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New Infrastructure Will Not Come Good, Fast, And Cheap

March 28, 2021

New Infrastructure Will Not Come Good, Fast, And Cheap

Anyone naive enough to think America is about to receive a big gift of newfangled “fixed installations” needed in order to function should look long and hard at what is really being proposed. The “underlying structure” a country and the economy rely upon includes things such as roads, bridges, dams, water and sewer systems, railways and subways, airports, and harbors. None of these things are cheap to construct and when it comes to infrastructure the words, good, fast, and cheap should never be clustered together. While many people see government spending on infrastructure as a job creator and a silver bullet for our ailing economy I would like to raise a word of caution, things are not that simple. The cynical part of me thinks the American people should get ready to get bent over and taken advantage of.

Spending Trillions Likely To Result In An Epic Fail

Now that Biden’s massive Covid-19 relief package has been signed into law, talk is moving towards what is next on the agenda, That’s where, most likely, his infrastructure plan resides, and this is a plan set to explode the budget. If you think that $1.9 trillion is a lot of money, it pales next to what the Democrats are going to propose as they continue on their spending spree. It appears that Biden wants $3 trillion or more which should scare away moderates such as West Virginia’s Joe Manchin but it has not. Not only has Manchin not blinked at $3 trillion in new spending instead, he recently stated Congress should do “everything we possibly can” to pay for it. He said there should be “tax adjustments” to former President Donald Trump’s 2017 tax law to boost revenues, his endorsement of raising the corporate rate from the current 21 percent to at least 25 percent, however, would do little.…click on the above link to read the rest of the article…

bruce wilds, advancing time blog, united states, government stimulus, infrastructure, crony capitalism

The Birth of a Monster

February 18, 2019

The Birth of a Monster

The Federal Reserve’s doors have been open for “business” for one hundred years. In explaining the creation of this money-making machine (pun intended — the Fed remits nearly $100 bn. in profits each year to Congress) most people fall into one of two camps.

Those inclined to view the Fed as a helpful institution, fostering financial stability in a world of error-prone capitalists, explain the creation of the Fed as a natural and healthy outgrowth of the troubled National Banking System. How helpful the Fed has been is questionable at best, and in a recent book edited by Joe Salerno and me — The Fed at One Hundred — various contributors outline many (though by no means all) of the Fed’s shortcomings over the past century.

Others, mostly those with a skeptical view of the Fed, treat its creation as an exercise in secretive government meddling (as in G. Edward Griffin’s The Creature from Jekyll Island) or crony capitalism run amok (as in Murray Rothbard’s The Case Against the Fed).

In my own chapter in The Fed at One Hundred I find sympathies with both groups (you can download the chapter pdf here). The actual creation of the Fed is a tragically beautiful case study in closed-door Congressional deals and big banking’s ultimate victory over the American public. Neither of these facts emerged from nowhere, however. The fateful events that transpired in 1910 on Jekyll Island were the evolutionary outcome of over fifty years of government meddling in money. As such, the Fed is a natural (though terribly unfortunate) outgrowth of an ever more flawed and repressive monetary system.

Before the Fed

Allow me to give a brief reverse biographical sketch of the events leading up to the creation of a monster in 1914.

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

The Psychological Warfare Behind Economic Collapse

December 21, 2018

The Psychological Warfare Behind Economic Collapse

The concept of using the economy as a weapon is not an alien one to most people. Generally, we understand the nature of feudalism and how various groups can be herded onto centralized plantations to be exploited for their labor. Some people see this as a consequence of “capitalism,” and others see it as an extension of socialism/communism. Sadly, many people wrongly assume that one is a solution to the other — meaning they think that crony capitalism is a solution to communist centralization or that communism is a solution to the corruption of crony capitalism. The reality is that this is just another false paradigm.

What is most disturbing is that the majority of the public have no grasp whatsoever of the true solution to the problem of corrupt or totalitarian economies: free markets.

Free markets have not existed within the global economy on a large scale for at least the past 100 years. The rise of central banking has eroded all vestiges of freedom in production and trade. Crony capitalism with its focus on corporate power and monopoly has nothing to do with free markets, despite the arguments of rather naive socialists who blame “free markets” for the problems of the world. If you ever hear anyone making this claim, I suggest you remind them that corporations and their advantages are a creation of governments.

The protections of corporate personhood, limited liability, unfair taxation of small business competition and legislation shielding corporations from civil lawsuits are all generated by government. Therefore, corporations and crony capitalism are much more a product of socialist-style systems, not free markets.

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

America Has a “Neo-feudal” System

December 20, 2018

America Has a “Neo-feudal” System

America Has a “Neo-feudal” System

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.).

No, 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: crony capitalism and 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 them rather than to labor.

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

Our political system, dependent on campaign contributions and lobbying, is easily influenced to protect and enhance the private gains of corporations and financiers. Combine this with the gains reaped by those with access to cheap credit and you have a financial nobility ruling a class of debt-serfs.

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

The Myth of Capitalism – A Book by Jonathan Tepper

November 7, 2018

The Myth of Capitalism – A Book by Jonathan Tepper

Crony Capitalism vs. Free Markets

Many of our readers are probably aware of the excellent work our friend Jonathan Tepper does for Variant Perception (VP)*****, a financial research boutique that really does bring a unique perspective to the table*. Jonathan (with co-author Denise Hearn) has just added a new book to his résumé, which is going to be released on 12 November: The Myth of Capitalism (MoC) – Monopolies and the Death of Competition** (a link to the official site is at the end of this post).

Jonathan Tepper and Denise Hearn: The Myth of Capitalism, an excellent plea for more competition and free markets.

MoC deals with a subject that has increasingly captured the attention of political and economic observers in recent years: the growing quasi-monopolistic powers of a small (and shrinking) number of large corporations that have seemingly succeeded in exempting themselves from competition.

They are often aided and abetted by government imposing regulations certain to suppress competition from less well-funded upstarts and smaller firms. At the same time governments are creating loopholes which only the biggest established firms with international operations are able to take advantage of.

Don’t get us wrong – we have no problem with loopholes as such: to paraphrase Mises, they allow capitalism to breathe. Problematic is only that the benefits granted to the most powerful players are denied to their potential competitors; we wouldn’t want to see these loopholes closed, we would like to see them extended far and wide.

Restoring Consumer Sovereignty 

MoC is not focused on questions of monopoly theory***. The book is actually quite a page turner, at the same time informative, entertaining and infuriating. It is primarily concerned with practical problems and discusses what might be done to overcome them.

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

It’s Time to Retire “Capitalism”

January 19, 2018

It’s Time to Retire “Capitalism”

Our current socio-economic system is nothing but the application of force on the many to enforce the skims, scams and privileges of the self-serving few.

I’ve placed the word capitalism in quotation marks to reflect the reality that this word now covers a wide spectrum of economic activities, very little of which is actually capitalism as classically defined. As I have explained here for over a decade, the U.S. economy is dominated by cartels and quasi-monopolies that are enforced by the Central State, a state-cartel system of financialized rentier skims that has no overlap with Adam Smith’s free market, free enterprise concept,i.e. classical capitalism.

This is what passes for “capitalism” in modern-day America: the super-rich get super-richer, a thin slice of technocrats, speculators and entrepreneurs advance their wealth and the vast majority lose ground or stagnate:

Here’s another snapshot of state-financier “capitalism” in modern-day America: the centralized organs of the state (the quasi-public Federal Reserve) creates trillions of dollars and hands the nearly free money to financiers, insiders and speculators, all of whom benefit immensely as this flood of cash pushes stocks into the stratosphere:

There are other versions of “capitalism” that are equally rapacious, all of which are iterations of crony-capitalism: gangster-capitalism, theocratic-capitalism, colonial-capitalism, and so on.

The key feature of these forms of organized pillage that mask their predatory nature by claiming to be “capitalist” is they ruthlessly suppress the three core dynamics of classical capitalism:

1. Competition

2. Open/free markets

3. Free flow of capital in all its forms (financial, social, intellectual, etc.)

The only way the few can pillage the many is if the many are denied access to competition, open markets and freely flowing capital.

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

Brexit and the Crisis of Capitalism

July 3, 2016

Brexit and the Crisis of Capitalism

If you collapse these extractive, debt-dependent crony-capitalist cartels, you collapse the entire status quo. 

Thousands of commentaries have been issued about Brexit in the past week.I’ve written four myself. Most discuss Brexit as the result of immigration issues, class war, political theater, a reaction against the European Union’s bureaucratic power, sovereignty, etc. Other essays focus on the potential upsides or downsides of Brexit.

What few if any commentators present is the idea that Brexit is a symptom of the Crisis of Capitalism.

The current global version of Capitalism is characterized by these overlapping dynamics:

1. Replacing stagnant real growth and income (and thus taxes) with debt.

2. Replacing investment in real-world productivity with speculation (i.e. financialization)

3. Replacing “everyone must have skin in the game” free-market capitalism withprotected, privileged Elites crony capitalism in which the few benefit at the expense of the many.

4. Replacing local, decentralized democracy and ownership with central planning.

5. Using “extend and pretend” financial trickery to mask insolvency, impaired assets/ collateral and non-performing loans rather than address the debt overhang directly via write-downs and liquidations of impaired assets.

If real (adjusted for inflation) growth and wages were increasing organically(i.e. as the result of free-market dynamics rather than central-planning manipulation)there would be no need for financialization, “extend and pretend” or central planning.

These ills are the status quo’s “fixes” to the Crisis of Capitalism, which arises from these causes:

1. It is no longer profitable to hire people to do an expanding range of work, from minding the jumble store on high street to writing software code that has been automated.

There is no fix for this. As I explain in my book A Radically Beneficial World, the idea that we can “tax the robots” to generate the $2.4 trillion we’d need to make a Universal Guaranteed Income a reality in the U.S. is pure fantasy, as profits collapse as the cost of those commoditized tools decline.

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

“For the Sake of Capitalism, Pepper Spray Davos”

January 20, 2016

“For the Sake of Capitalism, Pepper Spray Davos”

Screen Shot 2016-01-19 at 4.51.38 PM

Yra Harris just posted a blistering critique of the crony capitalist crooks congregating in Davos. The first few paragraphs of his post, For the Sake of Capitalism, Pepper Spray Davos, are a must read.

Enjoy.

Please, PEPPER SPRAY ALL THE ATTENDEES OF DAVOS in order to halt the rape of taxpayers and consumers across the globe. This annual conclave is responsible for more wealth destruction and the widening disparity in GINI coefficients than any public policy. I believe that the cost of attending Davos is priced at such an extravagant rate because it is a giant insider scam. Hobnob with politicians and policy makers in an effort to be part of the “smart money” crowd. It was the great moral philosopher and economist Adam Smith who so presciently noted: “People of the same trade seldom meet together, even for the merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” The conspiracy against the public has been the financial repression of the global middle class in an effort to bail out those who are attached themselves to the public treasury to maintain the “animal spirits” of crony capitalism.

The cost of an entrance pass to this private/public  congress of mover and shakers should sound an alarm to all those who desire transparency in financial markets. In contemporizing the words of Adam Smith, Samuel Huntington was credited in the online research cite, Acton Commentary, as creating the phrase DAVOS MAN: “A soulless man, technocratic, nationless and cultureless, severed from reality. The modern economics that undergirded Davos capitalism is equally soulless, a managerial capitalism that reduces economics to mathematics and separates it from human action and human creativity.”

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

Billary Buddy Marc Lasry’s Last Rodeo——The Jig Is Up On 25 Years Of Bottom Fisher Bailouts

January 13, 2016

Billary Buddy Marc Lasry’s Last Rodeo——The Jig Is Up On 25 Years Of Bottom Fisher Bailouts

As the Fed’s third and last bubble of this century heads for its splatter spot, the stench of desperate crony capitalism fills the air. You can count hedge fund mogul and Billary Buddy, Marc Lasry, among the upchucking financiers.

A few months back I heard him say on bubble vision that energy debt was a “once in a lifetime opportunity”. My thought was good luck with that, but even better luck to your investors—–who will need to get out of Dodge fast.

The truth is, Lasry had it upsidedown. Energy prices over the last 15 years were carried skyward by a once in a lifetime central bank driven credit explosion. The latter fueled a surge of phony demand and a tidal wave of malinvestment——not only in oil and gas, but practically everything else in the material and manufacturing economy of the world.

The reason that 2016 will prove to be a great historical inflection point is that the central banks of the world have finally run out of dry powder. After a 20 year spree in which their balance sheets exploded by nearly 11X—–from $2 trillion to $21 trillion—-they are being forced to shutdown their printing presses.

China has been obliged to stop because it has been slammed with a $1 trillion capital flight in the last year, and it’s accelerating. The BOJ and the ECB have already shot their wad and it’s done no good at all. The Fed spent 84 months dithering on the zero bound and now it has no dry powder left as the US economy slides into recession.

Accordingly, the great global credit bubble has finally run out of new central bank fuel. It has now surely reached its apogee at about $225 trillion compared to only $40 trillion back in 1994 when oil prices were still well under $20 per barrel.

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

Coal CEO Thanks Lamar Smith, Asks Him to Expand Probe of Climate Scientists

November 28, 2015

In recent remarks Robert E. Murray, the chief executive officer of Murray Energy, the largest privately-held coal mining company in America, enthusiastically praised Rep. Lamar Smith, R-Tex., the chairman of the House Committee on Science, Space and Technology, for leading an investigation into prominent climate scientists and environmental officials.

Murray, speaking at a gathering in Austin last week for global warming deniers organized by the Texas Public Policy Foundation, said he wanted to “congratulate” Smith on his subpoena of Kathryn Sullivan, head of the National Oceanic and Atmospheric Administration.

Murray then declared that the American Meteorology Association and Union of Concerned Scientists, two private nonprofits that serve the scientific community, also “need to be investigated.”

“They’re crony capitalists, they’re making a fortune off of you the taxpayer,” said Murray, who stood up to praise the Texas congressman again on the next day of the conference. After receiving the second round of compliments, Smith thanked the coal executive and took a seat next to him.

Watch Murray’s remarks below:

Smith, who gained notoriety for serving as the chief House sponsor of the Stop Online Piracy Act, a bill widely decried for promoting Internet censorship, is now leading the charge in Congress against the scientific community.

Since assuming the chairmanship of the House Science Committee, Smith has led a series of attacks on the scientific consensus around global warming, including hearings at which Smith and other GOP lawmakers berated officials involved in creating climate policy. Smith has also proposed legislation to create political criteria for studies funded by the National Science Foundation and to cut the budgets of scientists involved in climate research.

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

Untangling America from the American Empire

October 30, 2015

Untangling America from the American Empire

Those calling for an end of the Empire don’t seem to realize that the federal state’s vast entitlement programs are ultimately funded by the Empire.

The Status Quo would have us believe that America and its Empire are one entity. This is handy for those with Imperial designs but it is false: America could be untangled from its Empire, and many of us believe it is essential that America untangles itself from its Imperial structures and ideologies.

What I call The Imperial Project was cobbled together in the aftermath of World War II, when the Soviet Union and America posed an existential threat to each other’s ideologies and systems. It may be hard to believe, but the U.S. did not have a Central Intelligence Agency (CIA) or other espionage/intelligence gathering agency prior to World War II.

America had no spy agency and no Black Operations/Special Forces capabilities. The National Security State as we know it today did not exist.

Though the Deep State has long been an essential feature of the American power structure, the post-war Deep State extended its reach globally in ways that the pre-war Deep State could not.

I have covered the Deep State for many years:

Surplus Repression and the Self-Defeating Deep State (May 26, 2015)

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

The Dollar and the Deep State (February 24, 2014)

Many people naively think all that’s needed to end the Imperial Project is close America’s overseas military installations and end the endless wars of choice.While the eradication of the neo-conservative Imperial agenda would be a welcome first step, it would only be a first step, as I explained in  You Can’t Separate Empire, the State, Financialization and Crony Capitalism.

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

Crony Capitalism: The Cause of Society’s Problems

October 7, 2015

Crony Capitalism: The Cause of Society’s Problems

Since the economic downturn of 2008, the critics of capitalism have redoubled their efforts to persuade the American people and many others around the world that the system of individual freedom and free enterprise has failed.

These critics have insisted that it is unbridled capitalism, set lose on the world, which is the source of all of our personal and society misfortunes. We hear and read this not only in the popular news media and out of the mouths of the political pundits. We see it also in the election of a radical socialist to the leadership of the British Labor party, and a self-proclaimed “democratic socialist” riding high in the public opinion polls for the Democratic Party’s nomination to the U.S. presidency.

The first observation to make is that many if not most of the social and economic misfortunes that are most frequently talked about are not the product of a “failed” free enterprise. The reason for this is that a consistently practiced free enterprise system no longer exists in the United States.

The Heavy Hand of Regulation

What we live under is a heavily regulated, managed and controlled interventionist-welfare state. The over 80,000 pages of the Federal Register, the volume that specifies and enumerates all the Federal regulations that are imposed on and to which all American businesses are expected to comply, is just one manifestation of the extent to which government has weaved a spider’s web of commands over the business community.

The Small Business Administration has estimated that compliance costs imposed on American enterprise by this mountain of regulations maybe upwards of $2 trillion a year.

At the same time, the tangled web of corrupt government-private sector relationships is also reflected in the size and cost of special interest lobbying activities connected with the Federal government.

– See more at: http://www.cobdencentre.org/2015/10/crony-capitalism-the-cause-of-societys-problems/#sthash.AIaHx6WD.dpuf

You Can’t Separate Empire, the State, Financialization and Crony Capitalism: It’s One Indivisible System

October 1, 2015

You Can’t Separate Empire, the State, Financialization and Crony Capitalism: It’s One Indivisible System

The great irony is what’s unsustainable melts into thin air no matter how many people want it to keep going.

Disagreement is part of discourse, and pursuing differing views of the best way forward is the heart of democracy. Disagreement is abundant, democracy is scarce, despite claims to the contrary.

If you think you can surgically extract Empire from the American System, force the State to serve the working/middle classes, end the stripmining of financialization, limit crony capitalism/regulatory capture and get Big Money out of politics–go ahead and do so. I’m not standing in your way–go for it.

But while you pursue your good governance, populist, Left/ Right /Socialist/ Libertarian, etc. reforms, please understand the system is indivisible: the Deep State, the Imperial Project (hegemony and power projection), the State, finance in all its tenacled control mechanisms (greetings, debt-serfs and student-loan-serfs), crony capitalism /regulatory capture, money buying political influence, media propaganda passing as “news”, and the evisceration of democracy (something untoward could happen if the serfs could overthrow the Power Elite at the ballot box–can’t let that happen)–it’s all one system.

Should any one organ be ripped from the body, the entire body dies. The entire system defends each subsystem as integral as a matter of survival. As a result, the naive notion that big money can be excised with only positive consequences is false: restoring democracy places the entire system at risk of implosion.

No more bread and circuses, no more Social Security checks, no more state employee pensions–it all melts into air if any subsystem stops doing its job.

The system is interdependent. Each subsystem needs the others to function. I drew up a chart of the major components (but by no means all) of the system:

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

When Capitalism Turns to Cannibalism

July 16, 2015

When Capitalism Turns to Cannibalism

With authentic growth scarce, there’s no other way to reap huge profits but cannibalism.

When people say “capitalism has failed” or “capitalism has succeeded,” we have to ask: what type of capitalism do you mean? Authentic capitalism, in which capital is placed at risk to earn a return in a competitive, transparent marketplace, or do you mean cartel-state capitalism, or crony-capitalism, or monopoly capitalism or finance capitalism, i.e. the types that dominate the global economy?

As long as most startups crash and burn, and anyone with a few bucks and plenty of inner drive can start an enterprise, authentic capitalism still lives. But let’s face it, authentic capitalism occupies a diminishing corner of the U.S. and global economies.

With a work force of 150 million and around 120 million fulltime workers, the U.S. economy has about 6 million small businesses with employees and a few million self-employed (sole proprietors) who earn a middle-class livelihood: Endangered Species: The Self-Employed Middle Class.

The political and financial influence of small business and the self-employed barely registers on K Street, Wall Street and in Washington D.C. Politicos praise small business in the same way they speak of small family farms as the backbone of American agriculture–as a form of pandering for PR purposes while they pocket the big campaign contributions from Monsanto and Big Ag.

Meanwhile, in the real world, small business is in decline while corporate money floods the financial sector and Washington D.C.

The Washington Post published a study that found U.S. businesses are being destroyed faster than they’re being created. While not exactly a surprise, this is sobering evidence that small enterprise is in structural decline:

The 22.4 million with some self-employment income looks like a big number, but most earn a pittance: only a relative few earn what qualifies as a middle-class income, and 3 million of these are professional-sector corporations or partnerships:

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

 

 

Our Phantom Economy

June 15, 2015

Our Phantom Economy

Those who believe that phantom recoveries and phantom metrics can be substituted for reality are in for a shock in the next downturn.

Stripped of artifice, there are only two kinds of media stories: those that support the status quo narrative, and those that are skeptical of that narrative.

What is the status quo narrative? Simply this: not only is this the best possible arrangement of labor, assets and money, it is the only possible arrangement of labor, assets and money.

It is impossible to challenge a system that is the only possible arrangement; the only option is to accept it.

 

One of the greatest and most important PSYOPS of the Imperial State (U.S. Government) and its faithful lapdog the mainstream media is the unemployment rate. As I will show tomorrow, the real unemployment rate is between 20% and 40%, depending on whether you think someone earning $1,500 a year selling stuff on eBay and Etsy should be counted as “employed.”In effect, the mainstream media is a vast Psychological Operation (PSYOPS) aimed at persuading the American public that the status quo Imperial system of predatory, debt-based crony-capitalism that benefits the few at the expense of the many is not just beneficial to all its debt-serfs and welfare recipients, but it is the only possible system–there is no alternative(TINA).

The federal government is delighted to count everyone earning $100 a year as employed, and equally delighted to label everyone without a job (even one paying $100/year) who doesn’t qualify for unemployment insurance a job market zombie–a once living person who is no longer counted as among the living.

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

 

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