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The battle raging in the Deep State isn’t just a bureaucratic battle–it’s a war for the soul, identity and direction of the nation.

When do the unlimited powers of the Intelligence/Security agencies threaten America’s domestic and global national interests? The CIA and its political enablers claim the agency’s essentially unlimited powers, partially revealed by Wikileak’s Vault 7, pose no threat to America’s interests, since they are intended to “defend” American interests.

This is the rationale presented by neocon CIA allies in both political parties: the CIA can’t possibly threaten America’s interests because the CIA defines America’s interests.

This is the wormhole down which civil liberties and democracy have drained. It is an extraordinarily defining moment in American history when the director of the FBI publicly declares that there is no such thing as “absolute privacy” in the U.S.

In effect, privacy is now contingent on the level of interest the Security State has in the private conversation/data. If we read the U.S. Constitution, we do not find such contingencies: civil liberties are absolute. Post-1790 presidents have temporarily mooted civil liberties in time of war, and the CIA-led camp of the Deep State has justified its unlimited powers by effectively declared “a state of war is now permanent and enduring.”

So what’s left to defend if America has become the enemy of civil liberties and democracy, i.e. become a totalitarian state ruled by Security Services and their political henchmen and apologists?

I have long suggested that the tectonic plates of the Deep State are shifting as the ruling consensus has eroded. Some elements of the Deep State–what I call the progressive wing, which is (ironically to some) anchored in the military services– now view the neocon-CIA (Security State)-Wall Street elements as profoundly dangerous to America’s long-term interests, both domestically and globally.

Is the Deep State Fracturing into Disunity? (March 14, 2014)

…click on the above link to read the rest of the article…

It’s What’s Happening Beneath the Surface That Matters: Moral Decay and Rising Inequality

March 6, 2017

It’s What’s Happening Beneath the Surface That Matters: Moral Decay and Rising Inequality

These disintegrative forces are easy to see but elusive to pin down. Nobody defines themselves as self-serving, greedy and lacking in virtue. Everyone feels trapped in the system.

With the media’s hyperactive three-ring circus blasting 24/7, it’s easy to forget that everything consequential is happening beneath the surface, out of sight and largely out of mind.

What’s going on beneath the surface is structural and systemic–for example, the 4th Industrial Revolution that is transforming the global economy and social order, regardless of political ideologies or our wishes.

Centralization–the “solution” to every problem since 1940–is now the problem.Centralization generates corruption, privilege, rentier skims, institutionalized rackets and pushes one-size-fits all failure down the chain of command.

Fragmentation and the De-Optimization of Centralization (January 2, 2017)

Another “solution”–issuing more costly credentials–has also failed. An over-abundance of credentials pushes wages down, even for the highly educated, while the credential mill of higher education has become a bloated, ineffective cartel that charges outrageous fees for increasingly valueless credentials.

The structural changes in the economy are visible in these charts:

The civilian participation rate is plummeting, despite the “recovery:”

The civilian participation rate for men is in a multi-decade decline:

As a percentage of GDP, wages have been declining for decades.

The rich have managed to gain wealth and income while the bottom 95% have gotten poorer as the cost of living soars and their wages stagnate.

There is more going on here than changes wrought by technology. Consider how many analysts identify central banks as a key cause of rising inequality and debt burdens. Consider how many people identify “money in politics” as a key factor in the corruption of governance.

…click on the above link to read the rest of the article…

The Illusion of Progress

March 2, 2017

The Illusion of Progress

This is precisely what you’d expect of a self-serving elite that was desperate to cloak the unhappy reality that the relative few are benefiting immensely at the expense of the many.

The core narrative of politics everywhere is progress, i.e. “moving forward.” If progress isn’t being made, politicos and the system are failing.

In the past, “progressive” movements sought to advance both social and economic opportunities for marginalized groups.

For a variety of reasons, social progress has been decoupled from economic progress.

In broadly disintegrative eras such as the present, the stagnation of economic opportunity is masked by redefining progress in purely social terms: progress is defined as the social advance of a marginalized populace into the mainstream.

When the marginalized populace is comprised of many millions of individuals, social progress and economic progress are mutually reinforcing dynamics: opportunities for social advancement in the mainstream created economic opportunities, and vice versa.

Now that social/economic progress has lifted the major marginalized populaces–ethnic and religious minorities, gays–substantially into the mainstream, those remaining marginalized populaces are modest in size. Estimates of the trans-gender populace, for example, are generally less than 1% of the total population.

The marginalized groups’ advances that are markers for “proof of progress” have decoupled from economic advances. Few if any social-justice promoters of trans-gender rights, for example, claim any economic gains will accompany this social progress.

The reason why social progress has been effectively decoupled from economic progress is that the woeful lack of economic progress for the bottom 90% proves financial progress is now limited to an elite comprised of Oligarchs, Nomenklatura, the Technocrat Class and a relative handful of entrepreneurs.

…click on the above link to read the rest of the article…

How Do We Design a DeGrowth Economy?

February 24, 2017

How Do We Design a DeGrowth Economy?

The conventional objections to DeGrowth boil down to: it isn’t the status quo, so it can’t work. Actually, it’s the status quo that isn’t working.

I’ve written about DeGrowth for many years, including Degrowth, Anti-Consumerism and Peak Consumption (May 9, 2013), Degrowth Solutions: Half-Farmer, Half-X (July 19, 2014) and And the Next Big Thing Is … Degrowth? (April 7, 2014)

These are the basic concepts of Degrowth:

1. Consumerism is psychological/ spiritual junk food (French: malbouffe) that actively reduces well-being (bien-etre) rather than increases it.

2. Better rather than more: well-being is increased by everything that cannot be commoditized by a market economy or financialized by a cartel-state financial machine– friendship, family, community, self-cultivation. The goal of economic and social growth should be better, not more. On a national scale, the cancerous-growth measured by gross domestic product (GDP) should be replaced with gross domestic happiness/ gross national happiness (GNH).

3. A recognition that resources are not infinite, despite claims to the contrary. For one example of many: China Is Plundering the Planet’s Seas (The Atlantic). Indeed, all the evidence suggests that access to cheap energy only speeds up the depletion and despoliation of every other resource.

4. The unsustainability of consumerist “growth” that’s dependent on resource depletion funded by financialization (i.e. the endless expansion of credit and phantom collateral). (This is covered in greater depth in my short book Why Our Status Quo Failed and Is Beyond Reform.)

5. The diminishing returns on private consumption and “bridges to nowhere” (crony-capitalist public consumption).

6. The failure of neoliberal capitalism and communism alike in their pursuit of growth at any cost.

Degrowth is heresy in what John Michael Greer calls the religion of progress (i.e. growth). The faith that growth equals progress is akin to the Cargo Cult of Keynesianism, the notion that expanding debt exponentially to drive diminishing returns of growth is not only necessary but a moral imperative.

…click on the above link to read the rest of the article…

There’s a Difference: Fake News and Junk News

February 20, 2017

There’s a Difference: Fake News and Junk News

Media junkies on the tragic path to extinction believe the junk news, non-junkies see through the manipulation.

The mainstream media continues peddling its “fake news” narrative like a desperate pusher whose junkies are dying from his toxic dope. It’s slowly dawning on the media-consuming public that the MSM is the primary purveyor of “fake news”– self-referential narratives that support a blatantly slanted agenda with unsupported accusations and suitably anonymous sources.

Many of these Fake News Narratives are laughably, painfully bogus: that President Trump is a Russian tool, to take a current example. (That President Obama was a tool of the neocon Deep State–no mention of that. According to the MSM, America doesn’t even have a Deep State–har-har…the joke’s on you if you are credulous enough to swallow this risible absurdity.)

But the real danger isn’t fake news–it’s junk news. Junk News (the title of a 2009 book by an Emmy Award–winning journalist– Junk News: The Failure of the Media in the 21st Century) —is related to Junk Science and Junk Food.

Junk science is presented as “science” but cherry-picks data to support a specific but unstated agenda–an agenda that requires downplaying or overlooking conflicting data.

One common example of junk science is the approval of new medications by the FDA. If you actually dig into Phase III data, you may well find that the “benefits” of the new wonder-drug are barely above statistical chance, and the potential interactions with commonly prescribed (or imbibed) drugs are ignored.

This is how we end up with medications with an unfortunate side-effect: deathfrom misadventure, addiction, in combination with other commonly prescribed meds, etc.

(For more junk science, check out how meds going off-patent magically get FDA approval for additional –and immensely profitable– patent protection.)

…click on the above link to read the rest of the article…

Which Assets Are Most Likely to Survive the Inevitable “System Re-Set”?

February 9, 2017

Which Assets Are Most Likely to Survive the Inevitable “System Re-Set”?

Your skills, knowledge and social capital will emerge unscathed on the other side of the re-set wormhole. Your financial assets held in centrally controlled institutions will not.

Longtime correspondent C.A. recently asked a question every American household should be asking: which assets are most likely to survive the “system re-set” that is now inevitable? It’s a question of great import because not all assets are equal in terms of survivability in crisis, when the rules change without advance notice.

If you doubt the inevitability of a system implosion/re-set, please read Is America In A Bubble (And Can It Ever Return To “Normal”)? This brief essay presents charts that reveal a sobering economic reality: America is now dependent on multiple asset bubbles never popping–something history suggests is not possible.

It isn’t just a financial re-set that’s inevitable–it’s a political and social re-set as well. For more on why this is so, please consult my short book Why Our Status Quo Failed and Is Beyond Reform.

The charts below describe the key dynamics driving a system re-set. Earned income (wages) as a share of GDP has been falling for decades: this means labor is receiving a diminishing share of economic growth. Since costs and debt continue rising while incomes are declining or stagnating, this asymmetry eventually leads to insolvency.

The “fix” for insolvency has been higher debt and debt-based spending–in essence, borrowing from future income to fund more consumption today. But each unit of new debt is generating less economic activity/growth. This is called diminishing returns: eventually the costs of servicing the additional debt exceed the increasingly trivial gains.

…click on the above link to read the rest of the article…

The Collapse of the Left

January 23, 2017

The Collapse of the Left

The Left is not just in disarray–it is in complete collapse because the working class has awakened to the Left’s betrayal and abandonment of the working class in favor of building personal wealth and power.

The source of the angry angst rippling through the Democratic Party’s progressive camp is not President Trump–it’s the complete collapse of the Left globally. To understand this collapse, we turn (once again) to Marx’s profound understanding of the state and capitalism.

We turn not to the cultural Marxism that is passingly familiar to Americans, but to Marx’s core economic analysis, which as Sartre noted, is only taught to discredit it.

Cultural Marxism draws as much from Engels as Marx. In today’s use, cultural Marxism describes the overt erosion of traditional values–the family, community, religious faith, property rights and limited central government–in favor of rootless Cosmopolitanism and an expansive, all-powerful central state that replaces community, faith and property rights with statist control mechanisms that enforce dependence on the state and a mindset that the individual is guilty of anti-state thinking until proven innocent by the state’s own rules.

Marx’s critique of capitalism is economic: capital and labor are in eternal conflict. In Marx’s analysis, capital has the upper hand until the internal contradictions of capitalism consume capital’s control from the inside.

Capital not only dominates labor, it also dominates the state. Thus the state-cartel version of capitalism that is dominant globally is not a coincidence or an outlier–it is the the only possible outcome of a system in which capital is the dominant force.

To counter this dominance of capital, social democratic political movements arose to wrest some measure of control out of the hands of capital in favor of labor.

…click on the above link to read the rest of the article…

When Assets (Such as Real Estate) Become Liabilities

December 27, 2016

When Assets (Such as Real Estate) Become Liabilities

December 27, 2016

It will be the middle class that accepted the notion that “real estate is the foundation of family wealth” that will be stripmined by higher taxes on immobile assets such as real estate.

Correspondent Joel M. submitted an article that struck me as a harbinger of the future: In Greece, Property Is Debt:

“At law courts throughout Greece, people are lining up to file papers renouncing their inheritance. Not necessarily because some feckless uncle left them with a pile of debt at the end of his revels; they are turning their backs on what used to be a pillar of Greece’s economy and society: real estate.

Growing personal debt, declining incomes and ever higher taxes as Greece’s depression grinds on have turned property and the dream of easy money into dread of a catastrophic burden.

After many years in which only very valuable properties were taxed, many Greeks went from paying almost no taxes on real estate to not having enough money to pay.

In 2010, property taxes accounted for 0.26 percent of gross domestic product, while this year they are around 2 percent, according to state budget figures. ‘Suddenly, the state treated the Greeks as if they were rich, at the precise moment that they ceased to be rich.’

Among the many disruptions of the past few years, this one shows how traditional conceptions — and a sense of security — can be shattered. With a history full of wars, bankruptcies and rampant inflation, Greeks had always seen land as a haven.

But it is private debt — at 222 billion euros last year — that may prove an even greater danger. This shows in government revenues. With the unified tax, ownership of every kind of property is now subject to taxation.

…click on the above link to read the rest of the article…

“Fake News”, Censorship, Darwin and Democracy

December 14, 2016

“Fake News”, Censorship, Darwin and Democracy

Censorship is not helpful to democracy–rather, it is the death of democracy.

The mainstream media is awash with hyper-active headlines about “fake news.” How can we make sense of this sudden obsession?

Perhaps we can start by separating “news” from “analysis” from “commentary.” “News” is “he said this, she did that, this happened.” Analysis tries to make sense of trends that are apparent in the news longer-term–for example, why did Trump win? Is the economy actually healthy or not? “Commentary” is opinion that establishes a point of view and defends it while attacking other POVs.

All three of these news flows are constantly being spun /manipulated to support specific agendas and narratives. Now we are being told some of these news flows are false/ misleading and their intent is to disrupt democracy.

I would counter that censorship is not helpful to democracy–rather, it is the death of democracy. It’s all too obvious in the MSM hysteria over “fake news” that the narrative being pushed is: any criticism of Hillary or questions about her health, foundation, etc., were BY DEFINITION Russian propaganda.

Never mind that few if any voters changed their mind as a result of the “Russian hacking” (the Podesta emails); voters were already so polarized that the content of the the emails did not influence their decision, which was based on deeper foundations than “news.”

The fear of those who want to preserve democracy is that under the excuse of “eliminating Russian propaganda” the status quo will restrict everyone who is inconveniently challenging the status quo narratives with data-based analysis.

…click on the above link to read the rest of the article…

The Washington Post: Useful-Idiot Shills for a Failed, Frantic Status Quo That Has Lost Control of the Narrative

November 30, 2016

The Washington Post: Useful-Idiot Shills for a Failed, Frantic Status Quo That Has Lost Control of the Narrative

Don’t you think it fair and reasonable that anyone accusing me of being a shill for Russian propaganda ought to read my ten books in their entirety and identify the sections that support their slanderous accusation?

I was amused to find my site listed on the now-infamous list of purportedly Russian-controlled propaganda sites cited by The Washington Post. I find it amusing because I invite anyone to search my 3,600-page archive of published material over the past decade (which includes some guest posts and poems) and identify a single pro-Russia or pro-Russian foreign policy entry.

If anything, my perspective is pro-US dollar, pro-liberty, pro-open markets, pro-local control, pro-free-press, pro-innovation, and pro-opportunities to rebuild America’s abandoned, decaying localized economies: in other words, the exact opposite of Russian propaganda.

My “crime” is a simple one: challenging the ruling elite’s narrative. Labeling all dissent “enemy propaganda” is of course the classic first phase of state-sponsored propaganda and the favorite tool of well-paid illiberal apologists for an illiberal regime.

Labeling everyone who dissents or questions the ruling elite’s narrative as tools of an enemy power is classic McCarthy-era witch-hunting, i.e. a broad-brush way of marginalizing and silencing critics with an accusation that is easy to fabricate but difficult to prove.

Such unsupported slander is a classic propaganda technique. It has more in common with Nazi propaganda than with real journalism.

The real useful-idiot shills are the editors and hacks paid by the Washington Post, who are busy penning articles such as “Why the electoral college should choose Hillary Clinton”. Isn’t this fundamentally a call to over-ride the Constitutional framework of the republic’s democracy?

…click on the above link to read the rest of the article…

Welcome to Neocolonialism, Exploited Peasants!

October 23, 2016

Welcome to Neocolonialism, Exploited Peasants!

The U.S. peasantry has been stripmined exactly like the powerless colonial peasantry in the old colonial model.

In my latest interview with Max Keiser, Max asked a question of fundamental importance: (I paraphrase, as the interview has not yet been posted): now that the current iteration of capitalism has occupied every corner of the globe, where can it expand to for its “growth”?

My answer: neocolonialism, my term for the financialized quasi-colonial exploitation of the home domestic population. I described this dynamic in The E.U., Neofeudalism and the Neocolonial-Financialization Model (May 24, 2012).

We all know how old-fashioned colonialism worked: the imperial power takes political and economic control of previously independent lands.

In the traditional colonial model, there are two primary benefits:
1. The imperial power (the core) extracts valuable commodities and low-cost labor from its colony (the periphery)
2. The imperial power sells its own high-margin manufactured goods to the captured-market of its colony.

This buy low, sell high dynamic is the heart of colonialism, which can be understood as one example of the The Core-Periphery Model (June 11, 2013).

The book Sweetness and Power: The Place of Sugar in Modern History is an excellent history of how this model worked for Great Britain.

The Imperial Core controls finance and credit via its multinational banking sector, and it maintains high profit margins via its state-cartel model of production. The state enforces a cartel-crony-capitalist pricing structure in which competition is strictly limited to street stalls and black markets, and the corporatocracy can raise prices at will: for example, pharmaceutical products such as Epi-Pens can be repriced at will from $60 to $600 each.

If the colonists resist, the resisters are silenced and the media brought under control of the Imperial Deep State. (Sound familar? It should.)

…click on the above link to read the rest of the article…

Please Assume Crash Positions

October 16, 2016

Please Assume Crash Positions

That few believe Mr. Market can possibly stumble only increases the odds of a stumble.

You know how to get into crash positions, correct? Here’s your guide:

Very few punters expect a real downturn here in stocks. The reasons for confidence are many: the Fed has our back, buy the dip has worked great and will continue to work great, the Fed won’t raise rates until December (if ever), the Powers That Be will keep the market aloft lest a plunging market upset the election of the status quo candidate, and so on.

This confidence that the market will be on cruise control into the November post-election rally is the ideal set-up for a crash to SPX 1,850. While we can argue technicals all day, the fact is gaps get filled, usually sooner rather than later. There are two big open gaps in the S&P 500 around 2.040 and 1,860 that have been begging to get filled for months.

The question arises: after months of going unfilled, why not fill them now with a pleasantly unexpected little October crash? Technically, there are a couple of features that suggest the market would really, really like to plummet, if only the Plunge Protection Team would stand aside for a few days.

First, there are the open gaps that ache to be filled.

Then there’s the peculiar Zombie Market of July and August, when volatility vanished and trading ranges fell as close to zero as is possible. A sign of strength? Hardly.

Third, the SPX has struggled mightily to claw its way above the 50-day moving average, and has failed to surmount this important technical target despite a month of effort. That suggests Mr. Market is feeling the pull of gravity, and the slightest stumble will cause Mr. Market to careen over the cliff.

…click on the above link to read the rest of the article…

Sorry, Central Banks: Risk and Volatility Cannot be Extinguished

October 8, 2016

Sorry, Central Banks: Risk and Volatility Cannot be Extinguished

Central bank market intervention doesn’t extinguish risk–it simply transfers it to the system itself.

The unspoken claim of central bank policy is that risk can be extinguished by intervention/manipulation: once the Fed has your back, i.e. is supporting the market, risk disappears, and the easy profits flow to those who buy the dips with supreme confidence in the Fed’s ability to magically turn risk-assets into risk-free assets.

Unfortunately for the credulous investors who believe this, risk cannot be extinguished, it can only be transferred to others or to the system itself.

This confidence in central banks raises a pernicious systemic risk: assuming the “100-year flood” can’t happen every 6 years or so. I have from time to time highly recommended The Misbehavior of Markets. The author, fractal pioneer Benoit Mandelbrot, explains in simple mathematical ways how Modern Portfolio Theory, i.e. the management of risk, is based on a faulty conception of risk and statistical chance.

In a nutshell: while modern portfolio management is statistically based (all those “standard deviations” you always see referenced in quantitative analyses), the markets behave fractally. Fractals are known as the geometry of chaos, for they describe how seemingly stable systems can quickly, and unpredictably, degrade into chaos.

But as Mandelbrot explains, “100-year floods” actually occur with startling regularity in all markets. Put another way: you cannot disappear all risk with fancy statistical models and credit default swaps, etc., that offload the risk onto others, i.e. counterparties.

In other words, all you’re really doing is masking the risk–you’re not eliminating it. And in hiding the real risk, you are lulling the market participants into a pernicious choice architecture in which their willingness to take riskier and riskier actions is rewarded and encouraged, while caution is punished.

…click on the above link to read the rest of the article…

When Did Our Elites Become Self-Serving Parasites?

October 4, 2016

When Did Our Elites Become Self-Serving Parasites?

Combine financialization, neoliberalism and moral bankruptcy, and you end up with self-serving parasitic elites.

When did our financial and political elites become self-serving parasites? Some will answer that elites have always been self-serving parasites; as tempting as it may be to offer a blanket denunciation of elites, this overlooks the eras in which elites rose to meet existential crises.

Following in Ancient Rome’s Footsteps: Moral Decay, Rising Wealth Inequality(September 30, 2015)

As historian Peter Turchin explained in his book War and Peace and War: The Rise and Fall of Empires, the value of sacrifice was a core characteristic of the early Republic’s elite:

“Unlike the selfish elites of the later periods, the aristocracy of the early Republic did not spare its blood or treasure in the service of the common interest. When 50,000 Romans, a staggering one fifth of Rome’s total manpower, perished in the battle of Cannae, as mentioned previously, the senate lost almost one third of its membership. This suggests that the senatorial aristocracy was more likely to be killed in wars than the average citizen….

The wealthy classes were also the first to volunteer extra taxes when they were needed… A graduated scale was used in which the senators paid the most, followed by the knights, and then other citizens. In addition, officers and centurions (but not common soldiers!) served without pay, saving the state 20 percent of the legion’s payroll.

The richest 1 percent of the Romans during the early Republic was only 10 to 20 times as wealthy as an average Roman citizen.”

Now compare that to the situation in Late Antiquity Rome when

“an average Roman noble of senatorial class had property valued in the neighborhood of 20,000 Roman pounds of gold. There was no “middle class” comparable to the small landholders of the third century B.C.; the huge majority of the population was made up of landless peasants working land that belonged to nobles.

…click on the above link to read the rest of the article…

The Three Stages of Empire

September 22, 2016

The Three Stages of Empire

I consider it self-evident that we are in the third and final stage of self-serving Imperial decay.

Though Edward Luttwak’s The Grand Strategy of the Roman Empire: From the First Century CE to the Third is not specifically on the rise and fall of empires, it does sketch out the three stages of Empire.

Here is the current context of the discussion of Imperial lifecycles: the U.S. defense budget is roughly the same size as the rest of the world’s defense spending combined:

Luttwak describes the first stage of expansion thusly:“With brutal simplicity, it might be said that with the first system the Romans of the republic conquered much to serve the interests of the few, those living in the city–and in fact still fewer, those best placed to control policy.”

The second stage spread the benefits of Empire much more broadly:

“During the first century A.D., Roman ideas evolved toward a much broader and altogether more benevolent conception of empire… men born in lands far from Rome could call themselves Roman and have their claim fully allowed, and the frontiers were efficiently defended to defend the growing prosperity of all, and not merely the privileged.”

The third stage is one of rising inequality:

“In the wake of the great crisis of the third century, the provision of security became an increasingly heavy charge on society, a charge unevenly distributed, which could enrich the wealthy and ruin the poor. The machinery of empire now became increasingly self-serving, with its tax collectors, administrators and soldiers of much greater use to one another than to society at large.“

…click on the above link to read the rest of the article…

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