no doubt that it will revert to the mean, a balanced society, once again, but that reversion may be painful, and bloody, if history is any guide. But this too shall pass.

I like to include historical quotes in these pieces, like the extended Orwell quote above, not only to illustrate the situation using powerfully resonant words from greater writers than myself, but also, in a Socratic way, to infuse the quiet understanding that every generation fights perhaps not the same, but similar, battles against ignorance, greed, intolerance, mean-spiritedness, carelessness, lawlessness, fear, hysteria, betrayal, hatred, and apathy.

And so there is hope, always.

We are not facing anything new, anything insurmountable,  but rather the same old enemy, the principalities and powers, the rulers of the darkness of this world, and the ancient spiritual wickedness in high places.  And that is the basic plot line of all human history.

And so we will write our own particular chapter in human history and the book of life, and thereby be remembered by our children and our grandchildren, and perhaps by those who interest themselves in all things human, for all time.





I have to note, most strongly, that the same principle of objectifying the other as a prelude to oppression and the language of violence is a tool of both the extreme right and the extreme left.  Their inflexibility and intolerance of differences in the individual virtually indistinguishable, and in every case is used to justify violence and murder.



I include this clip below in particular because he is describing 'the economic hitmen coming home to roost' which has been a forecast and an image I have used for quite a few years.  And it is happening now, predominantly in parts of Europe, but very much in the US and the UK.  The move on from victim to victim, their ravening hunger insatiable.



As they become more extreme, belief systems tend to resemble their putative opposites more closely, and the center becomes almost imperceptible, if noticed at all and not merely held in complete disdain.

Acemoglu and Robinson: Why Nations Fail

In a generally deferential and ineffective Congressional spectacle, some say minuet and I think kabuki dance, Jim DeMint's 'questioning' of Jamie Dimon, who responded to most serious questions with poker faced whoppers, today pushed me over the edge, and so putting the internet feed on mute, I thought I would take a moment to bring the study Why Nation's Fail by Acemoglu and Robinson to your attention.

"Countries differ in their economic success because of their different institutions, the rules influencing how the economy works, and the incentives that motivate people,” write Acemoglu and Robinson. Extractive institutions, whether feudalism in medieval Europe or the use of schoolchildren to harvest cotton in contemporary Uzbekistan, transfer wealth from the masses to elites.

In contrast, inclusive institutions—based on property rights, the rule of law, equal provision of public services, and free economic choices—create incentives for citizens to gain skills, make capital investments, and pursue technological innovation, all of which increase productivity and generate wealth. Economic institutions are themselves the products of political processes, which depend on political institutions. These can also be extractive, if they enable an elite to maintain its dominance over society, or inclusive, if many groups have access to the political process. Poverty is not an accident: “Poor countries are poor because those who have power make choices that create poverty.” Therefore, Acemoglu and Robinson argue, it is ultimately politics that matters.

The logic of extractive and inclusive institutions explains why growth is not foreordained. Where a cohesive elite can use its political dominance to get rich at the expense of ordinary people, it has no need for markets and free enterprise, which can create political competitors. In addition, because control of the state can be highly lucrative, infighting among contenders for power produces instability and violence. This vicious circle keeps societies poor.

In more fortunate countries, pluralistic political institutions prevent any one group from monopolizing resources for itself, while free markets empower a large class of people with an interest in defending the current system against absolutism. This virtuous circle, which first took form in seventeenth-century England, is the secret to economic growth."

James Kwak, Failure Is An Option, A Review of Why Nations Fail

As you know I have often said that in a sovereign fiat currency, inflation and deflation are a policy decision.

Acemoglu and Robinson take this premise a broad step further, and show through many historical examples that national success or failure, as one might define it in terms of the broadest happiness and success for the most people, is also the result largely of policy decisions.

Neither austerity or stimulus will be effective in restoring growth to the American economy. Most if not all of the pain of austerity will fall on the hapless victims and the disenfranchised innocent, while most of the profits of recovery through stimulus will flow to the one percent. No matter what strategy you may employ, it is difficult to be successful against a stacked deck in a rigged game.

The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustained growth and recovery.

Why Nations Fail

I would tend to add to what Robinson has to say that extractive economic institutions tend to actively promote and fund extractive political movements, laws, public policy, and systems of both the left and the right. Even the subversion of effective government and a descent into near anarchy can serve the monied interests, because effective democratic government is a counterbalance against private power.

At their extremes, neither communism nor fascism nor corporate capitalism are much different, as they both become extractive for the benefit of a small elite at the expense and misery of the people.

The Political Continuum and the Uncomfortable Center

It will be important to keep this model in mind as we go forward.

Turmoil and crisis favor polarization, and fear brings out the extremes of both sides who unfortunately tend to make the most noise, because they are often wrong but rarely in doubt.

It will be hard to maintain a centered approach if you are independent or moderate. The far right will see you as a leftist, and the far left will see you as on the right. This does not say much about you and your thinking, but more about them and their unbalanced approach to the serious problems facing the developed nations.

It is hard to talk reasonably to anyone holding a position that is not held in reason, by its very nature. And so we might find ourselves caught in the middle as it were when the histrionics start in earnest.

Even in matters of faith, there are conflicts with the distortions of the far right, who hold faith as a rationale for their own ends rather than an end in itself. I do not judge, but I can listen. And when someone holds forth about a God without compassion and love, and when they reject His own laws, they declare themselves for what they are, rather than anything about Him.

“Thou shalt love the Lord thy God with all thy heart, and with all thy soul, and with all thy mind. This is the first and great commandment. And the second is like unto it, Thou shalt love thy neighbor as thyself. On these two commandments hang all the Law and the Prophets.”

For a believer in one God, Jew, Moslem, or Christian,  everything else is commentary, a 'how-to' and important for the individual on their particular Way, but tragically far too often a snare and a temptation, a place where people wish to hide, to avoid and resist obeying His righteous commands, and to feed their own passions and desires for power and privilege and place.

As for the irreligious far left, they are simply given in to the opposite pursuit of the will to power and glorification of the State (themselves) over all, in the manner of fascists but with a different name. The only freedom they truly desire is the freedom to dominate and enforce their wills as superior beings. They despise the common people, and that permeates their words.   They view themselves apart, and most often don't want anything to do with them after the initial struggle is done and the people have bled for them.

This is why the so-called neo-conservatives were so easily able to shift from far left to far right. They still view the world in the same distorted ways, but with different labels. As Aristotle might have said, it is all a question of balance.

Neither side wants anything to do with the individual soul and spirit of genuine love. They are 'campaigners' fully engaged in expediency for their cause, and its end is power. This is why a period of reform is so often frought with danger of one extreme or the other.

This is all to say, remember, as uncomfortable as it may seem at times, as each side grows louder and more strident, you are not alone. Our calling is to stay the course, maintain the happy medium, and keep the fires burning, and the children fed and warm.

Damning the Demimonde: Thomas Frank Versus the Oligarchs' Enablers

The defense being offered for Goldman Sachs, and Wall Street, is that since they are serial cheaters and everyone knows it, the victims should only blame themselves for thinking otherwise, and doing business with them, and being cheated.

I have heard this one quite a bit lately. When someone from the Street offers this defense it is a bit ironic and almost funny.

If you are a member of a fraternity of self-confessed cheaters and liars, your public statements may not be as credible and compelling as you think. Unless you are talking to hardcore muppets of course. 'Trust me, this time I am NOT lying. But if it goes wrong, I was and you should have known better.'

It is as hypocritical as the CEO defense, wherein these titans command outrageous salaries for their superior performance, but when crimes are discovered, it turns out they have progressive dementia, and are barely aware of what goes on in the businesses that they supposedly lead.

Are these people children? Or is anyone who takes them seriously merely a gullible idiot?

What about the politicians, economists, and the media that rise to their defense, and serve their interests, time after time? Are they merely dupes, useful idiots?

Thomas Frank reflects on the serial failures of the country's thought leaders in the following essay. Frank leans a bit left, and I thought the criticisms which he levels could be spread around much more liberally, if you know what I mean.

I can remember arguing with certain prominent 'progressive economists' about the growing bubble some years ago, and more recently the moral hazards of TARP, and being shut down as effectively as any reformer on financial television.

It is not a right or left thing anymore. It is what Lord Action called, 'the people versus the Banks.'

More broadly, it is about equal protection under the law, the primacy of the democratic republic versus the tyranny of the oligarchs and their enablers, the statists of both left and right.

Too Smart to Fail
Notes On an Age of Folly
By Thomas Frank

In the twelve hapless years of the present millennium, we have looked on as three great bubbles of consensus vanity have inflated and burst, each with consequences more dire than the last.

First there was the “New Economy,” a millennial fever dream predicated on the twin ideas of a people’s stock market and an eternal silicon prosperity; it collapsed eventually under the weight of its own fatuousness.

Second was the war in Iraq, an endeavor whose launch depended for its success on the turpitude of virtually every class of elite in Washington, particularly the tough-minded men of the media; an enterprise that destroyed the country it aimed to save and that helped to bankrupt our nation as well.

And then, Wall Street blew up the global economy. Empowered by bank deregulation and regulatory capture, Wall Street enlisted those tough-minded men of the media again to sell the world on the idea that financial innovations were making the global economy more stable by the minute.

Central banks puffed an asset bubble like the world had never seen before, even if every journalist worth his byline was obliged to deny its existence until it was too late.

These episodes were costly and even disastrous, and after each one had run its course and duly exploded, I expected some sort of day of reckoning for their promoters...

But what rankles now is our failure, after each of these disasters, to come to terms with how we were played. Each separate catastrophe should have been followed by a wave of apologies and resignations; taken together— and given that a good percentage of the pundit corps signed on to two or even three of these idiotic storylines mandated mass firings in the newsrooms and op-ed pages of the nation...

The day Larry Kudlow apologizes for slagging bubble-doubters as part of a sinister left-wing trick is the day the world will start spinning in reverse. Standard & Poor’s first leads the parade of folly (triple-A’s for everyone!), then decides to downgrade U.S. government debt, and is taken seriously in both endeavors. And the prospect of Fox News or CNBC apologizing for their role in puffing war bubbles and financial bubbles is no better than a punch line: what they do is the opposite, launching new movements that stamp their crumbled fables “true” by popular demand.

The real mistake was my own. I believed that our public intelligentsia had succumbed to an amazing series of cognitive failures; that time after time they had gotten the facts wrong, ignored the clanging bullshit detector, made the sort of mistakes that would disqualify them from publishing in The Baffler, let alone the Washington Post.

What I didn’t understand was that these were moral failures, mistakes that were hardwired into the belief systems of the organizations and professions and social classes in question...
[big snip]

“The main lesson we should take away from the Efficient Market Hypothesis for policymaking purposes is the futility of trying to deal with crises and recessions by finding central bankers and regulators who can identify and puncture bubbles,” announced Chicago school economist Robert Lucas from amid the ruins in 2009. “If these people exist, we will not be able to afford them.”

And the main lesson we should take away from the Efficient Market Hypothesis for our purposes is the utter futility of economics departments like the one that employs Robert Lucas.

A second lesson: if economists— and journalists, and bankers, and bond analysts, and accountants— don’t pay some price for egregious and repeated misrepresentations of reality, then markets aren’t efficient after all. Either the gentlemen of the consensus must go, or their cherished hypothesis must be abandoned. The world isn’t gullible enough to believe both of them any longer.

Read the rest here.

Things will change, but it is going to take some time. As Charles Mackay observed, a people do not go mad overnight, and they only come back to their senses slowly, one by one.

And history has shown that a minority of 10 to 20 percent may remain true believers to an ideology after it is thoroughly discredited and even vilified.  I was astonished to find Russians who in 1997 still longed for the days of Stalin, and of older Germans and Italians who even today have a sentimental wistfulness for a strong leader with a firm hand, and would welcome the return of der Führer.

I think this is because their ideas are founded not in reason, but in the realms of schadenfreude, a burning hole in their being that craves filling with the misery of others, or a natural obesiance to autocracy born out of a slavish dependence on the will of dark leaders who relieve them of the burden of thinking.

US Monetary Aggregates Update - Failure to Reform - At the Edges of the Policy Continuum

Dude, where's my deflation?

It may seem a little counter-intuitive, that the money supply measurements are growing strongly, at the same time that the growth of consumer credit and spending remains sluggish, with GDP lagging.

Well, perhaps not so sluggish as some might wish to portray, as show in the last chart, but certainly not with enough force to bring back jobs.  The Fed can create money but not real growth.

As a reminder, the changes in money supply are not independent, and must be judged in relation to other things in the real economy to determine their nature and its effects. Growth must match growth, and decline, decline, over some reasonable period of time and trend, in relation to population, real transactions ex-financial, or some other measure of genuine economic activity.

That is one of the better arguments, by the way, against the use of a gold standard.  To say that there is not enough gold is ludicrous, since it is just a relative thing, a matter of valuation.  The drawback is that the supply of gold seems to grow stubbornly slow, and may not keep pace with the growth of the economy in response to some event like the industrial revolution.  This could be handled by the revaluation of the gold and the currencies, so again one wonders how real the objection is.  Its greatest opposition is from those who wish to exercise a more flexible and stealthy monetary control.  

As I said I am not in favor of such a standard now, as the economies of the west are too weak to support their rigor, and they would be quickly corrupted.  A bi-metallic standard holds more promise, but that too is a discussion for another time.  These are remedies best used before the fact, and not ex post facto in response to long years of monetary abuse and distortions.

Increasing the money supply in response to a credit crisis, which the Fed is doing with historic vigor, is a blunt instrument. And despite all the so-called proofs and theories to the contrary, they said they would do it, they could do it, and so they are doing it.

There is certainly no lack of people who remain obstinate in their errors and illusions. I have a little more respect for those who try to maintain their theories while at least accepting the obvious. But unless they can create a whole of it, their theory is found to be lacking.

Money is a little esoteric I admit, but the mindsets of those who have been wrong for so long is even more mysterious to me, unless one assumes some misinformed, cultish adherence. And as forecast, their rationales and arguments are becoming increasingly hysterical, in every sense of the word. They are even reluctant and resistant to accepting any 'existence proofs.'

"...we stood talking for some time together of Bishop Berkeley's ingenious sophistry to prove the nonexistence of matter, and that every thing in the universe is merely ideal. I observed, that though we are satisfied his doctrine is not true, it is impossible to refute it. I never shall forget the alacrity with which Johnson answered, striking his foot with mighty force against a large stone, till he rebounded from it -- I refute it thus."

Boswell, Life of Johnson

Deflation and Inflation in an otherwise unconstrained fiat currency regime is a policy choice. The restraints come from any external standards including the acceptance at value of the currency by those outside the system. This is what the proponents of Modern Monetary Theory, those sons of Zimbabwe, fail to understand. At the end of the day, money printing at will must always resort to continual expansion and the threat of force to maintain its value. And when that force fails, the money fails.

The Fed certainly can do more to curtail speculation and incent real money into productive activity rather than speculation in a web of financial instruments. The Fed as bankers have rarely done well with their regulatory functions. And it would be denounced as 'political' and interfering with the [rampant fraud and looting in the] markets.

Rather it is to the governance of the nation, and fiscal and legislative policy, that the nation must turn. Unfortunately that segment of governance is caught in the same credibility trap as the rest of the country's fortunate ones who profited abundantly from the status quo and the financial bubble, and are feeling very smug about it, rationalizing self-proclaimed genius in their delusions, and 'winning.'

Make no mistake, as a policy choice deflation is possible. And for debtor nations to voluntarily choose deflation, in the artificial constraint of money and debt in pursuit of a stronger currency, without systemic reforms to address what specifically caused the recent credit crisis, is an act of national suicide. Minds fixed to extremes either can not or will not see or find the via media, the middle ground. They pass from extreme to extreme without ever finding a balance.

If one considers the Political and Economic Continuum I have constructed before, it is easier to understand this, and how the neo-liberals can become neo-conservatives, seemingly overnight.  The energy to cross the boundary from one extreme to another is less than the required energy and effort of returning to the center.  

At that end of the scale one sees only their extreme counterparts, and loses the ability to view the more distant middle ground, the vast center of society.  It is more than a willful blindness; it is a pathological disconnect from reality and the particular, an implosion of the self into a dissolute abstraction of slogans, symbols, and ideas.

And the extremes will tend towards distortion and delusion, as life does not flourish naturally on the tails of probability.  The far Left is as noxious and rarefied as the far Right.  At the end of the day, there is relatively little distance between them in terms of what it means to be specifically human.  The others, the great mass of humanity clustered at the center, becomes fully objectified, stereotyped, and statistical.  The far ends of the continuum are the well springs of the cults of death.

From a practical standpoint, central planning, whether it is performed by faceless bureaucrats or the monoplies of oligarchs, will tend to corruption and failure.
The path being pursued by some Western nations today seems to be untenable and lacking balance, and so the bleeding begins.  Crony capitalism has the momentum to create ever bigger losers and winners.  They are unwilling, and seemingly incapable of, discussing and investigating the frauds, much less correcting them. They fear to implicate themselves, and to disturb their 'good thing.'   And so they keep pressing forward to the hard stop, and the precipice.

The governance of old has tolerated the occasional bloodbath, so long as the few might personally benefit, as corrupt governments, mad rulers, and empires are wont to do. I pray not for that tragedy there, or anywhere.

Reform is the hard medicine that the governance of the country refuses to take. The failure is with the establishment as they once quaintly called it, the monied interests in a former age, and as always, the venality, blind ambition, and vanity of the privileged.