Guest Post: The Fundamental Injustice That Is Poisoning the Nation

Tyler Durden's picture

Submitted by Charles Hugh Smith from Of Two Minds

The Fundamental Injustice That Is Poisoning the Nation 

The guilty are powerful and free, the innocent burdened and oppressed: that is injustice.

There is a fundamental injustice that is poisoning the soul of the nation, and if it is not openly addressed then the nation will face the explosive consequences of institutionalized injustice.

Simply put, it is this: those responsible for the nation's financial crisis and its catastrophic after-effects are not paying for the consequences of their actions--it is the innocent, those who were not responsible, who are paying the price.

You can call it whatever you want: the Anarchy of the Super-Rich (as per Paul Farrell), the Financial Power Elite, the financial Oligarchy, Plutocracy or Corporatocracy, or the unprecedented concentration of financial wealth and political power in a financialized post-industrial economy. Whatever you call it, we all know this class of financiers and its minions got away with high financial crimes.

Do the crime, do the time--unless it's "white-collar" financial crime on a vast scale. Then you might pay a wrist-slap fine (a few million dollars from your treasure of embezzled hundreds of millions) and then you're free to go on your merry way.

The after-effects are not just the losses which can be totalled on a calculator: the really catastrophic losses are to the foundations of democracy and the economy. Democracy has been subverted--oh please, spare us the happy-story propaganda about "reform" and "the system worked"--and the economy has been incentivized to favor poisonously addictive financialization and the shadow institutions of corruption, fraud, embezzlement, favoritism, collusion and misrepresentation of risk. This might be summarized as the protection of vested interests, engineered and overseen by the partnership of the ever more intrusive Central State and the nation's Financial Power Elite.

The Central State, designed to protect the citizenry from an oppressive monarchy or Elite, now protects this Elite from the citizenry. That is how thoroughly the injustice has been institutionalized.

There is a second part to this fundamental injustice: look who will pay for the bailouts, guarantees and the interest on the borrowed trillions. Not the banks and bankers, to be sure. Who will pay? Those who the Central State can easily tap: taxpayers who earn most of their income from wages, and those politically weak players dependent on government payments.

Now that the bills of the bailout are coming due, the State isn't going after GE for more taxes. Heavens no--if you try that, the Panzer Division of GE's tax avoidance army would overrun you. No, the politically easy thing to do is raise taxes on wage earners and trim entitlements, because all the government needs to do is send down the orders and it is done: the taxes are withheld and the bennies trimmed.

To go after the Power Elite is just too difficult. They have the tax attorneys, the lobbyists, the campaign fundraisers, and all the rest.

The U.S. is just a third world kleptocracy on an Imperial scale. I explored the parallels with the Roman Empire in Survival+: the Elites increasingly avoided military service and taxation, the bedrock of Roman power, while the taxes on the middle class rose to such heights that this productive class was basically driven into serfdom. The bottom layer of State dependents was placated and made complicit with bread and circuses--yes, Rome had a vast "welfare state" and much of Rome's population received free bread to keep them quiet and pliant.

That is of course a road to ruin: let the Elite plunder at will, protected by the Imperial Central State, tax the productive class to fund the armed forces and free bread, and then buy off the lower class with bread and circuses.

The only successful model of reconciliation and justice we have is the "truth commissions" in other post-oppression autocratic kleptocracies. In countries that were deeply divided and poisoned by institutionalized injustice and exploitation, the healing process requires a public, transparent "truth commission" in which the guilty are brought forth to confess their sins against the innocent and face the consequences of their actions.

If a society cannot rouse itself to cleanse the fundamental injustice at the heart of its institutions, then it is effectively choosing self-destruction.

So far, the U.S. is pursuing the Roman Imperial model with an institutional zeal unmatched since Rome's fall.

Embedded institutional injustice has a price, a price which rises with every passing day of propaganda and prevarication. Some day the bill will come due and a terrible price paid in full. For those in power, the only concern is that it not be today or tomorrow.

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hugovanderbubble's picture

Thanks, Charles H, nice piece.

hannah's picture

...but if we cut only $38bil we can have a balanced budget and everything will be ok....!

crosey's picture

At 40,000 feet, such is the appearance.

At 100,000 feet, you see the entire globe in a steady creep back to feudalism.  The "kings" and "nobles" are no longer constricted by geography.

And so the macro-cycle continues, IMO.

Hernando's picture

Good observation.  The top 1/10 of 1% of the US, LatAm and Western Europe are intermarrying creating a global aristocracy. 

crosey's picture

It has been less than 100 years since Russia and Asia were feudal as well.

For those with access to, and an appetite for nothing more than power and wealth, feudal society must be nearly irresistible.

Escapeclaws's picture

I keep thinking of how they must envy those aristocrats who built the chateaux of the Loire. Imagine having Mozart or Chopin dedicate a masterpiece to you, a great patron of the arts--what better way to have your name immortalized? Where all the history that is written is of your family's lineage and noble exploits. Vast estates covered with forests, replete with game for hunting. Those others--they don't exist. Out of sight, out of mind. Yes, that's where we're going. Dahin, dahin, ich moechte ziehn!

crosey's picture

All was sweet until the beheadings and hangings started.....

Anonymouse's picture

Well said. That also goes to the allegation of an American lack of "culture". When it applies to manners and proper speech, that might be appropriate. But usually it refers to the lack of historic buildings, statues, works of art, symphony, and opera. All very nice things. But in Europe, virtually all were funded by the aristocracy for their amusement or aggrandizement. And that money came from the people.

It's the same argument when it comes to NPR, NEA, etc. in the US. The wealthy don't want to pay the full price for their leisure pursuits. Better that taxpayers subsidize the entertainment of the wealthy (oh, and in return, there often will be reserved $25 seats for the plebes as long as they bring their own oxygen and are not afraid of heights).

If you look at where socialism began, it was the wealthy. My theory is the wealthy in Europe saw how freedom and capitalism were class levelers in the US. To protect their social status, they started socialism. They would pretend to tax themselves with high rates. But written into the tax code were loopholes to allow them to avoid these taxes, so that the burden fell on the middle classes.

The rates for the middle class were not so high as to impoverish them, but would prevent all but a few from ever rising above their social position.

Result: the wealthy keep their money, their subsidies, and their social position, all while appearing magnanimous to most, allowing them the further benefit of sneering at the greed of those in the lower classes with the audacity to improve their lot in life.

hugovanderbubble's picture

DEBT haircut Schedule to be announced on Monday

Long-John-Silver's picture

I call dibs on the dumpster full of dead FRN's. I want to burn them in my fireplace this winter.

Beau Tox's picture

Yes, but on Monday the Barber Shops are all closed!

medicalstudent's picture

stopping this writing after the first sentence would have been adequate.


thanks for continuing.

Thomas's picture

Charles, despite the controversial blog yesterday (?), writes brilliant pieces. This one triggers two thoughts that have been swirling in my skull:

(1) In the money line of Denzel Washington's "The Great Debaters", the kid slams home the victory in a debate in which he had to support "civil disobedience" as a viable protocol, he points out that society better hope that it is viable because the alternative really sucks. Well these boys have chosen the alternative in this case.

(2) If we are heading into The Fourth Turning Jim Quinn would say, history will show that the trigger was not the financial collapse but rather the absence of appropriate response to it. This is, I believe, Charles' message.

Forgiven's picture

Exactly and well put.  The Fourth Turning will be quickly followed by the Fifth Turning, banksters on a barbecue spit, mmm...tasty.

Creepy Lurker's picture

What a fitting end for Chairsatan Benzebub. LOL

Thanks Tyler, I got a good chuckle out of that this morning.

Fox-Scully's picture

Are not the banks and banksters merely pawns to the super rich?

SilverDOG's picture



Most are trained to believe otherwise.

The 100 monkey effect, has only just begun.

euryale's picture

Except the lesson of the Roman Empire is that the Patricians of the Empire became the ruling families of the Middle Ages (Feudal lords). They became even more powerful after the Fall, and stayed that way until the Plauge wiped out enough serfs to give the surviving serfs some kind of leverage over the Patricians. The elite of today are looking forward to seeing those of us who grumble about being "wage slaves" get a taste of what real slavery is like - history demonstrates that the death of an Empire is tremendously enriching and liberating........for the elite, and they know it. Personally, I think the combination of extreme population overshoot and fossil fuel depletion could make this Fall much more horrific and much less predicatable than the Roman Fall (which could mean you are right about the cooking arrangements, but not in a way that any of us are going to relish.)

rocker's picture

'the innocent burdened and oppressed'    They will always be oppressed if most of them watch Fox and CNBC.

    I remember a asshole on ZH defending the self proclaimed professor Glenn Beck. The idiot actually believes everything Beck says.  How can the oppressed improve if they do not know the truth.

  The truth is, working people in this country settle for what the elite let them have. No more, No less. 

  Knowledge is power. That's why Fox brainwashes the burdened with lies and deceptions hiding reality and truth.

  Fox is convinced they can tell people HOW TO THINK.  So far it works very well. 

  Who said this famous quote?  "You have to shoot them in the Head".  It was on Fox and it worked well.

  This country is done. We are now Japan and the elite promise it to be so.

  One more funny thing I picked up on. How many people realize the elite have homes in France. 

  France, the nation they condemm to the oppressed in America. Freedom Fries. LOL on that.

eatthebanksters's picture

You should watch FOX News more often, it might dull your antagonism toward them.  Some of their editorial shows (Hannity, Beck...) have an agenda to be sure, but any intelligent person will respond to their rhetoric the same way they used to respond to Olberman and Matthews.  There are extremists on both sides of the political spectrum and they will watch what they choose to watch...FOX is no worse (or better) than any other news station with a bias, but I believe you think they are evil because they don't subscribe to your bias.  Who really wants to do the brainwashing?  (BTW, I hate the TBTF banks, I am getting my ass kicked in financially so you can't say I am one of the ruling elite).

rocker's picture

I don't watch any of them. I repeat. None. But I can assume your small defense reminds me that I spoke truth and you are already mentally corrupted.  Next you will tell me they are doing God's work as the professors of dumbness have proclaimed.

pazmaker's picture

I'm curious how you know so much about Foxnews to offer such a critique if you do not watch them?   How did you learn about them?   How did you become so intimate with the teachings of self proclaimed "Professor Beck"?



LFMayor's picture

LOL, +1 William Wilson by Poe!

rocker's picture

Much of what I watch comes from here listening to views. Then I investigate by going to You Tube and searching.

You see, I get my news and views from less that Mainstream news. Mostly BBC, it's all Free like ZH.

Free will live forever on the net. RT is "sometimes" interesting if you throw out any persuasions and keep the facts.

NewsTsar is quicklygaining my respect.  They report lots of factual news. So does Max Keiser, great for banking fraud news.   

I know what you are trying to say by asking how I offer such harsh critiques of MSM. Listened for 10 minutes and any smart person can confirm what I am saying. MSM is a waste of time. Something I value. 

It is MSM's own stupidity that I learn of their failures. For example, News, Congresswomen shot in head.

Go to You tube and type it in.  Then see feed that says. Fox news asshole said someone should do same.

Both are facts. I react to facts. Not views.  Example: ZH said Pimco is shorting bonds.  I confirmed same, waited for the pull back and today initiated short positions by buying TBT, TBF and PST.  Zero hedged I might add.

I might add to satisfy your concern, I do listen to Bloomberg during the day. For the Facts. They seem to be the best at reporting financial news. That said, when commentaries speak the mute button is close by. I don't want to hear bullshit from anybody.  I would rather listen to the XtraNormal Bears than MSM.  A great feature ZH offers now and then.

My biggest concern in life is how the rich elite rape the average Joe who worked honestly for a living. That being myself. I worked hard for my money and saved a little. I would like to keep it and possibly gain from my efforts. That being said, MSM will never help you do it.  ZH offers a better opportunity to learn and prosper.

My Opinion, (inside my brain now), politics are bullshit. Banksters are the scum of the earth. The bigger the bank, the bigger the scumbag, the bigger the crimes they get away with. Period.  Now you know who and what I am about.

Have a Good Day !!!    Eh !!!  

pazmaker's picture

Good Day to you as well Rocker.... I honestly don't know much about Beck ...I have some people tell me about him but the only few times I try to watch him he was very very annoying...tone of voice and mannerism's I couldn't watch him long enough to form an opinion on him.

rocker's picture

Much appreciated pazmaker. I noticed that I got trashed well today. That's O.K. by me.  I'm tuff enough. As I said, I worked hard for my money. I started with a Marine gym bag in hand and earned everything I own. Nobody gave me anything. I walked until I earned enough to buy my first car. Now I have three, a house, my Harley and a great women at my side. I still have the old Marine gym bag too. It reminds me of what it is like to have nothing and where I started from. To those who trashed me because they did not like what I said. Oh well.

Anonymouse's picture

For example, News, Congresswomen shot in head.

Go to You tube and type it in.  Then see feed that says. Fox news asshole said someone should do same.

I did as you suggested, and did not see it.  Perhaps you would be so kind as to provide the link since you have seen it.

Vendetta's picture

you're assuming that someone who loathes Fox News is "the other side". I don't see any unbiased news available in the media and therefore don't watch any of it.    Biased news isn't news, its all propaganda masquerading as news.  They effectively promote political division whether it is fox and their plethora of 'conservative' pundit shows bashing "liberals" or "liberal" msnbc type stuff bashing fox pundits. 

Its not news nor journalism, it is all propaganda.  All propaganda must have an element of truth to it in order to be "believable" by those who don't recognize propaganda and the intent to manipulate public opinion. 

rocker's picture

Excellent, right out of the military handbook.  Divide and conquer. They do it to the sheeple all day long.  

newworldorder's picture

Fox, MSNBC, CNBC, Drudge and Huffington,  in small doses daily allow each of us to capture the extremes in propaganda on both the right and left.

Nothing wrong with having the "intelligence" on which to base decisions. As long as the ZH community remains strong, it should be the cornerstone for our independent thinking.

Trundle's picture

Yes, they may not be better than the others- but they actually make up shit and feed it to the sheeple. 

redpill's picture

Beck is an act, and is far more annoying than wrong.


CH1's picture

Ah, yes, Beck hatred. Disagreeing is not enough; he must be destroyed, and every human being must denounce him publicly! 

Makes me want to watch more often.

samsara's picture


 if it is not openly addressed then the nation will face the explosive consequences of institutionalized injustice.

We will face the consequences of Institutionalized Injustice


CH1's picture

Ummm.... we have been for quite some time, haven't we?

silvertrain's picture

Tptb dont give a shit about nothing..They have money to burn..Im sure somewhere in america we could have built a nice bridge or road or something with this pocket change...

LFMayor's picture

That is a pleasant thought.  I wonder what sort of Belasarius they have to recall for defense?  Something tells me that he's not going to be using boiled hay this time around, either.

AlaricBalth's picture

Not taking my call? Well then....

Cyrano de Bivouac's picture

He's not there he went to Adrianople for some R&R.

chartcruzer's picture

We have reached the point of financial anarchy in many developed countries principally caused by unsustainable total debt loads and regulatory capture.   Global financial oligarchies have become masters at sustaining an immoral if not criminal debt load to sustain their revenues.    Our markets are being utterly manipulated to the detriment of the people (conservative savers) and the long term health of the country.

Behind this scene are a set of financial instruments resembling neutron super bombs.   The current interest rate derivative load in (just) the US is > $150T.   If rates rise significantly (to the historic mean) in a short period (a year), the results can be,,,,,,,.

We are sitting atop a 1000 exa ton financial warhead that must be serviced by the ever shrinking, tax paying, middle class if the financial system is to survive.  

There is no normal anymore.  Not anywhere.   The US can not be "fixed" as economic growth is too weak, government/private debt too large, and global competition for increasingly scarce resources too intense.   We are in the eye of the storm, it is moving slowly, and it is strengthening every day.


Time for a constitutional convension.,,,  "to refresh the tree of liberty"

JR's picture

I  second that.

America’s checks and balances are no longer in play; a private controller of the currency – the Fed – overrides those branches.  The Fed has involved, as a secret ingredient, America’s Gross National Product in its world operations.  The American people know not where their money has gone nor how much is gone.

However, the one necessary economic ingredient that the Fed cannot provide to solidify its new era of economics is a sustainable economic system – unless it’s a Soros system of ultimate control.  And that, IMO, isn’t going to happen in these united but individual states.

A lamprey…an eel “hides in the weeds in the bottom of a lake.  Sometimes it has to hide a long time. When a fat lake trout comes by, the eel shoots up and fastens its round mouth with a circle of teeth into the white belly of the fish.  The fish struggles awhile and then goes on about its business, with eel in tow.  It swims and feeds and lives for a long time, but it keeps getting thinner and weaker.  When it dies, the eel leaves it and goes back into the weeds…”  -- John D. MacDonald (Nightmare in Pink)

Fortunately, not all Americans are trouts.  America’s heritage is unique to her shores.  That 10 percent of people necessary to break this symbiotic, conspiratorial relationship between the U.S. Congress and the international bankers will force the system. These necessary Americans won’t agree to become slaves, hosts to a parasite. When it comes to national survival, desperate men are prepared to go to desperate lengths to turn the tide.

The real strength of this country is in its working people who have a Dream - of freedom - and they’re going to insist on a life - of freedom.

chunga's picture

I didn't leave my "ideology" left me. Or something like that...

newworldorder's picture

I would like to believe your statement on the 10%. Twenty years ago I would agree with you. Today I an not sure. Maybe yes in the Western or Southern states. The large population states you can forget about it. Bread and circuses are powerful urban tools.

newworldorder's picture

3+ on you comments:

I would like to add for most people -other than for daily needs-financial issues you described, do not resonate. The average person has in the past concentrated on daily living, which does not include knowing or understanding the various financial or governing systems that govern our daily lives.

On top of that the trust we place in our government has allowed the the scammers and bansksters to take advantage of our ignorance. In normal times our government provided a modicum of protection against these predators. This is no longer the case. The reality is that most people have not figured this out as yet.

To conclude, I don't think that it's as much  apathy that drives us, but the belief that someone in government is looking out for our interests. Katrina, the financial crisis of 2008, the gulf BP well blowout, etc., are all nagging reminders that this belief may not be true. Like a beacon or neon sign, people need to be constantly reminded. I hope the majority may come to realize our problems so that we can avoid disaster.

MachoMan's picture

If you are content with bread and circuses, then you have no incentive to change...  this is part of the problem...  I strongly suspect we get no material changes until the social underpinning is removed (either willingly or via third parties/external forces)...  the sight of bread lines leads to a different emotional response than catching someone swipe a card...  etc. etc.