Guest Post: An Ungovernable Democracy

Tyler Durden's picture

Submitted by Gordon T Long of GordonTLong.com,

There are five distinct stages in the life cycle of sovereign nations. These life cycle stages map to generational cycles and to Long Cycles such as the Kondratieff Cycle. Since these cycles are fundamentally behavioral shifts, they consequentially take the nations economic and political process with it. Democracies become exposed and borderline ungovernable in Stage V. This is a result of the electorate's expectations, entitlements and James Madison's "Complicity from the Tyranny of the Majority", as outlined in the "Federalist Papers".

 

STAGE V

After bubbles burst and when deleveraging occur, private debt growth, private sector spending, asset values and net worth decline in a self-reinforcing negative cycle. To compensate, government debt growth, government deficits and central bank “printing” of money typically increase. In this way, their central banks and central governments cut real interest rates and increase nominal GDP growth so that it is comfortably above nominal interest rates in order to ease debt burdens. As a result of these low real interest rates, weak currencies and poor economic conditions, their debt and equity assets are poor performing and increasingly these countries have to compete with less expensive countries that are in the earlier stages of development. Their currencies depreciate and they like it! As an extension of these economic and financial trends, countries in this stage see their power in the world decline.

ACCEPTING STAGE V

Success breeds complacency and complacency breeds leverage. Fiat currency enables a late stage country to delay the realization that it is no longer rich, but not avoid it.  The developed and emerging nations are in obviously different positions and consequentially their behavioral traits and priorities are different. Accepting the realities of Stage V is still to come for the developed world, and when it does it will be sudden and shocking to most people -- and to the financial markets.

The Stage I, II and III countries remain dependent on the late-stage countries, which will make the Stage IV & V descent into poverty painful for all involved.

THE END GAME

Because governments are borrowing aggressively to offset declining private sector leverage, the focus of the next crisis will be sovereign debt/currencies rather than housing or the stock market.  In a period of major Global Imbalances, which the world presently faces, this will make democratic policy setting extremely difficult and in fact will show democracies to be borderline UNGOVERNABLE. In cases of grossly distorted expectations, such as the US, it will be found to be UNGOVERNABLE.

This above confluence and much more discussed in the video, indicates that it is leading to a Constitutional Crisis in many developed democratic countries by the end of the decade.

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falak pema's picture

the road to despotism has nothing to do with democracy; all to do with its destruction. 

a 1% construct is no more democratic.

JKearney3153's picture

democracy has zero ROI, that's why it is destroyed in a Centrally Controlled Captalitist Society. 

MillionDollarBonus_'s picture

Interviews with average Americans 

What do average Americans want from their government?

Harry Ramiro, age 55, NJ

"I retired 3 years ago after 30 years as a public school teacher and proud union member. I am currently living on a reasonable pension of 100k plus benefits and social security. I am very happy with the way things are going in this country and I'm happy for things to stay just the way they are. However, I am shocked and terrified that there is talk in this country about cutting public sector pensions. As usual, the Koch Brothers funded right wingers aren’t happy with regular Americans getting paid for their contribution to society. As teachers, we expect our students to take personal responsibility for their actions, and we reward students according to their academic performance. Likewise public school teachers produce top quality high school graduates and we expect to be compensated accordingly. For christ’s sake, social security is running a surplus of IOUs! There is no need for cuts to public benefits, and people who tell you otherwise are lying little weasels."

TimmyB's picture

What bullshit. Most teachers don't get Social Security because as government workers they had a different retirement system.

Furthermore, no one in the US gets Social Security at age 55. Go peddle your lies elsewhere.

thewhitelion's picture

So your pension is higher than your salary was?  Unusual.

crusty curmudgeon's picture

Interview with average Americans (Part 2)

Melvin Flump, age 34, MA

"I want my neighbor's sausage on my plate.  Gimme."

Hugh_Jorgan's picture

It's funny, they mentioned that the government will go into gridlock and the Federal Government will fall back on monetary policy to affect change. This ebing because the Fed has the option to move on its own. However, they seem to ignore the fact that the Executive Branch can much of what it wants as well, via strong-arm regulation. The Obama Admin is passing nearly 70 new regulations per day at present. Central governence by regulation and further societal decay be the earmarks of the 2012-2016 period. Hope and change delivered indeed!

upWising's picture

Interviews with average Amercians

What do average Amercians want from their government?

Mister Bate Duller Bonehead, aka MDB, age 75, NYC

"I retired 45 years ago after 3 years as an Mission-Critical Laser-Focused CEO and am a proud 60-year country club member. I am currently living on a bare subsistence-level pension of 900k plus benefits (vehicle, housing, security, travel) and social security. I was somewhat happy with the way things were going in this country under Bush and now I'm worried that things won't get better for people like ME. However, I am shocked and terrified that there is talk in this country about cutting CEO pensions and taxing us "innovators" and "job creators." As usual, the Union-Hall funded left-wing bed-wetting long-haired hippie-type Commie-pinko-faggot-Muslim "working class" aren’t happy with REAL Americans like ME getting paid for OUR invaluable LEADERSHIP, job creation, and contribution to society. As INSPIRING LEADERS and Pillars of Society, we expect our underlings, er servants, to take personal responsibility for their actions, and we reward the rabble according to their level of servility. Likewise mission-critical CEOS such as I produce top quality Mission(ary Position) Statements and Declarations of Shared Values, approve logos, prattle on during conference calls, as well as other important "laser-focused" functions, and we DEMAND to be compensated accordingly. For christ’s sake, food banks are running a surplus of canned beans! There is a HUGE need for cuts to public benefits, if not TOTAL ELIMINATION, and people who tell you otherwise are lying little weasels."

klockwerks's picture

This old boy would be to old for ANY position let alone the missionary popsition

redpill's picture

 

 

 

Centrally

Controlled

Capitalist

Program

 

What a coincidence.

JKearney3153's picture

RedPill....now you're just scaring the kids! FORWARD, COMRADES!!!

GOSPLAN HERO's picture

http://www.youtube.com/watch?v=C0IYnRQJas0

"Preußens Gloria" auf dem Roten Platz in Moskau

I never ever thought I would live to see this!

I'm glad to see Germany and Russia try to reconcile ... just a small step.

Seer's picture

Well, after all, it IS for adults only! </sarc>

Flatchestynerdette's picture

RedPill:

Centrally

Controlled

Capitalist

Program

 

What a coincidence.

 

*

JKearney3153:

RedPill....now you're just scaring the kids! FORWARD COMRADES!!!

*

Me: Guess what JKearney - I'm scared! RedPill has done a good job.

falak pema's picture

roi = death of society; stop thinking in terms of false economic models; society is first man then economia; not the other way round.

You guys have false gods of "self fulfillment". Don't worship the golden calf, that holy book does has some valid arguments if you strip it of its dogma. 

You'll never build a society on "me first" and the rest can go to hell.

centrally planned is not a war cry for the enlightened but for the deluded. They can't see who pulls the strings of "central planning". 

JKearney3153's picture

you're exactly right, but the one's with the most money think this way. 

 

-Lower Class: "I need to make money to survive!!!!"

 

-Middle Class: "I make 'enough' money so I don't have to worry about it, thus I am HAPPY"

 

-Upper Class: "I need to make money, to make more money, to make more money, to make more money, to make more money........"

Seer's picture

I'm no fan of economic stuff, of whatever economic "systems," BUT... it's like having to deal with one's personal finances- I'd rather be doing something else...

Whether we like it or not we DO have accounting to do.  This IS a finite planet; and, there's insufficient resources to grow perpetually.  Not to mention, concerns over impacts to the environment (how much can you shit in your yard before it starts attracting flies? [it's rhetorical! I don't want to hear from people who have a lot of land saying how they can shit forever]).

We're a bit slow to go about it, but I think that all that is occurring is, if not direct discussion, indirect discussion of the sense that our values are totally whacked.  No, I'm NOT talking about "values" as in social mores, but our awareness of the costs associated with the consumption of resources.

"Economics" is that accounting shit that we've put off and now we've got to own up (each as a person) that what we're willing to work for is going to change, that the seemingly unending spending spree days are no longer possible.

LawsofPhysics's picture

The true power brokers have all been on the same page for quite some time.  You and your children will work for Chinese wages, this has been the game plan for a while now.

newworldorder's picture

RE" Red Pll and LawofPhysics,

No suprise here on Immelts opinions. AS a CEO and among many other CEO's he has been or climbing the Senior Management Ladder for at least 15 to 20 years. Imagine not being contradicted or told you are full of s..t for that period of time.  You hang out with like minded people and underlings who tell you what you want to hear. As a group he and thousands like him, know what they like and are in control.  He talks about the Chinese model, but at least the Chinese purge their senior party ranks after a number of years.

 

JKearney3153's picture

which stage is where the Proletariat get blind-folded and given a lit cigarette? 

CrimsonAvenger's picture

This stage, if you're given the blindfold before the reaming and the cigarette after.

Shizzmoney's picture

Thought this article would be about America (which has gotten too big):

http://www.youtube.com/watch?feature=player_embedded&v=RCNd7h0fsdE

rich_wicks's picture

Hey, can somebody make the graph smaller?  I can still barely make it out.

When designing graphics, always assume that the people viewing it have an EGA graphics video card and are running on a 286 with Windows 3.0  That's intelligent.

rich_wicks's picture

Yeah, it's super convenient to enlarge the whole page to 60 pt font just so I can see a stupidly designed graphic.

That's fucking smart, bitch.  Why, I don't even know why I complained.  Obviously it's intelligently made.

rich_wicks's picture

OR somebody could fix the fucking graphic?

NAAAAH

Diogenes's picture

Cursor on image, right click, open in new tab. Then click on that tab and ctrl + or ctrl roll wheel on mouse.

crusty curmudgeon's picture

But you can click on the image...and that way you can see it all by itself at ... the same size!  LOL

Okay, you want to open the floodgates?  Well here goes...

(1)  Fix the link "Alt-Market" for crying out loud (2nd from top on left).  It's been like that for a ridiculously long time.  It detracts from the professionalism of the site.

(2)  Indicate the name of the author for guest posts under the heading so you don't have to click on it and load it before you know who wrote it.  There are some posts I'd much rather read than others and I don't like to spend the time clicking on all posts.

(3)  Speaking of the size of images, I sometimes click on an article just to see a larger version of the thumbnail -- only to discover it doesn't exist.  Always have the image of the thumbnail (preferably a larger version) on the article page. 

There.  I feel better now that I got that out.

marathonman's picture

The US isn't a democracy.  It is a constitutional Republic.  Not that the Constitution is followed or anything.

A Lunatic's picture

It is a Constitutional Republic in name only, and what good is a Constitution that isn't followed??

Harbanger's picture

That it isn't followed is exactly why we fucked ourselves.  What made us American was the limitation on Govt. power in our Constitution. So we went astray and know what doesn't work, lets restore what we know does work.

Seer's picture

We fucked ourselves by not stopping with: "You're free!"  But then we started talking about expansion (yeah, that "growth" thing), Manifest Destiny and all...

Or did it all go sideways with "go forth and multiply?"

Harbanger's picture

Did you know Manifest Destiny was a progressive movement started in 1845.  By democrats of all people.

Winston Churchill's picture

It looks pretty.

It has no tankard stains.

Its the other barbarous relic.

Burr&#039;s 2nd Shot's picture

Ungovernable is fixed by moar government, apparently.

1100-TACTICAL-12's picture

Exactly.. and they aint public officals they are public servants.

AlamoJack's picture

You got that right Jack!!  Oh, wait a minute.  I'm Jack.

q99x2's picture

I quit. Let's start over. This time I want my own nation-state. You take California and I'll take Pennsylvania.

Jonas Parker's picture

Time for "The Republic of Texas"!

AlamoJack's picture

AGAIN!!  And take back the Lakota pieces (Look it up) as well from those phucking US bankers.

A Lunatic's picture

I guess I'm ahead of the curve, I'm already ungovernable.........

Future Jim's picture

I just wrote The Honest Voter Amendment yesterday to solve exactly that problem.

The Constitution distinguishes between the states and the District of Columbia, and it authorized only the states to vote for the President, the Senate, and the House of Representatives. Therefore, the residents of the District of Columbia were not allowed to vote for the President or the Congress.

In 1961, the following constitutional amendment was thus necessary to enable the residents of the District of Columbia to vote for the President – but not for Senators or Representatives.

The District constituting the seat of Government of the United States shall appoint in such manner as Congress may direct:

A number of electors of President and Vice President equal to the whole number of Senators and Representatives in Congress to which the District would be entitled if it were a State, but in no event more than the least populous State; they shall be in addition to those appointed by the States, but they shall be considered, for the purposes of the election of President and Vice President, to be electors appointed by a State; and they shall meet in the District and perform such duties as provided by the twelfth article of amendment.

The reason that the Constitution prevented the residents of the District of Columbia from voting is because that would have been such an unhealthy conflict of interest.

The intent was clear, but the mechanism was clumsy and inadequate for the leviathan that is government today, so why not amend the Constitution to let the residents of DC vote, while removing unhealthy conflicts of interest?

Such an honest voter amendment could lead to very small numbers of voters in some places like the District of Columbia, so let’s also fix the electoral college while we’re at it.

The Honest Voter Amendment:

Only an individual human being may vote.

One may not vote while one voluntarily seeks employment with the government, loans money to the government, borrows from the government, receives a check from the government, or works for a business that receives a majority of its profit from the government.

No American citizen shall be compelled to serve the government, loan money to the government, borrow from government, or work for any business.

A state or district whose proportion of the nation’s eligible voters is less than one half of one percent shall have no Senators. A state or district whose proportion of the nation’s eligible voters is equal to or greater than one half of one percent, but less than 1 percent, shall have one Senator.

JEHR's picture

A lot more attention should be paid to the role of corruption and fraud in bringing down democracy.  When no one goes to jail for committing financial fraud, then democracy is already losing.  For some reason, the leaders of the various institutions of the world have forgotten the virtues of honesty, fair dealing and equality.  The justice system looks the other way and the result is that we have a failed democracy.

A Lunatic's picture

No one going to jail for committing financial fraud is actually proof that democracy is alive and well, as it serves as evidence that the majority in this country do not take issue with, and in fact are actively involved in frauds of their own. BTW it is not necessary for Democracy and Rule of Law to coexist.........

TimmyB's picture

Wrong---it shows our government is directly controlled by large financial interests. You know,the same fucks who got the government to bail them out with TARP and trillions of dollars from the Federal Reserve.

A Lunatic's picture

Maybe you havent noticed the resounding lack of societal outrage regarding what you and I perceive to be criminal acts. The only thing I'm seeing is a nearly inconsolable cry of 'I want my free shit too'.

bobthehorse's picture

America is a nation of ass kickers 310 million strong.

We defeated the Nazis.  We pulverized Imperial Japan.

The news of our demise is a little premature.

We're experiencing some tough times.

However, we will not go quietly into that good night.

foodstampbarry's picture

Dude, get real! We're now a nation of lazy fat asses waiting for our gov't check, eating KFC and wating for Snooki to appear on our credit card purchased flat screen that we'll never pay off. Sadly, that generation of DNA no longer courses our veins.