Isn’t It Ironic

It would appear the worm has turned for Antifa. After Charlottesville it seemed all Democrats and even some Republicans defended Antfia as being ‘against white supremacists’ and they were treated as a mainstream group of people who happen to beat people up, but only Nazi’s and Klansman and that was ok.

Antifa has gone on to demonstrate since Charlottesville that they really are not too picky about whom they beat up – they have even beaten up Black Lives Matter folks. How to win friends and influence people? It also didn’t help the perception when they beat up people praying for peace in California.

Who beats up people praying for peace?

The focus of Antifa is apparently to oppose with violence anyone who is not them.

The Philadelphia ‘cell’ has come out calling for Marxist revolution. Antifa is leaving little doubt about where they stand ideologically and that they will use whatever level of violence they deem necessary to get what they want.

This is all leading to an interesting political situation – will having supported Antifa in the wake of Charlottesville end up being as politically toxic as supporting the Klan? That appears to be the road this is heading down at ever increasing speed.

Let us be honest – 90% of Americans are fed up with the hate and the violence. We are just done with it. Politicians perceived to have been supportive of a hate-filled violent group could end up paying a price in this environment. Antifa is demonstrating beyond any rational dispute that they are a hate-filled violent group.

Isn’t it ironic if the one thing that could unite and rally the overwhelming majority of people in this country is opposition to Antifa?

Could happen…

A Couple Of Indisputable Facts

A couple of indisputable facts:

We are living through the greatest credit bubble in history.

If credit bubbles do not continue to expand then they pop.

We are reaching the absurd stage in the attempt to keep growing the credit bubble. Ford is saying they will look past credit scores when people wish to purchase a new Ford (Note: the auto industry is already plagued by sub-prime loan repossessions). Some government-guaranteed mortgages are now ‘no appraisal’ loans. Central banks around the globe continue to inject credit into markets – to find people and entities willing to absorb that credit is getting more difficult and as a consequence standards are being continually lowered.

Government officials are encouraging people to take loans against the equity in their homes and more and more people are now doing just that. Even the anemic sub-2% GDP growth that we have been suffering through is now in danger – the government needs people to take out more loans to buy more stuff to keep GDP growth on the positive side.

‘Your-home-as-an-ATM’ is back with a vengeance.

GDP growth has indeed been anemic, auto sales are dropping, housing may have reached a plateau and Americans have individually and collectively more debt that ever before. The ability of central banks such as the Federal Reserve to continue levitating markets may be reaching a logical end. Janet Yellen and her cronies insist that is not true – but all of these same people insisted that the economy was in no danger in 2007 and 2008 as well so keep that in mind.

Some smart people believe we have reached peak asset value.

We have decided to substitute liquidity injections for actual growth. Central banks have now purchased assets equivalent to 40% of global GDP. How much more is out there to buy and propel ever upward? The Japanese bond market has effectively ceased to exist – the Bank of Japan is assumed to be the buyer of everything. The ECB is running out of things to buy – including corporate bonds.

It is generally assumed that the Federal Reserve will re-start Quantitative Easing, i.e. the purchase of assets, if the bubble starts to slip. As of this moment the Federal Reserve is still promising to ‘normalize’ their balance sheet – in other words sell the assets they had purchased under previous QE efforts.

This could get very sporting. There is a school of thought that all financial crisis are liquidity crisis. This is the reason that central banks began the liquidity injections eight years ago – the question that begs is if removing the liquidity injections would simply land us back to where we were eight years ago? In other words – all the central banks provided was eight years of CPR and when they stop will the patient die? All evidence indicates that is the case. If it is not the case the central banks would have ceased the liquidity injections years ago. This is the trap that we find ourselves in.

The flip side of that is that to continue the liquidity injections also continues the wealth and income disparity. During the eight years of Obama 60% of all economic growth took place in a single sector of the economy: financial services. In other words, Wall Street Banks received 60% of the GDP growth during the Obama years. Insurance companies got about 20% of the economic growth during the Obama years – so only 20% of economic growth went to people not on Wall Street or the insurance companies. Additionally Obama is the first President to never reach a 3% GDP growth rate – what little growth went to the rest of the economy was atrocious to begin with.

Why are those percentages so terrible and one-sided? The policies of the Federal Reserve combined with legislation such as Dodd-Frank and the Affordable Care Act distorted markets in a manner where it was less profitable to invest in productive business and more profitable, and much less risky, to invest in assets which the government and Federal Reserve were essentially guaranteeing and funding. What happened is pretty straightforward. It was theft pure and simple, but straightforward. On top of that the rehypothecation and collateralization of credit combined with the implicit and explicit government and central bank guarantees has created a situation where simply introducing credit, or being in a spot where you can invest in credit, is much more profitable than anything being funded by the credit.

Absolutely distorted markets created an absolutely distorted economy where a few people profit beyond imagination while the bottom 90% continually bleed wealth and income.

The error – or cowardice depending on how you view it – of Bush and Obama and Bernanke and Yellen was in not allowing the economy to reset after September of 2008. Firms that should have gone out of business were rescued and have become zombies. They are only profitable – and only continue to exist – due to the largesse of the government and Federal Reserve. At the same time legislation such as Dodd-Frank and the Affordable Care Act along with enhanced EPA regulations and other enterprise stifling actions raised the bar to new business enterprises being formed. The Obama administration each and every year saw more businesses go out of business than were started – that had never occurred before in all of American history. The lack of startups combined with the zombies is the reason why nearly 9 million full-time private sector jobs were lost during the Obama years – and that leads directly to why you have a President Trump.

How the governments and central banks will escape the trap they have laid for themselves without collapsing the entire house of cards is unclear. Any successful escape will have to include real moral courage, the ability to explain what is happening, the ability to stand up to the entrenched interest gaining wealth from these distortions and the ability to gain the co-operation of and co-ordinate with many entities around the world.

What are the odds…

The Treachery of Obama’s Hounds Who Call His Critics Racist.

Here is what I really resent about Obama’s slanderous defenders who scream “racist!”at his sincere critics. They don’t even take the man at his own word. He declared big intentions. He declared he meant to make America different. He announced Bill Clinton was kind of a wimp, as Democrat Presidents go:
 
“I think Ronald Reagan changed the trajectory of America in a way that, you know, Richard Nixon did not and in a way that Bill Clinton did not.” He wanted to be a Reagan for the Left.
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He said the Warren Supreme Court was not very radical, because, for all its disruptive rulings, it never decreed a Constitutional mandate for major redistribution of wealth.
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In his memoirs, he described working in the private sector as like being “a spy behind enemy lines.”
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On the cusp of his election he promised to “fundamentally transform America.”
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Barack Obama declared, over and over, his intent to be a transformative president.
 
Well, these are weighty matters and a lot of Americans thought our fundamentals needed some tightening up, but, they were mostly pretty good.
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Along comes this Social Organizer raised by communists who means to make everything different,. But, he says it in a soft voice, so fools were seduced. And they swooned. Fools like Peggy Noonan and David Brooks. And the national media? Fuggetaboutit. They just became is personal protection mafia.
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But the ugliest thing of all, is, people who see what he is, what he’s doing, what his administration was pushing cannot even talk about it honestly. Not then, not now.
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“Racist!” screams his mob. Even now, if you want to reverse the disaster that is Obamacare, you are accused of wanting to erase the legacy of the black man.
 
This is morally bullying rubbish. It is a vicious, cowardly tactic to deflect the debate about bedrock American policies. Obama did not announce he had the agenda of a black man. He announced he wanted to transform.
 
I don’t appreciate being called a racist for not thinking that we should be transformed. Obama said he had big ideas. They were big. I oppose them. And it has nothing to do with his pigment.

Interesting Days Lie Ahead Of Us

 

James Kunstler recently sat for a podcast interview and it is worth your time to listen.

 

Some meat:

 

“What we’re seeing is the result of behavior of people who have no idea what they’re doing. Most of the major systems that we rely on are entering a state of failure of one kind or another. And, of course, the larger problem is that they’re interlinked, and that their failures will be mutual and self-amplifying.

 

These systems include the energy system that has powered industrial civilization, the oil and gas industries which you’ve talked about a lot and I think that our listeners understand pretty well — although the finer points of it, like the ‘energy return on investment’, is something that’s certainly not understood by the general public, or most of the officers in our government, and certainly not in the New York Times, Washington Post or other major media outlets. They just don’t get that.

 

That energy problem is reverberating through everything, including agriculture and our inability to use the oceans in some way that’s not going destroy them. And the medical system. The education system. All these systems are blowing up. In the absence of being able to run them coherently in any kind of economic way, they’ve turned in to rackets — basically, people are trying to make a profit off of them dishonestly one way or another.

 

Because we’re immersed in comprehensive dishonesty in our culture, we no longer recognize what we’re doing or what the truth of our situation is. It’s pretty dismaying to see our culture flounder, particularly in trivialities and bad ideas(…)

 

My own guess is that the denouement to all this is going to involve disorder in the financial realm, because finance is the life blood of the techno-industrial society we live in. When that gets into trouble, the problems are going to thunder through all the other realms of our culture, and then we’ll be forced to pay attention. And I think that these financial disorders are not far off. When they happen, things are going to change.

 

You and I have been quite frustrated over the last eight years at the ability of certain authorities in our culture to manipulate prices and levitate markets and intervene in the physics of our economy. That just can’t go on forever. Even though it’s frustrating to watch, it looks to me like it’s climaxing. The disorders that are already present in our economy are manifesting now in our politics. And that to me is a pretty dangerous sign.”

 

Kunstler is infinitely more capable than I am at communicating these truths. The key here is “we’re immersed in comprehensive dishonesty in our culture, we no longer recognize what we’re doing or what the truth of our situation is.” Paul Brodsky recently alluded to our actual plague not being ‘fake news’ but ‘fake politics.’ The majority spend their time arguing about what to do in regard to a situation that only exist in fantasy. Let me give you a prime example – while the official Federal budget is about $4 trillion the Feds accumulate north of $4 trillion in additional debt each year that they choose not to count. The actual Federal government obligations exceed $8.4 trillion a year. This is the problem we should be dealing with, not the $4 trillion. Another example, while the official Federal debt is in the neighborhood of $20 trillion, the Congressional Budget Office says the actual Federal debt is $210 trillion – the gap is due to the annual accumulation of debt that the Federal government chooses not to count. $210 trillion in debt is the number we should be working with. As Kunstler said – “we’re immersed in comprehensive dishonesty in our culture” – and the fake politics that goes along with that comprehensive dishonesty.

 

For eight years we have been told about ‘economic recovery.’ The truth is that central banks have propelled asset classes ever upward by direct intervention in the markets. Central banks have now purchased assets equal to 40% of the world GDP. Printing money and then using that money to purchase assets in order to propel preferred asset classes upward now qualifies as ‘economic recovery’. The concept of ‘moral hazard’ is as antiquated as the curtsy.

 

Still not at peak absurdity!

 

Charles Hugh Smith recently posted “Ideology as Addiction.” Some gems from that post:

 

“Ideology fills two basic human needs: certainty and purpose. a constant state of uncertainty places a corrosive burden on the mind, emotions and spirit; the solution is a decision or resolution that resolves the uncertainty.

Humans need purpose to guide their life; aimlessness is debilitating and unnatural.

Addiction provides purpose, as the life of the addict is guided by the need to satisfy the addiction.

Ideology also provides purpose: the believer is called upon to defend and evangelize the ideology as an abstraction, and support its manifestations in the real world.

Addiction is an all-or-nothing state of being. If an individual can abandon the addiction at will and feel no deprivation, it isn’t an addiction; if sporadic half-measures suffice, it isn’t an addiction.

Ideology is also an all-or-nothing state of being. One doesn’t believe in capitalism or socialism, for example, in half-measure or occasionally when the whim strikes; one is convinced of the rightness of one’s ideology as a permanent state of certainty.

There is a sense of belonging and betrayal implicit in ideological beliefs that mirrors addiction. The sex addict, for example, feels only fellow sex addicts can possibly understand the compulsion and satisfaction of that particular monkey on one’s back.

In the state of ideological certainty/ addiction, only fellow believers can possibly grasp the perfection and rightness of the ideology. Thus this certainty is not just a state of being; it is also a state of belonging, hence the similarity of belonging to a cult and addiction.

To cease believing is heresy and an abject betrayal of the brethen/sisterhood. Hell hath no fury like a membership scorned or abandoned.”

 

It would certainly appear that people are indeed addicted to ideologies. That the ideologies are rooted in fantasy, fake politics and can only be maintained with comprehensive dishonesty (even if the true believer does not recognize the dishonesty) is what allows a certain class to exploit the fantasies to their economic benefit. Indeed certain classes continue to feed the ideologies, fantasies and fake politics – even financially supporting them – because they can create immense amounts of wealth for themselves from the addiction to fantasy.

 

Like Kunstler I believe the systems are breaking down – and breaking down because they are premised on dishonesty. Printing money, injecting liquidity, hiding debt, and purchasing assets in order to maintain an illusion does have a logical end. How does society react when that logical end is reached? What happens when a critical mass recognizes it was fake politics? What happens when the ideological addicts are compelled to unwind in the face of reality?

 

Interesting days lie ahead of us…

The Arpaio Pardon Reeks Of Politics

A few days ago my blog partner Shawn Mitchell posted that Trump’s Arpaio pardon was the right call. He presented a reasoned argument in favor of that.

Let me counter that with something visceral – I think it reeks.

Joe Arpaio being found guilty of evading the court order of a judge is a long the same lines as convicting Al Capone of tax evasion. We know he did much worse but it could not be proven in a court of law – so they nailed him on what they could. Arpaio’s reputation in Arizona is not a good one – and that is true among Republicans and conservatives as well as Democrats and Leftist. One can reasonably argue that the allegations against Arpaio are unproven and that would be accurate – to the same extent that the allegations against Capone were unproven.

I am not accusing Joe Arpaio of being a Mafioso and killing people and extortion and all of what Capone undoubtedly did – but the analogy holds that they convicted him of what they could rather than all he did. Arpaio has the reputation of flouting the law for political gain. That accusation is consistent regardless of party or ideology or race. This amounts to more than just a ‘where there is smoke there is fire’ argument. These allegations are overwhelming, they come from across the political spectrum and one would have to conclude that if they have no merit then congressman, senators, mayors, judges, lawyers and everyday citizens are all corrupt and conspired to sully the reputation of Arpaio. We all have confidence that if you were going to find a group of corrupt people it would most likely be within the ranks of congressman, senators, mayors, judges, and lawyers – but when people who agree on nothing else all agree Arpaio is corrupt we should all sit up and take notice.

We are left with the only logical choice being that either Arpaio is corrupt as hell or all of these other people are corrupt as hell in accusing him of being corrupt.

I will not argue that some of those accusers are not corrupt, I will not even argue that those accusers are not corrupt to a man but what are the odds in the face of evidence which falls just short of that required to convict that Arpaio is not corrupt? I would say nil.

Trump pardoning Arpaio stinks of politics – not justice.

Violence is Anti-hate and Peaceful is Far Right–The Washington Post Gets in Touch With Its Inner Orwell.

There was more Leftist violence in Berkeley yesterday. But the media is doing its best to blur and control the narrative. According to the Washington Post, black-clad Antifa members, armed with sticks and shields are really “anti-hate” protesters, who jumped barriers and attacked a “peaceful” “far right” rally while Berkeley police largely stood aside. 
 
Read the article and see if you can figure out how Antifa earns the moniker “anti-hate” or what makes the admittedly peaceful marchers who got attacked “far right.” Maybe it’s that their march was to say “No to Marxism.” Shriek. Apparently, in Berkeley and the editorial offices of the Washington Post, that position makes them Aryan skinheads. But, at least the Post admitted they were peaceful and the violence started when the Antifa “anti-hate” protesters went on the attack.
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Other media joined in the obfuscation, calling Antifa–which rejects capitalism and advocates communism–an “anarchist” group. It’s not clear how activists who want the government to control property, production, and distribution can be considered anarchists, unless all anarchist means these days is people who want to blow up American constitutional government and replace it with their utopian vision of government. Orwell should charge posthumous royalties.

 

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