Is Russia triggering a cleansing surge against financial secrecy? And stuff about Crypto!

Sometimes it's the dog that didn't bark in the night. The expected thing that did not happen. 

For example, where is the Russian cyber war that everyone expected to be one of Putin's spasms, unleashed against the West when he grew desperate? Weren't all our banks and pipelines and power grids going to collapse, at the very moment he gave a nod? Is it possible that our nerdy protector castes and their tools - and even out utility companies - turned out to be better than expected? Or Kremlin basement-dwellers much less competent?

Moreover, has anyone else noticed a plummet in the number of trolls on social media, now that Moscow is cut off from most? Has the vast Kremlin agitprop machinery collapsed, as Wired suggests? 

"The Kremlin has spent millions in terms of dollars and hours in Europe alone, nurturing and fostering the populist right (Italy, Hungary, Slovenia), the far right (Austria, France, Slovakia), and even the far left (Cyprus, Greece, Germany). For years, elected politicians in these and other countries have been standing up for Russia’s interests and defending Russia’s transgressions, often peddling Putin’s narratives in the process." 

And even more important, networks of American Q-nuts and Fox-watchers who till now never questioned even Twilight-Zone-level absurdities and schism-ing previously verbotten things called ... 'facts.'

Interesting article and we can hope it is true. Though, even if the Kremlin's surficial agitprop webs are dissolving, that still leaves in place the part of the Kremlin's influence web that is most powerful at swaying big swathes of Western elite castes, and through them millions of our most gullible neighbors - a part that no one, anywhere, even slightly talks about. (Except me, duh.)

Going back to czarist times, Russian secret services always, always sought foremost to entrap and blackmail enemy elites getting them to then serve as agents and moles. If Borat could do it accidentally to Rudy Giuliani, how hard can it be? And do you have even a remotely-plausible alternate explanation for Lindsey Graham? Or Ted Cruz or (hell yes) Susan Collins?

Again, there is one thing that Jobee could do to overnight restore health and vigor to America and Western civilization, though amid a few months of painful, searing light. That would be to establish a truth and reconciliation commission charged with recommending clemency in exchange for folks stepping forward with revelations about bad-things. Especially turning tables on their blackmailers.

If I am wrong about that being a big problem, possibly a cancer on us all... (how can I possibly be?)... then where would be the harm? But if I am right?

A few dems - and a whole lot of goppers - would have to retire. 

We may see more women in Congress, as a result. 

So? 

We'll be saner, better... and clean.

== Is EARTH Coming True? ==

Are we seeing - as predicted in my novel - a Western Revival and push back against World Oligarchy? First came a landmark deal agreed upon by the world's richest nations as one of Biden's first endeavors - a global minimum rate of corporation tax placed on multinational companies including tech giants like Amazon, Apple and Microsoft. Late last year, finance ministers from the Group of Seven, or G-7 nations agreed to a global base corporate tax rate of at least 15 percent.  Companies  with a strong online presence would pay taxes in the countries where they record sales, not just where they have an operational base.

And now, amid the furor over Russia's insane invasion of Ukraine, Western nations are hunting down assets like yachts and mansions set up in London and New York and Paris by Putin's fellow "ex" KGB agent oligarchs, billions stolen (with Bush-Cheney collusion) from Russian citizens by those former, sworn Marxist-egalitarian*) commissars and sheltered behind shell corporations. 

Will the U.K. and USA actually end that dismally vile practice across the board? No way! Not yet, that is. These baby steps are far short of the general transparency of ownership that came (fictionally, alas) out of my "Helvetian War." And far, far from enough! But at last some of my large scale 'suggestions' are being tried. 

Now to get all fifty U.S. states to pass a treaty among themselves, banning 'bidding wars' for factories, sports teams etc... with maybe a sliding scale tilted for poorer states or low populations. A trivially easy move that'd save citizens hundreds of billions.

And while we're at it, let's overcome the treasonous GOP resistance to fully funding the IRS to audit the rich.

== Other transparency news ==

ProPublica has obtained a vast trove of Internal Revenue Service data on the tax returns of thousands of the nation’s wealthiest people, covering more than 15 years. The data provides an unprecedented look inside the financial lives of America’s titans, including Warren Buffett, Bill Gates, Rupert Murdoch and Mark Zuckerberg. It shows not just their income and taxes, but also their investments, stock trades, gambling winnings and even the results of audits.

Taken together, it demolishes the cornerstone myth of the American tax system: that everyone pays their fair share and the richest Americans pay the most. The results are stark. According to Forbes, those 25 people saw their worth rise a collective $401 billion from 2014 to 2018. They paid a total of $13.6 billion in federal income taxes in those five years, the IRS data shows. That’s a staggering sum, but it amounts to a true tax rate of only 3.4%.  

Over the longer run, what we need is the World Ownership Treaty. Nothing on Earth is 'owned' unless a human or government or nonprofit claims it openly and accountably. Shell corporations go only one-deep to real people.

Note that this would not be 'socialism'! No tax rates would rise, no confiscature. Just trillions in wealth cached out of sight by cheaters added to tax rolls while rates for law-abiding taxpayers would go down.

In fact, so much illicit property would likely be abandoned by criminals etc. that national debts could be erased and the rest of us could have a tax jubilee. Don't believe that? Do the math. Offer wager stakes.

== The Crypto era? ==

Is that proposal moot, in an era when ownership can be masked with digital, crypto-property?

Well, first, I actually know a little. I've consulted with a number of companies about the coming era and I speak at "NFT Con" in San Diego on April 9-10. 

All right, there is no way to "ban" crypto currencies in general! But there is an approach to making them much more accountable to real life law, though I see no one mention it. 

Let's start with an ironic fact. Blockchain-based token systems are not totally secret!  Yes, they use crypto to mask the identity of token (coin) holders.  But those holders only "own" their tokens by general consent of all members of a communal 'shared ledger' that maintains the list of coins and which public keys stand ready to be turned by each token's owner. In that sense it is the opposite of 'secret,' since the ledger is out there in tens of thousands of copies on just as many distributed computers. Attempts to invade or distort or corrupt the ledger are detected and canceled en masse. (The ecologically damaging "mining" operations out there are partly about maintaining the ledger.)

All of this means that - to the delight of libertarians - it will be hard to legislate or regulate blockchain token systems. Hard, but not impossible. For example, the value of Bitcoin rises and falls depending on how many real world entities will accept it as payment... and governments have been hammering on that, lately, especially China.

There is another way to modify any given blockchain token system, and that is for the owners themselves to deliberate and decide on a change to their shared economy... to change the ledger and its support software.... 

...and I'll elaborate on that in another posting. If the world lets us.

Meanwhile, hang in there. The enlightenment is fighting back. Be prepared for good or bad. Help those on the front lines.

How did Politics Become Only About Incantations?

While degree and severity differ from far-left to the entire-right, so much of today's politics is about symbolism that it's hard to recall, sometimes, our heritage as pragmatic, scientific civilization bent on fact-driven self improvement and reform.

Some of these symbol battles are long-overdue, like tearing down Confederate monuments-to-utter-treason that were imposed on us by the 1920s KKK. I'm less convinced by the some of the more extreme 'trigger warnings' that give Tucker-Hanninanity nightly grist, but clearly some linguistic adaptations are timely and worth negotiating. 

It's far worse, of course, on today's entire-right, where almost every issue is symbolic. Seriously, name an exception, from "wearing a mask turns you into a slave" to excusing 35,000 registered Trumpian lies because "at least they owned the libs," all the way to an obsession over the naming of naval warships. Oh, and their nightly rants accusing liberals of symbol-obession.

Again, please chime in with even one Foxite 'issue' that's not fundamentally more symbolic - or based on disproved mantras like Supply Side - than about practical solutions,

Oh, sure, a clear majority of Americans - and Canadians and many others in the Enlightenment Experiment nations - are still capable of negotiation, seeking practical solutions and adapting their tactics to changing conditions and new arguments. In fact, most 'leftist' politicians - like AOC, Bernie, Liz, Stacey etc. - seem deeply committed to maintaining a practical coalition. Having learned from disasters in 80, 88, 94, 2000, 2010 and 2016, they dicker hard with Biden/Pelosi, then back them up to the hilt.

So, why is it so hard for that pragmatic majority to get things done?

Alas, romantic symbolism junkies on the far-left and entire-right have been incited into roars of rage that give them inherent advantages in elections, especially when cheats like gerrymandering ensure many districts are dominated by the enflamed.

Note: by coincidence, in the latest update from Noema Magazine, Nathan Gardels also comments insightfully about how symbolism and incantations are dominating polemic in a world that's desperate for reasoned/negotiations by pragmatic leaders.

== Two Big Minds who miss the point ==

 You might drop in on an interesting podcast interview of Steven Pinker along with the "worst American," George F. Will. Both brilliant fellows make interesting points. 

G. F. Will smoothly and articulately foists desperate incantations to support the notion that he did not spend his entire adult life serving as a court apologia-issuer for crushing the Enlightenment under restored feudalism. His verbal agility is always awesome to behold, as is his despicable rationalization.

Pinker ably communicates how special our Enlightenment is - one of just a few such experiments ever tried, now under siege by a worldwide oligarchic cabal.

Alas, when he lists enlightenment's failed adversaries, Pinker mysteriously ignores the one and only form of 'government' that dominated 99% of our ancestors across 6000 years... oligarchic feudal lordship. ("Despotism" does not cover it; in people's minds they envision garish Orwellian standouts like Stalin or Hitler, and not the vast sweep of normal feudal governance, from Gilgamesh to Louis XIV to Lord Fahrquar.) Which is puzzling, since just saying the "f-word" allows perfect refutation to Will's claim that he and fellow conservatives are 'classic liberals.'

If you want a definition that spans the 18th, 19th, 20th and 21st Centuries, then hearken to the First Liberal, Adam Smith. 

Liberalism might best be defined as removing the impediments to individuals competing or cooperating fairly, free of cheating by those with unfair advantages or power, impeded only by three things:

- the balanced rights of others

- the blatant common good, and 

- accountability to the future.

Those things can be and have been redefined by each generation, especially as we expanded our definitions of inclusion - who gets to stand and speak freely in the assembly or forum - broadening that sovereignty from feudalism's 0.001% to the 20% of Pericles and Jefferson... 

... then to the 35% of Jackson and then Lincoln's emancipation of ownership over one's own body... followed by suffrage, civil rights and today's empowerment of so many smaller, long-oppressed castes. That expansion of inclusion and citizenship - the Great American Project - has been a grinding, too-slow process! 

But in no other society has it proceeded as quickly or with such inexorable-if-incremental momentum. And no definition of 'liberalism' that excludes such vital work is anything but lying hypocrisy.

It is in such a context of 6000 years - and even the Fermi Paradox - that brilliant defenders of enlightenment, like Steven Pinker, fail to make the issues truly clear, alas. Indeed, do you see anyone out there trying to set our current dilemmas in the context of millennia?

As for George F. Will's endless incantatory efforts to rationalize that today's conservatism is somehow "liberal," in anything like those terms - or his ongoing calumny that openly accountable civil servants are anywhere near the threat to liberal enlightenment posed by a cartel of boyars, murder sheiks, mafiosi, casino moguls, both open and "ex" commissars and inheritance brats - well, that would be hilarious...

...if it weren't cosmically traitorous to everything he claims to believe in. Everything that gave him... everything.  

And hence why this supernova of ingratitude and sellout rationalization is the very Worst American.

== Hammer this! Keynesian stimulus works and Supply Side does not. Wager it! ==

Hand-wringing over inflation can't mask what the few residually sane conservatives can see plainly, that Demand-Side works and Supply Side is an utter failure. 

Both parties have "stimulated the economy" to the tune of about $10 trillions, across the last half century, with starkly different outcomes. GOP Supply Side "stimulus" (gushers of largesse into the open maws of the rentier-caste) never once had remotely the predicted benefits.

 In contrast, responsibly executed Demand Side Keynesian interventions - of roughly the same size - have had palpable effects upon the economy, in predicted directions.

Money velocity, employment, inflation, consumer spending AND savings, plus investment in production and R&D have all responded in the intended directions. 

Let me reiterate that last point to you conservatives. Now, at last, manufacturing businesses are again pouring investment into productive capacity! Which SS was supposed to get them doing... and never did.

Demand side isn't all honey! Deficits do rise, though generally so do tax revenues. California is pouring cash again into the state's Rainy Day Fund and will send rebates to taxpayers again, soon.

Is it possible for Keyensian stimulus to overshoot? Sure! The left-fringe incantations called "MMT" constitute an insane cult, though so far also a marginal one without power. Yes, if MMT's Frankenstein version of Keynesianism ever took hold, I'd expect overshoot. But unlike the GOP, liberals are not dominated by their nutty fringe. (See the first part of this missive, about the only clade of pragmatists that remain in US political life.)

Still, let's reiterate. Keynesianism simply works, especially when managed by rational folks like Jerry Brown, Bill Clinton, and Gavin Newsom, ALL of whom used surpluses and good times to pay down debt.

In contrast, the Supply Side cult* never had a single positive outcome of any kind.

Not one predicted benefit ever happened. Ever and at all. Even once. (As Adam Smith himself clearly predicted, the rich generally do NOT act the way SS-cultists said they will.)  I have put up standing wager offers on that for years now and SS apologists always run away or change the subject. They know their cult incantations are wearing thin.

And yes, I also offer wager stakes over which party is more 'fiscally responsible.' 

The crux: No Republican is in any position to gripe about red ink. For any member of that party of symbol-obsessed, incantation-chanting wastrels to lecture us - ever - about fiscal responsibility or debt - in any way - is the most outrageous hypocrisy...

... one almost as stunning as liberals' inability ever to point that out.

-------

-------

* Stop calling it "trickle down"!  I know that sounds oh-so clever to you. But that is YOUR side's term and they just shrug it off, ascribing it to 'jealousy."

 Go to their terminology and demand direct wagers whether Supply Side ever delivered on its promised benefits - after $10 trillions in red ink - on even one single promised outcome!

The Wealth... and Infrastructure... of Nations

With release of Joe Biden's new Infrastructure and Stimulus Plans, reactions have gone as predicted. Mitch McConnell and the entire Putin Party have declared their intention to block everything and allow nothing. Standard incantations are flowing -- from democrat deficits! to cutting taxes and federal spending makes jobs and capital! And then Sen. Tim Scott, in his 'rebuttal' to President Biden's Congressional speech, accused him of breaking his promise to be a 'uniter.' (More on that below.)

Okay, let's stop letting this be about 'sides.' Sure, there definitely are sides, and one of them is insane. Still, our real enemy is a meme claiming that all points of view are equivalent and not subject to factual refutation. 

It is an incantation that's clung-to desperately by the farthest left and today's entire, mad right. It implies that just repeating your own side's magical incantations will suffice. In fact, even pointing out a flaw in some small, sub-component makes you a partisan of evil.

No. At best you will only ever be 99% right. And criticism is the only known antidote to error. So...

Let's instead talk facts. Focusing on that word-of-the-month "infrastructure!"

== The two diametrically opposite ways that the US and China 'invested' $20 Trillions each, since 1995. ==

Both China and the US spent the last 25+ years pouring trillions into plans to vastly expand their productive capacity, infrastructure, skilled labor force and R&D. 

China's approach was simple: fund vast projects like high speed rail and whole new cities, while lending/investing in 'companies' that were in large part State Champions. Partly due to beneficent trade policies by the West, China's approach worked spectacularly well.

So you ask: "What was our method? And how did the American approach fare? 

Glad you asked. Our approach was called "Supply Side Economics." Summarized, it was: snuff out every method used to create the prosperous and dynamic American Pax since 1940. Virtually end taxpayer-funded investment in R&D, infrastructure, labor force training and so on, because that's "picking winners and losers." 

Instead of using the mixed-economy methods that built America from 1940 to 1995, Supply Side insists that we give many trillions in tax cuts and other direct benefits to the top 0.01%, on the theory that they would then turn and invest those massive cash infusions into... well... factories, productive capacity, competitively oriented infrastructure, R&D and the 'job creators' own, expanding work force. 

Supply Side (SS) was the most expensive national development experiment in all of human history. So how'd it go? 

Well, the results are clear. With some notable exceptions, rich people don't do that!

Adam Smith explained, way back in The Wealth of Nations, that when they get a lot richer, aristocrats and oligarchs tend to pour any wealth increase into rent-seeking ("rentier") asset bubbles and passive (slow money velocity) investments, and into capital preservation for their spoiled inheritance brats. 

And into cheating. Aristocratic cheating of the very sort that the American Founders - inspired in part by Adam Smith - rebelled against.

Let's be even clearer.

Of the half-dozen major - and hundreds of minor - experiments in Supply Side, not one of them ever approached anywhere near coming true. Every confident prediction - e.g. that budget deficits would vanish due to burgeoning economic activity - every single SS prediction failed diametrically to happen as forecast. 

That is 100%. And when you stick with an utterly disproved hypothesis, that's not science. It's a cult.

== Then there is Money Velocity... ==

Among the most powerful of all economic metrics is one that conservative mavens and "economists" absolutely hate ever to mention, because it eviscerates every cult incantation that they cling to. But it also happens to be a crucial measure of economic health.

It's money velocity. The rate at which each dollar changes hands, generating wealth and prosperity and growth, whenever it is rapid.

So let's talk money velocity, money velocity, and money velocity. 

It PLUMMETS after every tax gift to the aristocracy. 

It rises (duh?) with every Keynsian infusion into workers doing stuff. 

Useful stuff like infrastructure. 

Period. Always, and that is always.

Bet me on this. 

Oh please. 

Solid metrics, adjudged by panels of retired senior military officers. 

I will have your house.

== Then there is 'fiscal responsibility ==

And now the hypocrites screech about deficits. 

First, Democrats score better than Republicans in every metric of good governance and outcomes, including fiscal responsibility - like whether across any 4 year administration any effort is made to turn the rate-of-change of debt-gathering toward negative. In other words planting your foot on the deficit brake or the accelerator.

Democrats - across entire 4-year administrations - always try to slow the debt train, at least a bit, and sometimes succeed. 

Republicans never even remotely try. 

Bet me on that, too.

== Allons enfants de la patrie...==

Aside. Ruling castes throughout history have rationalized that they were inherent geniuses or better by nature - not happenstance or luck - than the 'mob' who must never be allowed to get their hands on power. We see this in the narratives justifying outrageous Republican electoral cheating to hold power when they lose almost every popular vote. We see it in appeals to racial and other divisions. We see it in the excuses made for skyrocketing wealth disparities and CEO compensation packages that are unconnected to any metric of actual company health, voted by their pals in an incestuous clade.

Making one ask: "Where do you honestly expect such insatiability to lead?" The most fundamental 'tell' that these folks vastly over-rate their own intelligence - and hire flatterers to reinforce the stories - is their stunning ignorance of actual history.

No, no. Your refuges on private Patagonian or Ural mountains, or on South Island or Vanuatu or under the sea and not safe. Safety can be found by starting now top work on your reputation as decent human beings.

Back to topic.

== Time for a Roosevelt ==

So now Joe Biden wants to invest in productive capacity, infrastructure, labor force and R&D? And AOC & co. are criticizing it for falling short of their Green New Deal?

Okay, calm down there, hoss. AOC is brilliant... maybe even 10% as much so as her fans think. (Yes that brilliant!) And she is savvy about her role. By criticizing Biden's plan, she widens the conceptual Overton Window to the left, helping Joe look 'moderate.' And that is a GOOD thing, fools. It is savvy, team politics! And it is no license for any of you to go hating on Biden, or raging at incremental progress.

On the other hand, I need to say something about Modern Monetary Theory (MMT), a fashion among some on the left. MMT is stunning, incantatory bullshit and a betrayal of actual, working Keynsianism. There, I said it. The left has its shibboleths, too. They are just a lot fewer and less divorced from all objective reality or ethical behavior. But keep an eye on them, too.

As for the Biden Infrastructure/stimulus Bill... well... there may be flaws in the plan, sure. If there were sane opponents to heed, I would listen to criticism, the only known antidote to error. An era of negotiation among adults, based on factual evidence, may someday return. Only right now...

 

...right now Republicans are in no position to criticize at any level, in any way!

 

In fact, there is no greater hypocrisy than for a Republican to chide anyone about fiscal responsibility, or economics, and that especially includes their volcanically hypocritical sexual-predator finger wagging on morality! (Bet me - oh please - which party features 3x as many sexual predators among their recent and present upper ranks! Actually it's 6x! But I am a cautious wagerer.)

But on today's topic -- totally aside from their massive turpitudes and treasons, there is the simple fact of spectacular incompetence and desperation to cling to voodoo incantations. We've seen nothing like it since the 1860s! 

Except that those earlier confederates at least had one virtue--just one--that these present-day jackasses utterly lack.

Guts.

Alas, unlike those gray-clad, brave fools of the 1860s, today's Foxite-putinists will never, ever bet manly wager stakes on any of their mad assertions! 

If you try to get them to actually step up and back up their incantations, the craven cultists always rave and spew and caper and jibber and distract... and then run away. Above all, they will dodge ever escrowing (with a reputable attorney) actual wager stakes over any provable/falsifiable assertion. 

Which ultimately shows that environmentalists are right about the effects of pollution mixed with alcohol. 

Something has happened to confederate balls.

The Velocity of Money… and Revolution

If you’re perfectly comfy with the economy’s gyrations, then pay no attention as I explain what’s actually going on. Economists have been recognizing signs of serious dislocation for some time. Even right-of-center fellows like newsletter mavens John Mauldin and Lacy Hunt have finally recognized the core indications. I wish I could share their excellent newsletters with you. But – at some risk of misinterpreting or even treating them unfairly – I intend to paraphrase. And criticize.

A recent Mauldin missive correctly cites the most disturbing symptom of trouble in the U.S. economy: a plummet in Money Velocity (MV).

To quote John:  “You may be asking, what exactly is the velocity of money? Essentially, it’s the frequency with which the same dollar changes hands because the holders of the dollar use it to buy something. Higher velocity means more economic activity, which usually means higher growth. So it is somewhat disturbing to see velocity now at its lowest point since 1949, and at levels associated with the Great Depression.”

Somewhat… disturbing? That’s at-best an understatement, since no other economic indicator is as telling. MV is about a bridge repair worker buying furniture, that lets a furniture maker get dentures, so a dentist can pay her cleaning lady, who buys groceries….

There are rare occasions when MV can be too high, as during the 1970s hyper-inflation, when Jimmy Carter told Paul Volcker “Cure this, and to hell with my re-election.”  But those times are rare. Generally, for all our lives, Money Velocity has been declining into dangerous sluggishness, falling hard since the 80s, rising a little in the 90s, then plummeting.

Alas, while fellows like Hunt and Mauldin are at last pointing at this worrisome symptom, they remain in frantic denial over the cause. Absolutely, it is wealth disparity that destroys money velocity. Bridge repair workers and dentists would spend money – if they had any.

We have known - ever since Adam Smith gazed across the last 4000 years - that a feudal oligarchy does not invest in productive capacity. Nor does it spend much on goods or services that have large multiplier effects (that give middle class wage earners a chance to keep money moving). Instead, aristocrats have always tended to put their extra wealth into rentier (or passive rent-seeking) property, or else parasitic-crony-vampiric cheating through abuse of state power.

See my earlier posting: Must the Rich be Lured into Investing?

== Situation Normal: Cheating Flows Up ==

Do not let so-called “tea party” confederate lackeys divert you. The U.S. Revolution was against a King and Parliament and royal cronies who commanded all American commerce to pass through their ports and docks and stores, who demanded that consumer goods like tea be sold through monopolies and even paper be stamped to ensure it came from a royal pal. Try actually reading the Declaration of Independence. “Taxation without representation” was about how an oligarchy controlled Parliament through jiggered districts and cheating, and used that power to funnel wealth upward.

Here’s a fact that shows where we came from… and might be going: over a third of the land in the thirteen colonies was owned – tax-free – by aristocratic families.

The U.S. Founders fought back. After their successful revolt, they redistributed fully a quarter of the wealth and land, and they did it calmly, without the tsunami of blood that soon flowed in France, then Russia, then China. That militantly moderate style of revolution actually worked far better at fostering positive outcomes for all. For the people… and yes, for local aristocratic families, who retained comforts, some advantages. And their heads.

Nor was that the only time Americans had to push back against proto-feudal cheating, which we now know erupts straight out of human nature. The Civil War was certainly a massive ‘wealth redistribution’ by giving millions of people ownership of their own lives and bodies. During the 1890s Gilded Age, we avoided radical revolution in favor of reform – e.g. anti-trust laws.

Our parents in the Greatest Generation – who adored FDR – sought to prevent communism by keeping market enterprise flat, competitive and fair. Far less radical than the Founders, their reforms created the flattest social structure and the most fantastic burst of economic prosperity, ever.

And dismantling the work of that generation has been the core aim of the confederate aristocracy, since Reagan.

== Dire beasties! Debt and the Fed ==

But let me share with you more of the myopia of decent men. John Mauldin continues: “Debt is another big issue for Lacy Hunt. People compare debt to addictive drugs, and as with some of those drugs, the dose needed to achieve the desired effect tends to rise over time.”

John then shows a chart (he always has the best charts!) revealing the additional economic output (GDP) generated by each additional dollar of business debt in the US. Needless to say, the effectiveness of each dollar of debt, at growing healthy companies, has plummeted.

Um…. Duh? Once upon a time, the purpose of corporate debt was to gather capital to invest in new productive capacity (factories, stores, infrastructure and worker training), with an aim to sell more/better goods and services that would then produce healthy margins that pay off the debt, across a reasonable ROI (Return on Investment) horizon.

This would then actually decrease the net ratio of debt to company value, across a sapient period of a decade or so.  This approach still holds, in a few tech industries, but not wherever companies have been taken over by an MBA-CEO caste devoted to Milton Friedman’s devastating cult of the quarterly stock-price statement.

Today, companies borrow in order to finance stock buybacks, market-cornering mergers and other tricks that our ancestors (again, in the Greatest Generation or “GGs”) wisely outlawed. Tricks that GOP deregulatory "reforms" restored to the armory of cheaters. Tricks that enable the CEO caste to inflate stock prices and meet their golden incentive parachutes, with the added plum of pumping rewards for their Wall Street pals who arrange the debt. 

Every parasitic act of “arbitrage” is justified with semantically-empty incantations like “correct price determination” – mumbo-jumbo spells that bear absolutely zero correlation with reality.

No wonder each added dose of debt is ineffective at actually growing long-term company value! What’s so hard to understand? Why are Mauldin and Hunt puzzled? 

Oh, yeah. They are honest and sincere men, at last able to perceive symptoms. But alas, they are also far too stubborn to acknowledge the root disease -- a conspiratorial cabal of would-be feudal lords. Loyal to a fault... (well, these plutocratic connivers are their friends)… John and other residually-sapient conservatives choose denial over admitting that Adam Smith had it right, all along.

Instead, Mauldin focuses again and again on his chosen Bête Noir … the Federal Reserve, even though the Fed has almost insignificant power over any of the things we’ve discussed here.  It’s Congress – Republican for all but two of the last 23 years – who sent U.S. fiscal health plummeting, from black ink to red that’s deeper than an M Class dwarf star. Congress did this while devastating every protection against monopoly/duopoly or financial conspiracy.

== Misunderstanding your own icons and heroes ==

Consider that Friedrich Hayek – often touted as the “opposite to Keynes” – actually agreed with John Maynard Keynes about many things, like the need for a very wide distribution of economic decision-makers. In an ideal market, this would be all consumers, empowered with all information. (There goes Brin’s broken record, repeating “transparency!” over and over.) Though yes, a 21^st Century Keynsian will call for a government role in (1) counter-cyclical stimulation and (2) inclusion of externalities, like the health of our children’s children and their planet. (Note the spectacular success of the greatest modern Keynsian politician, California's Jerry Brown.)

Hayek complained that 500,000 dispersed and closely watched civil servants could never substitute for the distributed wisdom of an unleashed marketplace of billions. Hm. Well, that’s arguable. But so?

What does the right offer up, as its alternative? A far, far smaller, incestuous cabal of a few hundred secretly-colluding golf buddies in a circle-jerking CEO caste? That’s gonna allocate according to widely-distributed market wisdom?

Hayek spins in his grave.

This selfsame CEO-caste went on a drunken debt spree that blatantly served the cabal and not their companies, nor the economy or civilization.

Blaming the Federal Reserve for that is like condemning the owners of a liquor store for all the drunk drivers crushing pedestrians. Sure, the low price of booze might have contributed, but it’s not the primal cause. Oh. And yes, it’s been Congress that keeps funneling wealth from the middle class into gaping, oligarchic maws.

== Some of these guys almost get it ==

How I wish I could share John Mauldin’s newsletter with you! It’s smart! I mean it. I always learn a lot, the charts are excellent. Moreover, I get self-pats on my own back, for assiduously reading the smartest commentators that I can find, from every side. Also, John’s a cool dude and way fun. I read every word and its maybe 70% real-smart stuff!

(For contrast, see the super-smart liberal “Evonomics” site; the place where Adam Smith is most-discussed and would be most at-home.)

Moreover, John does honestly acknowledge – forced by the blatantly obvious - that income and wealth disparities are problematic and rising, while money velocity plummets.

Only then he goes to the newest catechism of the rationalizing right… arm-waving that technology is at fault. 

Yes, okay, automation has a depressing effect on middle class wages. So? Then it is time for a conversation about the social contract again. Like how to keep the middle class “bourgeois” – by keeping them vested in shared ownership of the means – as well as output – of production. It’s what the Greatest Generation did, while troglodytes accused them of “communism.” The most-entrepreneurial generation in history, they were far from commies.

== Some in-yer-face time ==

Okay, it’s that time again; so let me talk again directly to the confederate/feudal elites aiming to restore inherited hierarchies of old. This is no longer about Mauldin, but the would-be overlords standing right in front of him, in his blind spot.

Dear oligarch-traitors. Let me avow that human nature and history seem to be on your side. Our experiment in flat-fair-open systems always had the odds stacked against it. Hence, you feudalists will probably get your wish. Briefly. The middle class will very likely fall into proletarian poverty while you rake it all in.

Your evident plan is to leverage new technologies to entrench oligarchic rule, right? I depict something like it in EXISTENCE, though done by far smarter zillionaires than you.

Only – was it really part of the plan to wage open war on every single fact-using profession? Now including not just science and journalism and law, but the FBI, intelligence agencies and the military officer corps?  And all the folks who are innovating in genetics and artificial intelligence, too? Really? Are you that confident?

Or else, perhaps you are like so many past lords -- so lulled by sycophants that you cannot hear Karl Marx chuckling, as he rises from his mere-nap. (Copies of his works are flying off the shelves, faster than any time since the 1970s.) If so, you may get much more than you bargained for. More revolution than any sane person would want.

Adam Smith wasn’t the only one to seek a way out of this dilemma. Nor were the U.S. Founders. Will Durant – one of the greatest historians – said this, in his book, "The Lessons of History":


“In progressive societies the concentration (of wealth) may reach a point where the strength of number in the many poor rivals the strength of ability in the few rich; then the unstable equilibrium generates a critical situation, which history has diversely met by legislation redistributing wealth or by revolution distributing poverty.”

The recent “great” time for America was built by moderate, if somewhat leveling, legislation. The Greatest Generation chose a Rooseveltean alternative to violent revolution. And it worked -- inarguably, spectacularly -- till cheating once more gained the upper hand.

Me? I stand with the Founders. With Adam Smith and a flat-fair-open market society filled with opportunity for all and grand, cheat-advantages for none. A relatively-flat society that still has loads of incentives. One wherein true competition among healthy-confident equals can thrive, pouring a positive-sum cornucopia for everyone.

And now, yes, “equals” must include all previously-squelched sources of talent – genders, races and the raised-up/blameless children of the poor.

You confederates, you are the traitors to that flat-fair-open-accountable Better Capitalism. The form that stood up to Marx and quelled him to sleep. The only kind of market system that can withstand the coming wind, when he awakens.

I stand with the Greatest Generation… and greater ones to come.  

I stand with the moderate, scientific, flat-fair revolution that accepts facts and complexity and denies simplistic incantations. Moreover, that moderate/calm/eclectic kind of revolutionary numbers in the tens… hundreds of millions. We include nearly all of the most-skilled, and our growing cadre hears the alarum.

We awaken. We rise. And you had better welcome this. Because it will either be our reforms or the tumbrels of Robespierres.

Choose.