FedUpUSA

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The self-interest of the alcoholic is to keep drinking. Is this truly in his best interests? The answer illuminates the pathology of power in America.

If we ignore the lip-service showered on “reform,” we find that there is really only one strategy in America: extend and pretend.Individuals, households, communities, cities, states, enterprises and the vast sprawling Empire of the Federal government and its many proxies–all are engaged in extend and pretend.

The closest analog is a seriously ill alcoholic who tells himself he just has a hang-over when it’s abundantly clear he is suffering from potentially terminal cancer.With a hang-over, extend and pretend is the only strategy that works: you can try various “magic potions” to relieve the symptoms, but the only real cure is to give the body enough time to cleanse itself of the toxins you’ve created and pretend to be functioning in the meantime.

In the case of aggressive cancer, then extend and pretend is the worst possible strategy: ignoring the rapid progression of the disease only makes eventual treatment more difficult and uncertain.

The only way to treat cancer is to face it straight-on, learn as much as you can about the disease and the spectrum of treatments, consider the side-effects and consequences of various treatment strategies, and then get to work radically transforming your entire life, mind, body and spirit to effect the cure.

Why do we perpetrate the delusion of a hang-over when it’s painfully clear we have cancer? We’re afraid, of course; we fear the unknown and find comfort in the belief that nothing has to really change. We call this denial, but it arises from fear and risk aversion.

In the moment, amidst all the swirling chaos of fear and uncertainty, we choose extend and pretend because it seems to be in our self-interest.

This is the ontology of extend and pretend: a delusional view of our self-interest.The drunk is terrified of not being able to drink himself into a stupor; in that dysfunctional state of being, then he perceives his self-interest as denying he has cancer because he knows that treatment will require him to stop drinking.

In effect, what he perceives as acting in his self-interest is actually an act of self-destruction.

Political and social revolutions occur when the productive classes realize the Status Quo no longer serves their self-interests.In other words, the revolution is first and foremost an internal process of recognition and enlightenment: all the propaganda issued by the Status Quo, i.e. that it serves the best interests of the productive classes, is finally recognized as false.

As this awakening begins, a divergence between the definitions of self-interest by the Power Elites (financial and political) and the productive classes begins to open. This is extremely dangerous to the Power Elites, who are fundamentally parasitical and predatory: their wealth and power all flow from the labor, taxes, debt service and passivity/complicity of the productive classes.

The Power Elites’ time-honored strategy to protect their own wealth and grip on power has three components:one is to pursue a strategy of pervasive, ceaseless propaganda to persuade the productive classes that the system is sound, fair and working for them; the second is to fund diversionary “bread and circuses” for the potentially troublesome lower classes, and the third is to harden the fiefdoms of power and wealth into an aristocracy that is impervious to the protests of debt-serfs and laborers below.

In addition to “the system is working for you” social control myth, the wealth/power aristocracy also invokes various fear-based social control myths: external enemies are threatening us all, so ignore your debt-serfdom and powerlessness, etc.

In the ideal Power Elite scenario, a theocracy combines faith and State: not only is it illegal to resist the Aristocracy, you will suffer eternal damnation for even thinking about it.

Ask yourself this: how much influence do you as a citizen, voter and taxpayer have over the Federal Reserve?If we’re honest, we must confess that the Federal Reserve is as remote to us as any branch of the North Korean government: we have zero influence over it, and the same can be said of our elected representatives.

This is the definition of an aristocracy, oligarchy (a power structure in which power is held by a small number of people), kleptocracy, etc.

The Power Elite has a key advantage over the citizenry: its own self-interest is clear.The citizenry must entertain this question: is the Status Quo really working for me or not? The Power Elite aristocracy has no such confusion: the Status Quo is working beautifully for them, and the only threat to their wealth and power is the possibility that the productive classes might opt out and stop paying the taxes and debt service which funds the parasitical Power Elite.

Thus the Power Elite has a single goal:to persuade and coerce the citizenry into accepting their powerlessness and debt-serfdom as a pathological form of self-interest.

There is another dynamic to the Power Elite aristocracy’s grip on concentrated wealth and power: the self-selecting, self-perpetuating pathology of the aristocracy and the Upper Caste that so slavishly serves them. Author Chris Sullins identified this dynamic as one of self-propagating fractals (The MacRib is Back!September 23, 2008):

There are readers who might feel I’m being very hard on the public with the comparison so far. But look how people have allowed their names to be changed. They have gone from being called citizens to consumers. A citizen is a very human word which denotes awareness, involvement, and participation. It’s a word that sounds active and conscious in its very nature. A consumer by contrast sounds far more passive. A lot of other animals and even inanimate processes consume things. A consumer sounds like sheep grazing.

Once a populace accepts a self-definition that strips out their participation as anything but passive consumers, then the maintenance of power boils down to test-marketing new social control myths and fear-mongering.

This sophisticated level of marketing and predation requires a highly trained class of servants:an Upper Caste of technocrats, middle managers, marketers, lobbyists, “creatives,” engineers, etc. who do the heavy lifting that keeps the Power Elite’s wealth and status not just intact but expanding.

The reward for this service is a hefty salary that enables the purchase of the signifiers of upper-middle class existence and an intoxicating proximity to power and status visibility, i.e. some measure of recognition as “being somebody important.”

Until very recently I reckoned this Upper Caste of loyal servants comprised about 20% of the American populace, but upon closer examination of various levels of wealth and analysis of advert targeting (adverts only target those with enough money/credit to buy the goods being offered), I now identify the Upper Caste as only the top 10% (the aristocracy is at most the top 1/10th of 1%).

Wealth and income both fall rather precipitously below the top 10% line, and as globalization and other systemic forces relentlessly press productivity into fewer hands, then the rewards aggregate into a smaller circle of laborers.

As noted yesterday in Social Fractals and the Corruption of America(February 8, 2012), you cannot aggregate healthy, thrifty, honest, caring and responsible people into a group that is dysfunctional, spendthrift, venal and dishonest unless those individuals have themselves become dysfunctional, spendthrift, venal and dishonest.

This is the ontology of the pathology of power:If you want to join the elite levels of the Upper Caste, where “doing God’s work” is a daily practice of fraud, embezzlement, misrepresentation, collusion, purposeful obfuscation, all in service of a pathologically self-destructive notion of self-interest, then you must become dysfunctional, venal and dishonest (with becoming spendthrift in service of acquiring signifiers of status a close fourth).

Since non-pathological people will quit or be fired, then these fractals of corruption are self-selecting and self-perpetuating.This is true not just of financial America but of elected officialdom. Anyone who is still naive or delusional enough to think that getting elected to Congress or the state legislature will empower “doing good” will soon learn the ropes: the next election is less than two years away, and if you want to retain your grip on power you’re going to need a couple million dollars.

And if you want to “get something done,” you will need to take orders from your party leadership and service your donors.

I once had a friend who by extraordinary effort got himself elected to the state legislature. Being a young idealist, he actually refused to vote as his party leadership directed: thus identified as a rebel, he was predictably out two years later.

So much for “working within the system.” By the time all the donors, lobbyists, leeches and parasites have been properly serviced, the “reform” bill is 2,000 pages long.

As a result of the feudal structure of wealth and power in America and the self-reinforcing, self-propagating fractals of pathological servitude, the citizenry are increasingly remote from power.The aristocracy, like feudal lords in distant, fortified castles, demands obedient service of the powerless citizenry– work hard, pay your taxes and service your debt–and fears any awakening of true self-interest.

Just because a devoted member of the Upper Caste is allowed to enter the castle to do his work doesn’t mean he is part of the aristocracy. That glow of proximity to power is his reward for dutifully slaving away as a higher-order serf.

The American Revolution was triggered not by a sudden upwelling of noble ideals, but by the realization of the landed nobility and productive classes that the commercial and political domination of Great Britain was placing their wealth and liberty at risk.

Put another way: they awoke to the fact that the Status Quo no longer served their essential self-interests. When the Upper Caste and productive classes reach this same conclusion, then perhaps they will elect a transformational third party to sweep away the corrupt political class.

This new party must embody a moral imperative that acts as a social fractal: retaining power is not the goal. If the people want to restore the pathological aristocracy to power in two years, then by all means let them have it. They will do so without our complicity, interest payments, labor and servitude, for we have opted out of pathology.

Charles Hugh Smith – Of Two Minds

“Sometimes the ‘people’ are right.”

Anonymous leader

******

“There are two kinds of outrage:

The anger of the disappointed spoiled;

The authentic moral wrath of the common people betrayed.”

Anonymous sage

Permit me to sketch some real-world political context.

America has evolved two cooperating political elites, each of which runs one of the two parties and shares three common traits: (1) high education levels, (2) important wealth (3) a distrust of the populist vote bordering on fear.  Winning elections for each requires a periodic courting ritual during which the populist vote (on which success depends) is earnestly sought, followed by a measure of post-election betrayal. Well before the 2008 credit-bubble crash and the advent of the Tea Party movement, I noticed the growing populist pressure.

“Populism in this usage represents the politically relevant precepts, attitudes and core positions that distinguish an enduring majority of adults from the political elites that depend on their approval.”

For decades, the corporate country club conservatives and the Lexus limousine liberals succeeded in achieving a rough division of the populist center: social populists on one side, economic populists on the other.

That situation was mutating well before the 2008 real estate credit bubble burst.  Just before that calamity, I wrote the following (in an analysis of developments in American populism):

“While I still believe that a legitimate populist movement can accommodate local custom (when popular sentiment clearly differs from the mainstream, thinking of the accommodations for gay marriage in Vermont for example), I also believe that there can be no accommodation for the anti-democratic reversal of the popular will in the rest of the country in this important area of life, especially by judicial fiat.  When judges, for example, abuse their trust by overriding the popular will, especially on essential ‘family values’ issues, a populist rebellion is virtually inevitable.

Politics is a game played among four players, each representing one mindset.

The game is about power, challenges to boundaries, and the reallocation of other people’s money & property.

1. For typical liberal minds, boundaries are obstacles to be eliminated, including the boundary between “mine” and “yours”.
2. For typical conservative minds, boundaries are bulwarks to be defended, including the boundary between “my kind of people” and the “unwashed”.

[Liberals and conservatives share a great deal more than they are willing to admit.]

1. For centrist minds, boundaries are threats to a delicate balance and boundary relaxations are always preferable to conflict.
2. The reasonable minds, the rarest of all, are equally wary of the toxicity of the ideologues and the weakness of many centrists whose tendency to conflict avoidance undercuts courage and principle when both are most needed.

People endowed with common sense agree that “extreme” ideologies[5] are harmful, yet many of them tend to ignore the extremism of the ideologues who claim to share the same general socio-political vision. But the difference is not just one of degree, as in intensity or passion. When actually adopted, all ideologies operate as powerful reality filters, screening out or distorting every inconvenient data set or challenging point of view that cannot be accommodated to the “correct” view. In a sinister operational sense, the extreme ideologies work like mind-worms, feeding on the vulnerable, substituting a secular catechism for critical thinking. The vulnerable groups include those closest to a particular ideology in the spectrum of belief, the rootless ones searching for “meaning and purpose” and all the post-modern thinkers who have abandoned their allegiance to the core moral order. They were Lenin’s “useful idiots”.  I like the term “unwitting prey” or even “pets”.

At this juncture in history, the most toxic ideologically saturated minds are still found among the progeny of the two malign ideologies of the last century:  Marxism and National Socialism. The beliefs of Lenin survive in the guise of bureaucratic egalitarianism and those of Hitler survive as population eugenics. The true believer ideologues[6] dance on a scary precipice, unaware of the yawning abyss, one foot-slip away.[7]  History taught in the classic manner, with fidelity to the past, sans ideological filters, is a powerful vaccine against the toxic infectious ideologies. We can hope that such classic history will once again be widely taught.

Each of the four archetypal mindsets (liberal, conservative, centrist and reasonable) is “onto something”. They are not ideologues – these mindsets are traditional styles of rational thought and communication. Each is a gift to us conveying some essential part of the big picture. Each has had its day and will again. No culture can afford to ignore or marginalize a single one of them, except at a steep cost, because each mindset is part of the civilized historical tradition.

No society without liberal, conservative and centrist minds – all of whom are in a mutual dialogue mediated by the reasonable minds – can avoid the “bubble trap”. The real world abhors a bubble.  Those who insist in living in one will eventually find themselves in an unchecked downward slide. The slope is steep and the momentum of the fall is constantly accelerating. The reasonable minds among us are the first to notice the pending disaster, but only an aroused population can stop it.

“Not my problem”, you say? No part of a human society falls over the precipice without taking others down with it. I believe that during times of great imbalance – like our present situation – we are in acute danger because the consequences of a major misstep will be unforgiving: We are permitted to briefly lose our balance, but we must quickly regain our footing or we will fall.  The precipice is always near, and it’s a very long way down.

Dialogue pierces bubbles and augments balance. At times like this, when political posturing and maneuvering trump dialogue, the abyss is much closer that we think.

About that Giant

Now, here is a secret. All this time a huge giant has been sleeping under our floor.

Go with the metaphor for a moment, and ask yourself: What would a dreaming giant dream?

HINT: The giant is us, the people, not the population, but that ancient virtual collective memory that holds the precious life lessons of our ancestors.  This is our giant, the keeper of our pains, joys, successes and failures – especially of our failures. The Sleeping Giant embodies our common wisdom, our common sense and our common morality.

When the players in the political game become too corrupt, too careless, too unbalanced and too arrogant, the center does not hold and things fall apart[8]. Eventually the noise from all those gnashing teeth awakens the Giant under the floor.  Meantime the Giant dreams of wisdom ignored.

Elites are typically out of touch. It is their nature, whether conservative, liberal or centrist.  They are disconnected by circumstance, out of touch almost by definition, and always distanced by the habits of comfortable neglect. In the Giant’s world, loyalty and trust trump ideology and one’s station in life – especially the ideological fads of the elites.  In the Giant’s world, loyalty and trust start with family and friends then radiate to neighborhoods, then to communities, and so on, ending at the borders of the country. Loyalty and trust are at the heart of the ancient moral code, the “Deep Torah[9] of humanity” if you will, the main precepts of which cannot forever be ignored by any people, including, especially, by the elites.

Our daily lives, the reality “on the ground”, shapes the alpha and omega of real life.  When we say that the elites are disconnected, this is what we mean they are disconnected from – and this is why they need to be watched at all times. But the common people are too busy living and struggling with daily life to keep up surveillance of the miscreant elites.

Among all the precepts and aphorisms of the ancient moral code, five themes sound in the Sleeping Giant’s dreams like thundering heartbeats:

1. Earning entitles one to keep its fruits – the harder the earning, the fiercer the keeping. This precept applies to all people regardless of their station. One does not initiate a general program of taking property from any group (i.e., without a fair individuated adjudication, such as reparations for theft) without threatening all groups. In the Giant’s world, the earnings of the common people the fruits of which are more precarious and therefore more precious, are to be carefully respected by the elites. Significant price inflation is a thinly disguised, elite-engendered theft of earnings.
2.  The common people and their children entitled to the same human dignity as the elites enjoy. In the Giant’s world, the common people must be every bit as well protected from predators (human, animal, institutional and inhuman) as are the elites and their children. For example, the specter of private security guards for the elites and underfunded, under-deployed police for the poor people is a violation of human dignity.  In the Giant’s world, the elites (who are functionally necessary, but not individually indispensable) will be “kept on” only so long as they honor the basic human dignity of the common people.
3.  Theft by a common person is stealing and should be punished. In the Giant’s world, there is no theft exemption for the elites. The “Deep Torah applies to all – ruler and ruled, powerful and powerless.  Yet theft by an elite person is sometimes a mere “resource reallocation”, until the crime is discovered, when it may be called “misappropriation.” In the Giant’s world, elites do not steal from the common people…even elected elites acting under color of law.
4.  Trust is the baseline commitment of the social order and individual relationships.  When elites disparage the family ties, the loyalty and trust relationships and arrangements of the common people, the foundation of general trust is damaged. Elites do not break trust with the common people nor publically undermine its value by disregarding it among themselves, except at their great peril. They do not debase the Deep Torah by adopting a separate moral standard for themselves.  Not without deeply angering the awakened Giant.
5.  Beware when the trust with the common people is finally broken: Then, even the most benevolent gestures of the elites become traps – hungry tigers are then considered safer company. In the Giant’s world, the elites do not trick the common people.

Our current elites include some very clever types who value their personal status over anything else.  Some of these clever ones actually fear the Giant, but they have a plan to lull it into sleep.  These elites have kept a subset of “the population” as pets.  These human pets enjoy a very limited capacity for independent thought and action, because they have been conditioned to dependency, and they live on highly filtered information[10].  These pets can be easily manipulated and even teased into a state of faux rebellion.  Occasional pet outbreaks are arranged or exploited[11] to create conditions that will allow the elites to reestablish themselves by changing costumes.

This is why mobs of noisome pets should not be confused with a Sleeping Giant Awakening.  Two distinct things must not be confused: The anger of the disappointed spoiled and the authentic moral wrath of the common people betrayed. Those unruly pets sleeping in tents in the public square are an intended distraction.  Moral outrage grounded in the Deep Torah will always trump ordinary discontent.

The awakened Giant is the real deal. But how can we tell the difference? How will we know when the Sleeping Giant has awakened?  Listen closely for a critical the voices cohering around five themes: (a) keeping earnings; (b) being kept safe from predators; (c) holding thieves accountable, no matter their status; (c) honoring trust relationships; (d) rejecting the falsely benevolent gestures. This is the growl of the “Deep Torah”. It is the authentic voice of the people that, when aroused, exhibits a sudden moral coherence and unmistakable power.

You may have noticed that the Giant is stirring. It may soon be fully awake. I leave it to the reader to decode the signs, both false and true.

Timing is everything.

A fully awakened, angry giant is a very blunt instrument indeed.  This is why populist rebellions tend not to end well, even for the common people who first cheered the “protesters”, only to discover, too late, that a new set of elites had been using them as unwitting foot soldiers all along.

There is a strategy for the survival of the good people and good institutions, the constitution of this Republic and the prospect of an American renewal during an Awakened Giant Event.

The strategy is grounded in five simple rules, easy to outline, but difficult to implement….

Rule One: The ideologues cannot be trusted.

Rule Two: Listen closely for the ancient moral message (see above).  The more quickly that message is heeded, the sooner the Giant will go back to sleep

Rule Three: When things go seriously awry, the voices of practical and moral authenticity will not diverge.  So beware those who are still trying to trick the people – even – or especially- in a “good cause.” Beware those who want to “break some eggs” to make an omelet when they really mean break some heads to make a revolution. And shun those who want to destroy human dignity and freedom to make “a better world”, because the really mean “a bigger kennel.”

Rule Four: The Sleeping Giant is us.

Rule Five:  Victory goes to the most self-disciplined, morally rooted (think deep Torah here) and determined candidates, parties and movements.

How awake are you?

Copyright © 2011 by Jay B Gaskill, Attorney at Law, All rights Reserved

Forwards and links are welcome.  For other permissions, contact the author via e-mail law@jaygaskill.com

The author is a California Attorney and the creator and administrator of The Policy Think Site www.jaygaskill.com and the linked blogs.

As if we aren’t already there….from The Hill this morning:

The Federal Reserve is turning its attention to reviving the ailing housing market, calling on policymakers to provide a boost to the sector and lift the broader economy. 

The Fed on Wednesday sent a 26-page white paper to Congress, providing a framework — including several steps that are already in the works within the Obama administration — designed to provide greater stability for the sector and the overall economy.

Uh huh.  As if there is something wrong with asset values correcting to come back into line with incomes. 

And here’s the blatant return to feudalism:

The Obama administration is examining ways to reduce the number of vacant, foreclosed homes by putting together properties to sell to investors for rental units. 

Sen. Jack Reed (D-R.I.) is pushing legislation that would convert hundreds of thousands foreclosed properties into rentals as demand rises for those types of properties. 

Isn’t that nice?  Subsidize investors (neo-Lords, many of the same culprits who caused this mess in the first place) so they can rent us (the serfs) back our own foreclosed homes without the banks taking a loss.

It goes on to explain:

“We caution, however, that although policy action in these areas could facilitate the recovery of the housing market, economic losses will remain, and these losses must ultimately be allocated among homeowners, lenders, guarantors, investors and taxpayers,” the paper said.

Here is an idea, why don’t we remove taxpayers from the line above and insert — banksters, congressmen, senators, legislative aides, lobbyist and employees of the Federal Reserve system. That way we can stick the losses onto the back of the people who caused the losses.

Now that would create real improvement in the economy.

Here are some semi-random notes on the Occupy Wall Street movement, based partly on some “insider” contacts.

I am honored to have long been in email correspondence with David DeGraw of Amped Status, one of the key initial organizers of the Occupy Wall Street movement.As a result of our mutual support society/correspondence, I am also honored to be included in an email group of people I consider the leading lights in the movement to restore democracy and fiscal sanity to this nation, people like Matt Taibbi, Barry Ritholtz, William Black, Max Keiser, Dylan Ratigan, Karl Denninger, Yves Smith, Michael Hudson, Nomi Prins, David Cay Johnston, Paul Craig Roberts, “George Washington” and Tyler Durden, to name some whose work you have probably read.

I want to start by saying that David DeGraw has acted under extreme pressure with integrity and grace at every step of this amazing journey. He is an American hero in my book, along with all the other initial organizers of the OWS movement: someone who cannot be bought, someone with the uncommon courage to act (virtually alone at times) against the united forces of oppression, exploitation and thuggery that is the Wall Street/Washington, D.C. Power Elite.

The OWS story appears to begin in late September, but it actually started in March, when David, Anonymous and other activists began organizing a June 14 “occupation” of Liberty Park: Acts of Resistance: What Are You Going To Do To Rebel Against Economic Tyranny? (June 1, 2011), Prepare For Revolution: The Empire State Rebellion Begins on June 14th (March 31, 2011), The A99 social network group, etc.

David has summarized his 19-month experience on the front lines of the movement: Report from the Frontlines: The Long Road to #OccupyWallStreet and the Origins of the 99% Movement.

What few people know or recall is that the June 14 occupation attracted a total of four citizens: David and three other brave souls:event organizer Gary Roland, Oren Clark and Kevin Dann. (Other sources say 16 people showed up but only these four were prepared to occupy the park.)

Here is David’s statement after the disappointing turnout: Back home from Liberty Park(June 15, 2011).

David does not try to take credit as a leader; rather, he repeatedly states the movement is decentralized and leaderless, mentioning the key roles played by Anonymous, A99 OpESR, US Day of Rage and the NYCGA (New York City General Assembly) among many others:

There are definitely other significant groups that played a key role. In such a decentralized movement, it’s hard to keep track of all the efforts being put forth. We will feature other perspectives in the days ahead.As Anonymous A99 wrote in response to questions about their movement:

“We are a DECENTRALIZED non-violent movement. If you are looking to contact one of our leaders, go to the nearest mirror and peer deeply into it. It may take some time, but, eventually, one of our leaders will appear with answers to all of your questions.”

This lack of identifiable leaders and shadow financial backers is driving the Power Elites and their Mainstream Media lackeys crazy.Since they are all pimps or prostitutes for one special interest or another, the storm troopers of the Elite cannot believe there isn’t some interest group behind the whole thing. A decentralized, self-organizing mass protest movement against their rule simply doesn’t compute.

I have also been honored to be included in another small email group formed by an anonymous Elite insider who uses the nom de guerre Guy Fawkes. I won’t divulge this list for reasons of confidentiality, but the key point made by Mr. Fawkes is that Washington D.C. is a bath-house/whorehouse where everyone is for sale and/or hustling:

The key to understanding Washington is to understand that the whole place is for sale. It’s not just politicians. It’s interest groups (right and left), media, foundations, lobbyists, etc.Companies/foundations/labor all essentially manufacture “public opinion” from thin air simply by routing money to the right mouthpieces — public interest groups, non-profits, academics & universities, analysts. It’s hugely sophisticated and the budgets are enormous.

They are all competing (and paying) to either get the government to screw their competitor or convey some government benefit to them.

The voice of the electorate — the real “grassroots” — gets completely lost in the din. As soon as a “movement” picks up steam (e.g. Tea Party, MoveOn.org) it becomes completely co-opted… Tea Party becomes about “Guns, God & Gays” as Denninger rightly points out. Huge sums of money are dangled in front of the movement’s leaders and the original purpose of the movement is transformed into something that the status quo can tolerate.

There’s no room in this town for anyone who challenges the status quo — be that a Ron Paul, a Dennis Kucinich, a Noam Chomsky, etc. (Republicans ridicule Ron Paul just as much as Democrats do… It’s NOT his ideas that they are afraid of, it’s that he’s a huge threat to their power and perks.)

We all know this, and some try to dismiss it as “business as usual”: politicos have always been corrupt, money is the mother’s milk of politics, etc., but these are excuses, not explanations. A nation ruled by a deeply, pervasively corrupt political/financial class is not a democracy or a haven of free market capitalism: it is a neo-feudal kleptocracy organized along a neo-colonial “plantation economy” model with debt-serfs kept in line by the toadies, lackeys and apparatchiks of government, media and finance–a class of enforcers, propagandists and regulators that constitute a Technocratic Caste, a caste with a taste for power and the big bucks that flow to those willing to sell their souls and bodies in service to extreme concentrations of wealth and power. (All of this is explained in depth in my book Survival+.)

The corporate media is bought and paid for, and “journalists” toe the line or they’re fired. It’s really that simple.

That’s why the Web/blogosphere drives the Power Elites crazy: they can’t co-opt it with cash. You want to buy this site’s content and message? Sorry–I already have enough money. It really doesn’t matter how much money I have–it’s always enough.This is something else the Power Elites and their prostitutes/pimps simply cannot understand: how can someone not be bought? Doesn’t everyone crave the “Elite status” of special passes, big salaries, shiny gew-gaws and luxury possessions? Those who have sold their souls for a few beads and bangles are unable to understand those for whom integrity and independence are the only types of “wealth” they recognize. All that the pimps and whores of Washington value so much–the access to corridors of power, the fancy cars, the costly cozy dinners, and all the other perks of servitude–are meaningless to us, crass, ugly baubles marking depraved, lost souls.

Though it’s early, there are a number of lessons to be drawn from Occupy Wall Street. Others have already filed excellent reports, for example Chris Martenson-Occupy Wall Street: What’s Really Going On, and David Graeber, via Yves Smith (Naked Capitalism): On Playing by the Rules.

Here are my observations.

1. As an old activist myself (circa the early-mid 1970s), I learned that timing is everything but it is out of our control. A well-publicized mass demonstration in June draws 16 people (or four), and one three months later draws thousands of people. The difference is a change of awareness/ consciousness crystallized in the broader culture.

Concepts and phrases that placed me and other bloggers firmly in the farthest fringes of American society in 2005 and 2006 are now mainstream, bantered around on thousands of blogs and social media sites. People usually gain an awareness of propaganda and servitude slowly, and often only when their servitude and the dominance of self-serving Power Elites actually start impacting their own lives. That is now happening to more and more people.

The key to this process is having explanations and models which make sense of what’s happening.As the Status Quo unravels/devolves, the propaganda becomes less and less persuasive as an account of how the world actually works. Alternative explanations suddenly “make sense.” For me, the neo-colonial “plantation” model of financial/political exploitation and oppression neatly explains how America functions in the real world: debt-serfs, a Technocratic Caste of enforcers/managers, etc., just like on a colonial plantation ruled by a distant, cloaked, unreachable Elite. Others have different models, but the key feature is that each alternative explanation disrupts and subverts the Status Quo narrative.

This process cannot be co-opted or stopped. The only question left to be answered going forward is how much pain and suffering the Status Quo Power Elites and their armies of technocrat toadies, lackeys and prostitutes will impose on the nation before their grip on power is finally relinquished.

2. Given the vast armies of toadies, lackeys and prostitutes at their command, the Power Elite likes nothing better than “illegal action” which it can then ruthlessly suppress (truncheon-wielding cops, media smears, financial harrassment via the agencies of regulation/enforcement, etc.)

This is why I favor direct, perfectly legal action by individuals and households to divest themselves of servitude/complicity in the Status Quo.Max Keiser’s campaign to cripple Power Elite speculators in silver is one example: if 100 million households each bought 10 ounces of physical silver, that would completely disrupt the speculative game played by Wall Street.

One way to take direct action is to avoid student loan servitude: whatever it takes, get an education and degree without burdening yourself (and enriching Wall Street) with huge student loans. It can be done, but it means moving outside the Status Quo propaganda and narrative.

There is no law (yet) requiring citizens to have a mortgage, or credit card debt or an auto loan. Imagine what would happen to Wall Street’s ponzi financialization schemes if there were no mortgages to slice and dice and sell. Removing your interest payments and debt from the system is a direct action against servitude and the dominance of the Wall Street/Washington Power Elite.

Debt forces our complicity and servitude. The first step to true independence and freedom is to owe Wall Street and the other systemically dangerous institutions (SDIs) nothing.Owing them nothing is still perfectly legal. Once their income streams collapse, then buying the pimps and prostitutes of Washington becomes much more difficult.

The storm troopers of the Elite in Washington will protect their interests at every turn; that is why “reforming the system” is essentially impossible.

There are three ways not to have a mortgage:
1. don’t get a mortgage
2. pay off your existing mortgage
3. If you are insolvent, declare bankruptcy and dismiss the mortgage debt via the legal process of bankruptcy.

Others have taken the route of strategic default.

Other direct actions include:

–remove your money from Wall Street firms and “too big to fail” banks, opting for credit unions and online securities accounts.

–closing credit card accounts and/or minimizing your use of credit cards, which generate vast fees and profits for Wall Street and TBTF banks–what William Black calls systemically dangerous institutions (SDIs).

– don’t vote for either criminal gang–the Demopublicans or the Republicrats. Vote for an alternative, or the non-incumbent, or at least someone who refuses to play the game (for example, Ron Paul or Dennis Kucinich). Not voting plays right into the Power Elite’s hands: the passivity and complicity of the average citizen is their greatest ally in maintaining their neo-feudal power.

There are other direct actions we can take in the privacy of our own lives and homes. The basic idea is simple: stop being complicit in an exploitative, oppressive Status Quo, and stop passively accepting the governance of prostitutes and pimps and the lackeys they appoint (Geithner, Bernanke, et al.) It is perfectly legal (so far) to be debt-free, to own silver and to vote against the two criminal gangs that run Whoretown (Washington, D.C.)

Demonstrating is a good way to join in common cause and to raise awareness within the passive public, but being debt-free and thus a free citizen is even more powerful. Removing your debt and interest from Wall Street and the other systemically dangerous institutions (SDIs) will cripple their power in a way that toothless political reforms cannot.

Becoming a free, independent citizen won’t solve all our nation’s problems, but it will certainly enable solutions that are now impossible in the current neo-feudal, neo-colonial plantation run by Wall Street and Washington.

Charles Hugh Smith – Of Two Minds

The commodification and expansion of credit and the transformation of housing from shelter to speculation doomed the nation to debt-serfdom.

How did America become a land of debt-serfs? We can trace our debt-serfdom to three core dynamics which now dominate the American economy.  To understand the transition from a state of minimal financial wealth/maximum freedom to one of debt servitude (illusory wealth and sacrifice of freedom for all that lifetime debt can buy), we first need to  understand the gradual nature of this transmogrification.

It has become a cultural given that major political changes are often wrought by conspiracies, official or informal.  Conspiracies–otherwise known as crony or cartel capitalism and insider manipulation of process and perception–do exist. However, major cultural shifts are long,  drawn-out affairs that result not from conspiracy but from the steady application of self-serving agendas by wealthy, politically powerful special interests.

It may be difficult for many to imagine, but it was once difficult to obtain credit.Two generations ago, “if you want a loan, you have to prove you don’t need it.”  Applications for credit cards, auto loans and mortgages were examined by bank officers in your local branch, people who had actual working knowledge of your payment history, account balances, etc. (Student loans did not exist.)

A modest home improvement loan required lengthy applications and a face-to-face meeting with a  senior bank officer, who asked probing questions about your personal finances. (I know this because I went through the process in 1980.)

Credit card limits were low–$500 was common–and it required an application to raise the limit on your one credit card (multiple cards were frowned upon as risky). An increase in your credit card limit was a reason to celebrate–you’d won the trust of your bank through prudent management of your money.

I know this sounds like 1880, but it was actually 1980, a mere 30 years ago.People had a home mortgage, but prior to 1970 the balances were modest in terms of annual income, and  the primary reason people got a mortgage was not to speculate on housing but because it was cheaper to own than rent, as millions of veterans qualified for low-down payment VA loans. (The Armed Forces were much larger in those days, in terms of active-duty personnel as a percentage of the population.)

In this environment of what we might call “artisan credit” issued by local bank branches, debt was frowned upon as risky and buying things required saving money.The auto industry had long depended on auto loans to sell millions of vehicles, but a hefty down payment was generally required.

A household with minimal savings was deemed a credit risk; the only way to get credit was to  slowly build up savings and perfect history of paying one’s bills and debts.  The only way for many to qualify for a credit card was to pledge cash savings to the bank: if you failed to pay, the bank would take your savings for payment of your debt.

You see the problem with this low-credit, low-risk environment: profits were slim, not just for banks but for retailers and the real estate industry.If people had to save up to buy a new item of clothing or an appliance, then the retailers were limited in how many gew-gaws they could sell. If people stayed put and didn’t buy and sell their houses frequently, then developers, lenders and realtors had a very limited field of profit-making opportunities. If only people who qualified via stringent credit standards had access to credit, then the transactionf ees and interest earned from credit were also limited.

The “solution” to that low-risk, low-churn, low-credit environment was the commodification and mechanization of credit.  An analogy can be found in industrial consumer goods such as autos. When autos were hand-made by artisanal craftsmen, they were extraordinarily expensive.  When Henry Ford mechanized the production, effectively turning them into mass-produced commodities, they became affordable to tens of millions of households.

The same thing happened with credit when computers took over the task of qualifying borrowers. A computer program assessed credit on a simple point system, and voila, the costly task of assessing credit risk fell to pennies per borrower. Not entirely by happenstance, banks  found that millions of households that had been viewed as risks now qualified for credit,  as the issuing  and servicing of credit–credit card annual fees, transaction fees, late fees, etc.–became a fast-growing, monstrously profitable gusher for banks.

Retail sales could now be driven by desire rather than arduous, purposeful savings and  a prudent credit record. The consumerist vision of the American Dream can be summarized thusly: to become a better, grander, different person, all you need to do is consume  differently.With access to commoditized credit, virtually anyone with a job could buy, buy, buy on whim, impulse and advert-created desire.  Easy, almost-universally accessible credit in vast amounts created the perfect world for both retailers and banks.

Powerful real estate interests funneled the rapid expansion of credit into vast profits by incentivizing “moving up,”  a code-phrase for transforming the housing market from one focused on security and shelter to speculation: the more times people sold and bought homes, the more transaction fees could be generated and the more developments sold.

A great number of seemingly subtle policy changes drove this transformation of housing from shelter to a speculative market accessible to Everyman and Everywoman: jumbo loans, expansion of Federally guaranteed mortgages, the easing of credit standards, the erasure of capital gains on owner-occupied residences, and so on. All these worked to expand access to credit, the incentives to churn and the size of loans available to consumers and homeowners.

What was not visible at the start of this commodification of credit was the inevitable end-game:anyone with a pulse and a willingness to lie/prevaricate/mislead via omission was issued jumbo mortgages to speculate in a real estate bubble of truly epic proportions; consumers were issued not one or two credit cards, but dozens, many with astronomical credit limits given the modest income of the borrower; students became indentured debt-serfs to lenders via massive student loans, and the need for saved cash essentially vanished as “no down payment” mortgages, auto loans and credit-based purchases became the norm.

Credit is a form of leverage.If a household earns the median household income of $49,000 a year, then trade-offs and disciplined sacrifices have to made to save up enough cash to buy consumer goods, education, a bigger, more luxurious house, etc.  With access to abundant credit, then the need for adult-level discipline, sacrifice and trade-offs  all go away; the household can indulge every desire and goal with child-like abandon.

So a household income of $49,000 can leverage purchases made with borrowed money up to $250,000 or even higher; with no down payments and super-low “teaser” interest rates, such a household could leverage their modest income into $500,000 in debt for everything from a university education to a McMansion to a boat to lavish overseas vacations–there was almost no limit to the debt “qualified” once down payments/cash vanished as a requirement and interest rates were manipulated below market rates to foster the illusion of solvency.

The initial conditions of any system set up the end-state. The commodification of credit to serve the interests of powerful industries made a credit bubble and collapse inevitable.It also made debt-serfdom inevitable.A culture and economy that once rewarded adult values and behaviors–discipline, sacrifice, trade-offs and the understanding that there is a price to every decision–was transformed into one that richly rewarded adolescent abandon, impulse and the temptations to lie to get what you want right now, or even more telling, “what I deserve.” In that phrase, the propaganda of the marketer reached perfection.

So how do we fix an economy and culture gutted by debt, its people reduced to debt-serfdom? We write off all bad, uncollectable debt, and we severely restrict credit to everyone and every financial entity. Now that the economy has become dependent on debt the way a junkie is dependent on heroin, going “cold turkey” will be painful.  But just as for the junkie, the only alternative to rehabilitation/moving beyond addiction is extinction. There is a price to every decision.

Charles Hugh Smith – Of Two Minds

Adding complexity offers a facsimile of “reform” that actually serves the Prime Directive of fiefdoms and cartels: self-preservation.

The most obvious features of recent political and financial “solutions” are their staggering complexity and their failure to fix what’s broken. The first leads to the second. Consider the healthcare “reform,” thousands of pages of mind-numbing complexity which slathers on thick layers of  bureaucratic control on a system which already costs twice as much per capita as competing developed-world systems.

Sadly, the “reform” simply solidifies the Status Quo fiefdoms and cartels that control the U.S. sickcare system.

The healthcare reform fixes nothing, while further burdening the nation with useless complexity and cost. The same can be said of the Dodd-Frank “reforms” of the embezzlement-based U.S. financial system. The original Glass–Steagall Act separating investment banking from depository banking was a few pages in length; by one count, Dodd-Frank  requires that regulators  create 243 rules, conduct 67 studies, and issue 22 periodic reports.

Meanwhile, back in reality, the Financial Elites of Wall Street and the  “too big to fail” banks still have the nation (and Europe) by the throat.

Complexity is itself a tax; the maintenance cost of complexity is high, and can only be justified when the added complexity solves a critical problem of the society as a whole.

Adding ineffectual complexity leads to diminishing returns, as the complexity itself crushes the system supposedly being “improved” or “reformed.”

Here is the “problem” which complexity “solves”: it protects Savior State fiefdoms and private-sector cartels from losses. State fiefdoms and cartels have one goal: self-preservation. Once sufficient power and wealth (or control of wealth) is concentrated in a fiefdom or cartel (generally the two are partnered, as each supports the other), then the power can be devoted to limiting losses or encroachment.

That becomes the raison d’etre of the agency or enterprise.

Complexity works beautifully as self-preservation, because it actually expands the bureaucratic power of fiefdoms and widens the moat protecting cartels. Once the fiefdom expands to manage all those new rules, only a handful of corporations can possibly afford the regulatory reporting burdens. They are thus free to exploit the populace as an informal cartel.

I addressed some of these issues inThe Cycle of Dependency and the Atrophy of Self-Reliance (July 2, 2011).

Put another way: in the competition with the private sector for scarce capital, the State and corruption always win. That’s why kleptocracies and banana republics are characterized by bloated, unaccountable State bureaucracies and systemic corruption: sweetheart deals, no-bid contracts, shadow banking, shadow governance by Elites, inefficient workforces that cannot be fired or held accountable, and so on.

Real solutions require radically simplifying ossified, top-heavy, costly systems.Complexity serves to protect the existing constituencies and cartels; it allows those with the most to lose the cover of “reform.” But the reform is only a simulacrum; it claims reform along with its expanded powers, but the result is system that is so complex that it loses all accountability. Complexity is the perfect moat.

This is the idea, of course: banana republics and other kleptocracies always manage to support vast State bureaucracies which enable and support private cartel stripmining of the national wealth.

Note that the Status Quo always supports complex “reforms” and dismisses radical simplification as “impractical.”  What “impractical” means is that various fiefdoms and cartels would lose swag and power, and that would be painful; thus it is verboten.

The single goal is preserving the revenue and reach of concentrated power centers:State fiefdoms with large constituencies and headcounts, and cartels with no competition and stupendous profits. The two are hand in glove.

But complexity does have an eventual cost: collapse. Keep adding decks to the ship and eventually it capsizes and sinks. One the ship is sufficiently top-heavy, all it takes is a small wave.

Of Two Minds