05 March 2014

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.




04 March 2014

Gold Daily and Silver Weekly Charts - Ebb and Flow - Gresham's Law


"When a government overvalues one type of money and undervalues another, the undervalued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation."

Gresham's Law
In case you were wondering why gold is flowing from west to east, it is Gresham's Law in action.  Nothing could be clearer.  What we have not yet seen is mispriced paper flowing back en masse into a vortex of defaults on counterparty risk.

It was 'risk on' in the markets as Russia's Putin reassured the world that he does not intend to invade the Ukraine, but will protect Russia's interests in the Crimea, a traditional base for their navy.

And so stocks soared, and gold and silver gave up some of the ground which they had taken yesterday.

So the ebb was in price, and there was no flow out of the Comex gold warehouse.

I suspect that March will be relatively quiet now, save for the stray exogenous event as we saw yesterday. The line in the sand has long been drawn on the charts, and the Anglo-American banking cartel is likely to try and hold the price about where it is now.

The wild card is the continuing physical offtake of real bullion in the Asia markets, particularly India and China.

President Obama submitted a 2015 budget today that was largely unnoticed with all the sabre rattling being done of the Congressional neo-cons.   It has an interesting infrastructure proposal, and some moves towards real tax reform by closing the massive carried interest loophole that serves the financiers and distorts capital allocation towards gimmickry. 

Given the broken state of the political landscape I sincerely doubt that anything constructive will be done.   Until the financial system is reformed, and balance is restored, there will be no sustainable recovery.   The plundering of the real economy by the moneyed interests will continue until exhaustion or collapse.

Bank of England Seeks to Suspend Derivatives Default Clause Now to Prevent Another Lehman.

I think when the time comes, when people finally wake up to the need to protect some portion of their wealth, there will be little or no physical gold or silver bullion available anywhere, at almost any price, for some period of time.

There will be a market dislocation as we saw in the credit markets when Lehman Brothers collapsed, and the pyramid of leveraged paper and cross claims came to a complete halt overnight, with no one knowing what is the real value of paper, and who owes what to whom.    It will be a cavalcade of broken promises and false representations.

And the Fed may face a daunting task in printing its way out of that one.  If it happens as I think, it will be a reckoning to remember.  It will be MF Global, writ large.

Have a pleasant evening.




SP 500 and NDX Futures Daily Charts - Rally Time, For Now


The markets took off higher overnight as Vladimir Putin indicated he was not interested in invading the Ukraine, but has moved to protect Russia's interest in the Crimea, which is their traditional naval base on the Black Sea.

I will not get into the response from Republicans like John McCain, since much of what they say is just partisan theater, politics as usual,  but let it suffice to say that it is a relief that the neo-cons are out of power and out of favor. One can forget how truly misguided they are.   I don't think they realize how the nation's attitude towards their discretionary wars has changed over the past thirteen years of continuous war. 

So what next. Despite the euphoria on Wall Street, the economic signs are still weak. I was reading the Fed's Mission Accomplished article by Tim Duy about those in the Fed who are urging higher interest rates now because of the 'tight labor market' and wonder to myself, 'what are they thinking?'

It is a tight labor market, if you are applying for a part time job flipping burgers or stacking shelves, but the recovery is tightly constrained to those economic sectors which have financialized the real economy, largely to the detriment of the greater public.

This is not to say that blowing a stock market bubble to cure the housing bubble that was created to offset the tech bubble is a good idea, but the Fed is celebrating The Recovery™ very prematurely, judging by the slack economic demand, continuing stagnation in real disposable income, and high economic uncertainty and insecurity enjoyed by most Americans.

Have a pleasant evening.





03 March 2014

Gold Daily and Silver Weekly Charts - Flight To Safety, Undeniable - Yellow Dog, Wagging


"When a nation threatens another nation the people of the latter forget their factionalism, their local antagonisms, their political differences, their suspicions of each other, their religious hostilities, and band together as one unit. Leaders know that, and that is why so many of them whip up wars during periods of national crisis, or when the people become discontented and angry."

Taylor Caldwell


"Every war when it comes, or before it comes, is represented not as a war but as an act of self-defense against a homicidal maniac...War against a foreign country only happens when the moneyed classes think they are going to profit from it."

George Orwell

Gold popped very hard today on what is undeniably a flight to safety out of fiat currencies and into something that is durable in a crisis with less counterparty risk. It was a clear result of the tension in the Crimea.

By the way, most Americans have little understanding of the role which the Crimea has played historically and how it is different from and more important to Russia than the Ukraine itself, which is important in its own right.

Nato has shoved its membership to the doorstep of Russia, using European as a proxy with the most to lose. And finally Russia has reacted, drawing their own line in the sand. And we are shocked, shocked that they can do something so primitive as send in the military to protect what they view as strategic interests over a territory and a people who have long standing ties.

I do not wish to defend Putin and what he is doing, as I prefer not to defend China. I view both of these former communist nations as evolving oligarchies that routinely diminish the rights of the individual and enjoy significant corruption at the top.  Copycats that they are.

Unfortunately continental Europe is providing a convenient buffer for this conflict by proxy, and we know what the Anglo-American policy thoughts on that topic have been of late, FU Europe. And that does not stand for Frank Underwood or Francis Urquhart, although it certainly matches their fictional styles towards politics depending on which version of House of Cards you may have been watching.  A house of cards indeed.

Have a pleasant evening.