Saturday, May 3, 2014

The Whip Hand

The Whip Hand

Why do tigers jump through flaming rings?  They are not afraid of the little man with the chair and the whip but they are in a cage and if they eat him their days are numbered.  And if we complain about the cage or the man with the whip, then, like slaves, we will surely feel the lash.  If we persevere in our intransigence, we will be disciplined.

Those are my thoughts on monetary reality.   Use the legal tender, pay what is asked of you, and if you rock the boat then like Tim Robbins in Shawshank, you could be cast down with the sodomites. 

No one has threatened me with anything.  As far as I know, I am a free man.  I enjoy doing my duty—I work, I pay taxes and I don’t lie or cheat but I would like to point out that for the noble and honorable among us, the fix is in.  Opportunity is currently looking for a scapegoat and if your savings or pension promises are the only source of protein, well, the long knives are after their feast.

Who deserves anything? Aren’t we all sinners and fall short of the glory of God? Well sure but what does that have to do with money? What you think you deserve you will probably not get. You might have been planning for a Florida golf  retirement  after a lifetime of toil and you need a certain amount of money for that.  Perhaps too a cruise or a trip to France.  But  that was all an image in your head,  something like a desert mirage. A lot of people are angling for the same thing and there is not enough “money” to provide it.  Who after all is going to do the work while we “retire”? So if it is time to get serious about politics, what exactly should we ask of our overseers?  A note to myself, I see that the authorities are “unsure” about the constitutionality of eliminating American terrorists on American soil. A drone attack on a Pakistani warlord is one thing but if neighbor Crazy Bill is the target or I squeak too much, then that’s a different matter. Rand Paul filibusters the Senate to protest the new CIA-chief who cannot categorically deny that drones could be used on American citizen terrorists, however that is defined.  Police work used to involve “arrests” (with warrants)  and trials (by jury?) but what exactly constitutes treason against the State?  Is my “hope and change” subject to misinterpretation?

Let me spell it out.  The State has gradually, due to careless decisions, worked itself into a box.  It has enjoyed dispensing the favors of royalty, it has enjoyed the trappings of legitimacy, and it is  nearing the end of its useful life.  The State wants to determine what is done and what has importance.  The rest of us are along for the ride and will be paying the bill.  The State “means” well which is to say it has an ethic of public service as long as they get to call the shots.  Freedom is defined as the opportunity to do what you are told or pay the consequences. The nub of the problem is that we CANNOT have real Freedom if manipulation of the value of the money is allowed. If careful stewards were to try their best to maintain and support the dual functions of money, both as a medium of exchange AND as a store of value, then perhaps their scrupulousness would permit our freedom.  But if the government says a dollar is what the government says it is (in short political money), then all our work and saving is measured by a scale that can be changed at any time.  The power to usurp is gradually exercised, financial repression is instituted and eventually tends toward absolute control.  It ultimately takes more and more money to make everyone do what they are told. 

Political money can be given or taken away.  Big banks with unfortunate losses have been subsidized with “asset purchases” by the holders of the Aladdin’s lamp of monetary largess.  Underwater homeowners are relieved of their home and large hedge funds acquire them to rent or re-sell at a better price.  Political money goes to who needs it to keep power.  The hot spring of money printing supports the crowding, teeming LIFE that the cold outer darkness freezes out.  If the question is how little you can pay a man and still get work out of him it is wise to remember that they do shoot horses when the maintenance costs get high.  I may be stupid enough to work for a carrot but I am not stupid enough to continue to plod after a carrot on a stick dangling 3 inches off my nose. So who to vote for in this multiple theatre of charades?
     The rightful definition of a citizen is a participant in the choices that the government needs to make. Money and votes are a citizens two tools to impact TPTB.  The last refuge is “doing your own thing”.  Opting out.  Voting has long since become meaningless.  The duty is flogged mercilessly but barely half the electorate makes it to a major decision.  When the vote is local--the voting participation falls below 20%.  And if the government can create all the money it wants or needs, why do I need to pay taxes?  The government looks bad creating its own money and our overseers need "buy in" to the system that allows them to gain control of incentives and permit their oversight.  Everybody needs to be on their little treadmills generating wherewithal(taxes) and allegiance (loyalty) to the State. Are we free? Any thoughtful observer when asked about freedom necessarily must mention obligation.  As in rights have responsibilities. We have this idea that our freedom allows us to consent to the oversight of the state but practically the state assumes it.  There is no other state so you have consented to this one. 
   Well, I don’t need any more monopoly money for my pretend retirement.  I am trying to figure out the “best” investments in an environment where the rules can be changed at any time.  Many countries' citizens have coped with their governments malfeasance by using dollars as a store of value:  Argentina, Venezuela, Ukraine, Nigeria, and others.  Now we Americans have a similar but more difficult problem--there is not another fiat currency that is any BETTER than ours.   How to navigate safely over the cataract that is coming is a knotty problem. I'll speak about that later. The world we have is not where we are going.  I would have to say the hippies of the 60’s were a little early.  All of their utopias blew up on the failures of human nature especially when confronted with the blandishments of a wanton culture.  And we are still living the dream but are getting closer to awakening.  In the 70’s I was grabbed by the ideas of the neo-Malthusians:  Ehrlich and Lester Brown.  I internalized the concerns of limits to growth, propounded the lessons of Earth Day, railed against militarism in Vietnam, admired Seymour Melman in his argument for a 75% reduction in the Defense Department to invest in social capital rather than destruction, and contemplated alternative development strategies to bring greater justice to desperately poor 4th world countries.  As a world community, we needed some sacrifice by the rich to create the conditions for the poor.  In my mind Reagan’s jingoism blew all that out the window.  We were in it for us.  We Americans were  the exceptional free people and had a God given right to grow as rich as possible and everybody else could come along if they could.   The neo-Malthusians have been around a long time and are just the sort of do-gooder scolds you can really believe in but a funny thing happened on the road to Apocalypse Now—we learned how to print money and sprinkle it on every asset so that now we could no more say what a horse is worth than why a dollar buys anything at all. 
  And as for my kids and their choices:  they are walking in two worlds—the world of their parents and grandparents and the collapsing future.  There is the world of progress and a belief in a technological future but I think they need to be prepared for a resource constrained future of contraction and a slow slide to de-industrialization.  What will it be? Onward and upward or systemic and cascading failures due to resource limits, population pressures, and financial criminality.  The rich got theirs but we middle class sods are pack mules on the Oregon trail to nowhere.  

What can the young people do? They are ready to work but leadership needs to put them to their task.  College is a dangerous investment.  Fun, but costly and potentially lethal.   Those loans cannot be shucked in bankruptcy and what about the real return?    I still think it wise to go to college even though there are precious few jobs worth pursuing.  You could chase aeronautical engineering, or architecture, or genomic counseling and still end up thousands of dollars in debt and 10th in line for an interview.  So though I would recommend going to college, you need  to think, really think (and talk to class-mates) about the future.  Read a lot of great books, make a lot of intelligent friends, get a “peer group” you trust, and then sally forth into the blast furnace of reality.  Don’t spend too much and don’t party too much.  Learn what is worth knowing and then get busy—no one said adulthood was easy.  That’s why in the insect world it’s the last stage.
   We really don’t know what kind of mixed up social order we are going to brew up as the high priced escapades become unaffordable and only the 1% are in a hurry to catch a plane.  Is the capital we have at all useful?  What are we going to do with a tanning salon, or a big box outlet with empty shelves-repurpose it as a homeless shelter with hammocks? What is the average miles travelled for every item in Walmart—8,000? Or what about your neighborhood grocery store  – 1,000 miles?  Does any of this work with gas going up or becoming as expensive here as it is in Europe?  Perhaps it might be a few years before that uncomfortable day but remind me again of the date that fracking will make the USA a net EXPORTER of fuel? We still IMPORT 50% of our energy.  I believe our last year as a net energy EXPORTER  was in the mid-50’s.
   We have some mighty careless leadership.  My own belief is that they are grabbing what they can and want to tiptoe around all the problems until they crash on the unsuspecting.  Please, don't let IT happen on my watch.  Just like the dumbfounded Bush--"this sucker could go down".  Yes, Virginia.  IT could happen.  But even if the interlocking global world financial system doesn't pancake like a World Trade Center tower, it is on the Darwin short list.  Big changes are coming and we will see who or what holds "the whip hand".

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