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How Poor Leadership can Create Collapse or Make It Faster: Lessons from European History

September 6, 2020

How Poor Leadership can Create Collapse or Make It Faster: Lessons from European History

The damage that a bad leader can generate is simply fearsome, especially if that leader has a lot of power and he is nearly impossible to remove from his position. If then that leader controls a large military apparatus, even including nuclear weapons, then the disasters that can happen are beyond the imaginable. If you, like me, doubt the competence of our current leaders, there is plenty to be worried about.

The problem seems to be that our system of choosing leaders guarantees to propel to the top all sorts of power-mongering psychopaths. And as the power we manage increases, going from nuclear weapons to the control of the Web, the chances for truly disastrous damage created by an incompetent leader also increase.

Maybe there should be a science of incompetent leaders that might be a branch of the more general “science of evil.” In this post, I propose a brief exploration of this field that starts with the idea that the past is the way to understand the future. So I repropose a theme that I had already examined: that of Louis Napoleon (Napoleon III) (1808-1873) one of the best examples we have of an incompetent leader who ruined the state he was leading. At that time, fortunately, there were no nuclear weapons available and Luis Napoleon himself was not so aggressive and bloodthirsty as other famously bad leaders. Nevertheless, the damage he generated was considerable and we can learn something from his story.

Napoleon 3rd: how to destroy an empire in the making.  

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

 

The New Normal: Extremes of Neofeudalism, Incompetence, Authoritarianism and Relocalization

July 1, 2020

The New Normal: Extremes of Neofeudalism, Incompetence, Authoritarianism and Relocalization

The pendulum swung to an extreme of globalization, financialization, centralization and monopoly, all of which created extreme systemic fragility.

Here’s what to expect in the rapidly evolving New Normal: extremes become even more extreme as the status quo attempts to force compliance with its last-ditch schemes to preserve what was always unsustainable while painting a happy face on the stock market, the one thing they can push higher as the global economy unravels.

Mark, Jesse and I discuss this dynamic in Salon #10: Remember when Maximum Pessimism and Irrational Exuberance were mutually exclusive? (54 minutes): realistic pessimism is lashed to the mast with the irrational exuberance of stock market soothsayers, central bank cheerleaders and the organs of propaganda (Wall Street) and control of the narratives (social media and search monopolies).

Cognitive dissonance? Yes. Schizophrenia? Sure. Crazy-making? Undoubtedly. So the default “solution” is petty Authoritarianism to ensure we only see approved narratives, that we focus on the happy-happy signal of the glorious stock market (best rally ever!), that we pay higher taxes without complaint, and so on.And of course, buy, buy, buy and borrow, borrow, borrow, lest the flimsy house of cards collapse.

As I explain in my book Why Our Status Quo Failed and Is Beyond Reform, the only possible output of central bank monetary stimulus is financialization, and the only possible output of financialization is unprecedented wealth and income inequality.

As Max Keiser, Stacy Herbert and I discuss in Fractals of Incompetence (15:30), the problem with pushing extremes is the system is incompetent at every level, from school boards to the Federal Reserve. Rather than solve problems, our institutions have devolved into mechanisms to protect clerisy / insiders from transparency and accountability.In the New Normal, systemic incompetence isn’t going to magically transform into competence, it’s going to reach new extremes of incompetence and self-serving hubris.

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

The Demise of Democracy

March 31, 2019

The Demise of Democracy

Leonardo da Vinci Vitruvian man c1510

Leonardo wrote: “Vitruvius, architect, writes in his work on architecture that the measurements of man are distributed in this manner”:

The length of the outspread arms is equal to the height of a man.
From the hairline to the bottom of the chin is one-tenth of the height of a man.
From below the chin to the top of the head is one-eighth of the height of a man.
From above the chest to the top of the head is one-sixth of the height of a man.
From above the chest to the hairline is one-seventh of the height of a man.
The maximum width of the shoulders is a quarter of the height of a man.
From the breasts to the top of the head is a quarter of the height of a man.
From the elbow to the tip of the hand is a quarter of the height of a man.
From the elbow to the armpit is one-eighth of the height of a man.
The length of the hand is one-tenth of the height of a man.
The root of the penis [Il membro virile] is at half the height of a man.
The foot is one-seventh of the height of a man.

It’s almost silly to write anything on Brexit right now, because at right now+1 everything may have changed again. But almost silly is not the same as completely silly. At this point, whatever the outcome will be, it will serve to ridicule the idea and image of the UK as a functioning democracy. Something that ironically all participants in the Kabuki theater claim to be intent on preventing.

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

Gross Incompetence

July 8, 2018

Gross Incompetence

Jean-Léon Gérôme Truth Coming Out of Her Well to Shame Mankind 1896

Here’s the lowdown: the EU’s single market mechanism dictates freedom of movement for labor, capital, services and goods. These are not divisible; you cannot have one without the other. Still, that’s precisely what Theresa May, again, is proposing. She basically wants to keep the UK in the single market for goods, and make other arrangements for the rest. The EU will not accept that because it could have 27 other countries coming with their own versions of single market à la carte.

So why does she come with version 826 of what she already knows will not be accepted? And why did her cabinet comply? There are a few possibilities. Perhaps May has finally understood that there is no manner of leaving the EU left to her that will not lead to utter disaster. Maybe she just wants the whole thing to stop. Or maybe Boris Johnson et al, sensing failure for May, see a chance to dethrone her and take over power. Then again, maybe they all look for a way to blame the EU for their own failures.

It’s hard to say, really. What’s obvious, through the comments of industries like Airbus and Jaguar Land Rover, is that 100,000s of jobs are at stake, along with 100s of billions of investments in Britain. Large enterprises are often branched out all through the EU, and they need to comply with EU rules; separate rules for their business with the UK would be a nightmare.

And even smaller companies, to varying degrees, face those same problems. For all you may think of the EU, it has arranged the single market strictly and successfully. There are enormous advantages for companies in that. Take those away and they will look at relocating towards the continent, where they would regain those advantages.

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

 

 

From Superpower to Incompetence

November 8, 2017

From Superpower to Incompetence

Having grown up during the second half of the 20th century, I don’t recognize my country today. I experienced life in a competent country, and now I experience life in an incompetent country.

Everything is incompetent. The police are incompetent. They shoot children, grandmothers, cripples, and claim that they feared for their life.

Washington’s foreign police is incompetent. Washington has alienated the world with its insane illegal attacks on other countries. Today the United States and Israel are the two most distrusted countries on earth and the two countries regarded as the greatest threat to peace.

The military/security complex is incompetent. The national security state is so incompetent that it was unable to block the most humiliating attack in history against a superpower that proved to be entirely helpless as a few people armed with box cutters and an inability to fly an airplane destroyed the World Trade Center and part of the Pentagon itself. The military industries have produced at gigantic cost the F-35 that is no match for the Russian fighters or even for the F-15s and F-16s it is supposed to replace.

The media is incompetent. I can’t think of an accurate story that has been reported in the 21st century. There must be one, but it doesn’t come to mind.

The universities are incompetent. Instead of hiring professors to teach the students, the universities hire administrators to regulate them. Instead of professors, there are presidents, vice presidents, chancellors, vice chancellors, provosts, vice provosts, assistant provosts, deans, associate deans, assistant deans. Instead of subject matter there is speech regulation and sensitivity training. Universities spend up to 75% of their budgets on administrators, many of whom have outsized incomes.

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

Is This Debt’s Last Rattle?

February 13, 2016

Is This Debt’s Last Rattle?

Crowd outside Wall Street Stock Exchange on BlackThursday Oct 24 1929

What we see happening today is why we called our news overview the “Debt Rattle” 8 years ago. The last gasps of a broken system ravished by the very much cancer-like progress of debt. Yes, it took longer than it should have, and than we thought. But that’s pretty much irrelevant, unless you were trying to get rich off of the downfall of your own world. Always a noble goal.

There’s one reason for the delay only: central bank hubris. And now the entire shebang is falling to bits. That this would proceed in chaotic ways was always a given. People don’t know where to look first or last, neither central bankers nor investors nor anyone else.

It’s starting to feel like we have functioning markets again. Starting. Central bankers still seek to meddle where and when they can, but their role is largely done. It’s hard to pinpoint what exactly started it, but certainly after Kuroda’s negative rate ‘surprise’ fell as flat on its face as it did, and then fell straight through the floor and subsequently shot up through the midnight skies, a whole lot more ‘omnipotence credibility’ has disappeared.

Kuroda achieved the very opposite of what he wanted, the yen soared up instead of down -big!-, and that will reflect on Yellen, Draghi et al, because they all use the same playbook. And the latter so far still got a little bit of what they were shooting for, not the opposite. Still, one could also make a good case that it was Yellen’s rate hike that was the culprit. Or even Draghi’s ‘whatever it takes’. It doesn’t matter much anymore.

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

An Almost Perfect Storm of Incompetence and Felony

November 11, 2015

An Almost Perfect Storm of Incompetence and Felony

“People of privilege will always risk their complete destruction rather than surrender any material part of their advantage. Intellectual myopia, often called stupidity, is no doubt a reason.

But the privileged also feel that their privileges, however egregious they may seem to others, are a solemn, basic, God-given right.”
John Kenneth Galbraith, Age of Uncertainty

“Misdeeds, once exposed, have no refuge but in audacity. And they have accomplices in those who are fearful in their complicity.”
Tacitus, Annals

I was discussing the markets this morning with my friends Dave and Bill Murphy as we generally do.  This is what I just wrote back in response to a question from Bill.

I read his columns at LeMetropoleCafe.com every day.  His is an amazing crossroads for discussion of things that are interesting about precious metals.  I have been a subscriber since 2000. Dave has a new site at Investment Research Dynamics that is quite good and different since he has a very different background in the heart of darkness as a NYC bond trader from mine as a Bell Lab rat and Silicon Valley roustabout.

We just saw a very historically significant decline in the precious metals in terms of days lower without relief. And we have seen a remarkable rise in the US dollar index against the Euro and the Swiss franc that cannot possibly be good for the real economy of the US, when every other developed nation is trying to devalue their currencies to stimulate their exports and inhibit imports.
I believe that a portion of the gold selling in particular is an effort to knock down the open interest in gold for December. If there was any serious attempt for holders of those contracts to stand for delivery, even JPM, which has been obviously building up its stores of gold to act as the ‘fixer’ in that market, would not be able to cover the demand.

JPM was consistently taking delivery for their house account in gold, and just transferred 70,000+ ounces over from Nova Scotia’s warehouse, from whom they had been taking delivery.

As we know, in the last big delivery month, JPM stepped up with an enormous amount of their gold, 400,000+ ounces, to provide enough real bullion to satisfy the contracts standing for delivery. Even now their inventories remain somewhat depleted.

The dollar has also been soaring, because the Fed is trying to pretend that the US is recovering so that they can raise rates.  A strong dollar and higher rates are very harmful to what is almost undoubtedly a fragile economic recovery in the US.

And it is fantasy to think that the US can somehow go it alone, and continue to improve while the rest of the world is cutting rates because their economies are slowing.

The Fed wants to raise rates for their own policy purposes, so they can cut them, without going overtly negative, when their latest financial bubble starts to collapse, which it may already be doing. They cannot really raise rates in a Presidential election year past June, so they will push ahead, to serve their own purposes, even as they harm the real economy.

There will be another financial crisis as the IMF warned today. There will be a serious dislocation in several financial markets, including the precious metals and the bonds at some point, that will rock the current system to its foundations.

It is a portion of the credibility trap which inhibits any meaningful remedy and reform.

It is an almost perfect storm of incompetence and felony.

The Last Refuge of the Incompetent

August 20, 2015

The Last Refuge of the Incompetent

There are certain advantages to writing out the ideas central to this blog in weekly bursts. Back in the days before the internet, when a galaxy of weekly magazines provided the same free mix of ideas and opinions that fills the blogosphere today, plenty of writers kept themselves occupied turning out articles and essays for the weeklies, and the benefits weren’t just financial: feedback from readers, on the one hand, and the contributions of other writers in related fields, on the other, really do make it easier to keep slogging ahead at the writer’s lonely trade.

This week’s essay has benefited from that latter effect, in a somewhat unexpected way. In recent weeks, here and there in the corners of the internet I frequent, there’s been another round of essays and forum comments insisting that it’s time for the middle-class intellectuals who frequent the environmental and climate change movements to take up violence against the industrial system. That may not seem to have much to do with the theme of the current sequence of posts—the vacuum that currently occupies the place in our collective imagination where meaningful visions of the future used to be found—but there’s a connection, and following it out will help explain one of the core themes I want to discuss.

The science fiction author Isaac Asimov used to say that violence is the last refuge of the incompetent. That’s a half-truth at best, for there are situations in which effective violence is the only tool that will do what needs to be done—we’ll get to that in a moment. It so happens, though, that a particular kind of incompetence does indeed tend to turn to violence when every other option has fallen flat, and goes down in a final outburst of pointless bloodshed.

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

 

Olduvai IV: Courage
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Olduvai II: Exodus
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