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Idiocy and mendacity are a bad combo in the affairs of nations, especially
in elections. The present case in the USA displays both qualities to
near-perfection: on one side, a boorish pseudo-savior in zero command of
ideas; on the other side, a wannabe racketeer-in-chief in full command of her
instinctive deceit. Trump offers incoherent rhetoric in opposition to the
current dismal order of things; Clinton offers empty, pandering rhetoric in
defense of that order. Both represent an epic national drive toward political
suicide.
The idiocy and mendacity extend to the broad voting public and the
discredited elites pretending to run the life of the nation. The American
public has never been this badly educated and more distracted by manufactured
trivia. They know next to nothing. Even college seniors can’t name the
Secretary of State or find Switzerland on a map. They don’t know in what
century the Civil War took place. They couldn’t tell you whether a hypotenuse
is an animal, a vegetable, or a mineral. Their right to vote is a danger to
themselves.
The elites operate in their own twilight zone of ignorance, only at a
loftier level, flying on wings of sheepskin. Submitted for your approval:
Harvard wizard Kenneth Rogoff’s new book, The Curse of Cash. This
is the latest salvo in the international campaign to herd all money
into the control of central banks and central governments, supposedly to make
central planning of the economy more effective — but really for the purpose
of extending the fallacy that the mis-pricing of credit and collateral (that
is, of everything) can save the current incarnation of crony capitalism, and
more to the point, save the fortunes of the racketeers running it, along with
the reputations of their intellectual errand boys. Henceforth, all “money”
transactions would be traceable, allowing unprecedented power for authorities
to regulate the lives of citizens.
It remains to seen whether the American public might be snookered into
this scheme, which already has some traction in Europe. Of course, Europe is
headed into some interesting political heavy weather of its own in the months
ahead, and there is plenty of reason to think that even the docile people of
Denmark and Sweden might eventually revolt against the central bank regime if
they see the Germans do it.
Aggravating matters is the hyper-complexity of our current financial
arrangements, much of it in the service of deliberately mystifying the
masses. Does the public understand the rationale behind zero interest rate
policy (ZIRP)? Not any more than they understand the interaction of gluons
and quarks or the doctrine of the Holy Trinity. It is one of the abiding
mysteries of our time, for instance, that a group like AARP, purporting to
represent the interests of retired persons, has offered not a peep of
pushback to ZIRP, which has pounded retired people dependent on savings into
penury. Of course, this might be explained by the pervasive racketeering
feature of our current national life: AARP is an insurance racket
masquerading as a citizen interest group. Or, stretching credulity to suppose
that AARP is honest, perhaps the org’s executives don’t understand that zero
interest on savings equals zero income to savers.
Kenneth Rogoff tries to justify his war on cash by invoking two of the
era’s favorite bogymen: terrorists and drug dealers. Cash, he says, allows
this axis of evil to do its thing(s). This is a ruse, of course. If currency
is eliminated, these outfits will turn to gold and silver, it’s that simple.
And so will everybody else, by the way. The real reason to abolish cash and
herd all money into central banks is to permit the authorities to confiscate
it one way or another, either by unavoidable taxation or by “bail-ins” —
declaring deposits to be “unsecured loans” that can be repudiated in the
event of a financial “accident.”
The results are already in for this experiment: “money” becomes more and
more dishonest, that is, it cannot be trusted to represent what it pretends
to stand for: an index of account and a store of value. Its role as the basis
of capital formation is so impaired that real capital (i.e. wealth) cannot be
generated, meaning that none of the credit issued as “money” will ever be
paid back. Zero interest rate policy eventually equals zero interest paid.
“Money” based on loans that won’t be paid back loses its legitimacy. Herding
all the “money” onto central bank computers only allows for more
three-card-monte maneuvers to conceal the bezzle. It would be much harder to
hide the destruction of value in circulating paper currency. Eliminating
currency as a medium of exchange can only lead to the repudiation of “money”
— which will beat a quick path to the repudiation of all authority. And there
is your recipe for really suicidal political disorder.
One more thing this week: why exactly are America’s Clinton-invested
political elites inveighing so strenuously against Russia and its president,
Mr. Putin? The US has gone out of its way to provoke Russia militarily the
past several years. We foolishly sponsored the revolution in Ukraine that has
left it a failed state — and which prompted Russia to reclaim the Crimea,
historically its own territory and the site of its strategically crucial warm
water ports. We continue to run NATO war game exercises along Russia’s
borders. We fly surveillance planes in their airspace and then act surprised
when Russia sends up fighters to remind us where we are. We hold naval
exercises in the Black Sea and wonder why the Russians buzz us. Are we out of
our minds? How would we act if the Russians flew their planes over Catalina
Island or held naval war games off Hampton Roads? Who does the US policy
elite think they’re kidding?
These memes in financial and foreign policy are dangerously crazy and
dishonest. They are doing a good job of making the US political establishment
look like a claque of fools and outlaws, and laying a red carpet for the
election of Trump, the fake savior… the apotheosis of the fabled Greater
Fool.
