From the conclusion of my earlier post on the topic:
It is the state against the people; it is the stakeholders against the subjects. Significant power and wealth and militarization and a massive overt and covert “security” apparatus are on one side, and significant anger and frustration is growing on the other side.
Returning to Lincoln’s speech:
In my opinion, it will not cease, until a crisis shall have been reached, and passed.
We know what came a few years after Lincoln’s speech, the last time the house was so divided.
It seems to me that the “subjects” obliviously (or otherwise) remain settled as long as they view that their standard of living can be maintained and gradually improved; they will defer to the “stakeholders” as long as the promises (go to college & get a job, secure retirement, social / welfare programs, etc.) made by the stakeholders to the subjects are kept.
I don’t even think that “fairness” matters much to the subjects – the subjects have long felt (for both correct and incorrect reasons) that the system isn’t fair. However, as long as the above two conditions are met, it is enough for the subjects to comply – to go along and get along.
The subjects no longer view that the two conditions – a gradually improving standard of living and that the promises being kept – are being met or will be met. It is the pushback due to these that has caused the subjects to push back against the stakeholders.
There is No Easy Way Out
John Mauldin has been on a roll recently regarding the evil path that central bankers have taken. He continues with his most recent post, Federal Repression System:
I must confess, the more I think about where the “monetary policy community” of academic elites has brought us, the angrier I get. …what the Fed has done is to destroy the retirement hopes and dreams of multiple tens of millions of my fellow US Boomers, and when we include the effects of the destructive policies of the rest of the world’s central banks, the number becomes hundreds of millions.
ZIRP and NIRP for seven years, with the realization dawning on many (especially the Ph.D. class and the stakeholders) that there is no way out of this condition without economic devastation. Hundreds of millions with little to no hope of even a reasonable retirement. I will suggest that the situation is much worse.
The recovery has come with no jobs, yet investors have had ever-increasing wealth from the inflation of prices in public markets and other assets. No chance for savings; no hope for government retirement benefits; no possibility that pensions – both private and public – will meet the obligations; no way for graduates to get out from under more than one trillion dollars in student loan debt; countless millions on the government dole – both overtly and covertly.
All at risk, all to be lost. And the subjects know this and want to blame someone.
We will have another financial crisis and/or recession, probably soon, and we can’t trust the Fed to respond correctly.
Inherently, they can’t respond correctly. A room full of Ph.D.s cannot replicate the market – and only the market can respond correctly. Everything is just manipulation and delay of the inevitable.
We’ll be lucky if whatever comes out of their Frankenstein lab is only ineffective. There’s a very real risk they will make the situation far worse.
It seems to me – and I suspect Mauldin knows this as well – they will do something, and their actions will make things worse.
The masses of unprotected people are in no mood to swallow more monetary policy medicine, much less any additional remedies that globalist plutocrats may try to shove down their throats.
The subjects have more sense than the Ph.D.s.
In an ideal world we might be glad to see the Fed stand aside and let markets adjust themselves.
This was true in 2007. And in 2001. And in pretty much every year since Greenspan took the helm. And since 1913.
The problem is that said adjustment will now be extremely painful for a large part of the population. So the Fed may be damned if it does and damned if it doesn’t.
Unfortunately – we, the subjects, are the ones who will be damned if the Fed does and damned if the Fed doesn’t.
There is no way out. From where will come the improved standard of living? With no chance to make a return on assets, what will draw out investment? With the promises – made by both government and private retirement, pension, and welfare schemes – having no chance to be met, what (or, certainly, who) will keep the subjects in line?
The Wounded Beast
Forgive what might seem like a diversion….
Several countries are facing existential threats; several of these have the weaponry to destroy tens or hundreds of millions, if not billions: the Anglo Empire (the United States and Britain), Russia, China, every country in Europe, Turkey, Israel, Syria, Iraq, Iran, India, Pakistan. In many, if not all, there are internal divisions as well as external threats.
The stakeholders fighting each other for ever-increasing stakes; the stakeholders losing their grip on the subjects; the subjects losing their faith in the stakeholders. This is not a recipe for peace. It is not a recipe for a smooth transition.
The Anglo Empire is dying and is seen as impotent. Unfortunately, it is the most powerful and deadly force in the world and it does not accept losing. Battle lines are drawn: Syria, Ukraine, Africa, China, the Baltics, India…and Russia.
Our Best Hope
The end of the Soviet Union offers the one example of a peaceful end to empire, perhaps a unique example: military failures abroad and the failure of promises at home. For the west especially, this will not be the experience. The Soviet Union died a peaceful death because the people had decades of knowledge behind them regarding the failed promises of the state; the people knew for decades that they were nothing but cattle. They had no “faith” in the “goodness” of the mythology.
None of this cynicism and pessimism has deep roots in the west; the results of the awakening due to the destruction of the mythology will not be as smooth as it was in the Soviet Union.
The Battle Lines
Returning to what might have seemed a diversion: what will the political leaders of the dying, impotent Anglo-empire do as they see their global power recede? Will they walk away peacefully, accepting their new status as did post-Soviet Russia? A confederation like Switzerland? Not likely.
Stakeholders vs. subjects; the governors vs. the governed; the 1% vs. the 99%; race against race; SJW against traditionalists; dying empire vs. burgeoning competing sovereigns; numerous countries facing existential threats. No more increasing standard of living; government promises intended to keep the subjects in line will be broken. The possibilities for unrest and violence – a war of all against all.
On top of all of this: the most comprehensive police state ever developed vs. the rest of us.
The beast won’t go away quietly.
Donald Trump seems to offers some hope of averting a nuclear World War Three. There is nothing he or anyone else will be able to do to avert the economic catastrophe that is baked into our future.
External threats, internal threats; external confrontation, internal confrontation. The people will demand and welcome a savior. He (or she) will not usher in an era of limited government and constitutionalism; this will not be what the people want.
They will want security – physical and economic. They will want an authoritarian. Donald Trump will seem mild in comparison to what follows.
Someday, we will reach the other side. There is another side. The other side offers the possibility of a far more decentralized world – in my mind, a certainty – and a far more decentralized world is libertarian theory put into practice. Because it is possible, we continue to do what we can to increase the probability.