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On David Stockman's Out-Rage

Bruce Krasting's picture




 

 

72368558_96108

 

A few years ago I walked around David Stockman’s backyard. I was admiring his stone walls. We fell into a conversation about rocks and masons. David has a good eye for stone, and he knows the proper way to lay it up (A balance of symmetry and chaos, with the least amount of mortar possible). I was pleased to learn that he holds stone masons (all artists) in much higher regard than lawyers, bankers and politicians. My kinda guy.

We talked about the macro/micro issues at length - Stockman knows the numbers and the history. He has an interesting perspective on the global economic scene. I thought about the meeting later. I concluded that Stockman was not just passionate about the state of affairs – he was out-raged. I wondered why.

 

Stockman is still out-raged. His new book, The Great Deformation, is his opportunity to vent some of that emotion. He does a pretty good job of it. There are a dozen “names” who will cringe reading it.

 

stockman_0131364421181

 

This is a history book. It’s a detailed account of the key events since the Depression that have shaped modern finance. I love history, and I’m familiar with those events. Stockman’s spin on financial history makes for a very good read. There’s something for everyone. For example, were you troubled by the bailout of AIG, and TARP? If so, you’ll love this chapter:

 

Paulson's Folly - The needless Rescue of AIG and Wall Street

 

 

Do you worry that Bernanke has overplayed his hand with monetary policy? Stockman rips him apart:

 

The Bernanke Bubble: Last Gift to the 1 Percent

or

How the Fed Brought the Gambling Mania to America's Neighborhoods

 

 

Do TV talking heads influence Fed policy? Stockman says "yes".

The Rant That Shook the Eccles Building: How the Fed Got Cramer'd

 

 

Worried about US indebtedness to foreign central banks? That’s covered in:

Monetary Roach Motels

 

Stockman puts meat on the bones to some old stories. A few examples:

Nixon took the USA off of the gold standard in 1971. The motivation and timing was Nixon's burning desire to win the 1972 elections. He devalued the dollar for a short-term boost to the economy. Tricky Dick rigged the global currency markets to achieve his ends. That makes Watergate look like small beer. Very high stakes poker was played. Nothing new today.

 

During WWII the Fed capped long-term interest rates at 2.5%. To hold that level, the Fed bought up all the supply (A slightly different version of today’s QE). The rate cap continued until 1951. How it ended (and the secret fight between Truman and the Fed) is history worth studying. This is a window into what will happen when the Fed is forced to end the current QE. Not surprisingly, it was 5% inflation that ended cheap money in 1951. How do you think Bernanke's QE will end?

 

 

A central element of the US economy is Roosevelt’s New Deal – Stockman shreds it:

The payroll tax has become an anti-jobs monster

In truth the trust funds are both meaningless and broke.

The fast approaching day of reckoning is thinly disguised by trust fund accounting fiction.

 

 

There's plenty of one-liners; a few of the many I found amusing:

 

On George Kaiser's "loss" in Solydra: (How not to make friends in Tulsa)

by essentially "shorting" Uncle Sam, George Kaiser stands to harvest a 4.6 times return on his sham investment to "rescue" Solyndra

 

On Elon Musk (How not to make friends in SoCal)

That a megalomanical promoter like Elon Musk could walk off with half a billion in taxpayer money, blown in less than four years, and make himself the toast of Hollywood in the process is powerful evidence that the putative conservative parted has vacated the ramparts of the US Treasury.

 

On Bernanke ("befuddled academic") and Janet Yellen ("career policy apparatchik"): (How not to make friends at the Fed):

these hired hands keep the carry trades well lubricated and generate continuous opportunities for speculators to extract vast economic rents from deformed financial markets

Bernanke is the godfather of of the debt zombies.

 

On former Treasury Secretary Hank Paulson, and the AIG bailout:

in one of the most egregious derelictions of duty every recorded, Paulson and his posse of Goldmanite hotshots hastily and blindly shielded these behemoths (the TBTF banks) from even a dollar of loss on their AIG insurance policies.

 

On economists:

New Deal revivalists Like Paul Krugman are essentially telling fibs and peddling historical legends is not offensive merely because it distorts the distant past. These legends actually compound the deformations of the present by rationalizing policies that cannot succeed and will only bury the nation deeper in debt.

 

Glenn Hubbard was of the opinion that the Wall Street-coddling policies of the Greenspan-Bernanke era had been a roaring success.

 

The preposterous Fred Mishkin headed the posse of debt-bubble deniers who dominated the Fed's supporting cast. In a major study he concluded that the only bubbles in Iceland were those welling up from its famous hot geysers.

 

Keynes fancied himself a dandy, of course, and would never have been caught wearing the equivalent of Gandihi's loom. But when it came to nations and their unwashed masses, it is not at all surprising that he thought the nationalistic and autoartic Nazi Germany was the most likely candidate for early adoption of his program.

 

My only disappointment with The Great Deformation is that there is very little in the way of what could be done, versus what is being done. Stockman does offer up a few thoughts of what might be considered. These will get more than a few eyebrows raised on Wall Street and in D.C.:

- Abolish deposit insurance, strangle the Fed and shrink the banks.

- Adopt a Super Glass-Steagal. Abolish bailouts.

- Eliminate the Electoral College and establish strict term limits.

- A balanced budget, eliminate economic subsidies, shrink the federal government.

- Impose a 30% tax on wealth to reduce debt to 30% of GDP (assumes a $10T tax on the top 10% - think Cyprus on steroids)

- Eliminate income taxes and replace it with consumption taxes.

This is all blue sky stuff. It sounds alright, but it's not feasible for the USA to consider any of these measures. Stockman acknowledges that his list will never see the light of day, "They would never be adopted in today's regime of money politics, fast money speculators, and Keynesian economics".

 

Stockman sees nothing but trouble ahead for the USA. He realizes that the changes that are needed to avoid the big fall are simply not in the cards. Now I understand why he's so out-raged.

 

reillymasonry-IthacaNY

Hat tip:KR

 

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Sun, 03/31/2013 - 14:16 | 3393724 Binko
Binko's picture

Somehow getting corporate money out of politics would be a doable start. Ban political advertising completely and give all candidates equal time on TV and the internet.

Sounds radical but the primary reason our country is on a path to complete destruction or breakdown is that our elected officials are 100% controlled by short-term corporate interests. Remove the money needed to campaign and remove the chance for personal enrichment and we'd get a different breed of candidate who, when elected, could actually make a stab at doing what's best for the country.

Perhaps the most warped aspect of our current system is when spouses and other relatives of Senators and Congresspeople work as big dollar lobbyists. Do you think Senator Agribusiness is voting his conscious or is he voting for what makes his wife, a lobbyist for Monsanto, millions of dollars?

Sun, 03/31/2013 - 14:01 | 3393669 crosstherubicon
crosstherubicon's picture

Where was Stockman's rage when he was in a position to actually do something meaningful? I'm not impressed by this Johnny come lately.

Sun, 03/31/2013 - 13:57 | 3393651 moneybots
moneybots's picture

 "I'm more afraid of the banksters than the gubmint."

 

You should be afraid of both.  They are in collusion.

Sun, 03/31/2013 - 15:26 | 3393888 All Risk No Reward
All Risk No Reward's picture

If Bruce were a fan of history, he'd be telling people to read this...

Chapter 19—Reflation and Inflation, 1897-1925 in Carroll Quigley's Tragedy and Hope is a must read to get proper historical context.

http://archive.org/details/TragedyAndHope

Download the PDF and start reading at page 270 (in the PDF, the pages differ the paper book copy)

"In addition to these pragmatic goals, the powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank, in the hands of men like Montagu Norman of the Bank of England, Benjamin Strong of the New York Federal
Reserve Bank, Charles Rist of the Bank of France, and Hjalmar Schacht of the Reichsbank, sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country,
and to influence cooperative politicians by subsequent economic rewards in the business world."
p277

and

"Montagu Norman's Devoted Colleague in New York City Norman had a devoted colleague in Benjamin Strong, the first governor of the Federal Reserve Bank of New York. Strong owed his career to the favor of the Morgan Bank, especially of Henry P. Davison, who made him secretary of the Bankers Trust Company of New York (in succession to Thomas W. Lamont) in 1904, used him as Morgan's agent in the banking rearrangements following the crash of 1907, and made him vice-president of the Bankers Trust (still in succession to Lamont) in 1909. He became governor of the Federal Reserve Bank of New York as the joint nominee of Morgan and of Kuhn, Loeb, and Company in 1914. Two years later, Strong met Norman for the first time, and they at once made an agreement to work in cooperation for the financial practices they both revered. These financial practices were explicitly stated many times in the voluminous correspondence between these two men and in many conversations they had, both in their work and at their leisure (they often spent their vacations together for weeks, usually in the south of France). Norman and Strong Seek to Operate Central Banks Free from Any Political Control"
p280

"Norman and Strong Were Mere Agents of the Powerful Bankers

Who Remained Behind the Scenes and Operated in Secret

It must not be felt that these heads of the world's chief central banks were themselves substantive powers in world finance. They were not. Rather, they were the technicians and agents of the dominant investment bankers of their own countries, who had raised them up and were perfectly capable of throwing them down [Greenspan and Bernanke are trhe modern equivalents]. The substantive financial powers of the world were in the hands of these investment bankers (also called "international" or "merchant" bankers) who remained largely behind the scenes in their own unincorporated private banks. These formed a system of international cooperation and national dominance which was more private, more powerful, and more secret than
that of their agents in the central banks."
p280-281

There are a whole lot more gems like these sprinkled throughout this chapter.

Debt Money Tryanny

http://www.keepandshare.com/doc/4768883/debtmoneytyranny-6-1-pdf-60k?tr=77

Weapons of Mass Debt

http://www.keepandshare.com/doc/3324744/wmdebt-graph-3-79k?tr=77

Sun, 03/31/2013 - 13:29 | 3393558 the grateful un...
the grateful unemployed's picture

All policies work if there are sufficient controls to enact them. This talk about capital controls is bothersome, because it implies the policy makers are losing their grip. The solution is not new policy, because all policies are the same, fascist, socialist, capitalist. They all work as long as people understand their roles in the economy. At the moment we're transitioning to a jobless society, and its been a bumpy ride. Policy makers can't decide what everyone is supposed to do. The FED/UST/POTUS can't make policy for the Congress (not surprisingly Congress has a low approval rating). Now FedUstPotus is being forced to micrmanage the hot money issue, this hot money is good, this hot money is bad. More confusion. If Stockman is saying anything here, it's that policy needs to have MORE continuity, which tends to piss off those people who think the policy is wrong to begin with.

Ergo Stockman has no solution, except that we need a consistent policy, and that we all have some idea where we fit in the economic picture. (this is what all economists say, agree or disagree?) A lot of us are sitting on our hands, no jobs, forced into early retirement, and losing what wealth we may have saved in order to live. At this point Stockman is probably saying, to the policy makers, make up your mind, stick with the plan, and communicate your plan so people know what to do (so business knows how to invest its capital) The third alternative is to strip the policy makers of their ability, but that always ends in a difficult transition, and the new policy doesn't really matter, its all in the execution.

Sun, 03/31/2013 - 11:55 | 3393361 Fuh Querada
Fuh Querada's picture

"There is no solution"
Dr Paul Craig Roberts, recent KWN interview

Sun, 03/31/2013 - 13:29 | 3393555 j0nx
j0nx's picture

I don't believe in a no-win scenario - Captain James Tiberius Kirk

There is always a solution to a problem. You may not like it but alas there it is. The people hold the solution to this problem but they are reticent to use it so this fraud, criminal behavior and corruption continue to occur. I'm not saying the solution is desirable. I'm only saying that there IS a solution.

Sun, 03/31/2013 - 10:19 | 3393207 Ban KKiller
Ban KKiller's picture

I am ready to have another financial/social "experiment" in "money" placed/forced upon me. 

Long quotation marks.

Short pension plans.

Sun, 03/31/2013 - 09:23 | 3393163 overmedicatedun...
overmedicatedundersexed's picture

what are banks to do?? they need to write loans, they use .gov as thier biggest debt boy, they need to expand off shore business to write those loans, so close manufac in USA and ship the loans off shore to multiple countries across the world, see there are few jobs in USA because the banks needed the expanded debt markets , so america is the country that supports the world, not as so many think of america as raping the world you guys got it wrong.

if the outcomes to the west are lower standards of living, it is what is needed to keep the debt machine feeding the wall street and international banks, the banks must win.

Sun, 03/31/2013 - 09:24 | 3393161 Ned Zeppelin
Ned Zeppelin's picture

I commend David for his calling out of Hank Paulson, traitor to the American people and for whom one can only hope justice will come a-calling some fine day.

Sun, 03/31/2013 - 02:43 | 3393008 Augustus
Augustus's picture

Stockman is far from any financial genius.  Sure, he can do some legitimate name dropping from his past experience.  However, i suspect that he no longer owns that home you visited as he had a personal bankruptcy.  He wiped out the hedge fund investors that he suckered into his schemes.  He is an incompetent, not a person of wisdom.  Just because he can now state that the various trust funds will go broke does not confirm his genius with finance.  His only claim to fame is that he became a hero of the liberal media when he pubicly disagreed with Buch and Reagan.

Sun, 03/31/2013 - 16:04 | 3393998 pashley1411
pashley1411's picture

I was hoping someone else here was also willing to pop a few tail feathers off Stockman.  Seems like his claim to fame was selling a bill of goods to Reagan in 1980, when it was Volker who had to carry ball.     He was in power for a couple of years, and then gone, the tax reform of 1986 was implemented by others.

Stockman calls out some of the more brazen thieves of the late 20th century.   So what, we do that here day after day.   There are no feasible policy perscriptions in the NYT's article, none whatsoever.    Some tinkering naive political bs, like eliminating the electoral college, putting politicians on the public dole, hoping to abolsh human nature.    You use greed and fear, not whitewash it.

Government service is full of these fckin simpletons who don't have to live with the consequences of their actions.

Sun, 03/31/2013 - 09:18 | 3393157 TrulyStupid
TrulyStupid's picture

The "liberal media"?  No such thing...only the official propaganda organs of a one party state. Time to rethink this obsolete myth.

Mon, 04/01/2013 - 12:50 | 3396262 Village Smithy
Village Smithy's picture

Until you can make that statement and get nothing but "ups" we have a long way to go. There are just so many that still believe they are voting in a democracy. Keep fighting the good fight. 

Sun, 03/31/2013 - 10:04 | 3393199 ISEEIT
ISEEIT's picture

No such thing....only the ministry of truth.

Fixed it for ya.

Sun, 03/31/2013 - 05:28 | 3393057 mrdenis
mrdenis's picture

I didn't know THAT ....(in my best Jonny Carson voice)

Sun, 03/31/2013 - 01:45 | 3392980 Boxed Merlot
Boxed Merlot's picture

good eye for stone, and he knows the proper way to lay it up (A balance of symmetry and chaos, with the least amount of mortar possible). I was pleased to learn that he holds stone masons (all artists) in much higher regard than lawyers, bankers and politicians. My kinda guy...

 

Here in the northern California gold country, we still have many chinese stone walls, particularly in the "Notorious" Calaveras county built during the gold rush that have remained standing for well over a hundred years without any mortar.  Wisdom, like wealth is an equally valuable commodity, and I dare say, in shorter supply than the latter. 

In fact, it's most likely a greater barbarous relic of US history than Ben believes gold to be.

 

jmo.

Sun, 03/31/2013 - 00:42 | 3392921 kareninca
kareninca's picture

I wonder what Stockman is doing with his own money, now that even bank accounts are fair game.  I don't see him being able to do much more than we can.  His money, which he did sort of work for, is just as much on the line as (nearly) anyone else's.  I wonder if he thought things would go this far, and get this bad.

I do seem to remember reading that he was in gold and cash.  But that only gets you so far, in case of confiscation, theft, and devaluation.

My impression of him is that he wanted to make his pile, and then sit back in economic security and be reasonably pro-social.  Did anyone else notice that he was one of the winners of Mish's raffle?  There was a list of names  -  I'm assuming it was *that* David Stockman.  Funny that he would buy a ticket and then win. 

Interesting days, when someone as savvy as Stockman, is nearly as economically screwed as mere mortals.

p.s.  agh!  how did my post become first!  I added it to the end!  I don't want that much attention, even anonymously!

 

Sun, 03/31/2013 - 01:02 | 3392952 IamtheREALmario
IamtheREALmario's picture

My guess is that in the not too distant future as the US turns into an old Soviet era state money will disappear, but power and privilege will remain for some. It will be the power to inflict harm on others that will fuel the oligarchs and those not willing to be evil-toads will get the "Uncle Joe" (Stalin) treatment.

Pretty sad when psychopaths rule the world ... but then again, isn't that part of the point of the "age of chaos"? It is a litmus test ... a final exam of sorts for humanity. Why is it that we always fail?

Sat, 03/30/2013 - 23:59 | 3392859 Monedas
Monedas's picture

Abolish FDIC .... give us SDBI .... Safety Deposit Box Insurance .... double indemnity if the government confiscates contents !

Sun, 03/31/2013 - 01:37 | 3392976 Bear
Bear's picture

Great Business Idea ... one bank could sell another bank default insurance ... 32 pages of disclaimers and in small print ... "Should said default result in a material loss for the issuing company and consequently in default of said company then said company retains the right to obfuscate the purchaser of said insurance."

Sun, 03/31/2013 - 00:10 | 3392875 spooz
spooz's picture

Seriously?  You want to be carrying wads of cash around?  Not sure I like that idea.  Postal savings banks with accounts that are accessible electronically would be much nicer, imo.  I'm more afraid of the banksters than the gubmint.

Sun, 03/31/2013 - 00:28 | 3392889 Monedas
Monedas's picture

I was just highlighting .... that FDIC doesn't cover SDBs .... I haven't had a SDB in 20+ years .... I think I heard way back then .... it's illegal to store cash in a SDB ?  Important papers, jewelry and rare coins .... OK .... bullion .... not so sure !  If someone wanted to learn about the legalities of SDBs .... they would probably have to read Obama's Affordable Healthcare Act .... everything's in there !

Sun, 03/31/2013 - 01:43 | 3392850 spooz
spooz's picture

If deposit insurance is abolished will the government provide risk free money storage, like postal banks? Or will we be forced to throw our savings into the big financial casino?

Like the wealth tax idea, makes up for his big mistake in the past when he pushed trickle down supply side Reaganomics which resulted in a steady rise in inequality in our country. Top 10% sounds like a nice target for it.

I'd also like to explore the idea of giving selection of Senators back to state legislatures if we're going to get rid of the electoral college.

 

Sat, 03/30/2013 - 23:41 | 3392824 New American Re...
New American Revolution's picture

The only way out of this mess is to Elect A New Congress committed to making Congress take back all of their constitutional powers (Article I, sec. 7,8&9), and perform the  execution of these powers exclusively in the Public Forum.  This creates the transparency in government the people require in order to provide for the true Consent of the Governed.  At that point, the people rule the government and the access to the powers of government are denied all tyrants.   This ends the FED, 2B2Fails, Crony Corporate Capitalism automatically, cuts entire segments of goverment, balances the budget, and returns to the states, those constitutional powers of the states.

When the people rule their government, this is called Liberty, or more specificially, Political Liberty.   It is a catalyst in government that changes EVERYTHING, automatically.   It is not to be confused with Personal Liberty, which is an illusion and a lie left over from the French Revolution.

You can read about it all at www.electanewcongress.com.  It's all there.  The Declaration of American Liberty to sign, the 2014 Congressional
Campaign HM 535 to Elect A New Congress using the Declaration as the litmus test for everyone who runs for Congress, as it serves as transparency to enable the true Consent of the Governed, until Liberty is restored.  Then the operating model of Liberty will provide the necessary transparency.   Liberty is not that hard to install and the website answers most every question.  The problem is that too few really understands Liberty.

Liberty answers every problem Stockman and everyone else brings up because it completely removes and replaces the failing system of tyranny we live in today with a Liberty centered operating model of government.   There are no individual solutions to each symptom of tyranny.  The only answer is to grab it by its root, tear it out, and replace it with a Liberty based operating model.   Our Constitution works, we just have to use it properly as it was designed.  The problem in America is that we don't, as each power of Congress has been usurped and those with access to those powers now rule.   This is called tyranny, or when the government rules the people.

The Declaration of American Liberty lays out the basica contitutional rules in our Constitution required to restore Liberty and its operating model of government, clearly and completely.

Liberty is not that hard to restore, but it is hard to get minds to look past the symptoms of a systemically failed tyrannical state that David Stockman describes in his book.   Both he and we pretend that this is the only system we have to operate our governing system.   Once people understand their is an alternative, they will go there.  But first, they must understand Liberty because that is the alternative.   And when they do, they will see through the illusion and act to restore Liberty.

Liberty.  It is far more than you think it is.

Serfs Up America!

WmW Fawell electanewcongress.com

Sun, 03/31/2013 - 12:02 | 3393377 RafterManFMJ
RafterManFMJ's picture

Yea that's going to happen. I'm guessing you'll find your one hand filling with shit pretty soon while you wish in the other.

Sun, 03/31/2013 - 00:09 | 3392820 Monedas
Monedas's picture

I'm tired of Nixon getting the blame for taking us off the gold standard .... any Democrat would have done it worse .... it's right up there with .... Bush lied people died !  We were hemoraghing gold .... and what's happen since .... it's all been leased and sold ?  Give the  guy a break .... much worse things have happened since .... and not a word out of the MSM !  Why do we never hear .... LBJ took the silver out of our coins ? Don't fall for these stupid, lying, leftist templates !  End of message !

Sun, 03/31/2013 - 00:48 | 3392934 Vooter
Vooter's picture

What was he, your fucking lover? Who gives a shit? Do you actually spend time worrying about presidential legacies? Presidents are all assholes who absolutely, positively don't give a shit about you--why would you give a shit about them? Stop being a partisan monkey--if you still vote for anything in this country, you're a fool and an asshole...

Sun, 03/31/2013 - 11:59 | 3393372 RafterManFMJ
RafterManFMJ's picture

Nixon was the lover of the blue collar worker; he fucked every one firmly in the ass.

Price/wage controls
Birthed the EPA
Complete delinkage from gold yielded no real growth in wages since the mid seventies
Forced wives into the workforce to maintain household income while simultaneously depressing labor rates by increasing supply

His rotting cock fucks even now from the grave.

Sat, 03/30/2013 - 23:27 | 3392814 palmereldritch
palmereldritch's picture

Hey Bruce, Can you give us a hint as to what Dave's handle is on ZH?

Sat, 03/30/2013 - 23:53 | 3392853 Monedas
Monedas's picture

MDB ?

Sun, 03/31/2013 - 00:44 | 3392929 palmereldritch
palmereldritch's picture

Nah, more like TiS...

Sat, 03/30/2013 - 23:04 | 3392795 crzyhun
crzyhun's picture

Damn nice wall, which says to me that if we worked more with our hands our minds would follow. There would be less junk, fiat currency, Dearest Leader, Pajama boy, and the like. There would be pride in achievement and accomplishment would be rewarded and the result would stand.

Sat, 03/30/2013 - 22:06 | 3392740 azzhatter
azzhatter's picture

Interesting, I will probably read it. David is an enigma. I did business with his disasters at Heartland. For a smart guy he is a terrible businessman.

This only changes with violence now. The corruption is too entrenched. A few dead bankers and congressmen might wake people up

Sat, 03/30/2013 - 21:43 | 3392700 RaceToTheBottom
RaceToTheBottom's picture

I had thought that Stockman was an Austrian.  I can see now he doesn't fit into any category.

Sun, 03/31/2013 - 01:14 | 3392960 IamtheREALmario
IamtheREALmario's picture

I think he realizes that the money problems are actually "people problems". His solutions go to the heart of the problem. It is corrupt parasitic people using the power to create and distribute money, as a way to garner and consolidate undeserved power, that is the problem. In his world, he would by-pass the labels and simply take away their power. No system is perfect, but distributed power is much more preferable to consolidated power.

Sun, 03/31/2013 - 00:10 | 3392873 Real Estate Geek
Real Estate Geek's picture

He's in the same category as a reformed smoker.

Sat, 03/30/2013 - 21:39 | 3392687 Radical Marijuana
Radical Marijuana's picture

"disappointment with The Great Deformation is that there is very little in the way of what could be done"

From a practical and realistic point of view, there is NOTHING that can actually be DONE, except to watch and wait, as all of these kinds of Deformations get Greater! Everything that enabled those deformations to begin, and to grow at a nearly exponential rates, are STILL WORKING!!!

The central issue is the funding of the political processes, which has become a runaway postive feedback where the profit from fraud could be reinvested in more fraud. Nothing is more profitable than successfully corrupting governments! Probably the most leverage of all came from paying for the assassinations of politicians that otherwise could not be bribed or intimidated.

America has had more than a Century of the runaway triumph of the banksters taking control over the government. Pretty well all the checks and balances are gone now! The profits that the banksters were able to make from gaining the power to make money out of nothing, as debts, easily enabled them to buy up control over the mass media. Today there are a handful of huge corporations from which Americans get 90% of their information. The elections are puppet shows, put on by the mass media, which together are a trillion dollar industry, while the starring puppets in those shows spend billions of dollars on their performances. Even most of the voting machines have been privatized, and cannot be trusted.

WHERE in those social facts is there any reasonable hope that it is possible to fix these GREAT DEFORMATIONS??? As far as I can tell, the only thing we can do is develop our macabre sense of humour in order to try to cope by laughing at the evils, rather than crying over those tragedies, (which will not make any difference either.)

The established systems of legalized lies, backed by legalized violence, were the result of the methods of organized crime used to take control over the government. That process is now a runaway, which is going to turn most people into its road kill. I WISH I could think of something that could be done! However, anyone who fully faces the social facts that the government of the USA has been almost totally taken over by a banking cartel, run by a collective group of trillionaire mass murders, who are able to profit from every evil thing that they can possibly do, like profit from junk food, e.g. Monsanto et al., or profit from disease, like the pharmaceutical companies, etc., and profit from wars, which are NOT WON, other than by corporations making more money from fighting them, and so on, and so on ...

Therefore, I tend to appreciate an intelligent analysis of these kinds of political problems, BUT, I am not too disappointed by an absence of "solutions" ... since fully facing the results of that analysis tends to destroy any reasonable hope that there are any possible "solutions" ...

Sat, 03/30/2013 - 21:25 | 3392671 shinobi-7
shinobi-7's picture

Plenty of interesting thoughts indeed in this book but the problem with David Stockman is history or rather his history. Yes Nixon is responsible for the first phase of the undoing of the financial system and Stockman wasn't there yet. But as a supply-sider in the Reaganomics program, he is very much responsible for planting the seeds of ever growing debt. So sorry, but I do not see salvation in old school ideologues criticizing the current ones!

Sun, 03/31/2013 - 01:45 | 3392981 Bear
Bear's picture

They all have to spend to buy votes,it's just that the current crop in DC are buying votes with my grand children's money.

Sat, 03/30/2013 - 21:19 | 3392655 ramacers
ramacers's picture

who needs to read stockman or anyone else to see the big fall. concentrate on living thru it if advisable.

Sat, 03/30/2013 - 21:29 | 3392626 Yen Cross
Yen Cross's picture

    Paul Krudman,(props to akak) 'charlatan', would be an under statement Bruce. You're far too kind. 

    I'll read Mr. Stockmans book when it has an ending...

Sat, 03/30/2013 - 20:53 | 3392605 ptoemmes
ptoemmes's picture

I saw "I was admiring his stone walls", but read "I was admiring his stone balls".  Of course the latter does have some truth to it as well - not that you were admiring them literaly ;-)

 

 

Sat, 03/30/2013 - 20:07 | 3392528 q99x2
q99x2's picture

Since the Federal Gov't is worthless secede. There are plentu of people in each state to have their own effective governments. Things aren't like they were 200 years ago.

Sat, 03/30/2013 - 21:07 | 3392634 adr
adr's picture

Agreed, the only path forward is the slaughter and destruction of the central government. Or the starvation of it through secession. The secession movement in Montana and Texas will continue to grow.

They might even pull in surrounding states. North and South Dakota, Oklahoma, Kansas, and Nebraska would fall in line with a secession move by Texas and Montana. Collectively those states hold more resources than the rest of the country combined. Idaho and Arkansas would probably follow next. Iowa would be a problem because of the massive Big Agro bond to Washington.

Imagine a line of states from Mexico to Canada seceding, cutting the USA in half. States rich in oil, gas, and food. I'd move in a second. Let the coasts have their Silicon Valley frauds and Northeast MBAs. I wonder who would starve?

Sun, 03/31/2013 - 14:33 | 3393759 Binko
Binko's picture

Well, the West Coast wouldn't starve. California, Oregon and Washington are more than self-sufficient in agriculture. The East Coast and Rustbelt would not be so well off.

I agree there is no real solution that fixes ongoing problems and keeps the USA intact. The power structure is simply too massive, too entrenched and relentlessly focused on their own benefit.

The creation of a Gestapo style Homeland Security Dept that is slowly pushing police state control and survellience into every corner of the land was the final death blow to any chance of peaceful change. Any movement for change that arises and gains any traction will be crushed.

When the next big economic crisis hits, twice as bad as the last, with no remaining possibility of bailouts and bandaids then you will really see successionist movements start to pick up steam. Homeland Security will come down on them like a ton of bricks. But if the people are angry enough that might be the trigger for actual rebellion.

Sat, 03/30/2013 - 23:59 | 3392858 Real Estate Geek
Real Estate Geek's picture

They're pretty rich in ICBM's too!  If those states gained control of the missiles secession would be a fait accompli.

Sat, 03/30/2013 - 20:01 | 3392514 russwinter
russwinter's picture

A Must Read, David Stockman's New Book, the Great Deformation

http://winteractionables.com/?p=403

Sat, 03/30/2013 - 19:56 | 3392507 hairball48
hairball48's picture

The reason some people want the electoral college gone is a national popular vote would allow blue states like California and or New York elect a president much more easily. If a particular candidate carried NY and CA by margins in the millions, it might not matter that the other 48 states voted marginally for the other guy.

Sun, 03/31/2013 - 11:48 | 3393344 RafterManFMJ
RafterManFMJ's picture

Kalifornia needs to be broken into three seperate states. It is entirely to large to manage. The three states could be called north, central and looney tune California.

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