FedUpUSA

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The Pampas of Argentina or the backwaters of Paraguay were the preferred location for those who openly professed their reprehensible loyalty to the Führer principle. However, do not blame all those ex-Nazis for selecting the shores of the Americas for their new domicile, their seeds were planted long ago in the offices of Wall and Broad Streets. Leni Riefenstahl’s Triumph of the Will saga shares more, than what one wants to admit, about the dark side of American History.

From the beginning of the Republic, the Federalists conspired for the illegal passage of their central government constitution in order to form a competing world empire with their British cousins. Their leader was Alexander Hamilton, who championed making individual states subservient to the original crony capitalists. When the Father of our Country, George Washington admonished about the dangers on entangling alliances, the world was warned that the drive towards independent liberty was compromised under this new Federal system.

When Andrew Jackson rallied frontier populism against the establishment elites of his era, you had an opportunity to restore some of the former glory of the Revolution of 1776. The conflict over the abolishment of the National Bank symbolizes the eternal struggle that continues to this very day.

The Manifest Destiny of the U.S.-Mexican War demonstrated just how far the country strayed from the fundamental concept of independence from England. The expansionistic campaign had more in common with the Crown than the Boston Tea Party.

The early 19th century fascists looked to their next defender Abraham Lincoln, the lawyer for the railroad corporatist cabal and the worst of all despotic presidents, to complete the task.

Myth #1: Lincoln invaded the South to free the slaves.

Myth #2: Lincoln’s war “saved the Union.”

Myth #3: Lincoln championed equality and natural rights.

Myth #4: Lincoln was a defender of the Constitution.

Myth #5: Lincoln was a “great humanitarian” who had “malice toward none.”

Myth #6: War was necessary to end slavery.

The significance of the War of Northern Aggression is that the principle of independent sovereign states under the precepts of constitutional law died. With the prevention of secession, the liberty of a voluntary union was betrayed for the rule, under a loyalty oath, to an Amerikan Reich.

The next False Flag excuse was the Spanish-American War and the “Remember the Maine!” slogan that pushed the country into a “Pacific Imperium“. Those NeoCons, like Senator John McCain, who revere Theodore Roosevelt as a model for imperialist jingoism, draw their psychopathic lusts from the same bloodline as Reinhard Heydrich and Heinrich Himmler.

World War I produced the infamous Woodrow Wilson internationalist treason. No longer will America be a society governed by elected representatives. The only coup to come out of his administration was won by the banksters. The fate of a proud people, sealed with the creation of the Federal Reserve, the establishment of the income tax and the permanent foreign military intervention abroad is the basis for the final destruction of the country and the horrors that befell our nation in the last century.

World War II inflicted the Franklin D. Roosevelt curse that guaranteed the imposition of socialism on the American people. How ironic that the Hitler bogyman’s regime, the scourge of Western Civilization and the reason for defending democracy, ultimately lead to similar collectivist policies, now adopted in the United States.

Just look to the ignominious involvement of Prescott Bush’s involvement with the funding of Adolph Hitler. Even FAUX news cannot hide the relationship in Bush’s Grandfather Directed Bank Tied to Man Who Funded Hitler.

“Prescott Bush was one of seven directors of Union Banking Corp., a New York investment bank owned by a bank controlled by the Thyssen family, according to recently declassified National Archives documents reviewed by The Associated Press.”

So what can and should a “reasonable man” conclude from these examples from history? The essential lesson is that the pristine fairy tale of the federal government’s noble role as defender of righteousness, that politicians want to accept and often die for, is a fictional myth.

Power politics always serves the interests of the banking elites, who control the political process, own the financial capital and manipulate the media viewpoint of events. This reality is pure fascism. You live under this system, so grow up, and admit it . . . it is the lamentable truth.

The Fourth Reich did not originate with Operation Overcast, the initiate name for Operation Paperclip. The classic book Fourth Reich of the Rich, by Des Griffin deserves another read.

“Some 150 years ago, in a speech at Springfield, Illinois, Abraham Lincoln acknowledged the fact that “no foreign power or combination of foreign powers could by force take a drink from the Ohio or make a track on the Blue Ridge in a trial of a thousand years.”At what point then is the approach of danger to be expected? I answer, if it ever reach us it must spring up from among us, it cannot come from abroad. If destruction be our lot, we must ourselves be its author and finisher. As a nation of freemen we must live through all time or die of suicide.”

Are we committing national suicide? Webster’s Dictionary (1828) defines suicide as: “Self murder; the act of designedly destroying one’s own life.” For that to be true on a national scale, the decisions leading up to our national self-destruction would, of necessity, have to be made by those who govern the country Congress, or “the government.”

Much of the German population was captivated by Hitler. The “presstitute” Goebbels’ media holds out Obama as a shining example. His manners are a composition of every tyranny to grace the scorched earth of despotic government. Will the America public come to their senses and make war against this Amerikana version of the Fourth Reich? You need not look for the Boys from Brazil to find today’s Nazi’s. They do their business in New York City, run their international institutes from London and order their bombing from Washington, DC.

Sieg heil! to the New World Order is the modern definition of national suicide.

SARTRE

“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.

Countries around the world, particularly in the West, are hopelessly in the red, with debt rising every day. Even worse, politicians seem paralyzed, unable — or unwilling — to do anything about it. It is a global disaster that threatens the immediate future. But there might be a way out.

When Carlo Ponzi, a dishwasher from Parma, Italy, immigrated to the United States in 1903, he had $2.50 in his pocket and a million-dollar dream in his head. He was able to fulfill that dream, at least temporarily.

The scheme continued. Ten investors turned into 100, and 100 investors turned into 1,000, until the scam was discovered. Ponzi spent many years in prison, and he died a pauper in 1949. But his name remains important to every criminologist today — and every economist.

Economists use the term “Ponzi scheme” to describe a disastrous mechanism in which someone pays off old debt by constantly taking on new debt. The repayment of the debt — the most recent loans, plus interest — is deferred into the distant future, fueling an eternal process of debt refinancing.

It’s the classic pyramid, or snowball scheme, practiced by thousands of con artists after Ponzi. The most spectacular case was that of New York financier Bernard Madoff, who was responsible for losses of about $20 billion by 2008. Snowballs are set into motion, becoming bigger and bigger as they roll along. In the worst case, they end in an avalanche that takes everything else with it.

Western economies have not acted much differently than the fraudster Madoff. In 2011, they were virtually inundated with bad news and old sins. Almost everyone — in Europe and in the United States — has been living beyond their means, from consumers to politicians to entire countries. Governments have become servants to the markets upon which they have become dependent.

Bigger Snowballs

On an almost weekly basis, the reports have become more worrisome and the sums of money involved more staggering. Many are now concerned that, as 2012 begins, the snowballs will only get bigger — and roll faster:

• There are the banks in Europe, which will have to repay about €725 billion in combined debt in 2012, including €280 billion in the first quarter alone. With the private market largely off-limits to them, the banks have had to rely on the European Central Bank (ECB) to bail them out. The ECB is now lending them fresh money — as much as they want — at minimal interest rates.
• There is a country like Italy, which has an exorbitant amount of debt to service at the beginning of the year. About €160 billion in debt will mature between January and April; the total for the entire year is about €300 billion. The government in Rome is already having trouble finding buyers for its bonds.
• There is the ECB, which is creating billions essentially out of nothing. On an almost weekly basis, it is acquiring bonds that no one else would buy from Portugal, Spain and Italy and, in the process, it is turning into a reluctant financier of nations. This financial aid already amounts to €211 billion.
• There is the European Commission, whose president, José Manuel Barroso, supports the use of so-called euro bonds. These bonds, which would be issued jointly by the countries in the monetary union, would amount to an accumulation of collective debt on top of national debts.
• There is the €440-billion euro bailout fund, of which €150 billion are already promised to Greece, Ireland and Portugal. But because this amount is still not enough, the finance ministers have decided to “leverage” the fund, a seemingly harmless term for bringing in additional lenders, thereby multiplying the volume of credit.
• And then there is the United States, which only remains solvent because the Congress in Washington keeps raising the debt ceiling. The American government already owes its creditors about $15 trillion. Stay tuned for the next installment.

In other words, there are plenty of snowballs that have started rolling and getting larger with each rotation. Some aspects of the economic system in the industrialized countries resemble a gigantic Ponzi scheme. The difference is that this version is completely legal.

Living on Credit

Old debts are paid with new ones, with borrowers giving not the slightest thought to repayment. This has been going on for a long time, far too long, in fact. It was only with the eruption of the financial crisis in 2007 and the outrageously expensive bailouts of banks and economies that many people realized that the entire world is living on credit.

“Debt is rising to points that are above anything we have seen, except during major wars,” economists at the Bank for International Settlements (BIS) concluded in a recent study. “The debt problems facing advanced economies are even worse than we thought.”

This is even true of seemingly rock-solid Germany. In the third quarter of 2011, German public debt amounted to €2.028 trillion, an increase of €10.8 billion over the debt level just three months earlier. Germany’s public debt grew by about €120 million a day — or more than €80,000 a minute — between July and September.

To make matters worse, this increase occurred in a quarter marked by plentiful tax revenues and a significant decline in unemployment. But debts increase independently of whether times happen to be good or bad.

The End of the System

The same thing is happening almost everywhere. In the first decade of this century, which was by no means a weak period economically, countries more than doubled the level of debt — to an estimated grand total of $55 trillion by the end of 2011.

The United States leads the pack with its national debt of $15 trillion, followed by Japan with about $13 trillion. Germany’s €2 trillion looks almost paltry by comparison. Today, the three major rating agencies award their highest credit rating to only 14 countries in the world.

The fact that nations are continually spending more than they take in cannot turn out well in the long run. The word “credit” comes from the Latin “credere,” which means “to believe.” The system will only function as long as lenders believe in borrowers. Once the belief in the creditworthiness of borrowers is destroyed, hardly anyone will be willing to buy their securities.

When that happens, the system is finished.

This is precisely what happened with Carlo Ponzi’s scheme. And now entire countries are suffering suspiciously similar fates. They are no longer being taken seriously.

Meanwhile, it is also flaring up in the United States once again, with Democrats and Republicans blaming each other for the nation’s debts. Instead of taking responsibility and consolidating the budget, President Barack Obama prefers to rail against the Europeans’ approach to crisis management. They, in turn, refuse to tolerate any interference, especially from the United States, which they blame for being the source of the financial crisis in the first place.

In this fashion, the Old World and the New World are tossing the blame back and forth, while confidence in politics and its ability to avert collapse is dwindling on both sides of the Atlantic. Is there still a way to stop the avalanche, or at least to diminish is destructive force? Why do countries that collect taxes have to borrow money in the first place?

Part 2: Of Good Debt and Bad Debt

Alexander Jung – Spiegel

This is getting old…

It took a relatively obscure former British academic to propagate a theory of the financial crisis that would confirm what many people suspected all along: The “corporate psychopaths” at the helm of our financial institutions are to blame.

Clive R. Boddy, most recently a professor at the Nottingham Business School at Nottingham Trent University, says psychopaths are the 1 percent of “people who, perhaps due to physical factors to do with abnormal brain connectivity and chemistry” lack a “conscience, have few emotions and display an inability to have any feelings, sympathy or empathy for other people.”

Bah.

Such people do exist, of course.  But that’s not the point.  This sort of behavior is self-defeating in any operable society because those who operate in that world quickly find themselves with few friends and fewer opportunities.  Word gets around.

Soon nobody will do business with you without donning a titanium butt-plate first, as they get tired of being violated.  That in turn drives up your cost of doing business and suddenly your competitors have an edge.  They exploit it, and now you’ve got trouble — if you don’t reform you’re soon out of business.

This is the usual dynamic.  It led those who were psychopaths to practice “quick hit” economic acts.  In the old West the huckster ripped off someone or robbed a stagecoach, but never showed up in town and plied a trade for any length of time, because they’d never get away with it — soon the lynch mob would appear and give you a permanent necktie.  In the more-modern era you were simply run out of business and then run out of town.

But something happened in the 1990s and into the 2000s.  The Government became infested with the same sort of game, and started to embrace and even sleep with some of these monsters — sometimes literally!  Government found that it could run the same game that was plied in the old days of “snake oil” and use it to buy votes, and so long as they made more and more outrageous claims the voters would suspend their disbelief and continue to buy into their games at the ballot box.

Now the psychopaths in the business world had a partner who would shield them — literally — from the consequences of their actions.  Money laundering, bogus securities that the sellers knew were worthless, even actual bribery became part of the business model and the justice system was blinded by those handlers in the government, who relied on the very same hucksters to finance their political promises!

So yeah, sure, we have psychopaths on Wall Street.  But the real problem doesn’t lie there.

The root of this problem lies in Washington DC, because without their active cooperation there would have been thousands of indictments, trials and prison sentences handed out by now.

But in point of fact there have been none.

Chief executive officers from eight of the largest US banks receiving government aid testify at a House Financial Services Committee hearing in Washington, DC, 02/11/09 (photo: Brendan Smialowski/Bloomberg)

I’ll be damned.

As 2011 slithers to its end, none of the major problems that led to the crisis point three years ago have really been solved. Bank balance sheets still reek. Europe day by day becomes a financial black hole, with matter from the periphery being sucked toward the center until the vortex itself collapses. The Street and its ministries of propaganda have fallen back on a Big Lie as old as capitalism itself: that all that has gone wrong has been government’s fault. This time, however, I don’t think the argument that “Washington ate my homework” is going to work. This time, a firestorm is going to explode about the Street’s head – and about time, too.

….

Over the next year, I expect the “what” will give way to the “how” in the broad electorate’s comprehension of the financial situation. The 99 percent must learn to differentiate the bloodsuckers and rent-extractors from those in the 1 percent who make the world a better, more just place to live. Once people realize how Wall Street made its pile, understand how financiers get rich, what it is that they actually do, the time will become ripe for someone to gather the spreading ripples of anger and perplexity into a focused tsunami of retribution. To make the bastards pay, properly, for the grief and woe they have caused. Perhaps not to the extent proposed by H. L. Mencken, who wrote that when a bank fails, the first order of business should be to hang its board of directors, but in a manner in which the pain is proportionate to the collateral damage. Possibly an excess-profits tax retroactive to 2007, or some form of “Tobin tax” on transactions, or a wealth tax. The era of money for nothing will be over.

But it won’t just end with taxes. When the great day comes, Wall Street will pray for another Pecora, because compared with the rough beast now beginning to strain at the leash, Pecora will look like Phil Gramm. Humiliation and ridicule, even financial penalties, will be the least of the Street’s tribulations. There will be prosecutions and show trials. There will be violence, mark my words. Houses burnt, property defaced. I just hope that this time the mob targets the right people in Wall Street and in Washington. (How does a right-thinking Christian go about asking Santa for Mitch McConnell’s head under the Christmas tree?) There will be kleptocrats who threaten to take themselves elsewhere if their demands on jurisdictions and tax breaks aren’t met, and I say let ‘em go!

Hoh hoh hoh.

Michael Thomas is right, you know.  I’ve been trying to get purchase for draining the swamp and punishing the wrongdoers among the various political classes in DC and elsewhere for a long time, in some cases dating back to the 1990s.  My stock in trade is mathematics — that irrespective of the money flowing into the coffers of campaigns and lobbying offices what’s being attempted cannot work and as a consequence we are choosing between doing the right thing now and having it suck and doing it later by force and having it suck more.

Why appeal to people in this way?  Well, what else do you have when the base case — that you should do the right thing because it’s right — no longer has any currency?  In a city (DC) and nation (America) where bribery and corruption have become a way of life, where lies told to the electorate as a means of buying votes has become the degenerate set that’s left of what used to pass for law and order, you can no longer appeal to people’s “better virtues.”

All that’s left is trying to appeal to their desire to survive what’s coming, whether that survival is political or at rather-more-fundamental level.

This isn’t the sort of thing that anyone wants to talk of openly, of course, but we must, because just like mathematics it is inevitable on the path we are on.  The idea that one can “throw money from helicopters” as Bernanke has put forward is an intentional fraud.  Diluting the currency base of course simply makes everything more expensive you need while attempting to bail out those in debt at the same time.  For the common man in debt nothing happens.  For the poor who never had access to credit at a material level they literally starve and thus civil and political order is threatened.  The wealthy, for their part, simply skim off more and more to “protect” their capital.   That a man who runs this sort of crap manages to get reconfirmed after intentionally averting his eyes to the bubble being blown as a consequence of his policies is an outrage.  It speaks to the high corruption of public process and public life, but it is not an isolated incident or uncommon in the world of today.

The IMF’s Lagarde talks of Europe being “everyone’s problem”, as if Germany and France decided to con the world with hinky Greek derivative deals.  Perhaps some French or German banks did so (along with American ones), but France and Germany themselves?  No.  But now, having happened, it suddenly is someone else’s problem to bail out, and oh by the way, it’s not just Greece.

At its core the problem is both simpler and more complex than it first appears.  The complexity is intentionally used as a foil by various pundits and others who argue that we must support the “financial innovators” lest it all go somewhere else.  But Paul Volcker, hardly a dummy, has said in public that the only real “innovation” in the financial industry in the last 30 years was the ATM!

He’s right, you know.  Ginning up some debt deal and selling it to rubes, knowing full well that it was crap and destined to eventually blow up, is nothing new at all.  A column over at Interfluidity argues that the bankster model is not only old hat but has driven much of innovation through the ages.  To that argument I call bull.

Simply put the question being put forward in the latter article proceeds from a false premise.  The idea that we gain some sort of “societal benefit” from these misallocations of capital is trivially proved to be false using nothing more than basic analysis and mathematics.  All you have to do is look here:

Notice how the outstanding debt increase, quarter by quarter, exceeds that of output.  The premise run by Interfluidity is that the societal good in terms of Nash Equilibria is therefore false, as it is not adjusted for the claims made against the future.  This of course is exactly the sort of lie the banksters and politicians have run as their stock in trade for 30 years, and it is not surprising at all that Steve would fall into the trap.  After all most of us alive have spent the majority of our lives in this lie.

If I can falsify the premise from which you proceed then the remainder of your argument goes in the ashcan.  Sorry Steve.

The smartest guys in the room (that would be the banksters) always believe they can get away with it, of course.  Some of them are delusional, many for the same reasons.  A number of those who are considered “respectable” even subscribe to idiocies like “MMT”, believing that somehow the government causes economic growth through deficit spending.

But the graph above does not lie.  As I have repeatedly commented these beliefs are much like perpetual motion in its various forms; there is always someone who claims to have figured it out.  But the laws of thermodynamics say perpetual motion is impossible, and ultimately once again the person running the scheme is proved to be wrong — usually intentionally so when their hidden energy source is discovered.

The choice is not between a modern economic system that favors growth and living in caves.  It is between economic progress that is sustainable and funded from economic surplus and one that is built on debt bubbles, lies, and ultimately must and does collapse.

The former is an economy that grows through actual innovation and improvement in productivity, where debt is a tool to liquify transaction flow rather than pyramid upon the shoulders of the people.  The latter is the lie we’ve lived for 30 years, and which is now reaching its mathematical conclusion.

We face a time when in the present we have a choice of becoming adults and accepting what we’ve done, along with what we must do, or continuing to pound on the table like a petulant child demanding another bar of chocolate.  The latter path has been the road of the last 30 years, but now the supply of chocolate is exhausted.  There is food to be had outside in the form of strawberries, ears of corn and even a rabbit or three, but to obtain the latter we must get off our collective asses and pick the strawberries, cultivate the corn or shoot, skin and cook the rabbit.  We are choosing now between recognition and personal effort, along with acceptance of the harm we’ve done by eating all that chocolate (we’re all 100lbs overweight!) or literal starvation through laziness.

The old political and bankster ways are out of gas folks.  There is no path forward on the road we’ve been traveling — the bridge is out and our choice is to either stop before we reach the edge or take the plunge onto the rocky cliffs below.

Choose wisely.

If you spend much time watching the mainstream news, then you know how incredibly vapid it can be.  It is amazing how they can spend so much time saying next to nothing.  There seems to be a huge reluctance to tackle the tough issues and the hard questions.  Perhaps I should be thankful for this, because if the mainstream media was doing their job properly, there would not be a need for the alternative media.  Once upon a time, the mainstream media had a virtual monopoly on the dissemination of news in the United States, but that has changed.  Thankfully, the Internet in the United States is free and open (at least for now) and people that are hungry for the truth can go searching for it.  Today, an increasing number of Americans want to understand why our economy is dying and why our national debt is skyrocketing.  An increasing number of Americans are deeply frustrated with what is going on in Washington D.C. and they are alarmed that we seem to get closer to becoming a totalitarian police state with each passing year.  People want real answers about our foreign policy, about our corrupt politicians, about our corrupt financial system, about our shocking moral decline and about the increasing instability that we are seeing all over the world, and they are not getting those answers from the mainstream media.

If the mainstream media will not do it, then those of us in the alternative media will be glad to tackle the tough issues.  The following are 40 hard questions that the American people should be asking right now….

#1 If Iran tries to shut down the Strait of Hormuz, what will that do to the price of oil and what will that do to the global economy?

#2 If Iran tries to shut down the Strait of Hormuz, will the United States respond by launching a military strike on Iran?

#3 Why is the Federal Reserve bailing out Europe?  And why are so few members of Congress objecting to this?

#4 The U.S. dollar has lost well over 95 percent of its value since the Federal Reserve was created,  the U.S. national debt is more than 5000 times larger than it was when the Federal Reserve was created and Federal Reserve Chairman Ben Bernanke has a track record of incompetence that is absolutely mind blowing.  So what possible justification is there for allowing the Federal Reserve to continue to issue our currency and run our economy?

#5 Why does the euro keep dropping like a rock?  Is this a sign that Europe is heading for a major recession?

#6 Why are European banks parking record-setting amounts of cash at the European Central Bank?  Is this evidence that banks don’t want to lend to one another and that we are on the verge of a massive credit crunch?

#7 If the European financial system is going to be just fine, then why is the UK government preparing feverishly for the collapse of the euro?

#8 What did the head of the IMF mean when she recently said that we could soon see conditions “reminiscent of the 1930s depression“?

#9 How in the world can Mitt Romney say with a straight face that the individual health insurance mandate that he signed into law as governor of Massachusetts was based on “conservative principles”?  Wouldn’t that make the individual mandate in Obamacare “conservative” as well?

#10 If the one thing that almost everyone in the Republican Party seems to agree on is that Obamacare is bad, then why is the candidate that created the plan that much of Obamacare was based upon leading in so many of the polls?

#11 What did Mitt Romney mean when he stated that he wants “to eliminate some of the differences, repeal the bad, and keep the good” in Obamacare?

#12 If no Republican candidate is able to accumulate at least 50 percent of the delegates by the time the Republican convention rolls around, will that mean that the Republicans will have a brokered convention that will enable the Republican establishment to pick whoever they want as the nominee?

#13 Why are middle class families being taxed into oblivion while the big oil companies receive about $4.4 billion in specialized tax breaks a year from the federal government?

#14 Why have we allowed the “too big to fail” banks to become even larger?

#15 Why has the United States had a negative trade balance every single year since 1976?

#16 Back in 1970, 25 percent of all jobs in the United States were manufacturing jobs. Today, only 9 percent of all jobs in the United States are manufacturing jobs.  How in the world could we allow that to happen?

#17 If the United States has lost an average of 50,000 manufacturing jobs a month since China joined the World Trade Organization in 2001, then why don’t our politicians do something about it?

#18 If you can believe it, more than 56,000 manufacturing facilities in the United States have permanently closed down since 2001.  So exactly what does that say about our economy?

#19 Why was the new Martin Luther King, Jr. Memorial on the National Mall made in China?  Wasn’t there anyone in America that could make it?

#20 If low income jobs now account for 41 percent of all jobs in the United States, then how are we going to continue to have a vibrant middle class?

#21 Why do the poor just keep getting poorer in the United States today?

#22 How can the Obama administration be talking about an “economic recovery” when 48 percent of all Americans are either considered to be “low income” or are living in poverty?

#23 Why has the number of new cars sold in the U.S. declined by about 50 percent since 1985?

#24 How can we say that we have a successful national energy policy when the average American household will spend a whopping $4,155 on gasoline by the end of this year?

#25 Why does it take gigantic mountains of money to get a college education in America today?  According to the Student Loan Debt Clock, total student loan debt in the United States will surpass the 1 trillion dollar mark in early 2012.  Isn’t there something very wrong about that?

#26 Why do about a third of all U.S. states allow borrowers who don’t pay their bills to be put in jail?

#27 If it costs tens of billions of dollars to take care of all of the illegal immigrants that are already in this country, why did the Obama administration go around Congress and grant “backdoor amnesty” to the vast majority of them?  Won’t that just encourage millions more to come in illegally?

#28 Why are gun sales setting new all-time records in America right now?

#29 Why are very elderly women being strip-searched by TSA agents at U.S. airports?  Does that really keep us any safer?

#30 The last words of Steve Jobs were “Oh wow. Oh wow. Oh wow.“  What did he mean by that?

#31 How in the world did scientists in Europe decide that it was a good idea for them to create a new “killer bird flu” that is very easy to pass from human to human?

#32 If our founding fathers intended to set up a limited central government, then why does the federal government just continue to get bigger and bigger?

#33 Are we on the verge of an absolutely devastating retirement crisis?  On January 1st, 2011 the very first of the Baby Boomers started to reach the age of 65.  Now more than 10,000 Baby Boomers will be turning 65 every single day for the next two decades.  So where in the world are we going to get all the money we need to pay them the retirement benefits that we have promised them?

#34 If the federal government stopped all borrowing today and began right at this moment to repay the U.S. national debt at a rate of one dollar per second, it would take over 440,000 years to pay off the U.S. national debt.  So does anyone out there actually still believe that the U.S. national debt will be paid off someday?

#35 If the U.S. economy is getting better, then why are an all-time record 46 million Americans now on food stamps?

#36 How can we say that we have the greatest economy on earth when we have a child poverty rate that is more than twice as high as France and one out of every four American children is on food stamps?

#37 Since 1964, the reelection rate for members of the U.S. House of Representatives has never fallen below 85 percent.  So are the American people really that stupid that they would keep sending the exact same Congress critters back to Washington D.C. over and over and over?

#38 What does it say about our society that nearly one-third of all Americans are arrested by the time they reach the age of 23?

#39 Why do so many of our politicians think that it is a good idea to allow the U.S. military to arrest American citizens on American soil and indefinitely detain them without a trial?

#40 A new bill being considered by the U.S. House of Representatives would give the U.S. government power to shut down any website that is determined to “engage in, enable or facilitate” copyright infringement.  Many believe that the language of the new law is so vague that it would allow the government to permanently shut down any website that even links very briefly to “infringing material”.  Prominent websites such as Facebook, Twitter and YouTube would be constantly in danger of being given a “death penalty”.  The American people need to ask their members of Congress this question: Do you plan to vote for SOPA (The Stop Online Piracy Act)?  If the answer is yes, that is a clear indication that you should never cast a single vote for that member of Congress ever again.

So do you have answers to some of the questions posted above?

The Economic Collapse