Wednesday, December 07, 2016

Populism in America: "Follow the Money"

If you want to understand today's populism, don't look to the mainstream media's comically buffoonish propaganda blaming the Russians: look at the four issues listed below.
One of the most disturbing failures of the mainstream media in this election cycle was its complete lack of historical context for Trump's brand of populism.If you consumed the mainstream media's coverage of the campaign and election, you noted their obsession with speech acts (as opposed to concrete actions), personalities and conspiracy theories pinning American populism on Russian propaganda.
The mainstream media dismisses populism by pushing two absurdly ignorant narratives:
1. Populism (we're told) always leads to authoritarian rules and/or fascism (i.e. Nazism). All populist movements are therefore tarred with the Nazism brush: no good could possibly come from Populist movements because they always lead to fascism.
This is convenient for the apologists of the embattled status quo, but it's utterly false:America's enormous populist movements have never led to fascism.
2. Since the status quo is wonderful and America's economy is strong, dissent or populism cannot be home-grown--it must be the work of the Devil, in the guise of "foreign propaganda."
Notice the classic propaganda ploy being deployed here: since dissent is impossible in a regime as well-managed and prosperous as America's status quo, populism must be driven and controlled by evil foreign agents.
This is laughably absurd: America's populist movements, including the present one, have been revolts against the concentrated wealth and power of self-serving status quo elites.
If the mainstream media actually employed well-informed analysts rather than empty-headed politically correct parrots, you might have learned that America has a long and rich history of populism that did not lead to authoritarianism or fascism.
Mike Swanson of WallStreetWindow.com and I recently discussed Populism and political realignments in a 34-minute podcastCharles Hugh Smith on The Mainstream Media and the Populist Global Revolt.
There have been several major populist movements against the ruling elites:Andrew Jackson's election in 1828 stemmed from such a revolt, and the Populist Party (a.k.a. People's Party) and Socialist Party movements of the late 1800s and early 1900s were progressive/left-wing reactions to the enormous concentrations of wealth and power in the elites of the day.
Both movements attacked the money and credit mechanisms of the elites: in Jackson's case, the target was the Second Bank of the United States; in the Populist Party era, the issue was free silver, i.e. the expansion of the money supply via issuing silver coinage.
There are two dynamics at work beneath the surface of populist movements.One is a transformation in the dominant mode of production, i.e. the organization and ownership of the productive assets that power economic growth, and the second is the political realignment that results from a transformation in the mode of production.
In the 19th century, agrarian interests that were losing power to industry and banking/ finance typically found expression in populist movements.
Such movements included an elite faction that saw its power and wealth being threatened by new elites. For example, England's landed gentry resisted the political and economic power of industrialists, who sought an expansion of the engines of their wealth: global trade and a poorly paid, mobile urban workforce.
Mike mentioned a seminal book, Golden Rule: The Investment Theory of Party Competition and the Logic of Money-Driven Political Systems, which proposes there is actually only one party in America: the property party, i.e. those who own the productive assets of the nation.
The winds of change can be understood by tracking which wealthy factions are funding the two political parties. Author Thomas Ferguson makes the case that Franklin Roosevelt won the presidency partly as a result of the financial support of large multinational corporations with global interests.
Roosevelt's opponents were typically domestic companies that depended on cheap labor and stiff tariffs to keep out competition.
The current era of populism is perhaps best typified by Bernie Sanders, who raised a phenomenal $234 million from individuals, with Political Action Committees (PACS) contributing a thin sliver of $6.3 million to his campaign.
There is no better proof that today's populism is deep-rooted and broad-based than Sanders' astounding $234 million contributions from individuals, not elites.Please name me another presidential candidate who raised 97% of their funding from small donors.
Hillary Clinton raised a gargantuan $1.3 billion,of which $188 million came from Super-PACs. A tiny percentage of her total funds came from small donors; her campaign raised $556 million and the Democratic Party's (elitist) fund-raising committees ponied up another $544 million. (source)
Trump's campaign raised about 27% of its funds from small donors, compared to the Romney campaign's 6%.
Today's populism has drawn funding from individuals and enterprises who have been left out of globalism's massive increase in elitist wealth. If we look for issues that crossed party lines, i.e. that drew support from both Sanders and Trump supporters, we find four core issues:
1. Anti-globalism
2. disgust with the Establishment's self-serving corrupt elites, i.e. anti-elitism
3. Economic nationalism
4. Anti-endless-neocon-wars, drone strikes, foreign entanglements
Issues 1, 3 and 4 were encapsulated in Democrat George McGovern's 1972 campaign slogan come home, America, a message disdained by today's Democratic Party elites, who have skimmed hundreds of millions in campaign contributions from global finance and corporate interests.
Take a look at these charts of U.S. corporate profits and the decline of labor's share of GDP, and ask: isn't the source of today's populist disgust and anger at America's ruling elites rather obvious?
Is it coincidence that corporate profits skyrocketed from about 2001, right when labor's share of GDP fell off a cliff? If you want to understand today's populism, don't look to the mainstream media's comically buffoonish propaganda blaming the Russians: look at the four issues listed above and these two charts.
Mike Swanson and Charles Hugh Smith on The Mainstream Media and the Populist Global Revolt (34 minute podcast).

For what it's worth, my copy editor reckons Inequality and the Collapse of Privilege($3.95 Kindle ebook, $8.95 print edition) is my best book. It is, if nothing else, highly relevant to today's economic/social schisms.


Join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.
Check out both of my new books, Inequality and the Collapse of Privilege ($3.95 Kindle, $8.95 print) and Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle, $8.95 print). For more, please visit the OTM essentials website.

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Tuesday, December 06, 2016

Our "Gaslight" Economy

If you don't like what these charts are saying, please notify The Washington Post to add the St. Louis Federal Reserve to its list of Russian propaganda sites.
Yesterday I described our gaslight financial system. Today we'll look at our gaslight economy. Correspondent Jason H. alerted me to the work of author Thomas Sheridan ( Puzzling People: The Labyrinth of the Psychopath), who claims to have coined the term gaslighting.
As noted yesterday, gaslighting has often been used in the context of personal relationships to describe a manipulative person's attempts to undermine and control their romantic partner.
In a larger context, these manipulative techniques can also be applied to our perception of the entire economy:
1. Questioning, belittling, discounting and undermining our experience of economic "animal spirits" and general conditions.
2. Overwriting our memory of the economy of the past, again by undermining, questioning and belittling our memories.
3. Discrediting and marginalizing our definitions of economic well-being, in favor of the manipulator's definition of our well-being.
4. Using authority and "experts" to disqualify and discredit dissenting views.
5. Denigrate and deny our lived experience of economic conditions by repeating the institutionalized authority-approved narrative of "what actually happened."
6. Disorient, discredit and destroy dissent with a torrent of false statistics, false narratives, false accusations and false claims of our errors.
It seems obvious to me that we are being gaslighted to forget the widely distributed prosperity of the past and accept that the stagnation of the past 16 years is equivalently prosperous--in direct contradiction to the lived experience and memories of the bottom 80%.
Please compare the following four charts of unemployment, real hourly pay, inflation and full-time jobs with your economic experiences of the past two decades. The mainstream media and financial media are saturating us with claims that the economy is doing great: unemployment is a historically low 4.6%, real wages rose an astonishing 5% this year, millions of new jobs have been created, interest rates are at all-time lows, inflation is subdued and all in all, the U.S. economy is doing great--and if you disagree, well, you're a Russian propagandist because legitimate dissent is impossible.
Here are the charts that illustrate our phony gaslight economy, with my notes.Please note the charts are from that well-known website of Russian propaganda, the St. Louis Federal Reserve (FRED).
Over the past 60 years, an unemployment rate of 4.6% correlated with a booming economy of strong job growth and rising wages. Do you think the economy is booming, outside of hotspots such as San Francisco, CA and Portland, OR? The top 5% have done very very well over the past 16 years, but what about the bottom 95%?
Official inflation as measured by the Consumer Price Index shows a mere 10% total inflation since mid-2008. Does this align with your experience of real inflation? Here is my view: The Burrito Index: Consumer Prices Have Soared 160% Since 2001 (August 1, 2016)
While hourly compensation has gone up 60% since 1970, when adjusted for inflation it has declined. If this is prosperity, then what does stagnation look like?
Here's a chart of full-time employment. Does that tiny blip higher after eight years of "recovery" look like a widely distributed boom to you?
What else can we make of the vast gulf between the status quo's ceaseless projection of "the economy is strong" and these charts--and our own experience? As for memory-- those of us who have been working for the past 40+ years recall real prosperity--and the past eight years are not at all like periods of prosperity in the past.
Rather, the few at the top have amassed vast wealth while the bottom 95% have experienced stagnant wages and declining real wealth.
If you don't like what these charts are saying, please notify The Washington Post to add the St. Louis Federal Reserve to its list of Russian propaganda sites.

For what it's worth, my copy editor reckons Inequality and the Collapse of Privilege($3.95 Kindle ebook, $8.95 print edition) is my best book. It is, if nothing else, highly relevant to today's economic/social schisms.


Join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.
Check out both of my new books, Inequality and the Collapse of Privilege ($3.95 Kindle, $8.95 print) and Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle, $8.95 print). For more, please visit the OTM essentials website.

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Monday, December 05, 2016

Our "Gaslight" Financial System

Perhaps the ultimate gaslighting in human history is our current fiat money creation system that benefits the few at the expense of the many.
The terms gaslight and gaslighting are entering the political media lexicon, with partisans of both parties accusing the other side's candidate of gaslighting in the presidential election. The terms refers to the 1944 film Gaslight in which Charles Boyer subtly manipulates the environment to cause Ingrid Bergman to question her memory and sanity.
Generally speaking, gaslighting has been used in the context of personal relationships to describe a manipulative person's attempts to undermine and control their romantic partner.
As I understand it, gaslighting refers to a specific set of manipulative techniques:
1. Questioning, belittling, discounting and undermining our experience of places and events.
2. Overwriting our memory of events with false memories, again by undermining, questioning and belittling our memories.
3. Discrediting and marginalizing our definitions of self and identity, in favor of the manipulator's definition of our identity and place in the world.
4. Using authority and "experts" to disqualify and discredit dissenting views.
5. Denigrate and deny our lived experience and memory by repeating the institutionalized authority-approved narrative of "what actually happened."
6. Disorient, discredit and destroy dissent with a torrent of false statistics, false narratives, false accusations and false claims of our errors.
Correspondent C.D. suggests gaslighting can be applied to the entire financial system. Here are his comments in reference to last week's post Beyond Income Inequality:
Do Wallerstein or Picketty (or any mainstream economists) ever talk about larceny via extortion, fraud, artifice, forgery, false pretense, and conversion, among other types of theft? Do they talk about interest-bearing, debt-based money? If they don't, I think they're missing two gargantuan pieces of the puzzle.
Nations have lost trillions (in today's money) from theft/larceny since the 15th century and have paid many more trillions in interest.....often to the same criminals who stole these vast amounts of money. Economists that don't look at these things are like a business owner who just looks at his costs and sales without looking at the employees who are fudging their time cards and stealing money from the till and then wonders why he isn't making any profit.
It seems to me that only crimes committed on a small and moderate scale are punished; the large crimes are rarely punished. Indeed, people venerate various systems that systematically plunder whole nations and give it a name that ends in "ism" and then the big players in the system are protected and even lionized.
We have a fundamental problem with dishonest weights and measures.... in this case, money/currency. What would happen if someone was using false scales to buy and sell grains? They would go to prison (hopefully). What happens when someone uses pieces of paper that are used to measure ones work/time/effort (money/currency) where there is built in scarcity and an inexorable decline in the value of the that paper due to its debt-based, interest bearing nature? Well, they get to live high on the hog and hire people at banks, government, and universities, who then convince everyone that this paper is good and provides security and prosperity.
The convincing of people to accept this system is a form of gaslighting done by psychopaths. We have been gaslighted so much in our lives, most people can't imagine what life would be without it.
We are bounced from one extreme to another where the "isms" fight over who will steal from whom and how much, all the while, the thieves at the top (who often develop the theories that become "isms") get more and more at the expense of the rest of us. If you have not done so, I urge you to research the concept of gaslighting. I think it will help you in further understanding why things are the way that they are.
Thank you, C.D., for an eye-opening application of gaslighting to our entire money/financial system. I have addressed the role of centrally created and distributed money many times, for example If We Don't Change the Way Money Is Created and Distributed, We Change Nothing (December 24, 2015).
Exposing the racket at the very heart of our money is one key topic in my bookA Radically Beneficial World: Automation, Technology & Creating Jobs for All.
Here's the reality: our currency (money) is created at the top of the wealth/ power apex, by central and private banks. This money is borrowed into existence, so somebody (either taxpayers or borrowers) must pay interest on the new money.
None of this money is created at the bottom of the pyramid where the 99.9% live. You want some new money? You'll have to borrow it and pay interest.
Our entire money system is a "trickle down" racket: the banks and financiers can borrow unlimited sums into existence, and some of this "trickles down" to the 99.9% via mortgages, auto loans, etc., or perhaps a few service jobs if a corporation that's close to the money spigot expands operations in the U.S.
But as I have explained many times, most recently in Why Our Status Quo Failed and Is Beyond Reform, those close to the new money spigot can outbid everyone else for income-producing assets, and scoop up the national income without hiring even one more worker.
The "crazy" alternative to the money only benefits the .1% racket I propose is to create money at the bottom of the pyramid when someone performs useful work in their community. In my view, it makes sense to create new money when useful labor is performed, not when a bank or financier needs nearly-free money to buy assets or issue credit cards carrying 23% annual interest rates.
Labor-backed crypto-currency sounds "crazy" until the whole money-only-serves-the-top-.1% system collapses under its own weight. When all the "money" that's been created to serve the central and private banks vanishes in a financial supernova--a possibility considered "impossible" by the mainstream, along with rising interest rates and inflation--then what is "crazy" and "impossible" change rather radically: the "impossible" becomes not just possible but inevitable, and the "crazy" suddenly makes perfect sense.
Perhaps the ultimate gaslighting in human history is our current fiat money creation system that benefits the few at the expense of the many. We've been manipulated into believing this is the only possible monetary system and the only possible financial system.
Not true. Wake up, people. There are other ways to create and distribute new money, and other ways to arrange a financial system to serve the many rather than the few.
The status quo apologists will of course angrily deny this reality (see above graphic). Their own place at the trough requires them to defend the indefensible. Their denial and anger are indicators of gaslighting and their own sad acceptance of servitude.

For what it's worth, my copy editor reckons Inequality and the Collapse of Privilege($3.95 Kindle ebook, $8.95 print edition) is my best book. It is, if nothing else, highly relevant to today's economic/social schisms.


Join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.
Check out both of my new books, Inequality and the Collapse of Privilege ($3.95 Kindle, $8.95 print) and Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle, $8.95 print). For more, please visit the OTM essentials website.

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Sunday, December 04, 2016

A Disintegrative Winter: The Debt and Anti-Status Quo Super-Cycle Has Turned

With this list of manifestations in hand, we can practically write the headlines for 2017-2025 in advance.
How would you describe the social mood of the nation and world? Would anti-Establishment, anti-status quo, and anti-globalization be a good start? How about choking on fast-rising debt? Would stagnant growth, stagnant wages be a fair description? Or how about rising wealth/income inequality? Wouldn't rising disunity and political polarization be accurate?
These are all characteristics of the long-wave social-economic cycle that is entering the disintegrative (winter) phase. Souring social mood, loss of purchasing power, stagnating wages, rising inequality, devaluing currencies, rising debt, political polarization and elite disunity are all manifestations of this phase.
I have covered the cyclical nature of human social orders many times, most recently in We've Entered an Era of Rising Instability and Uncertainty (July 18, 2016)
Historians David Hackett Fischer (The Great Wave: Price Revolutions and the Rhythm of History) and Peter Turchin (Ages of Discord) have assembled data and models for these long-term cycles.
Based on the history painstakingly assembled by Fischer and Turchin we can anticipate:
-- Ever higher prices for what I call the FEW Essentials: food, energy and water.
-- Ever larger government deficits which end in bankruptcy/repudiation of debts/new issue of currency.
-- Rising property/violent crime and illegitimacy.
-- Rising interest rates (until very recently this was considered "impossible").
-- Rising income inequality in favor of capital over labor.
-- Continued debasement of the currency.
-- Rising volatility of prices.
-- Rising political unrest and turmoil (see "Revolution").
With this list of manifestations in hand, we can practically write the headlines for 2017-2025 in advance.
Gordon Long and discuss these overlapping/ reinforcing social, political and economic cycles in a new video Cycles: Anti-Globalization and the Debt Super-Cycle. Here is a chart from the program that displays the rise of political polarization:
As for rising wealth/income inequality, the apex controls the money and thus the power:
Gordon and I also discuss the many different cyclical analyses that are now overlapping. Cyclical analyses based on demographics, socionomics, debt, wages and prices are all issuing the same conclusion: we're in the Disintegrative Winter phase of a multi-decade socio-economic cycle.
Here's our discussion of Cycles: Anti-Globalization and the Debt Super Cycle (30 minutes):
Gordon's abstract of the program: Cycles and the End of the Debt Super-Cycle

For what it's worth, my copy editor reckons Inequality and the Collapse of Privilege($3.95 Kindle ebook, $8.95 print edition) is my best book. It is, if nothing else, highly relevant to today's economic/social schisms.


Join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.
Check out both of my new books, Inequality and the Collapse of Privilege ($3.95 Kindle, $8.95 print) and Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle, $8.95 print). For more, please visit the OTM essentials website.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
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