Economic and political analysis-Window on culture-Media criticism

Sunday, December 13, 2009

We're complicit in Obama's Grand Illusion

Talk of the White House crashers and Tiger Woods' infidelity dominates the mainstream media.

Obsessing over celebrities, Americans are spellbound in a state of mass delusion. We live vicariously through the lives of celebrities. We inflate celebrity to superhuman status, then collectively gasp as our superhumans show their fallibility, like Tiger Woods. Superstar athletes are praised, and sport elevated, to the point image and reputation matter more than the people underneath.

We're compulsively drawn to ignore our lives and fixate on celebrities in a form of escapism. Addictions pattern themselves similarly. The addict can go on borrowing, or using, indefinitely. It's only when some transfixing event strikes that the addict realizes they have a problem. Until then, everything's honky dory even if the facade is crumbling.

Politically, celebrity worship masquerades within the pageantry of a Presidential campaign. The celebrity-in-chief is President Obama. His campaign epitomized the rhetorical over the practical, image over the reality. So slick was the illusion that most Americans missed the deception; they instead got caught up in the spectacle of the campaign.

The interests of big government and big companies overlap. As more money flows into the political sphere, it's only natural that companies seek to expand their influence, in a trade of campaign contributions for political favors.

Groups with the most influence end up benefitting the most. Key constituencies include the National Security State/MilInd complex (legitimized through the Terror War) and banking/financial complex. Outside the top two tiers of the pecking order, there's Health Care and Prisons (legitimized by the Drug War). Stripped of not-for-profit competition, health care reform appears to be a mammoth giveaway to the insurance industry. Watch premiums rise even faster than the 20% or so that is the norm these days.

Politicians sell their control over regulations, which are channeled to benefit established players, who've cultivated the closest ties to government. Of course there are dire effects from influence-peddling: weakened regulatory standards led to the financial crisis last fall (coupled with plentiful cheap cash from the Fed).

Without greedy hedge fund managers and Citigroup lobbying for an end to Glass-Steagall, the crisis wouldn't have occurred. Neither would have a solution so beneficial to industry been offered as part of the disaster capitalism/opportunism which rose as a result of the regulatory failure. In this respect the response showed how cronyism and corruption dominated both the cause and its solution (which represent nothing more than an expensive band-aid).

There's the General Motors example. Even better is Citigroup, a company that received $308 billion from government as Barack Obama's first act subsequent to his election.

Like so many others, this story never made it to the mainstream press, whhich was busy covering the historic election and euphoria it generated in anticipation of change to come.

The Matt Taibbi's article in Rolling Stone blows open the corruption of the Obama administration in his recent article, titled, "Obama's Big Sellout."

A government that runs on behalf first of corporate stakeholders could be called an oligarchy or fascism. America may not yet be exhibiting the raw ultranationalism associated with fascism, but it's possible we're in a more benign form like Mussolini's definition of fascism. The Italian dictator predicted that a benign form would do well in the US, largely because Americans were uniformed and gullible.

Debt spree

Bad as it is, there's growing government, then there's the current Congress and its spending binge, which is at $1.4 trillion+/year for the foreseeable future. Then there's the private Federal Reserve with all its lending to financial institutions (these far exceeded TARP). Under the Constitution, only Congress has the right to spend our money.

No matter how arrogant or foolish our notions of self-grandeur, we've become a debtor nation, and a bad risk at that. The Chinese dictate with increasing leverage how we spend our money, The recent cash for clunkers was a Chinese invention, not an American idea. Apparently the Chinese wouldn't accept our currency but demanded collateral--in this case the scrap steel from vehicles whose engines had been sabotaged.

Then there's the taxes to pay for wars, wars we don't need, that have next to nothing to do with our security. The 9/11 strikes weren't planned in Afghanistan, but rather Hamburg, we will learn from KSM torture-tainted testimony. They weren't carried out from there but rather from our own shores, with training in Florida.

As a result of overspending, reduced medicare benefits are inevitable. The elderly do vote, so the friends of health insurance company who killed off the public option had better be careful. Then again with Leiberman (I-Insurance Industry) carrying the all-important 60th vote, they may have little to fear.

Reduction in social spending have long been a target of Right-leaning economists. Under the so-called Chicago school, many neoliberals carry Ayn Randian style views about entitlement programs. These ideals led Obama to restrict any health care reform to that which wouldn't incur any deficit--deficit neutral. This stipulation confounds the budget-busting spending for wars without end, which will increasingly compete with a shrinking pool of government funds, unless of course they choose to simply crank up the printing presses, which creates inflation, or what is known as the stealth tax.

The spiral into debt which Americans have entered as individuals and families is repeating itself as a national crisis. Like the debtor, our government knows full well that it's operating beyond its capacity to repay, just like some credit junkie maxing out the credit cards. Then one day, it hits--the day of reckoning, the hitting bottom. It's really no different addiction to addiction.

Like an addict who's been used, we're willing to continue to live in a state of denial. It's easier to let things go then face the truth we've been lied to and manipulated, election-after-election. Meaningful transfers of power rarely happen as Congressmen with campaign war chests bloated with corporate contributions win time after time. Obama used a theme of change which by now has been relegated to throwaway status. I wonder how long politicians will avoid it.

Why is all this so important? Well, we need to mature as a culture, to the point we can understand where we're going to end up. Also, we need to understand that media and the very state of media saturation which we live is not an opportunity to learn, grow, or share, but rather a delusional form of reality avoidance.

Now I'm not going to say obsessing on something or other from time to time will doom us all. I am saying tat we, the American people, need to accept that being unhappy is part of life. We don't need to over-consume. We need to lead a way of life that's sustainable. A big part of rebuilding the social fabric requires warmer, face-to-face, and more real communication than a one-way relationship with personalities in the media.

If we don't change, and let ourselves be led by a group of conglomerates in reducing our lives to the point, as Rachel Corrie put it, that we're nothing more than the choices we make as consumers.

Americans can feel passionate about their communities, and so people may put down their phones and really talk to one another, face-to-face, to deal with problems we face in our communities.

As one example typical throughout the country these days, I noticed schools here in Indiana are facing massive budget cuts. Should cutting education come before other priorities? The state plowed over $500 million into Lucas Oil Stadium in Indianapolis. Yeah, the Colts are good and all that, but can we afford to shortchange our education in order to build them a stadium?

As a Colts season ticket holder, I remember the previous building, the RCA (Hoosier Dome) as being perfectly adequate. The newer building may be impressive, but did it have to be so big and expensive? (Before you condemn me for my lack of loyalty, let me remind you that I sat through two season when the Colts were 3-13!) But seriously, can't we restrain ourselves--or does everything have to keep getting bigger, or fancier?

If I'm a reactionary, let it be to the ascension of common sense over the unending and unfulfilled quest for happiness that seems to dominate our lives. The latter is unsustainable and the earth is telling us so, as it strains to accommodate the world's replication of the American lifestyle, with its gluttonous appetite for energy and raw resources.

In time, it will have to end: the American lifestyle of bigger cars, bigger houses, and rising standard of living that is. What will kill it? Less consumption is probably the only cure for excess consumption. Maybe Americans will freely choose a lifestyle that's more harmonious with our environment. Maybe we'll have to.

Not just the money

Of course there's the ever growing State, with its ranks of bureaucrats and red tape--the problems the whole Reagan Revolution was supposed to solve. Worse even than all the spending is the lack of accountability for those in power. They can, and do get away with everything we let them get away with--which at this time is everything.

Recent revelations indicate that Blackwater personnel operated alongside the CIA, acting as agents of our government. Of course the use of these mercenaries allows the CIA to circumvent laws and accountability for their actions.

For now, these forces do most of their dirty work across the Rubicon. The Rubicon River distinguished domestic Roman territory with that of the provinces and barbarians. In the modern lexicon, this could be translated as do the nasty over there, rather than back home.

When will the forces that we release on supposed terrorists find their way home? The slaughter at Fort Hood seems to indicate many people associated with the wars we fight abroad will be forever tainted in one way or another. It bears remembering that over 50,000 Vietnam veterans took their lives. Fort Hood was the Army's worst base for suicides, averaging over three per month.

I don't think we have to be scared about what veterans with untreated PTSD will do in our neighborhoods. We could all be the victims of sporadic violence. Instead we should look at the government's blessing of Blackwater/Xe as evidence that the government believes itself beyond the law, and those who act as its agents beyond criticism and moral boundaries.

Look no farther than detainee063, a day-by-day summary of the treatment of a Guantanamo detainee. This torture has been going on for years. We don't know who's responsible, just that bad things transpired. Is it such a leap to think that those same abuses of power might some day make themselves back to our shores. And maybe these acts will be justified not by threat of terror but instead something motivated by a narrow political agenda.

Apparently what Blackwater people do meets with our government's blessing, which purports to act in our name. Exactly who are these shadowy mercenaries operating at the fringe of international legal accountability? Sanctioned by government, whatever these people do will be considered by the world as being done in our name, at our government's bequest.

Confederation vs. federation

Emerging in the rampant spending and naked power grab by the Federal government is a states' right conflict. The states have lost time and time again to the Feds, which isn't perhaps that much of surprise considering the cases are decided in federal courthouses, paid by federal funds, run by Department of Justice attorneys paid with federal taxes, and judges appointed by the President.

Then again I suppose we're supposed to buy into the horribly naive notion that justice can be served apart from the political system controlling it. (This was why the Plame prosecution could go no higher than the Libby conviction--no DoJ can convict the administration to which it belongs. In another Bush-era travesty at the federal level, a number of DoJ attorneys also walked out in protest during the Monica Gooding political appointee scandal. (Federal attorneys are supposed to be above partisan litmus tests as requisites for hiring or advancement. It didn't work that way and seven or more prosecutors lost their jobs due to politically biased performance reports.)

Under the Constitution, states can reject federal control. Federal government operates at the pleasure of the states, not the other way around. Fact is, the Constitution isn't being followed in a myriad of ways. Declaring war without the explicit consent of Congress is but one example.

John C Calhoun, a champion of states' rights, believed the states were the ultimate authority, not the federal government. The 10th Amendment puts it this way:
"The powers not delegated to the United States by the Constitution, nor prohibited by it to the State are reserved to the States respectively, or to the people."

The Constitution thereby limits the authority of the Federal Government! This isn't exactly news, but in this Orwellian age (one of universal deceit), that's a fact (truth) worth repeating (constituting a revolutionary act). Remember this fact. Spread it to everyone you know.

How liberating it is to think that we--the people--don't have to give the federal government any powers beyond that granted it by the Constitution. Yet the Constitution does contain a mechanism to change itself, so it's hardly a static document. If we pass an amendment, we add to the Constitution and can thereby abrogate--or lose--rights we previously had not given to the federal government.

Take the 13th amendment, which created the IRS. Why would the people want to be taxed? Well, the 13th amendment was passed not by a democratic vote but through approval of 2/3 of the states, as stipulated in the Constitution. Or was it? A strong case could be made that amendment wasn't passed by the requisite 33 states. Records can't be located indicating the state legislatures in a dozen of those states ever passed the 13th amendment. Congress itself passed it near Christmas, while many of its members were on break.

So if it sounds strange that the Constitution would be altered in order to create a federal tax system, it's because the rules were bent, undemocratically, in order to create a monetary system based on a private banking cartel, the Federal Reserve.

To generate revenue for the bankers, the IRS was created at the same time. Our payments to the Treasury actually go to the Federal Reserve! The interest on the government's debt--our debt--actually goes to the private, for-profit banks who lend our money back to us, through government borrowing.

Without the IRS and a means to tax, it's unlikely that private bankers would be willing to lend to our government, so the two work together, with the IRS providing a reliable stream of income back to the lenders of the people's money. These banks also borrow the most money, for rates of interest subsidized by the Federal Reserve. So they borrow our money from us, and make us pay interest on it. Their profits are the net of what they can borrow for and loan it out, minus losses.

The inadequacies of this system are becoming painfully clear, as trillions in the people's money gets lent to banks through TARP and Federal Reserve discount windows. The big banks meanwhile have been reticent to lend, and instead plow their borrowing back into Treasuries. Government debt provides a low but reliable rate of return for essentially nothing, as the loans extended to them by the Fed come at rates of interest near zero.

So the central banking scam continues. Through devaluation of the dollar/inflation, Americans have lost 96% of their spending power since the creation of the Fed in 1913. Inflation means higher wages, and that allows the IRS to collect more and more revenue, without raising tax rates. Yet as inflation rises, the increase in revenues can't cover the massive interest on our debt, which will rise as interest rates go up to fight the inflation.

More taxes are coming, courtesy a climate crisis declared by Obama just last week. I can't recall the exact wording--and mainstream reports are non-existent--but Obama essentially proclaimed CO2 a threat on a level of terrorism, which grants him essentially unrestrained powers to fight the threat, just like the War on Terror exempts the President from the Constitution and War Powers Act.

Defending the American people is offered as the excuse, but no where in the Constitution does the President have this right to defend the American people, only the Constitution, and therefore the right doesn't exist.

We're headed from a federation to a confederation. As Jefferson said, we the people have the right, not privilege, to reject the form of government we now have. How could it happen? Peacefully, through an Article V convention. A more expedited transition could also come in the wake of collapse of our economy or monetary systems. History indicates that these latter events will bring immeasurable pain and hardship, but often do usher in revolutionary change. Why? Because as a wise man once said, we only change when the pain of change becomes less than the pain of going on as we are.

Government increasingly is as chief source of revenue for many people, and these numbers will climb as economic hardship and growing numbers of elderly demand more out of government. This dependency on handouts creates a general sense of entitlement among the recipients. Already half of us pay no taxes. How many more can fit at the trough, either working for government or being subsidized for it? Eventually an economic system encumbered by too many dependents collapses, as the Soviet Union showed. If the wars and our present spending is to serve a greater good, it will be shrink the time frame between realizing we must change and ignore our financial problems.

A good article on the debasement of our currency titled "Requiem for the dollar" is available in the Wall Street Journal. Note the non-conventional source for the origin of article-it comes from James Grant of Grant's Interest Rate Observer.


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  • At 2:39 PM, Blogger Bill Walker said…

    The author did not mention a major fact regarding an Article V Convention. The states have submitted enough applications to force a convention call already. The fact is Congress refuses to obey the Constitution and call an Article V Convention.

    All 50 states have submitted 750 applications for an Article V Convention. The texts of the applications can be read at www.foavc.org.

  • At 4:55 PM, Blogger jbpeebles said…

    Appreciate Bill's comment. I find consolation in the truth people are trying to protect our country from the problems we're having, many of which stem from a too close connection between corporations and government.

    Speaking of which, Bernanke was chosen as Time's Person of the Year. In an excellent TechTicker interview, Chris Whalen of Institutional Tech Analytics assails the choice of Bernanke. Whalen targets Bernanke's failure to keep the Federal Reserve independent. Whalen calls the notion of a Fed controlled by the Executive branch "ridiculous" and a violation of historical norms.

    Whalen goes on to talk about how the economy bubble overinflated economic growth for years and that deflating the bubble, not reinflating it, is the only way to get economic growth to sustainable levels.

    As if to give a perfect example of the quid pro quo between financial entities too close to fail, with their armies of lobbyist high in White House and Congress (Taibbi's "Rubenites"), Citigroup just received a $38 billion tax break. This amount is sufficiently large to offset any gains taxpayers may have been able to take from an early repayment of TARP. Besides the influence it reveals, the tax deals shows that Citigroup is in fact broke, a so-called zombie bank, which will likely need financial assistance until its inevitable dissolution. See the yahoo article here.

    Couple other timely articles of interest include Pastor Chuck Baldwin's article on a potential civil war and a piece about the un-Constitutional legalization of torture under the Obama regime here by Carl Herman.

  • At 7:33 PM, Blogger The Arthurian said…

    Hey, buddy.

    "Whalen goes on to talk about how the economy bubble overinflated economic growth for years and that deflating the bubble, not reinflating it, is the only way to get economic growth to sustainable levels."

    I don't understand this. It sounds like Whalen means we need prices to fall (deflation)... But no. The bubble "overinflated growth." So maybe Whalen means that 'real output' grew too fast? Kinda sounds like it. Kinda sounds like he thinks "sustainable levels" of growth would be lower levels of growth.

    Maybe. But if so, it's pretty funny, because the notion that "government spending is excessive" is always used to explain sluggish economic growth. So if we need even lower levels of growth, then maybe we need higher levels of government spending??

    As I said, I don't understand the Whalen words.


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