The people running the world’s businesses and governments mostly come from elite business and law schools. Graduates emerge from these programs with well-honed skills in verbalization, public presentation, image management, and strategic conformity, and with a hubristic belief that they are qualified, even entitled, to run large and important institutions.
For all their intelligence, they often lack a nuts-and-bolts understanding of how any particularly institution actually operates, or the qualities of character necessary to inspire basic respect among the people with whom they will work, much less to manage, motivate, or lead them. A few try to remedy their deficiencies. Most are willfully blinded by exaggerated estimations of their own merit, and the praise and confirmation they receive from others of the same stripe.
In either business or government, the lower rungs (constituents being the lowest rung of government) are closer to on-the-ground realities. Open and honest lines of communication to the upper echelon are rare. In light of reprisal risks, most people tell bosses or political functionaries what they want to hear. Most bosses, bureaucrats, and politicians investigate no farther, and craft self-serving narratives to promote what they’re doing.
The genesis of the burgeoning political revolt is the realization that the business-government nexus is not functioning as advertised and is contrary to the interests of the people subjected to it. Much of what the ruling class has done has failed, and failed spectacularly, especially when measured against the hype that promotes it. Hubristic delusion has prevented much of the elite from recognizing either their failures or shattering credibility. They are falling in line for Hillary Clinton, but here too they delude themselves.
Clinton will not be the status quo they know and love because that status quo is doomed. How much longer can the Federal Reserve undermine savings, investment, and production, and reward leveraged speculation with zero and lower interest rates? How long can the government continue to borrow before the Fed is the only buyer of its debt? When will ever-expanding debt and ever-mounting regulations crush the already faltering economy? What will be the point of recognition that there is no way the government can keep all the promises it has made? When will Obamacare and a host of other unaffordable government-provided goods and services be pronounced dead? When will the hope of global domination be abandoned? When does the average Joe and Jane become aware that most of what government has done has been a massive mistake?
These are questions that presume eventual outcomes. It’s astounding that the status quo has been maintained for as long as it has, that the answer to all these questions is: “Not now, but sometime in the future.” While there are a myriad of reasons for the absence of a generally recognizable collapse, three stand out.
Taking debt monetization, interest rate suppression, and asset price promotion to previously undreamed of outer limits, central bankers have also explored new frontiers in economic and financial anesthetization. Pain has its uses, one of which is that the sufferer may take remedial actions to ameliorate or stop it. Financial anesthesia, like the medical variety, masks pain and consequently delays the patient’s healing responses to it. Cheap, abundant fiat debt forestalls necessary but painful deflation, bankruptcies, the repricing of assets, and their transfer from the weak to the strong, and it consigns the economy to the realm of the living dead. How long can such a state of suspended animation last? Japan started anesthetizing and zombifying its economy twenty-six years ago and its economic monitors still register activity, albeit anemic. Now that Japan’s strategy has gone world-wide, nobody really knows how long a global zombie economy can stagger forward.
The remaining productive Americans carry the gorilla of government on their backs. With each new tax, regulation, dollar of debt, unfunded promise, and addition to the rolls of people supported by the government, the gorilla gets heavier. Perversely, at least in the short run, that has diminished the threat to the government that its milk cows balk at the increasingly onerous regime—they are too busy trying to survive it. Furthermore, as the number of producers decreases and the number on the dole increases, the pool of potential resisters shrinks. This cannot go on forever. The Atlases will shrug eventually, or more likely collapse, but until they do the government’s game keeps going.
Finally, the government has its own public-opinion-molding operation and has co-opted most of the “independent” media. One would be hard put to find a single adjustment to the government’s economic statistics production process over the last several decades that has had the effect of increasing either the inflation or the unemployment rate. The “news” Americans get from the mainstream media about the US’s many interventions in foreign lands is laughable: propaganda at best, usually closer to outright fiction. The news Americans don’t get about those interventions, government surveillance, weapons boondoggles, the deep state, crony influence and enrichment, immigration, crime, and the futility of wars on poverty, drugs, and terror fills alternative media websites and books that seldom make bestseller lists. Managing, shaping, and stifling information flows has kept the powers that be in power…and the incurious millions docile.
Hillary Clinton represents the powers’ fingers-crossed hope that their hideous, destined-for-breakdown contraption can be kept going for a few more years. Donald Trump represents the resentment of those who bear the brunt of their increasingly obvious failures. Whoever gets elected, at some point the unsustainable will give way and the powers’ artifices will become manifest liabilities. Which has already occurred with the mainstream media and is in process with the Fed. The media’s blatantly biased coverage of the election has irretrievably shredded its credibility and has probably caused a net addition to the ranks of Trump voters. Faith in the Fed’s nostrums is dwindling as the much touted liftoff never arrives. Fundamentally unsound, debt-saturated economic and financial systems will eventually vomit out a crisis that central bankers can’t fix or forestall.
In the long run reality is reality, not what the powers would like it to be or what they try to con the masses into believing it is. Don’t give up hope! The long run is short enough that most of us won’t be dead when it arrives.
NOBODY READS LONG BOOKS ANYMORE