Everybody Knows

Everybody knows that the dice are loaded.

Everybody rolls with their fingers crossed.

Everybody knows that the war is over.

Everybody knows the good guys lost.

Everybody knows the fight was fixed.

The poor stay poor, the rich get rich.

Everybody knows that the boat is leaking.

Everybody knows that the captain lied.

Everybody got this broken feeling.

Like their father or their dog just died.

That's how it goes.

Everybody knows.

-- Leonard Cohen (1988)

shit from an old notebook

Let the products sell themselves.
Fuck advertising, commercial psychology.
Psychological methods to sell should be destroyed!

Because of their own blind involvement
In their own conditioned minds
The unit bonded together
Morals, ideals, awareness, progress
Let yourself be heard!

-- Mike Watt / D. Boon (Minutemen) 1984

Tomorrow

Tomorrow never comes.
What kind of fool do they take me for?
Tomorrow, a resting place for bums,
A trap set in the slums.  But I know the score.

Tomorrow, as they say, all work and no play.
What do they take me for?
Tomorrow, an awful price to pay.
I gave up yesterday, but they still want more.

-- Lottie Pendlebury (Goat Girl) 2018

imbalanced resource / capital distribution

Three dynamics that define any human civilization are the distribution of resources, capital, and agency. Resources are straightforward — food, energy, shelter, etc.  Capital is financial (money), tangible (tools, ownership of land, etc.) and intangible (social / human capital). Capital productively invested produces income. Agency is control of one's life, having a say in community / public decisions, and having some control and power over one's circumstances.  When these three are distributed asymmetrically -- where the majority of the resources, capital, and power are distributed to an elite -- society and the economy are imbalanced and prone to stagnation and eventual discord.

Statistics are unequivocal: income-wealth inequality in the U.S. continues reaching new heights. This is reflected in asymmetric access to healthcare and other resources, asymmetric ownership of income-producing capital, and limited agency.  The bottom 90% of the U.S. economy has been decapitalized: debt has been substituted for capital. Capital only flows into the increasingly centralized top tier which owns and profits from the rising tide of debt that's been keeping the bottom 90% afloat for the past 20 years. Globalization and financialization have richly rewarded the top 5% and especially the top 0.1%. Everyone else has been been reduced to a powerless peasantry of debt-serfs.

America has no plan to reverse this destructive tide of neo-feudal pillage. Our leadership's "plan" is benign neglect: send a monthly stimulus of bread and circuses (the technocrat term is Universal Basic Income or UBI) to all the disempowered, decapitalized households so they can stay out of trouble and not hinder the New Nobility's pillaging of America and the planet.

As for agency: Martin Gilens of Princeton University and Benjamin Page of Northwestern University are authors of the study "Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens."  Professor Gilens gave this brief summary of their conclusions:

"Ordinary citizens have virtually no influence over what their government does in the United States. And economic elites and interest groups, especially those representing business, have a substantial degree of influence. Government policy-making over the last few decades reflects the preferences of those groups — of economic elites and of organized interests." (Foreign Affairs, Jan. 2021, Monopoly Versus Democracy)

That is as definitive as soaring income-wealth inequality. Both are inherently destabilizing.

Meanwhile, central bankers, monopolists and the politicos whose campaigns are funded by monopolists are all frantically trying to convince us their policies will heal the metastasizing tumor consuming America.  Borrowing a quarter of the nation's entire economic output every year to prop up an ineffective, corrupt status quo is merely kicking the can down the road while not addressing the root problems in our country.

If America cannot bear to discuss these realities (and structural solutions) openly, the social, economic, and political orders will unravel in a non-linear Cultural Revolution with a highly uncertain outcome.

-- Charles Hugh Smith (The Daily Reckoning) March 27, 2021

 

I am the virus

 

Death misery and tears
Calculated waves of fear
Drawn up by think tanks
There's a darkness in the west
Oil swilling
Guzzling corporate
Central banking
Mind-fucking omnipotence


False flags and black ops
Tavistock manufactured shocks
Something's gone horribly wrong
Hot flashes for the neo-con
A population in deep denial
Contagion released from a vial


No one believes in 9/11
Steel frame buildings don't fall in seconds
Murderers in black robes decapitate innocents
The public's blank stare
Did you sleep okay last night, Mr. Blair?

I am the fury, the spirit of outrage
I am the fire
I am the virus
I am the furnace where resentment glows
I am the bias
I am the virus
I am the Hydra headed beast
I am the worm you can never delete
I am the danger that never sleeps

-- Killing Joke (2015)

bank regulation

The Board of Governors of the Federal Reserve System recently published their annual Supervision and Regulation Report which measures the financial condition of major U.S. banks, including loan growth and liquidity in the banking system.  Overall, 45% of U.S. banks with more than $100 billion in assets received a supervisory rating of “less than satisfactory.”  That’s not good. As we learned during the 2008 crisis, the stability of these large banks is essential to the health of our banking system.

Furthermore, this rating should not sit well with hardworking Americans who bailed out many banks during that last major crisis.  As bank lobbyists continuously push for more deregulation, it's prudent to remember what happened a decade ago with bank bailouts and a market crash.  We need more regulation, not less, if banks continue to receive less than a “C” grade on their report cards.

-- Nomi Prins, The Daily Reckoning (edited) (Dec. 7, 2019)

Speculation Encouragement

Needless to say, if you bail out speculators, they will simply speculate more. And if you do it over and over and predictably so, you will extinguish the fear of risk and loss, which is the only thing which keeps the speculative impulses in check.

-- David Stockman (as quoted in The Daily Reckoning) Sept. 24, 2019 (slightly edited)

market manipulation

The problem with any kind of market manipulation (what central bankers call “policy”) is that there’s no way to end it without unintended and usually negative consequences. Once you start down the path of manipulation, it requires more and more manipulation to keep the game going.  Finally it no longer becomes possible to turn back without crashing the system.

Of course, manipulation by government agencies and central banks always starts out with good intentions. They are trying to “save” the banks or “save” the market from extreme outcomes or crashes.  But this desire to save something ignores the fact that bank failures and market crashes are sometimes necessary and healthy to clear out prior excesses and dysfunctions. A crash can clean out the rot, put losses where they belong and allow the system to start over with a clean balance sheet and a strong lesson in prudence.

Instead, the central bankers ride to the rescue of corrupt or mismanaged banks. This saves the wrong people (incompetent and corrupt bank managers and investors) and hurts the everyday investor or worker who watches his portfolio implode while the incompetent bank managers get to keep their jobs and big bonuses.  All it does is set the stage for a bigger crisis down the road.

-- Jim Rickards (The Daily Reckoning) July 31, 2019

Central Bank Experimentation

The grand central bank experiment of the last 10 years has ended in utter and complete failure. The games of cheap money and constant intervention that have brought record global debt to the tune of $250 trillion and record wealth inequality are about to embark on a new round.  All under the banner to “extend the business cycle” at all costs. Never asking whether they should nor considering the consequences.  This is not capitalism, nor does this ongoing farce constitute free market price discovery. It’s politburo based central planning, desperately trying to keep the balls in the air.  

The pretense is gone, it’s all about keeping the illusion alive that the Fed knows what it’s doing, that it’s always there to save markets from any trouble.  But since they are not elected by the people and face zero consequences for failure, they don’t have to consider the collateral damage they inflict.  Everything every central banker has uttered last year was completely wrong. Every projection they made over the last 10 years has been wrong.  Why place confidence in people who are staring at the ruins of the policies they unleashed on the world and are about to unleash again?  We’re all staring at a colossal policy failure with no accountability.  Brace yourselves as no one, absolutely no one, can know how this will turn out.

-- Sven Henrich (Northman Trader) June 7, 2019 (edited)

Too Big to Fail (Again)

In the wake of the 2008 financial crisis, the bank bailouts did not save the economy as their architects advertised. Rather, they bolstered the biggest U.S. banks from an insolvency crisis of their own creation. Those banks were, and remain, too big to fail. Their CEOs are too connected to jail.

The leaders of the major banks oversaw multi-trillion dollar enterprises that committed fraud, lost other people’s money, harassed public service members, and fired thousands of low-level employees. Worst of all, they have put the entire financial system and markets at the edge of ruin again.

Big banks know they have political and Federal Reserve support. Low or negative rates provide banks access to cheap capital if they need it, which encourages greater recklessness than if they had to “pay” more for it. They have taken this as a license to gamble large. By rescuing and supporting the big banks’ dangerous behavior, such recklessness has been not only condoned but encouraged.

The argument big banks make about their mega derivatives positions is that they are “hedged.” In other words, though the total (or “notional”) figure is large, most of the long and short positions net out against each other. The problem with that assessment is that the big banks take long and short positions against each other. They have set themselves up again in domino fashion.

We are heading for another financial crisis at some point. No one can say when for certain, but probably sooner than later. There’s a lot more money supporting the system artificially that the central banks have conjured than we had going into the last crisis. If that subsidy was to go away or be reduced, the money would come draining out of the same financial system that it’s been inflating.

-- Nomi Prins (Daily Reckoning) May 23, 2019 (edited)

The Undrainable Swamp

The establishment’s concerns have less to do with peace and security than raising sales, earnings, and stock prices in the Atlantic-area's military industrial complex. And the establishment won’t abide any threat to its power.

The Swamp is so undrainable that it will end up making mincemeat of Donald Trump.... The ultimate causes of his demise are anchored deep in the failing status quo. America is so addicted to war, debt, and central bank driven false prosperity that even the most resourceful and focused challenger would be taken down by its sheer inertia.

But [Trump] is so undisciplined, naïve, out-of-touch, thin-skinned, unfocused, and megalomaniacal that he is making it far easier for the Swamp critters than they deserve. To a very considerable extent, in fact, he is filling out his own bill of indictment.

-- David Stockman (The Daily Reckoning) August 4, 2017

profound political disunity

[A] nation ruled by Imperial kleptocrats is intrinsically destabilizing, as there is no longer any moral or political center to bind the nation together.  The public sees the value system at the top is [to] maximize personal profit by whatever means available (e.g., complicity, corruption, monopoly, and rentier rackets), and they follow suit by pursuing whatever petty frauds and rackets are within reach: tax avoidance, cheating on entrance exams, gaming the disability system, lying on mortgage and job applications, and so on.  But the scope of the rentier rackets is so large, the bottom 95% cannot possibly keep up with the expanding wealth and income of the top 0.1% and their army of technocrats and enablers; so a rising sense of injustice widens the already yawning fissures in the body politic....

When the system is rigged, "democracy" is just another public-relations screen to mask the unsavory reality of Oligarchy....  The conventional markers of democracy -- elections and elected representatives -- exist, but they are mere facades; the mechanisms of setting the course of the nation are corrupt, and the power lies outside the public's reach.  History has shown that democratic elections don't guarantee an uncorrupt, functional government. Rather, democracy has become the public-relations stamp of approval for corrupt governance that runs roughshod over individual liberty while centralizing the power to enforce consent, silence critics, and maintain the status quo....

-- Charles Hugh Smith (Of Two Minds blog)

American Corporatocracy

One little-remarked consequence of central banks' policies of near-zero interest rates and quantitative easing is the unrivaled dominance of mobile global capital.  The source of corporate political power is the ability to borrow essentially unlimited sums for next to nothing: what I have long termed free money for financiers.  Armed with central-bank supplied unlimited credit, global capital can outbid local residents and businesses. Over time, profitable enterprises and assets end up in corporate hands....

The same dynamic — the unparalleled power of cheap credit — then funds corporate dominance of the political process.  As corporations buy up productive assets, they consolidate these assets into cartels and quasi-monopolies that can be protected from competition by lobbying and campaign contributions.  Governments come and go, candidates come and go, and political movements come and go, but the Corporatocracy remains in charge. 

-- Charles Hugh Smith, Of Two Minds blog (edited)

inflation deficiency nonsense

For several years now, a small group of Keynesian academics and hacks have seized nearly absolute financial power. They’ve used the Fed’s printing presses to justify the lunacy of unending zero interest rates (ZIRP) and massive quantitative easing (QE) on the grounds that there is too little inflation. This whole consumer inflation-targeting scheme is an inherently preposterous notion. There is not one scrap of evidence that 2% consumer inflation is better for rising living standards and societal wealth gains than is 0.2%. And there is much history and economic logic that points in exactly the opposite direction....

[T]here isn’t an inflation deficiency problem, and there never has been. The whole 2% inflation mantra is just a smoke screen to justify the massive daily intrusion in financial markets by a power-obsessed bunch of monetary central planners. They made it up and then rode it to ever increasing dominance over the financial system.

-- David Stockman (The Daily Reckoning) Feb. 22, 2016

The Problem of Big

So long as there are only two ways to get ahead -- the legitimate way, which leads to earned success, and the illegitimate way, which leads to unearned success or, if things go wrong, to jail -- the system of freedom and responsibility we call democratic capitalism works very well. As a rule, people who make good choices (who work hard, play by the rules, and live within their means) succeed, and people who make bad choices (who don’t work hard, don’t play by the rules, and live beyond their means) fail. This goes for institutions large and small, and for people powerful and weak. The rules for all of us start with the law and, ultimately, the U.S. Constitution.

One of the problems of Big (i.e.: an organization that has reached such a size that its continued existence and success is no longer contingent upon its quality of service) is that it creates a third option: neither obeying the rules nor breaking the rules, but changing the rules as you go. That’s what happens in cronyism, which is in effect legal cheating. [Big] institutions change the rules, so what would have been cheating, and what many people see as cheating, is actually blessed by the state. The transactions of crony capitalism -- campaign contributions on one side, policy changes on the other -- are all perfectly legal.... Big government and its Big partners rob individuals and our nation of freedom, opportunity, and prosperity.

-- Jim DeMint, former US Senator (SC), Falling in Love with America Again (2014) [quote edited]

war is a racket

War is just a racket.  A racket is best described, I believe, as something that is not what it seems to the majority of people.  Only a small, inside group knows what it is about.  It is conducted for the benefit of the very few at the expense of the masses.

I believe in adequate defense at the coastline and nothing else.  If a nation comes over here to fight, then we’ll fight....  I wouldn’t go to war again as I have done to protect some lousy investment of the bankers.  There are only two things we should fight for.  One is the defense of our homes and the other is the Bill of Rights.  War for any other reason is simply a racket.

-- Major General Smedley Darlington Butler, USMC.  1933 speech

market speculation and waste

When the central banks turn the money markets and the capital markets into carry-trade driven casinos... the result is inherently a massive, dead-weight loss to economic output and national wealth.  That's because capital and other economic resources are drastically misallocated to pointless secondary market speculation and pure economic waste....

[A]bsent the inherent checks and balances of the free market, these central bank-enabled casinos do not simply boom and bust randomly;  they do so chronically and predictably.  With the ever-increasing confidence levels developed over the bubble cycles since the early 1990s, an entrenched class of permanent, professional speculators has learned to front-run the maneuvers of our monetary politburo almost perfectly.

-- David Stockman, The Daily Reckoning (April 16, 2014)

tomorrow is already here

Originally the set-up [was] to serve society. Now the roles have been reversed -- they want society to serve the institutions. 
-- Tim Gane / Laetitia Sadier (Stereolab) 1996

Amerimacka

The land of the free, built on slavery
Our consciousness in captivity
The promised land is the liar's den
Culture of greed has got to end
-- Garza / Hilton (Thievery Corp.) 2005

sunken waltz

washed my face in the rivers of empire.
made my bed from a cardboard crate
down in the city of quartz.

no news, no new regrets.
tossed a susan b. over my shoulder,
and prayed it would rain and rain --
submerge the whole western states.
call it a last fair deal
with an american seal
and corporate handshake.

take the story of carpenter mike --
dropped his tools and his keys and left
and headed out as far as he could
past the city's gated neighborhoods.
he slept 'neath the stars,
wrote down what he dreamt,
and he built a machine
for no one to see,
then took flight
first light of new morning.

-- Joey Burns / John Convertino (Calexico) 2003