Of Two Minds: Is 2021 an Echo of 1641?

Charles Hugh Smith from Of Two Minds wonders Is 2021 an Echo of 1641?

If you don’t discern any of these dynamics in the present, what are you choosing not to see?

The reason why history rhymes is that humanity is still using Wetware 1.0 and so humans respond to scarcity, abundance and conflicts over them in the same manner.

I am struck by similarities between the conflict-torn mid-1600s and the present: global climate change (The Little Ice Age in the 1600s), political upheavals and wars which intertwined civil and imperial conflicts. Global Crisis: War, Climate Change and Catastrophe in the 17th Century is a fascinating overview of this complex era which disrupted regimes and empires from England to China.

Climate change (The Little Ice Age) generated scarcities of grain in a time of burgeoning human populations. As in the present day, everyone assumed ample harvests would continue forever–expanding abundance is the New Normal. Alas, Nature is not a steady-state system and cycles are not tamed by our desire for ever-expanding abundance.

Humans respond to scarcity by assessing who’s getting the biggest pieces of the shrinking pie. When hunger begets desperation, various dynamics are set into motion as those without agency and capital, i.e. political and financial power do whatever they can to get enough to survive while those holding the majority of political and financial power, jockey to maintain or expand their power.

These dynamics are fluid and prone to non-linear flows in which relatively small actions unleash enormous consequences that are not predictable. If we squint, however, we can discern some repeating patterns in this chaotic swirl:

1. Private owners of capital (i.e. elites) seek to influence the state to protect / expand their holdings.

2. The dispossessed / disenfranchised masses seek redress / succor from the state.

3. The geopolitical balance of power becomes increasingly precarious as competition for control of resources and political power heats up.

4. The state’s resources are diminished by famine, decline of trade, etc. as pressures from geopolitical rivals, elites and the masses are spiking, reducing the state’s ability to respond to the multiple challenges / overlapping crises.

5. The overlapping crises reveal and exploit the weaknesses in the political, social and economic structures, and in the competing elites.

6. Leaders concentrate centralized power in the hands of the few as a coping strategy by reducing the influence of broad-based councils, assemblies, etc. This concentration of power at the expense of the many (including lower-level elites who were accustomed to holding some consequential power) increases resistance of those being cut out of the decision-making and increases the odds of catastrophic errors of judgment in the few at the top.

7. As the state falters or divides into warring factions, the most powerful elites take control of resources and power from the state, both as a defensive measure and as a means of exploiting the crisis to their own advantage.

8. Populist leaders arise demanding a fairer distribution of resources and power. The more repressed the masses, the greater the disorder created by this emergence of long-silenced voices.

9. Each node seeking to defend or expand its share of resources and power projects and amplifies persuasive rhetoric, symbols and beliefs to unify its supporters around deeply held values and aspirations.

10. With so many loyalties in play–local, regional, linguistic, political, social, religious and economic–each node / faction seeks to decisively cement loyalties by establishing all-or-nothing hard lines via ideologically “pure” rhetoric that demonizes competing factions, effectively dividing the populace into us-and-them camps that leave little middle ground for compromise or negotiation.

11. In this fevered competition for loyalty and trustworthy followers willing to sacrifice for the faction, leaders view every advance as evidence that compromise is unnecessary as total victory awaits the next “win.”

12. Given the grievous losses and potentially devastating consequences of competing factions gaining ground, the victors of each battle hasten to take revenge on the losing faction, laying waste and inflicting cruelties that harden the hearts of the surviving losers and inciting their own determination to exact a full measure of revenge when fortunes turn their way.

13. Only when the land, people and treasure are all exhausted does the promise of total victory fade, and the factions seek some negotiated settlement that leaves whatever power they still have intact lest they lose everything.

14. The eventual settlement could have been reached in the initial stages of disorder, but the leaders of the factions were too myopic, too confident in their own judgment and power, too greedy for more and too hubris-soaked to appreciate their own weaknesses and the immense pitfalls ahead.

If you don’t discern any of these dynamics in the present, what are you choosing not to see?

Of Two Minds: What We Don’t Elect Matters Most – Central Banking and the Permanent Government

Charles Hugh Smith from Of Two Minds talks about the people in government for whom we are not allowed to vote. These bureaucrats in various administrative agencies make much of the law that governs us, but they are not in the legislative branch and they are not representative.

What We Don’t Elect Matters Most: Central Banking and the Permanent Government

We’re Number One in wealth, income and power inequality, yea for the Fed and the Empire!

If we avert our eyes from the electoral battle on the blood-soaked sand of the Coliseum and look behind the screen, we find the powers that matter are not elected: our owned by a few big banks Federal Reserve, run by a handful of technocrats, and the immense National Security State, a.k.a. the Permanent Government. These entities operate the Empire which hosts the electoral games for the entertainment and distraction of the public.

The governance machinery controlled by elected representatives is tightly constrained in what it can and cannot do. It can’t do anything to stop the debasement of the nation’s currency, which is totally controlled by the Politburo of the Fed, nor can it do much to limit the Imperial Project, other than feel-good PR bits here and there.

The president wields vast powers but even the president is powerless to stop the debasement of the nation’s currency and the enrichment of bankers, financiers, corporations, etc., who fund the campaigns of the gladiators, oops I mean politicians.

If we set aside the term Deep State and simply call it the unelected machinery of governance (Permanent Government), we get a clear picture of its scope and power. Presidents, senators and representatives come and go, but the machinery of Empire grinds on, decade after decade.

A great many people and places in America don’t matter to the Fed or the Permanent Government, and so they’ve been abandoned to their fates. The darlings of the Fed and Empire are clustered in Silicon Valley and other urban hubs where the technological and financial machinery of global hegemony are fabricated and maintained.

Those far from these centers of banking, finance and Big Tech have little to no stake as owners of meaningful capital. All they have to sell is their labor, and that’s been losing purchasing power for decades as financialization and globalization have stripmined rural America and enriched the bankers, financiers and speculators who serve the Fed and unelected Permanent Government.

The Fed and the Permanent Government have been very, very good to the few at the expense of the many. Look at the chart below at America’s complete dominance when measured by the soaring wealth of its top 1% power elite: We’re Number One in wealth, income and power inequality, yea for the Fed and the Empire! And we don’t have to elect them–they elect themselves.

Of Two Minds: Corruption Is Now Our Way of Life

Charles Hugh Smith at Of Two Minds writes Corruption Is Now Our Way of Life on the collapse of the USA.

Systemic corruption and the implosion of the social contract have consequences: It’s called collapse.

Social and economic decay is so glacial that only those few who remember an earlier set-point are equipped to even notice the decline. That’s the position we find ourselves in today.

Many Americans will discount the systemic corruption that characterizes the American way of life because they’ve known nothing but systemic corruption. They’ve habituated to it because they have no memory of a time when looting wasn’t legalized and maximizing self-enrichment by any means available wasn’t the unwritten law of the land.

If you don’t yet see America as little more than an intertwined collection of skims, scams, frauds, embezzlements, lies, gaming-the-system, obfuscation of risk and exploitation of the masses by insiders, please read How Corruption is Becoming America’s Operating System. (nakedcapitalism.com, via Cheryl A.)

Here on oftwominds.com, you might want to read No Wrongdoing Here, Just 6,300 Corporate Fines and Settlements. (May 2015)

When JP Morgan Chase engaged in fraud and was fined a wrist-slap $1 billion, nobody went to prison because nobody ever goes to prison for corporate fraud and criminal collusion: JPMorgan to pay almost $1 billion fine to resolve U.S. investigation into trading practices.

Simply put, corruption is cost-free in America because most of it is legal. And whatever is still illegal is never applied to the elites and insiders, except (as per Communist regime corruption) for a rare show trial where an example is made of an egregious fall-guy (think Bernie Madoff: whistleblowers’ repeated attempts to expose the fraud to regulators were blown off for years. It was only when Madoff ripped off wealthy and powerful insiders did he go down.)

There are three primary sources for the complete systemic corruption of America. One is the transition from civic responsibility for the social contract and the national interest to winner-take-most legalized looting.

This transition is visible in the history of empires in the final stage of collapse. The assumption underlying the social order slides from a shared duty to the nation and fellow citizens to an obsession with evading civic duties: military service, taxes, and following the rules are all avoided by insiders and elites, and this moral/social rot then corrupts the entire social order as elites and insiders lean ever more heavily on the remaining productive class to pay the taxes and provide the military muscle to defend their wealth.

That corruption is now everywhere in America is obvious to all but those adamantly blinded by denial. The JP Morgans pay fines as a cost of doing corrupt business, while “public servants” game the system to maximize their pensions with a variety of tricks: colluding to boost the overtime of the retiring insider; finding a quack physican to sign off on a fake “heart murmur” so the insider pays no taxes on their “disability” check, and so on in an endless parade of lies, scams, skims and insider tricks.

The excuse is always the same: everybody does it. This is of course the collapse not just of the social contract but of morality in general: anything goes and winners take most. Insiders look the other way lest their own skims and scams be contested, and elites and insiders view those who aren’t skimming and scamming as chumps to be pitied.

The second dynamic is that financialization has completely corrupted the American economy, and that corruption has now spread to the political and social orders. Once the financial sector conquered the real economy, it began siphoning 95% of the economy’s wealth to the top .01% and their toadies, lackeys, apologists, enforcers and technocrats.

As they hollowed out the real economy, distorted incentives and made moral hazard the guiding principle of the American way of life, the recipients of financialization’s domination gained the wealth to buy political power from the pathetically corruptible political class.

The corruption that we call financialization corrupted democracy and undermined the social contract by eviscerating the value of labor and creating a pay-to-play political order that’s a mockery of democracy.

The third factor is the decay of America’s institutions into fronts for personal gain. While Higher Education insiders are masters of self-serving PR, the truth is they’re not concerned about their debt-serf “customers” (students) learning the essential skills needed in the tumultuous decades ahead–they’re worried that the revenues needed to pay their enormous salaries and benefits might dry up.

“Education” is nothing but a front for the corruption of self-enrichment by the elites and insiders at the top.

The same is true of “healthcare.” The concern of insiders isn’t the declining health of America’s populace, it’s the decline in revenues as fewer “customers” come in for the financial scalping of emergency care.

“Healthcare” is nothing but a front for the corruption of self-enrichment by the elites and insiders at the top.

Thanks to the Federal Reserve’s endless free money for financiers and endless federal borrow-and-blow deficits, the unstated belief is since there’s endless “money”, my petty frauds and skims won’t even dent the feeding trough–there’s always another trillion or three to skim and scam, and there will never be any limit to the feeding trough.

There is no limit until the system implodes. Then the collapse becomes limitless.

Ironic, isn’t it? The oh-so convenient belief that America’s wealth and power are eternal and godlike in their glory fosters the crass corruption that has weakened America to the point of no return: systemic fragility and brittleness.

American Exceptionalism has been turned on its head: America is now as perniciously corrupt as any developing-world nation we smugly felt so superior to, and with extremes of wealth and income inequality that surpass even the most rapacious kleptocracies. This destabilizing “exceptionalism” is now the defining characteristic of the American economy, society and political order.

Systemic corruption and the implosion of the social contract have consequences: It’s called collapse, baby, and the rot is now too deep to reverse.