Blog Archives

Bearish on Fake Fixes

The conventional definition of a Bear is someone who expects stocks to decline. For those of us who are bearish on fake fixes, that definition doesn’t apply: we aren’t making guesses about future market gyrations (rip-your-face-off rallies, dizziness-inducing drops, boring melt-ups, etc.), we’re focused on the impossibility of reforming or fixing a broken economic system.

Many observers confuse creative destruction with profoundly structural problems. The technocrat perspective views the creative disruption of existing business models by the digital-driven 4th Industrial Revolution as the core cause of rising income inequality, under-employment, the decline of low-skilled jobs, etc.–many of the problems that plague the current economy.

I get it: those disruptive consequences are real. But they aren’t structural: the state-cartel system is structural, because cartels can buy political protection from competition and disruptive technologies. Just look at all the cartels that have eliminated competition: higher education, defense contractors, Big Pharma–the list is long.

The fake-fixes to the structural dominance of cartels and entrenched elites come in two flavors: political reforms that add complexity (oversight, compliance, etc.) but never threaten the insiders’ skims and scams, and monetary policies such as low interest rates and unlimited liquidity that enrich the already-wealthy by funneling whatever gains are being reaped to rentiers rather than to labor.

I explain how this neofeudal economy is the inevitable result of our system in my new book Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic.

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Our Culture of Rape

Stripped of pretense, ours is a culture of rape. Apologists for the system that spawned this culture of rape claim that this violence is the work of a few scattered sociopaths. The apologists are wrong: The system generates a culture of rape.

The engine of our culture of rape is the elevation of the entitled-insider classto untouchability: they are above the law, and more equal than others in their freedom to impose every sick sociopathology known to humanity on the powerless peasants imprisoned in our noxious neofeudal system.

For the true sickness of our society and culture is measured not in the vile crimes of our entitled-insider class: it’s measured by the armies of enablers, protectors, enforcers and apologists who protect the entitled-insider classfrom exposure and justice. After 25 years of blatant abuse of power and crimes that have yet to enter the court docket, 25 years during which the cream of the American media purposefully ignored his blatant abuses of power, the moldering putrid remains of American journalism has finally emerged from its fetid nests, trembling in the unaccustomed brightness of day, to “report,” 25 years too late to save his innumerable victims, Harvey Weinstein’s Army of Spies (New Yorker).

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There Is One Way Out of Debt-Serfdom: Fanatic Frugality

If we accept that our financial system is nothing but a wealth-transfer mechanism from the productive elements of our economy to parasitic, neofeudal rentier-cartels and self-serving state fiefdoms, that raises a question: what do we do about it?

The typical answer seems to be: deny it, ignore it, get distracted by carefully choreographed culture wars or shrug fatalistically and put one’s shoulder to the debt-serf grindstone.

There is another response, one that very few pursue: fanatic frugality in service of financial-political independence. Debt-serfs and dependents of the state have no effective political power, as noted yesterday in It Isn’t What You Earn and Owe, It’s What You Own That Generates Income.

There are only three ways to accumulate productive capital/assets: marry someone with money, inherit money or accumulate capital/savings and invest it in productive assets. (We’ll leave out lobbying the Federal government for a fat contract or tax break, selling derivatives designed to default and the rest of the criminal financial skims and scams used so effectively by the New Nobility financial elites.)

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The Elites Have Destroyed the Status Quo’s Ability to Self-Correct

For any system to endure, it must maintain a built-in capacity to self-correct: that is, it must generate accurate informational feedback about dangerous asymmetries and auto-correct with behavioral feedback.

This is true of ecosystems and enterprises as well as political/social systems.

Human systems can lose the ability to self-correct in three basic ways.

1. The information feedback is no longer accurate because self-serving interests manipulate the data to maintain whatever narrative/data-flow supports their power, wealth and income.

2. Self-serving interests limit any behavioral feedback that threatens their power, wealth and income.

3. Those in positions of responsibility who are tasked with managing behavioral feedback are no longer accountable, so the needed behavioral feedback fails.

Self-serving interests committed to protecting their power, wealth and income have destroyed our economic-political system’s ability to self-correct. There are many examples of these three dynamics; here are a few.

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The More the Establishment Freaks Out Over Trump, the More Attractive He Becomes

The Establishment is freaking out about Donald Trump for one reason: they didn’t pick him. The Establishment is freaking out because the natural order of things is that we pick the presidential candidates and we run the country to serve ourselves, i.e. the financial-political elites.

Donald Trump’s candidacy upsets this neofeudal natural order, and thus he (and everyone who supports him) is anathema to the Establishment, heretics who must be silenced, cowed, marginalized, mocked and ultimately put back in their place as subservient debt-serfs.

With Trump ascendant, the serfs are selecting the noble in the castle on the hill. Outrageous! Unheard of!

You know the Establishment is freaking out when Establishment pundit mouthpieces like David Brooks and Francis Fukuyama are freaking out about Trump. David Brooks could not restrain his disdain for Trump on a recent Charlie Rose segment, in which he intoned (and I paraphrase) that Trump can’t put eight words together without referring to himself, i.e. he is not just a narcissist, but he is (take this, Trump!) a fragile narcissist— unlike people like Brooks, of course, who are solid, secure, wise, well-educated, erudite water-carriers for the status quo.

Policy heavy-hitter Fukuyama confesses the political system in the U.S. is broken but he can’t understand why the citizenry has selected the “singularly inappropriate instrument” (his description of Trump in the pages of Foreign Affairs) of Donald Trump to express their disdain for their neofeudal lords.

Well, Mr, Fukuyama, let me explain it to you: the debt-serfs have selected Trump precisely because the neofeudal financial-political nobility you represent consider him a “singularly inappropriate instrument”.

But, the pundits rage, he’s a narcissist. He’s fragile. (Now isn’t that a classic middle-brow slam from the hopelessly middle-brow (“I only sound middle-brow due to my starring role in the mainstream media; actually I’m brilliant beyond words”) Brooks.

Policy guru Fukuyama has a much better turn of phrase, of course: “narcissist” is way too common and middle-brow a critique at his level. Thus we get “singularly inappropriate instrument” (ooh, now there’s a sharpened blade that slips easily between the ribs).

Dear Establishment pundits, flacks, hacks, sycophants, apparatchiks, toadies, lackeys, functionaries, leeches and apologists: the more you label Trump as “singularly inappropriate,” the more attractive he becomes to the 81% who’ve been left behind by the financialized-globalized-neofeudal order that has so greatly enhanced your own wealth, influence and power.

Trump is attractive because the Establishment fears and loathes him. Why? 1) They didn’t pick him and 2) he might upset the neoconservative liberal hegemonyEmpire that the Establishment elites view as their global entitlement.

The elitists like Brooks and Fukuyama admit that politics have failed. But they believe the solution is more people like us in power. You know, reasonable, well-educated elitists who won’t stoop to get our hands dirty with laundered millions (for example, the Clinton Foundation).

The utter cluelessness of the professional apologists and punditry would be laughable if it wasn’t so pathetic: the more you fume and rage that Trump is unqualified, narcissistic, singularly inappropriate, etc. etc. etc., the more appealing he becomes to everyone who isn’t inside the protective walls of your neofeudal castle.

The people outside the cozy walls of the protected elites don’t care if he is unqualified (by the standards of those who get to pick our presidents for us) narcissistic, singularly inappropriate, and so on–they are cheering him on because you, the multitudes of water-carriers for the Imperial elites, the teeming hordes of well-paid, I-got-mine-so-shut-the-heck-up pundits, flacks, hacks, sycophants, apparatchiks, toadies, lackeys, functionaries, leeches and apologists, are so visibly afraid that your perks, wealth, influence and power might drain away if the 80% actually get a say.

Dear pundits, flacks, hacks, sycophants, apparatchiks, toadies, lackeys, functionaries, leeches and apologists: we’re sick of you, every one of you, and the neofeudal Empire you support. We want you cashiered, pushed outside the walls with the rest of us, scraping by on well-earned and richly deserved unemployment.

My new book is #5 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition)For more, please visit the book’s website.

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Central Banks Have Pushed the Middle Class Down into Neofeudal Serfdom

In traditional feudal systems, serfs were the landless peasantry who worked the land of their feudal lords in exchange for protection. In our present-day neofeudal system, serfdom has a different definition: present-day serfs own little or no productive capital and have few opportunities to ever acquire any.

The Marxist term wage-slaves describes those who, lacking capital, have only their labor to sell. This describes the vast majority of people in both capitalist and socialist systems, but what makes the present system neofeudal is the central banks: by extending essentially unlimited credit at near-zero interest rates to financiers and corporations, the central banks have given the top .01% the ability to outbid mere savers for income-producing assets (i.e. productive assets).

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