Aim your rocks at glass houses.
The Overton window is the range of policies politically acceptable to the mainstream population at a given time. It is also known as the window of discourse. The term is named after Joseph P. Overton, who stated that an idea’s political viability depends mainly on whether it falls within this range, rather than on politicians’ individual preferences. According to Overton, the window frames the range of policies that a politician can recommend without appearing too extreme to gain or keep public office given the climate of public opinion at that time.
Heaven forbid anyone appear too extreme. Our rulers keep discourse safely within the Overton window by allowing debate about the details of what the government does or doesn’t do. However, those who question the necessity of particular government agencies or programs, or government in general, are beyond-the-pale extremists and cast into the Abyss of the Unacceptable, one zip code over from the Abyss of the Deplorable.
The Federal Reserve has been much in the news lately. The term “repo” is shorthand for a repurchase agreement. The repo market allows those who own securities to sell them to lenders and repurchase them on a set day at a higher price. The difference between the sale and the repurchase price is interest to the lender. The repo market is huge, providing short-term financing for hundreds of billions of dollars worth of transactions daily, primarily in government and agency debt.
On September 16 the repo market blew up. Short term repos usually carrying interest rates of 1 or 2 percent required rates approaching 10 percent for the market to clear. The Fed stepped in, offering massive fiat credit to push rates back down. It wasn’t just a one-time glitch. Since then, the repo market has required substantial and repeated injections of Fed fiat credit. The Fed has announced injections totaling close to half-a-trillion dollars, or $500 billion, over the next few weeks to prevent the market from seizing up over year-end, when demand for repo financing is traditionally brisk. That will take the Fed’s balance sheet to around $4.5 trillion, the high reached after the last financial crisis.
There are plenty of articles about the causes of the blowup and its implications and SLL has reposted some of them. Not alone among commentators, SLL’s best guess is that markets are seizing up under massive and ever-expanding US government debt. Unless the Fed buys what nobody else wants, the market will crash and rates will skyrocket. Time will tell. Without getting further into those weeds, the incident follows a pattern inherent in any government-central bank sponsored system of fiat credit creation.
Credit expands faster than underlying economic production until interest and principal can no longer be paid and credit begins to contract. Governments and central banks meet that inevitable consequence with a still greater expansion of fiat credit, setting the stage for the next contraction and expansion. How successful governments and central banks are in forestalling economic and financial catastrophe is merely a detail. The important point is that the cycle, each successive crisis larger than the previous one, is a feature, not a bug, of fiat credit systems. Eventually they all crash.
Will the repo market be the tipping point for the next credit contraction? Apparently it already is, judging by the Fed’s frantic response. However, focusing on the details keeps the debate within the Overton window. Instead, ignore the details and look at the destruction wrought by the fiat credit system since inception. The dollar is worth about 2 percent of what it was in 1913 when the Fed was created. The Fed has amplified rather than damped economic fluctuations (for a masterful exposition of the destructiveness of US, European, and Japanese central banks the last several decades, see “The Japanization of the European Union,” Jesús Huerta de Soto, SLL, 12/13/19). Which prompts the Overton window-shattering question: why do we need central banks in the first place? The Overton window-shattering answer: we don’t.
We’re not yet to the point where shattering questions are asked about central banks or other government or government-aligned institution, but we’re well into stage one: the realization that the status quo is not working for anyone but a small sliver of the population. Stage two has also launched: recognition that promoters of the status quo lie incessantly. So too has stage three: things keep getting worse.
The lying is incessant. The Organization for the Prohibition of Chemical Weapons’ (OPCW) official conclusions about an alleged chlorine attack in Douma, Syria were unsupported by the evidence and several OPCW investigators raised unaddressed objections at the time. The findings were skewed to support propaganda justifying retaliatory airstrikes by the US, UK, and France. Justice Department Inspector General Michael Horowitz’s report detailed the FBI’s lies and deliberate omissions of exculpatory material to the FISA court. The Washington Post recently published what are being called the Afghanistan Papers, culled from a trove of Freedom of Information Act releases. Numerous military and civilian officials lied about America’s eighteen-year and counting war in Afghanistan from its inception.
This is a couple of weeks’ disclosures concerning official prevarication. The OPCW story hasn’t received much coverage in the mainstream media, while the IG report and the Afghanistan Papers have. They’re the tip of the iceberg. While more people are seeing the iceberg that’s above the water line, the Overton window and pervasive official secrecy still obscures the much larger part floating below the surface.
It probably doesn’t matter. There is one bedrock truth about governments: they are based on coercion, violence, and fraud. It’s easy to mistake lack of public reaction to stories like the above for insouciance or mental sloth, but many people have internalized that governments repeatedly lie, they don’t need the details. They don’t have time to follow all the stories or to speak out and protest the undeniable lies and injustices—they have lives to lead. There are often nasty reprisals for those who speak out or protest, and they know that, too. But an ever-increasing percentage of the populace know in their bones that contemporary governance is rotten to its evil core. Whatever trust that once existed between government and the governed is long gone and it’s not coming back.
What visibly agitates people are officially promoted issues and the attendant propaganda when they clearly see the effects on own their lives and well-being. Donald Trump rode immigration to the White House, astounding legions of pundits and self-proclaimed experts who endlessly assured us that illegal immigrants don’t take jobs, commit crimes disproportionate to their numbers, run drugs, or soak up welfare-state benefits. The unwashed masses rejected the assurances in favor of their own experience and knowledge.
Once a person or institution loses trust, propaganda and “explanations” only increase skepticism and cynicism. The crowd promoting anthropogenic, apocalyptic global warming climate change is the same one that’s promoted open immigration, welfare and warfare states, and central banking, among other follies. Climate change is nothing more than a Trojan horse for more coercion, command, and control, ultimately leading to global government.
The “deniers” reject the supposedly settled science. Science is never settled, there are only hypotheses that offer more explanatory and predictive power than previous hypotheses. Nobody listens to messages from messengers they don’t trust, and resorting to hysterically hectoring harpies doesn’t help the cause. AOC can take care of herself, but using a sixteen-year-old stooge is particularly reprehensible. Patriotism was once the last refuges of scoundrels, now it’s “the children” (see Clinton, Hillary, It Takes a Village: And Other Lessons Children Teach Us, 1996, Simon & Schuster).
The 1910-1920 decade kicked off the long bull market in government.
In the US, we got the Federal Reserve, the income tax, direct election of senators, and Prohibition.
The world got World War I and the Treaty of Versailles, the Middle East sliced up into European satrapies, the Bolshevik Revolution, and the Spanish Flu.
The next hundred years was a montage of government-sponsored horrors: the Great Depression, World War II, tyrannical dictatorships, mass slaughter, nuclear weaponry, terrorism, environmental degradation, the American military-industrial-intelligence-media-academic complex, and an unprecedented explosion of debt to pay for it all. Yet, after the bloodiest century in human history, in which governments killed an estimated 100 to 200 million people not counting the wars, questioning the legitimacy and necessity of governments is still outside the Overton window.
Arctic blasts of reality are set to shatter that window and freeze all those who believed its double panes would protect them. It’s necessary because the current system is never going to improve itself. Only a full demonstration of the horrors of the old and unimproved will open people’s minds to the possibility of something different, something new and improved. Stage four is system collapse and we’re on the cusp. It will be the direct result of the last century’s follies and will spell the end of the bull market in government.
The widespread dissatisfaction with the way things are, even before collapse, portends something much more ominous ahead. Brexit, Trump, Catalonia, Hong Kong, the Yellow Vests, and the other protests and unrest are relatively minor perturbations. Reform and separation are their predominant themes, not rebellion and overthrow. Reform, unfortunately, is impossible; entrenched elites’ money and power flow from the corruption. Separation and secession are the last, best hope for any kind of semi-peaceful resolution of the tensions besetting the world.
The Civil War was fought to preserve the federal government’s control of the states. The Overton window puts beyond question that the Civil War permanently vanquished all consideration of secession. However, the centrifugal forces of decentralization and devolution are waxing. Eventually they will hurl present political arrangements against the wall. Doesn’t some sort of peaceful breakup make more sense than an inevitably bloody and doomed effort to preserve the unwieldy dominion of the corrupt, parasitic, and bankrupt federal government?
For those of us bent on upending present political arrangements, it’s more logical to lay claim to part of the country as the US splats against the wall than to try and reconstitute a government to govern the sprawling American land mass, and a disparate and ideologically incompatible population of 330 million. Part of something is better than all of nothing. Texit or Appalachexit would be far easier than restoring a Constitutional republic to the whole of the United States. And there’s a tactical advantage to advocating for peaceful secession rather than violent revolt: the former won’t get you thrown in jail—yet, unless you’re in Catalonia or China—the latter might.
Let those who want to remain safely within the Overton window have their welfare and warfare state, their central bank, their faltering empire, and their domination by parasitic government. Let the rest of us discover freedom, true peace, and self-sovereignty in one or more breakaway provinces.
Surely if these outside-the-window notions are merely crackpot fantasies our efforts will fail and we’ll come skulking back, recognizing Washington as our one true master and begging for reunification. And if our efforts succeed? That’s stage five, a prospect we’re not to supposed to think of, dream about, or strive for, the stuff of our rulers’ nightmares. It’s why they installed the Overton window in the first place.