Partisanship isn't all political

Yet more of my raw commentary from Hot Air, this on the long starting IRS scandal with the investigation of conservative non-profit organizations, which we are also getting hints of it going to Jewish groups and for-profit organizations in business.  Here I lay out something basic to keep track of in this thread on the topic:

Obama refuses to put the IRS in its proper place – he calls it an ‘independent agency’ but it isn’t. The IRS is under the Treasury Dept.

Now if the Tea Party groups reporting the increased forms and illegal questions are right, then this started in 2010 and it came from the one place that had one of the fastest nominees to go in place because of the financial ‘crisis’: Tim Geithner.

Tim Geithner was pro-Obama while in the Federal Reserve and knew the ropes, and was supposed to be wicked smart while being unable to do his own taxes. TurboTax Tim should have had a real good idea how to run the Treasury Dept. and yet within a year and half of his being in charge you get this sort of thing going on.

Thus TurboTax Tim is either:

- absolutely incompetent, doesn’t know any of the ropes in the financial side of DC and has no clue about how to properly run a large organization,

OR

- ran a department where it was not only allowed but encouraged by lack of oversight to start running a partisan investigation of those that the Administration didn’t like politically.

It can’t be both due to the amount of time TTT had in the FR: he did, indeed, ‘know the ropes’ and had progressed up the ladder of leadership high enough for Obama to appoint him. Basically the first option is non-viable as a cover-up fallback line.

That means TTT had put into place individuals who would run a partisan IRS. It takes a good six months to a full year for someone to actually figure out a high level federal job (look at every Administration post-WWII for this, as few get off the ground smoothly with appointees) and then start actually exercising decent oversight (or lack thereof) from their positions. Factor in time to go through the Senate and time to figure out the job and you get nearly a year and a half because the Senate wasn’t being all too swift on appointees.

If one remembers back to articles during the 2008-09 time frame pointed out that TTT was pro-Obama early on while he was at the Federal Reserve, so this raises the question: what, exactly, were the policies of the Federal Reserve and were they being influenced by Geithner towards partisan ends?

Any investigation of the IRS under Geithner must ALSO look at the Federal Reserve and start giving IT scrutiny because any head of the Treasury coming from the Federal Reserve that allows such things to go on under his command may also have had problems at his prior job.

If the IRS has problems, then Treasury has problems.

If the head of the Treasury Dept. had this sort of problem under his command then scrutiny into prior job activities in the financial sector under federal oversight must be performed because of the rapid pace in which the partisanship started.

Thus the Federal Reserve tenure of Tim Geithner going all the way back to his early NY Fed. days must be on the agenda. Not just a standard scandal due to an Administration, but also this actor put in place by them in the Dept. where it originated.

IRS then Treasury.
Treasury then Geithner.
Geithner then Federal Reserve.

Let your Congresscritter know as they might be a bit overwhelmed by the rush of events to figure this one out.

ajacksonian on May 14, 2013 at 7:28 AM

And then adding on to that just a bit later:

 

Spot on analysis. And TTT and the REB were college bosom buddies.

AH_C on May 14, 2013 at 7:44 AM

My thanks!

I try to state only what is the blindingly obvious to me and the early help of TTT with Obama was something the Left cheered about at the time. Go back to late 2008 to early 2009 in the HA archives and you can pull up some of the articles and commentary.

TTT was one of the engineers of the fiscal situation in 2008, along with a couple of his cohorts (Bernanke and Paulson), and they were strong-arming the bailouts through Congress and Bush, and then threatening banks who weren’t taking them when Obama came to office.

Something was and is seriously wrong with the Federal Reserve and its role in the financial crisis and the rise of Obama, then the slathering across all banks the problems of the few (mostly Citibank) is deplorable. It shows partisanship and an attempt to centralize the fiscal power of the US in the Federal Reserve by using it to partisan ends to get people into power to further go after organizations questioning the scope of US power: Tea Party groups.

Going after Tea Party and limited government organizations is not just a help to Obama but to the FR to escape scrutiny in ITS role in the fiscal mess we are in. It isn’t the sole author, but it is a major co-author and beneficiary of the Obama spending as it now has pent-up digital cash with which it can threaten the entire global banking system by destroying the value of the US dollar. To-date that money hasn’t been released and so inflation is low… the moment it gets into circulation your dollar will drop to some small fraction of its buying power and hyper-inflation ensue.

This time bomb must be stopped as well as the threat of financial destruction via the FR.

The IRS is just one part of a larger machine.

Pay attention and remember that fire must also be aimed at Geithner, Treasury and the Federal Reserve to get to the bottom of this. Geithner is a partisan and has been one to his own ends and beliefs before Obama. If you think a partisan federal government is a problem, imagine a partisan financial system that isn’t answerable to government.

ajacksonian on May 14, 2013 at 7:58 AM

I can point out that if one were a partisan in favor of an increased role for the Federal Reserve in controlling government policy or to evade government scrutiny, then working to quash those supporting those things would serve a dual function.  Also note that by Obama's attempt to make the IRS an 'independent agency' he is trying to isolate it from the Treasury Dept. and Tim Geithner's oversight.  This is not the case, of course, and Tim Geithner has control over these events by his position in the Treasury Dept.  It is odd to see a President try to protect an underling who should be easily bus-bound, but that is the case here.  It is by that odd protection that one must ask: why is President Obama trying to protect Tim Geithner?

And what was Geithner's agenda in the Federal Reserve and his role in the lead-up to the financial crisis?

Present through the lens of the past

Watching Dinesh D'Souza'z presentation of Obama's America 2016 was an exploration of the themes that have showed up in the immigrant experience in America as seen through the prism of not only Barack Obama but that of Mr. D'Souza.  Simple, factual presentation of his own background allows D'souza to present a contemporaneous view of Barack Obama's life that is not something that native born Americans experience.  This matters due to the roots of D'Souza coming from India and Barack Obama's parents coming from the US and Kenya.  More directly, Barack Obama Sr. would marry a woman of the US left, the far left, in the era of the Cold War.  It is to be remembered that the far left of the US picked up on 3rd World Anti-Colonialism that was fostered by the USSR.

The historical record of Barack Obama's life is what it is: one can disagree with ideologies, viewpoints and even simple analysis (to a degree), but the facts are what they are.  Barack Obama was brought up with his father, a 3rd World Anti-Colonialist, having bad traits washed from him by Obama's mother, particularly in respects to her second husband.  As her husband moved to embrace capitalism, she sent Barack back to her parents (who were also of the US left) so as to protect him from the shifting ideals and ideology of her new husband.  Gaining Frank Marshal Davis as a mentor that was a close friend of Barack Obama's maternal grandfather, put a hard basis for a pro-Communist viewpoint in Obama's early life.  The recounting of Obama's life, thereafter, is following his own footsteps and talking to the people who knew Obama and, most importantly, Barack Obama, Sr.

I grew up in the Dragon Year cohort, which is separated my a handful of years from both Obama and D'Souza and thus did not have their direct experience of the US left and its influences from the 3rd World Anti-Colonialist movement.  Those few years are enough to take that movement from a vital one (bolstered by the numbers of the Baby Boomer generation) to one of intellectual exhaustion.  Unlike these men I also grew up in a more crunchy form of socialist household, one that adhered closer to First International views and criticized later ones and those of Progressives.  Thus by the time I hit my time at University, I had a grounding in the rhetoric and intellectual methodology of the US left, although I had serious problems with its basic underpinnings.    With that said, those students that were on the left appeared to be losing interest in the actual underpinnings of their own ideology.

There is a fundamental  problem with 3rd World Anti-Colonialism as it was propagated in the US upper educational system: it couldn't explain why Western   Colonialism (or Imperialism via support of 3rd World regimes) was bad, while that of Communist expansion were either good or just not to be mentioned or glossed over.  If the imposition of economic exploitation is bad when done, then it is the activity that is bad, not the economic system of which power is doing it.  Yet at every turn capitalism was bad and communism good when attached to the same activity.  The disparity of wealth happened under both types of economic system, and there was no way that native regimes could pay for finished goods without regard if it came from East or West.  This is hypocrisy of the highest order, and yet is constantly whitewashed by those holding it whenever it was pointed out to them.  If the activity is one that is exploitative, then how can it be sanctified or whitewashed by any who support it?  And if there is a difference, then what is it and why can the same activity be good when done under different auspices if the activity, itself, is bad under any condition?

Without underpinnings in understanding ideology and sociology, or even just the basic rhetoric of socialism, there is no case that can be made and, worse still, it can only be a negative case when it is made as socialism has not uplifted any people to prosperity as a society, but only a select few apparatchiks who run the system.  Like capitalism.  3rd World Anti-Colonialism as a form of communism  puts a blame on capitalism for exploiting countries when those countries, on their own, did not have the basis for utilization of their resources.  That is due to a lack of skill sets amongst the general populace necessary to perform the tasks of creating and running an industrialized economy. 

As D'Souza points out, the colonial experience of India was one in which education was spread but upward mobility was sharply and precisely limited by the British.  After moving out from being a colony, India attempted 3rd World Socialism as helped by the USSR.  Which didn't work.  Yet the basis for creating a capitalist society had been left by the British in the form of an educational system and a bolstering of a merchant class (one of the areas somewhat available in India for advancement).  Socialist attempts did not bring about an economic base with prosperity and a general uplifting of the human condition, while capitalism did.  In talking to Obama's half-brother about his book, we find that he points out that the way Kenya went with 3rd World Anti-Colonialism actually retarded the growth of the Kenyan economy in comparison to other countries that were at the same or lower economic level in comparison.  Indeed, South Africa lasted longest under the colonial banner of the UK, and came out the best prepared to advance economically which led him to the argument that Kenya would have done better to have remained as a colony for another few decades.

In other words: colonialism isn't all bad.

India was able to actually leverage its education system and the higher general education of its population as compared to pre-colonial times to finally step away from socialism and start letting its people become productive and build the industrial infrastructure to support a modernizing Nation.  South Korea, that had been far more backward than Kenya and war ravaged has turned itself around into a modern, industrialized Nation even though Kenya had a head start on it at the time of Kenyan independence.

Yet the talking points from the US left that has imbibed in 3rd World Anti-Colonialism tell that colonialism and imperialism (as witnessed by the 19th century global land grab by colonialist powers) are only negatives and have no positive artifacts to them.  Yet there are examples of just the opposite of where colonial rulers have actually established educational systems, a relatively orderly bureaucratic system and even the nucleus of what could become a middle class.  If the caste system could not be wiped out in India, the excesses of it, particularly towards women at the death of her husband, could be stopped as well as death cults that struck fear into the population at large.  These are no minor tasks as they weren't being addressed under any prior ruling regime and continued as artifacts of Indian culture for centuries and longer prior to British rule.  On the flip side the Belgian Congo is an example of actual and deep exploitation and impoverishment of natives by a colonial power.  The counter to that are places like Indonesia, Malaya, S. Africa and (up to just recently) Egypt.  Where anti-colonial forces and revolutions have prospered, the systems put in by the colonialist powers have been diminished, repudiated, attacked or just abandoned to the detriment of the general population wherever that has happened.  Land redistribution does very little good if those on the receiving end don't know how to use it and, even worse, since 1970's era 'green revolution' methods require relatively large scale farms the efficiencies of such large scale agriculture are not only dismantled but can not come about until smaller land holders agglomerate back under a larger, incorporated farm system.

The glossing over of the benefits of capitalism, industrialization, private ownership of land, and actual job creation that necessitates an educated population are, at best, glossed over and receive head shaking from modern leftists to, at worst, questioning if having a good education system, modern economy and jobs is actually a good end goal for these societies.  What had started as a semi-rigorous religious outlook by Marx had, by the 1980's, lost all attempts at intellectual rigor and just wanted the patina of intellectualism by spouting good-feeling slogans without actually thinking what the preconditions for them actually are.  A utopian vision of society that has no realistic and well thought out anchor points to reality, that have the faults of its linkages unaddressed and those that do the criticizing attacked, is a recipe for not just disaster but slaughter on a scale unimaginable to the modern mind.  A modern mind that has, within its knowledge scope, two World Wars and the use of WMDs.

What had once been a relatively civilized, if authoritarian, economics viewpoint had morphed, by the mid-1980's, into a system that was now equating those who fought under no flag, for themselves and whatever grandiose slogans they offered, and did so without benefit of a uniform, accountability structure or even popular support as being the direct, exact equivalent of those who were held accountable, did have support, fought by rules of warfare, and had a civilized infrastructure around them.  Yet those at the beginning of the socialist project would have called those fighting without even the barest attempt at civilized behavior barbarians and, more importantly, destructive to industrialized society and the prospects of ever getting to socialism.  By embracing the USSR communist vision and talking points before the collapse of the USSR, by embracing sloganeering over methodology and rigor, and by ignoring the lack of cohesion between grand feel-good visions and the actual state of human nature, the modern left that joined with the 3rd World Anti-Colonialist movement had become not anti-colonial but anti-West and anti-civilization as they excused any and all deviations from civilized behavior as 'necessary to the cause' which is said in various ways.

The surest way to leaving modern leftism behind is to deploy the methodology and rigor of the old 'crunchy' socialists of the First International to these latter-day leftists inspired by socialism and communism, but who are unable to apply any rigor to their ideals and ideas.  By simply pointing out that private property capitalism is a necessary part of the creation of the pre-conditions for socialism because it must create a broad-based system of education to better exploit the working class is a key part of socialism that the modern Left can't even address nor understand as an intellectual concept.  You don't have to be a dyed in the wool socialist to find the intellectual vacuity of modern leftism (and its anti-colonialist cohorts) but just point out that under the dogma they are seeking and its end goals, that it makes no sense at all.  You don't even have to believe the underlying premises of old line socialism to do that, just point out that the end result of abolishing private capital and putting the State in control before the preconditions of Marx are met (and those do, by golly, vary greatly even in Marx's own works) is the worst of all systems that has no need to uplift and educate the poor that the private capitalist has, and just exploit the workers to the end of the State: State Capitalism.  The concept of State Capitalism didn't start with the Right but with the Left and was the exacting criticism applied to the USSR, Fascist Italy, Nazi Germany, Communist China and any place where the industrial preconditions laid out by Marx were not present.  I found that vacuity just by pointing out that rigor to those who were in University attempting to figure out their own leftism and the lack of any actual intellectual knowledge about the underpinnings of their belief system were astounding, then and now.  One can appreciate the intellectual rigor of the old left and that the basis for it is misplaced, but the new left preferred slogans to rigor, feeling good about being smart rather than applying mental capacity to actually understanding what it was they were saying, and hand waving that all of this would come about in a peaceful way when all evidence from the past of their own movement had demonstrated just the opposite, not to speak of the broader history of mankind as a whole.  There is a high degree of resonance with Mr. D'Souza as he recounts his early time in the US and trying to talk sense to those on the left who approached the overseas students and had no clue about what the actual conditions were overseas in their Nations of origin.  That was true throughout the left a decade later and to see that it had already been present a decade earlier was not surprising at all.

Dinesh D'Souza by being conservative in the late 1970's didn't get to see the decay of the modern left in the US from the inside and only recognizes the artifacts of it as a social commentator and conservative from the outside.  From the inside his recounting of how Barack Obama came to his beliefs, indeed took up the dreams from his father which were anti-colonial/pro-communist makes a lot of sense.  The disjointed life that Barack had with missing father in Hawaii, going overseas, his mother re-marrying, his step-father doing well in life and his mother sending young Barry back to her leftist parents, his time in Columbia University, Harvard, his Chicago mentors, traveling to Kenya after his father's death, associating with Bill Ayers... all of that leads to a form of US leftism that is anti-colonialist, pro-communist and wholly destructive to society as it cannot reconcile itself to the fact that the high ideals only impoverish people.  Keeping his father's dream alive is keeping a toxic viewpoint going and embracing it, thoroughly.  This meant a move away from intellectual rigor, and shifting the focus of the anti-colonialist prism to the American experience and utilizing the leftist structure in the US to rise to power.

If the US had shame still left from the era of Jim Crow racism, then electing Barack Obama as a 'uniter' meant that those doing the electing had never bothered to ask: just what was it that needed uniting?  If the goal is to create one America, isn't that contrary to the espoused values of multiculturalism and giving hosannas  to the differences in cultures within the US?  When one speaks about what they wish to achieve, and those goals are high, then one must ask 'what have you achieved that makes you think you can get this done?'  None of the lofty and intellectual rigor that used to be in the Old Left, that examination of methodology and seeing if those means were to any ends that were part of the long term goal, are present in Barack Obama, because he has flat-out been unable to state what the means to the end goals are and what they mean to each and every citizen of the United States.  And if his vision is that of anti-colonialism, then when he talks about the need to bring down the 1% then he isn't talking about the rich in America, but all Americans as even the lowliest beggar in the US, the homeless in the US, those gone without a job and having lost their wealth due to the housing market, that all of these people are still much, much richer than any average citizen in a 3rd World Nation.  As pointed out by those D'Souza interviews (and I do paraphrase to get past some of the intervening steps of loss of productivity and sovereignty), the way to redistribute wealth globally is to diminish the rich and make everyone poor and turn the clock back not just to the pre-colonial period but, by and large, to a pre-industrialized one as well with only a very few Nations having any productive capacity at all... and they will have nuclear weapons.  America, you see, under the leftist goal of 'no nukes', means no nuclear devices for America and a severely crippled industrial base unable to recover past productivity due to crushing debt and the welfare state.

I've read about those lofty goals during the 1980's and the US Left is stuck in the 1980's when it isn't stuck in the 1960's, and there is a disjointedness to the slogans, to the goals, and to the rhetoric and lack of logical rigor that is breath-taking.  Unwilling to study history, save through a PC lens that has pre-determined outcomes and results and must ignore anything that contradicts those results, a fantasy ideology is fostered about the past and what a great place the pre-colonial, pre-industrial era was.  Anyone who wishes to read about those pre-colonial, pre-industrialized times without the rose colored PC glasses should do so and then add in the every so often WMD and applying that set of scenarios to the modern world may experience a certain horror that awaits the US.

In Barack Obama's vision of 2016.

The three factions of the Republican Party today

I'm using my prior break-out of the factions within the Republican Party from back in 2008 to look at where things stand today with the candidates in the field.  I will be doing some re-posting of material from that and not going into the over-view of them within the current atmosphere of the pre-election cycle.

As they have broken out these three groups stand out, and they do have sub-groups within them but gain factional affiliation by their positions as sub-groups.

I)  First is the SecCons or Security Conservatives.  The strong position of the US to wage war in her defense was a vital concern during the Cold War and this faction was in ascendance then.  By putting military concerns first they were able to back a strong and final build-up against the USSR that covered decades and put the Soviet system which was always on the ropes down and out for the count.  These were the backers that won the equivalent of a World War without bringing on true nuclear conflict.  Their problems are in the realms of Fiscal, Social and Domestic policy outside of the military realm and with the draw-down from Iraq, the ongoing relatively low-level conflict against the Talibe in AFPAK and helping out a few other Nations in COIN (Philippines, Colombia, Kenya, Yemen) they are losing a strong position within the Republican Party.  While some of the candidates will support a continued level of military affairs, this faction has no backer who is first and foremost for the military.  Without the Soviets and with China now having its economy implode in bad debt, the lower threat of terrorism going nuclear is not one that pushes people to actively support the old style military structure.  The military, for its part, understands this and is adapting to the modern world, but it is a world with a lower need for capital intensive defense systems and without a large economic need the SecCons are being marginalized.

Part of the marginalization is the comfort to social moderates and liberals, plus a willingness to spend heaven and earth for the latest equipment.  Our times are no longer ones that allow for such extravagance and socially the pendulum that started swinging in the 1890's with Progressivism has, apparently, reached as far as it can go on the other end of the cycle.

II)  Second are the FiCons or Fiscal Conservatives.  This part of the Republican Party has been part and parcel of the 'Rockefeller Republican' brand for decades.  It is this section of the party that is now breaking up due to the Tea Party movement that hadn't even been thought of in 2008.  Today there are two branches within the FiCons and they are currently the ones on the internal battle-lines for the party, itself.  Thus I will go into a bit of detail here.

1) Rockefeller Republicans - These are the 'Establishment Republicans', the guys with the money and many of the reigns via the control of the party leadership and their influence has withstood the Reagan Revolution with its SoCon underpinnings.  These are generally seen as the Big Business supporters for earmarks, subsidies, tax breaks and so on via budgetary work in DC.  It is this segment that overwhelming benefits from the K Street lobbyists who use their outside money and revolving door connections to get inside influence on the federal budget.  This is mirrored in the Democratic Party, to be sure, but in the Republican Party when anyone spoke of 'fiscal conservative' between 1950 and 1980, it was this cohort that was being referenced.  Do note that they are FOR tax breaks but not FOR cutting the size of government, therefore any short-term gain in political advantage from tax breaks is off-set by further erosion of personal liberty of the individual due to larger and more officious government.  While it was this faction that called out the problem of SSA and M&Ms, they are also the ones most notable for being unable or unwilling to get these programs reduced or on a road to being abolished as fiscally unsound.  At least two of the current candidates come from this faction (Mitt Romney and Newt Gingrich) or are affiliated with it via their business and political outlooks, and while they are (apparently) at odds with each other on the campaign trail, they are both unwilling to do any wholesale revision of the US government.  Abolishing programs still leaves the apparatus to regenerate them in place, thus removing 'welfare' has allowed for other programs to flourish where there was once that single program and done at higher cost and less accountability.  No one who believes that individual liberty is the basis for society, the Nation, government and the State would ever espouse 'mandates' for anything upon individuals in the name of fiscal conservatism.

2) Tea Party FiCons - The largest faction of the Tea Party is in this sub-group within the FiCons.  Unlike the older cohort, this cohort sees small business and smaller government as the course to go for fiscal conservatism.  The argument that government is doing things it was never designed nor meant to do and not doing those things well or efficiently for the citizenry and, in fact, is infringing on individual fiscal concerns is one that is a 'Fusion' concept, of which I will talk more about later.  Unlike the RR-FiCons, the TP-FiCons are building a fundamental ECONOMIC case for the power of personal liberty to guide the economy that is not a RR-FiCon one.  Where the RR-FiCons are inherently Hamiltonian or Progressive in their outlook, the TP-FiCons are inherently Jacksonian and Traditionalist in their positions.  The inherent nature of an economy being made up of individual transactions at the lowest level seeking the most efficient means to enable such transactions and then allowing for a larger emergent phenomena  to take root based on those transactions is one that is immediately identifiable to TP-FiCons: it is not just Hayek but the nature of human liberty and its source that argues for this and argues against the intermediation of government in any meaningful positive (that is to say in the realm of positive liberty) way and only that it needs to exercise its negative powers granted by the people to safeguard the economy from aberrant actors who will not play by the set of rules for economic exchanges.  Government cannot make such low level decisions without huge negative impact on the overall economy and, no matter what other 'good' is generated, the lost value of human liberty to fully flourish is something that impoverishes rich and poor alike and makes it harder for the poor to advance.  This sub-group is aiming to remove the Establishment RR-FiCon death grip on the party via campaign donations: members directly donate to individuals running for office, not to the party.  This has only been going on, in a real sense, for less than 2 years and due to the economic times we are in and the failure of government to adapt to them (indeed it continues being the problem to the Nation, economically) the more the TP-FiCons will shift the RR-FiCons out of control of the party funds and the party system.

III) Social Conservatives -  In the prior work I broke this category up into the Christian Conservatives and the Traditionalist Conservatives, each with their own outlook on society and the role of government and the church in people's lives.  While not at logger-heads, they have not always marched to the same tune and it was only for a few short years under Ronald Reagan that both sub-groups had time together in-step and in-formation.  Today these two sub-groups are now getting a new blend via a third group made up of parts of each of them and the TP-FiCons: the Fusionists.

1) Christian Conservatives - Here the prior break-out of religious observation and moral law guidance that was the bastion of the Christian Conservatives is now finding that it can make an economic case, as well, which is uncharted waters for many Christian Conservatives.  Moral Law guidance is, itself, only secondarily economic and primarily about the duty of man to god and society to make both moral so as to get good government.  Thus, until the last 2-3 years, the idea that government could be used to promote a moral 'good' was an idea taken up by some candidates (Mike Huckabee in 2008, Newt Gingrich in this go around).  Yet this is fundamentally against moral teachings as government is the last, least and worst place to receive any moral teachings.  Anything that gets between you and God should be disdained, and yet the Progressive Era had slowly shifted Christian Conservative SoCons into this idea that government is the last refuge for the poor and needy to go... not to the actual people who make up the Nation as caring for the poor and needy is a directive to individuals, not to States nor Nations.  The idea that government can tell you when you can work, how long you can work, if you are worthy of 'retirement' benefits, and on and on have been a slow and steady erosion of the moral fiber of the Nation by assaulting the moral fiber of individuals inside and, increasingly, outside the realm of religiously observant Americans.  The moral line in the sand against abortion was the first sign that this erosion had gone too far, but that Christian Conservatives could only do this small portion of the work of protecting society and could not grasp the larger threat to the entire society on a moral basis that government was pushing.  The awakening of Christian Conservatives to the much, much deeper teaching of our rights being vested in us took over three decades to finally filter into this sub-group of SoCons, and the re-identification of not just Life but Liberty and the Pursuit of Happiness being prime movers granted by God is now spreading amongst the Christian Conservative SoCons who used to just stick to their faction knitting but now find a way to express a much deeper moral and religious belief for society via economics.  Being conservative it is a slow to move group, but once in motion little will stop it, and if the line in the sand is but a starting line for repeal of the Progressive Era, then it will be the individual who couple God, Faith, Life, Liberty and the Pursuit of Happiness as a continuous whole that will be the major part of the Fusionist sub-group.

2) Traditional Conservatives - These are the followers of Federalism, a society that treats its fellow citizens with respect, the builders of hearth and home (not just those who purchase one) and while religious to a large extent, it is the religion of conviction at home by the fireside with one's children and the role of man to build a good society for not just himself but for his fellow man, as well, as a great good and duty of man.  While this is the quietest faction of the SoCons they have been a part of the party since Lincoln, and have always understood respecting government but questioning its extent and growth.  For Traditionalists there is always an economic point to be made and it is centered on the family check book and how one spends money for oneself.  These are the individuals who uphold thrift, of neither a borrow nor lender be, paying back one's debts not just promptly but ending them as soon as possible, and for supporting the notion that a man cannot be free if he is in debt to any other man or institution via his finances.  This sub-group may be the first to fully Fuse with the TP FiCons as there are direct parallels (indeed very deep parallels) between household accounting and government accounting, and that if you owe someone then you are in their power due to your debt.  The case that man who is in debt is living on borrowed time and that his works are prone to failure and collapse (no matter if they last) is one that is understood deeply within the Traditionalist Community.   It is this community that is closest to the old Democratic Jacsksonian community (that left the Democrats in the late 1960's) and the amount of cross-over between the old trail blazers (Jacksonians) and the old first settlers (Traditionalists) have always made them able to get along on a social level.

IV) Fusionist Conservatives - Fiscal Conservatism has deep roots in not only societal good but the teachings from the Judeo-Christian heritage about duty to God and one's fellow man.  Unlike libertarians the Fusionists recognize that not all of man's liberties and rights are positive, as Nature gives us both equally (although not in equal amounts), so that the necessity of society to generate organs to watch over and stop the exercise of negative liberties and rights within society requires government.  Man is not wholly good nor evil, but has positive and negative rights and liberties which we can bias via moral teachings to curb the negative rights and liberties and enshrine the positive ones worthy of protection.  Government is to recognize that these positive liberties and rights are to be protected, not infringed upon, and the case for this comes not from legal proceedings but from moral teachings, upholding society, and holding government accountable for the negative powers we grant it to safeguard society and the individual.  This is a deeply libertarian approach, yes, but it is not made by modern libertarian channels but through ones of religious observance, religious teachings and understanding man's duty to God and his fellow man.  Fusionist Conservatism is, at once, deeply conservative and extremely expansive in this day and age as it is the naturally recognized antidote to tyrannical or despotic government.  When Barack Obama chided the people of Pennsylvania as grasping on to their guns, god and bible, he was mocking the very basis of what is the enemy of Progressivism and Socialism in all its forms.  These three, together, give the basis for personal liberty (guns), the originator of our liberty (God) and the written moral teachings of God (the Holy Bible) all in one swoop.  Throw in Gold and you have the result of protected personal liberty able to prosper with obedience to God and upholding moral teachings.  Gold is a result of these things, not a cause of them, and it is garnered through liberty ONLY.  Unwittingly Barack Obama named the Fusionist Awakening in these concepts and knows not the history of a debauched, debased and decadent society that adheres as leeches to government is dissolved by a devout people willing to undergo martyrdom for eternal salvation.  One laughs at these things at their peril, and in speaking of them the seeds that were already planted over decades were given final fertilizer and water to grow again.

At the rate of change for the Republican Party and Conservatism as a whole, the next decade is one that will be fraught with danger and great promise.

Government will need to climb down from its Himalayan Mountain Range of debt.  It can be tossed off, with great social turmoil, or it can climb down by jettisoning the infringement of positive liberties and rights in the way of retirement, medical aid and the million and one other things done in the name of 'good' from environment to energy to agriculture to 'the humanities' to education, either via slow phase-out or wholesale cut-off.  Government so large, so officious and, at the same time, so incompetent creates a Law of Rules in which any person is probably in violation of some rule or regulation at any given moment in the day.  The Rule of Law is simple and easy to understand laws that are clearly defined and enforced without favor nor fervor, while the Law of Rules is all about favoritism and payoffs.  To do this requires and understanding of our fellow citizens that we, as man, have been living over the margin and near the edge of the abyss waiting for one ill moment to topple us into despotism or worse.  To get back from that edge the argument that our personal liberties, rights and freedom are our own salvation in this life and the next, and that passing them off to others (which is so very easy) means that we, as individuals, become cold and cruel to our fellow man because we refuse to recognize his circumstances and help him out of them.  Government cannot do that, indeed it MUST NOT do that as that is not its place as a part of society.  It is just an organ of society, and one that processes the identified problems and waste material and gets rid of them... which is not the brain, in case this has been missed.  No better argument for chasing appetites to constipation of debt can be rendered than is shown by our current government which has been eating so much in the way of the positive it can no longer accomplish its duties to us, as citizens, via its negative powers and responsibilities.

This is a hard argument to make as the Deadly Sin of Sloth is one that guides this age as no other.  Yet the problems of our fellow man are not for someone else to attend to, but for us, as individuals, to ameliorate.  One cannot sit back and let others take care of things, because becoming glued to one's sofa soon means that you can no longer remember how to move from it and become the very sort of problem you were unwilling to deal with in the first place.  The heart of charity is not taxation, which is the negative liberty of theft who's power we lend for government in a limited area of commerce, but in the heart of man who is willing to give time, effort, though, a helping hand and last and least is cash to his fellow man to create a better society.  To get a more cohesive society (albeit with stark and fun differences for that is the essence of liberty on the positive side) we cannot entrust government as a caretaker or the builder of a safety net as it is not only prone to corruption but inefficient and will seek to grant favor to the few via funds that are not available, so as to expand power over the many.  Government granted positive outlook is tyrannical at its core because it can couple the whip with the reward and break man to it.  To stop that require accountability on the fiscal side, first, so as to get rid of the unnecessary appendages of government that threaten liberty in the first place.  When there is no safety net, no tax breaks, no subsidies, we are then left to our own devices to find a good way to live without the costly help of tyranny.

The current field of candidates reflects those trying to grasp on to the old, and dying, those trying to muddle through and a few trying to chart a path to a better future with smaller government and enhanced liberty for man.

Four years will not alter the fundamentals changing America.  We may crash off the mountains into debt, but that is not oblivion as we then get to the end state in a few days, and with next to no government, to boot.

The trends cannot be changed.

What can be altered is the outlook of individual to embrace what is coming and help soften it and explain it, so that we can get to a better place as a society and a nation.

If you dare to, that is.

Unthinkable, thought

The Economist presents an article on 02 DEC 2010 on How to resign from the club.

The 'club' in question is the Eurozone, and resigning from it is presented as a showing how Nation States can get over a debt crisis via examining past such crises in other Nations. The EU has a problem in that it is not a Nation State but a cooperating agreement amongst Nation States and, thusly, more of a confederation than a federation (as these things are normally termed for such governmental arrangements). Thus leaving the EU would be done to localize debt to those debtor Nations within the EU and as a result end the Euro as a currency. The article presents the rationale for this, but does not come down in an advocacy position, but a neutral one as this is an article to examine the process not the implications of it beyond the economic.

To start the reasons for leaving are put into question form:

The idea of breaking up the currency zone raises at least three questions. First, why would a country choose to leave? Second, how would a country manage the switch to a new currency? Third—and perhaps most important—would leavers be better off outside the euro than inside it?

Why Leave

First is the 'why' question for a country - what is the rationale for this leaving of a common currency?

The primary reason is economic independence from the common currency and there is a reason for doing so for both strong and weak economies (as measured in their economic activity, debt load and state of solvency).

Germany, with a relatively robust manufacturing economy that has been shedding social programs and increasing the retirement age, is seen as able to cover its debt better than other Nations in the EU. Thus their portion of the common debt would have the backing of a strong currency and even see an influx of funds from other countries from individuals seeking a 'safe haven' for their cash. This would require massive changes to the banking regulation which seeks to get at savings accounts outside the country, but that could be put down as effective for EU funds only, and those converted to other currencies (like the brand new Deutschmark) would not have that regulatory overhead. This would be kept in check, to a small extent, by keeping lines of credit open for liquidity to foster economic activity. The change-over would cause an export problem as the strong DM would mean that the value of its goods would rise as compared to under the Euro, but that would be from a stable economic base that has actual liquidity to it. Thus a transition, though hard, would not be expected to be long.

Greece and weak countries, at the other end of the scale, also need economic policies that reflect their populations. The Euro has been no boon to these countries, either, as the ability of the earned Euro to purchase goods from stronger Nations within the Eurozone has decreased. Weaker economies having to compete inside the Eurozone are unable to do so and they are pressed from the outside by Asian manufacturers able to undercut Eurozone production costs. Thus, while holding to a Euro means having a more powerful currency, you have far less of it due to lack of economic activity and governmental promises on retirement and other payouts to selected groups of people within their Nations. Leaving the zone means that these countries (Greece, Spain, Italy, Portugal, Ireland) can put out currencies that can be devalued and yet find a stable floor based on the state of the economy. These Nations would become quite poor as they have a non-economical basis for their social structure in regards to working life, labor costs, and taxing policy, all of which would return to local control without EU overhead. And independent Nation is better able to navigate social policy, as an example, than a larger Confederation forcing an end social policy via a currency and regulatory system that does not take local conditions into account. These Nations did not change their policies coming into the Euro, beyond some one year benchmarks, and continued their spending policy for a generation based on lower interest loans garnered by joining the EU. Now that all comes due with defaulting on debt looming on the horizon.

How to Leave

The 'how' part is the mechanical part - the way to get from Point A to Point B.

Here the article is short and sweet, with some analysis after:

How could this be done? Introducing a new currency would be difficult but not impossible. A government could simply pass a law saying that the wages of public workers, welfare cheques and government debts would henceforth be paid in a new currency, converted at an official fixed rate. Such legislation would also require all other financial dealings—private-sector pay, mortgages, stock prices, bank loans and so on—to be switched to the new currency.

That plus have the printed and coined new currency ready to go, and having the banks exchange the old and new. The original set conversion ratio would last for a period of time and then the old scrip is no longer legal tender (although a minor collector's item for numismatic enthusiasts for generation after). This has been done a few times in the history of the US and happens far more frequently outside the US.

Argentina is a Nation that did this during its fiscal crisis and, as a result, destroyed its own banking system with a contraction in available credit to cover losses on loans that had a more favorable exchange rate than other items so as to keep savers mollified.

Germany would tend to have a stronger currency than an abandoned Euro, not only because Germany has left the Euro but due to the Euro having represented an average value across all Nations: the less capable Nations brought the value of the Euro down as they did not change social and fiscal policy to that of thrifty Nations like Germany. A new DM would gain its own adherents and those that then convert their local currencies on the basis of the DM for purposes of trade and commerce. The cost of the value of its debt would fall, over time, if it could keep its fiscal house in order and maintain a productive economy with low economic overhead by the national government. Its current holdings in other EU countries would be devalued while its own currency gained strength, and limitations on capital movement from weak countries would limit the ability of Germans to shift those funds or convert capital into liquid assets.

Weaker Nations would have to set limits on the amount of withdrawals per person, per year to transfer into a DM. This is on top of the losses that all people would suffer (personal, commercial, financial and institutional) due to the sudden change in value of the Euro in regards to the currencies leaving it. Those in weak countries paid in devalued currency would not like that state of affairs and yet see that they have limits on exactly how much of that currency can leave the Nation. This acts in the form of a firewall that limits currency trading and capital flight at the expense of internal accounts being devalued. Thus some capital is retained even during a general currency devaluation. Here good laws would allow for a legal process of wealth transformation to take place so as to avoid lawsuits over the incurred costs of devaluation. The internal scrip for these Nations would be debt obligation (or IOU) scrips that would, over time, be converted to a real currency. It would be an extremely devalued currency, yes, but the only one for legal tender in the Nation after all the Euros had been converted to them.

While a shrunk Euro would still have its member Nations to back it, those outside of it would be faced with the EU board acting to the interests of members... although the question of how long the Euro would survive comes into being with Germany leaving or one or more of the weak economies deciding to 'go it alone' to survive.

Fallout

Shifting a National currency, even when done via normal means such as the need to replace one format of bank notes with another or going on/off a gold/silver standard is one that does happen for normal Nations. In the latter part of the 20th century this has happened more often than most people think as you consider the Nations that have gone off of a worthless internal scrip to create one of value: Poland, Hungary, Czechoslovakia, Romania, Bulgaria, East Germany (moving to the DM then Euro), and Russia. These Nations all faced a scrip that was uniform under Communist rule, but of no real value outside of its trading block. Dollars went for ten to one hundred times the official exchange rates inside these Nations, and when time came to break away their currencies got unhooked from the centralized system run from Moscow. We don't notice those change-overs, in the West, but they did happen quietly and efficiently as the Eastern Bloc vanished in a matter of years, taking Russia with it out of the Communist era.

Argentina has been more problematic, but while facing a set of challenges for having a currency not pegged to a foreign currency, it is a set of problems largely under the control of the Nation and its policies. That is the goal of the exercise, to bring the financial house under sovereign control and have a Nation set its own path on what is agreeable and disagreeable to it and suffer what fate hands out to those choices.

The US

The United States has many artifacts of the EU in its common currency arrangement: member States taking on huge debt load at rates that they could not normally get, a massive decrease in productivity due to the overhead of the State, and the flight of capital and individuals from some States to others. Additionally the National system has taken part in multiple Ponzi schemes for public programs, these being Social Security, Medicare and Medicaid, all while enacting laws and regulation that increase the cost of manufacturing causing a flight of capital overseas for decades, thus lower the rate of economic growth. On a National level spending, regulation and social payouts are the mirror of that in some European Nations now looking to cut back on them severely: Great Britain, Germany, France. Meanwhile there is also a debtor State problem with a number of States with their own social programs that are fiscally unsound in the realm of public spending: CA, NY, IL, MI, MA all come to mind.

There is already the start of a debt scrip system going on in CA as the State is now offering IOUs to those who should receive refunds on their income tax. At this point CA does not accept such scrip to pay off debt to the State, but the moment it does so it has its own and devalued currency. NY has made some similar sounds as well as a few other States so highly in debt that they cannot offer standard refunds on taxes.

This state of affairs of States having their own currencies existed right up to the Civil War and is perfectly legal but how you do it is important, and CA is not headed into good territory there.

Here are the powers of the Constitution in this realm:

Section. 8.

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

To borrow Money on the credit of the United States;

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;

[..]

Section. 10.

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

CA is running afoul of Section 10 of the US Constitution and to complete its system of scrip would be required to offer gold or silver backing for its debt obligations. Basically a gold or silver debt scrip.

Just how much gold and silver does CA have? Beyond what is in 'them, thar hills' not much due to the FDR Administration having gold taken into Ft. Knox from all over the Nation as it was illegal to have large quantities of gold. Which brings up the question: is it legal for the US federal government to have done that? As the States are permitted to make legal tender of gold and silver, does the US government have the power to stop them from doing so by confiscating the gold and silver from those States?

Consider a proposal to have CA, say, ask to have its portion of the US held gold and silver reserves returned to it via population size. It would be recognized that the federal government has its own need of reserves and that could be made at 30% of the total held for the Nation.

Just working with gold the US has 4,603 tons, or 147.4 million troy ounces, the latter of which is easier to work with for numbers (going via Wikipedia for ballparking here), and this isn't including other bullion reserves like those at West Point.

So a proposal to keep 1/3 in reserve for the federal government means the following is available to the States via population: 98.27 million troy ounces.

Current population of the US at the census site: approx 311 million people.

Current population of CA: approx 37 million.

Call that just a bit shy of 12% of the population, which would yield it 12% of the gold: 11.8 million troy ounces.

Total long and short term debt issued by CA (Source: CA Treasurer's Office): approx. $53.3 billion

Note that CA's debt is huge compared to any price of gold today.

With that said the State would have the legal basis to offer a currency with a conversion rate to the US dollar for CA incurred debt. If set sufficiently above the current rate of conversion, say at $1,500 per ounce, the new Golden Bear (which I invent for this purpose) currency would have a lower valuation than US currency but have full gold backing to it. CA could start issuing this currency to those who would be getting tax refunds or other forms of funds from the State and create a dual currency system within the State for its own gold tender and standard US greenbacks. In addition CA would probably place a holding time limit for cashing out gold, so that the Golden Bear will have time to circulate and get a real value, perhaps as much as 5 years for that.

CA would then have to decide if it wanted to incur debt via US dollars or its own Golden Bears. While 11.8 million troy ounces sounds like a lot, that is less than 1/3 troy ounce per citizen in the State. If CA can get its fiscal house in order in 5 years, stop the debt outflow and get a sane tax climate in place for investors, it can offer a 'safe haven' currency that is gold backed (possibly have silver backed ones as well, but it is difficult in getting the silver reserve figures) and holds the State to the value of the currency.

The Golden Bear would be a 'hard' currency and if set above the current conversion price of gold, then gain few attractors but serve as a reserve system to pay off internal debts owed to the citizenry. Citizens would be faced with a currency that would take a few years to convert to physical gold (with 1 troy ounce = 1.0971428571 ounce = 31.1034768 gram) with each Golden Bear dollar only about 0.02 gram weight or waiting to get paid in US greenbacks once CA got more of those to go around... which it might do by marketing Golden Bears or converting a portion of its debt into Golden Bears for payout (possibly the short term debt). Once in circulation the value of the US greenback would float compared to the Golden Bear and it is possible that CA might even see an influx of some cash if it can get its fiscal house in order.

Of course CA and probably AK would see a major uptick in the gold prospecting business as getting gold and getting gold backed tender in return makes the gold portable. CA might see an increase in gold reserves, over time, if it got its house in order. Other States might take this route to try and get some foundation to their economies and find some, final bottom to their fiscal woes as they have a new and much smaller economic platform to move to. This would mean that most of the 'services' in the way of regulations, 'entitlements' and even such things as public pensions would either get liquidated or devalued or have a final gold backed tender put into their holdings which they can sell at market prices.

Congress did not have the power to stop this after the Civil War and no power was given to it during or after then to allow it to stop such things: they are allowed in Article 10 explicitly. While paying off debts to the federal government would still be done in greenbacks, if those are seen as getting worth less and less, then the States would have a means of fall-back currency by issuing gold and silver backed tender based on the holdings being held for all of the people at the bullion depositories. The US federal government would still have a substantial gold and silver deposit for the Nation, but the rest would be used by the States to create legal tender in the States for State obligations. And as it is circulated debt backed by gold, it is not normal valued currency and might be impossible to tax (can you tax debt? my guess is: no).

A two-track system would be a PITA, to be sure, for each State, yes. But this might be a way to give the people of those failing States some assurance that there is a final, much smaller, fall-back position for their States that would have an opportunity to shed obligations and right their economies. And with a gold backed system the people would be assured of being able to get some useful currency after their State's bankruptcy and re-ordering to become solvent. We would still be a common Nation, but those in financial crisis would be allowed to figure their way out on their own and not put the entire Nation at peril for the spendthrift ways of the few.

Con Man Universe Description

A Confidence Man is an individual or group that runs a corrupt game or scheme so as to defraud those who pay into or invest in such a scheme.  I will horrendously oversimplify this, as the multiplicity and complexities involved in con games, as well as types of them, are enormous.  Still they all boil down to just a few major factors.  In the universe of the Con Man (and associates) there are only a few classes of people outside of those actually running the thing:

1) The Plant(s) - These are individuals who may know about the scheme or game, or may only be willing to accept minor payment to take part in the game or scheme so as to make it work.  Plants are the individuals who 'win' or get pay outs early on in the system.  These are the individuals that give a patina of legitimacy to the scheme or game so as to entice others to take part.  Plants can also be individuals who are of a later class, but so early on in the scheme or game that it 'works' for them.

2) Rubes - These are the individuals who buy into the game or scheme as 'legitimate' but have no knowledge that a game is going on.  Plants can be first generation Rubes who unknowingly play the game or pay into the scheme but are in that select segment that must get a payout, of some sort, so as to keep the mollified and have the illusion of an above-board operation remain.  Rubes who become Plants via this unknowing pay off of a fraudulent scheme or game in its first iteration also serve as recruiters to get more people to play the game or buy into the scheme.  The more gullible Rubes there are saying that the scheme or game is legitimate, the greater the long term pay off for those running the game or scheme.

3) The Mark - The Mark are the individuals in the high profit zone for the game or scheme.  Marks can be from any level of Rube-dom, but they are the ones who will buy into the scheme late enough so that they will not get their money back.  Marks may be unintentional players who just want to have some 'fun' or who have a predilection to believing the scheme works due to the number of Plants and Rubes.  When the game or scheme fails, these are the folks who lose the most.  Once a confidence scheme is fully operational after the first level of pay outs, anyone paying in can be said to be The Mark.  The Mark is the target of the swindle.

4) Those who see through the game or scheme for what it is.  These are the people that the game or scheme derides, calls them 'unsophisticated' or 'stupid' or otherwise castigates them.  That serves the two-fold purpose of assuring the Rubes and future Marks that they are the 'smart' ones who are going to 'make' money off of the scheme or game.  The level of attacks on those who see through the game may be intense enough to convince them to become Rubes, which also makes them qualified to be Marks.

 

Consider the world of Bernie Madoff with a scheme built up out of the 'intelligent' investing class of rich individuals.  He originally made his name as a smart trader on Wall Street, and with a good history of some ability to pick stocks he gained the reputation of knowing what he was talking about.  That portion of the patina to his con game ran through until just a few years ago, but the con, itself, started in the 1980's.  The con started with friends and family, and then became a 'word of mouth' affair that described the 'incredible deal' that Madoff had for those willing to invest in his organization.  The deal was that Madoff had a 'secure' group of stocks and bonds that were 'market proof': they gave a steady yield no matter what the market did.  His immediate friends and family became Plants and they created the aura of Madoff being able to 'out-smart' the market and even had pay offs to show for it.  Thus the investment scheme gained legitimacy as it was seen as being able to pay out as it said it could do.  For nearly two decades the population of Rubes expanded and so did the population of Marks.

The external population was kept at bay as they were not privy to the investment scheme system.  Part of making the aura of stability was that it went after rich individuals and conned them into believing that their money gave them good and smart advice via this system.  Madoff's system was recognized for what it was when a mathematician exposed the fraud in 2001, but by then the Universe of Rubes and Marks was large enough to convince Congress and Regulators that the scheme was legitimate.  Like any Ponzi Scheme it requires a new generation of individuals to pay into it, and lacked funds to actually pay out as there were very few actual investments in the scheme at all.  The numbers were made up.  As the latest recession started to tremble into the upper reaches of the markets, those individuals finding their investments evaporating went to Madoff to get their money back, as he said they could do.  He hoped to weather out the storm, thought it would be minor, and was able to pay off the first few people asking for funds as he hoped to retain the air of legitimacy via their becoming Plants.  As the numbers wanting their money back increased, the system could no longer pay out to them and the scheme was revealed for what it was.

 

Enron's mess of water and energy trading followed a similar set of lines in the buying, trading and selling of energy and water as commodities via the State run system in California.  Enron's attempt to hold financial pay outs steady, however, led to misreporting finances, that then steamrollered once the fraud was uncovered.  It went from controlling a majority of the private power sold in California to nothing in a period of months.  Here the scheme was the utilization of the ever increasing energy needs in California to purchase energy outside the State and put it through the State's regulatory system which was stifling the creation of new power facilities in the State.  In this case the Rubes set up the system to run the game, and the people of California were the Plants and then the Marks. 

Enron, by manipulating the power market, was able to create shortages and hike costs all the while showing a sound financial footing in the commodity trading scheme that it ran.  This scheme ran well enough, at an internal loss of course, that they expanded into the water markets and started doing the same thing.  When the crooked money transfers, kick-backs and executives siphoning funds from the company to leave it as a shell was revealed, the entire set of schemes imploded.  When the Plants became the Marks via the legitimacy given to the scheme via the Rubes in Sacramento, the ability to actually buy and sell power into California showed deficiencies in the accounting practices at Enron.  Whistleblowers would reveal the system, but the system itself can be seen as a creation of an over-weening State wanting to get around hard decisions and a confidence game stood up to gull the Rubes into believing that they could do so.  Rubes who set up a system to make hard decisions for them are less likely to run good oversight on the system as actually doing so gets them involved in distasteful decisions which they want to hand off in the first place.

 

Stepping up in scale is the Bank of NY penetration by the Red Mafia that started in the early 1990's with the collapse of the USSR.  In the post-USSR set of Republics there was a lack of hard currency as the Soviet Ruble was worthless.  Yet there were still factories, mines, and a population that could work if you could do the minimal and guarantee food for them.  Those able to get hard cash, or even work out barter systems between ore, finished goods and food gained control of the means of production as they became available.  Approximately one-third of that fell into criminal enterprises which were set up by an internal group of operatives assisted by the financier on the lamb, Marc Rich (the from previous articles on the Red Mafia, in particular this one on international finances).  Again the Rubes set up the system (the Russian government) for the Con Men to operate and once they were able to sell goods and ore for hard cash, they immediately went into procuring banks and over-seas accounts.  To get around foreign investment transaction oversight required penetrating western financial institutions, which was done via the Bank of NY (my lengthy article on that is here).  In short being able to get a couple of Plants into the BoNY system allowed for other operatives from the Red Mafia to utilize a money laundering system on a global scale that would process approximately $70 billion through it in less than ten years, and more like 7 years.  The fraud became apparent when one of the side operators (only a side operator in this area, but a major player in Russia) Semion Mogilevitch who was part of the YBM/Magnex fraud scheme that took place in the Canadian and US commodities market for permanent magnets.  That securities fraud funneled money through the BoNY and into a system of trade and transactions that still has not been teased out.

In this case the fraud system is so large, and the fronts operating with legitimacy via the legal framework in Russia and exploiting the nature of the capital and commodities markets in the west, that no one can even be sure if the fraudulent transactions have actually stopped.  When billions of dollars go into transactions for aluminum or steel, who will notice a few hundred million more in fraud bundled in with it?  In this case the Rubes in government have made everyone, globally, potential Marks.  The Plants are those individuals who actually had normal transactions go through the fraudulent system early on.  Even with the tightening of banking and financial regulations by many countries, many other countries refuse to do so as they are seen as 'safe havens' for 'troubled times' and enjoy having the benefits of large money transactions funding their governments via minor taxes.  So while a few Plants have been prosecuted, along with a Rube or two, the Marks remain defrauded.

 

Moving up scale from that.... and you can move upscale from that, size-wise, is another Ponzi Scheme that has been rolling blissfully along for nearly 80 years.  It has the patina and age of legitimacy.  There are lots of Plants who get pay offs from the system, and it has a full population of Rubes who, by law, are also The Marks.  This is another Rube created system by government unwilling to make hard decisions and wanting to pass on any oversight of a system that was not meant to work outside of very limited circumstances.  The scheme seems so 'nice' that Rubes don't want to admit to themselves that it doesn't work:  look at all the Plants getting pay offs!  Unfortunately as they are also The Mark there are a few people starting to realize that this system is broke (not just broken, but broke) and that paying into it will not sustain or recover it.  This system is the US Social Security Administration, and since its first pay outs in 1940 it has been creating a class of Plants to confirm that the system 'works'.

Based on the proposition that you 'invest' into an account with government, you are 'guaranteed' a set of payments equal to what you paid in plus 1% until you draw all 'your' money from the account.  Even when created private annuity systems paid out better via investments as those running annuities must keep reserve capital inside their funds system to allow for pay back of funds over time.  In good times the funds run on the excess made, stock a portion of earnings into the reserve and then utilize the rest to grow the system.  In bad times the limited payoffs cause the fund system to shrink, but retains operating expenses necessary to run pay outs from reserves to cover those who paid into the system.

The US government, on the other hand, spends the money it gets and puts a big, fat IOU in the reserve of SSA.  This became law during the Johnson Administration, and since then there are no 'reserves' of funds for SSA: it is broke and pays out in income from FICA and now from the general fund of the US government.

By definition any scheme that is able to pay out early adopters but only by growing the base of those paying in while keeping no reserves (or only a slim reserve like Madoff) is a Ponzi Scheme.

Thus SSA is a Ponzi Scheme.

Every single individual drawing 'their' promised money is involved in a wealth transfer system with the government as intermediator so that young, and relatively poor, working class individuals pay to have the older, and generally richer, generation 'retire' with a 'guaranteed income' from SSA.  Set up so that those who would get money from the system would be limited via a 'retirement age' of 63 which was also the average life expectancy when the system was started, it would never have had to pay out to more than half the older population and thus would 'work'.  Demographic trends in two directions make this unworkable: increased average life expectancy, and the child replacement rate.  I have examined this problem previously (in this article) but when this is taken in the context of a Confidence Game the perspective becomes clear - the retirement age is kept constant (even as life expectancy increases and child per family decreases) so as to create a 'faith' in the system that it 'works' and will be able to run like this forever.  Madoff would pay off some early investors entirely and that gave them faith in the system and they spread the word about it.  So, too, does SSA have a couple of layers of the Ponzi pyramid behind it giving the sense that this systems is 'workable' and 'legitimate'.  And as with any good con game, the Con Man has gained such a degree of confidence that, like Enron, even when presented with the cold, hard facts, people don't want to believe that this is the way it is actually run.

When this system comes down all of the Rubes will know they are the Mark, and some of the Plants will, also.

The system has been run, like the California energy trading system, to put off hard decisions and yet get pleasing results, to the point where the first internal audits of SSA in the 1980's put its collapse around 2050.  Then in the early 1990's it was 2030.  Around 2000 it was 2020.  SSA went into the red this year.  Every single politician since that original revelation during the Reagan Administration who has told you this system: 'works', is 'sustainable', is run 'efficiently', and is 'good' has been lying through their teeth to you or are oblivious to the ways of economics and demographics.  Yet as they take an Oath to the Constitution, and thusly to you, they have been negligent in their duties for decades.  Remember those trying to point out the problems in the system or try to 'fix' this already rigged system have been shouted down as being 'mean to the elderly', 'stupid', 'hurtful', and just plain 'ignorant'.  That has been the shouting down by the Con Men to continue the system by castigating those who recognize the con game for what it is.

We have got a problem, and in a sane world every politician who has willingly supported SSA as it stands since the 1980's should be up on fraud and negligence charges, with decades ahead of them in the Federal Pen.

 

 

Now moving up in scale...

What?  Isn't that bad enough?  Isn't the fact that our National Debt is more than all the money in the world (and that is on the optimistic side) bad enough?

My fellow Americans there is a problem that will hit us, from out of the blue, in the next few years that is not our own Progressive/Socialist/Communist Establishment Elite Politicians or of their making.  Not by intent, at least.

Nation States can give the instant aura of legitimacy, the patina of something being 'real' and 'working' even when such schemes they put forth make zero economic sense, at all.  Why?  Because they can tax the hell out of their people.  The US started running another Ponzi style scheme in the home mortgage market and the advent of the 'securitized' home mortgage by Ginnie Mae (my article on that and the destruction of the traditional mortgage market).  In this system the government 'guarantees' the risk of home mortgages via the 'securitized' system by bundling loans together.  Thus we saw loans that were pure junk get AAA ratings when they were bundled together via the fiat of government regulation.  Those regulations are still on the books, by the way.  Thus banks were forced into working with this market arrangement if they wanted anything to do with the home mortgage market, and if they didn't Fannie and Freddie had started to move in with their even higher risk loan capabilities that gained the benefit of the 'securitized' market.  That is how we got a multi-decade housing bubble: by government regulation, forcing banks to accept government assessment of risks, and then cutting down the amount needed to get a home to zero.

Didn't work so hot, did it?

Now imagine a country that does that with residential real estate, like we did, commercial real estate (that is slowly coming out here, too), and industrial real estate and facilities.  In other words a country that has its entire economy built on a bubble of bad debt that it is unwilling to own up to, but must do so as the creditors it invited in want their money out in the securities that they were given.  That country is not the United States.

It is China.

I wrote about that in The Directivity of China.  The reason I more or less live my life by trend analysis is that once a trend is established it will continue unless its underlying causative factors change.  To get its industrial growth in the 1990's, China issued debt obligations: they promised to pay back the money with a nominal rate of interest.  When those notes came due in the mid-2000's they 'rolled over' the debt as in 2003-2006 China looked pretty safe, all things considered.  Now the next debt 'roll over' has arrived and the creditors want their money plus interest.

China's problem is that it did with its entire real estate, commercial and industrial sectors what the US did with 'securitized' loans: it gave junk loans the imprimatur of being good loans via its ratings.  In fact those loans were crony capitalist loans that went to making factories that were not well run and failed.  Luckily the cronies, being cronies, could get more money by hitting up their friends in the government to continue on the patina of 'everything is working just fine'.

Thus the Con Men are the Chinese government, just as it was the US government for SSA, Fannie, Freddie, Ginnie, etc.

The plants for this, in China, are the crony capitalists and some foreign capitalists willing to take on some risky loans that might get a high payback.  Some factories actually moved to China for its low cost labor force.  Meanwhile as industrial plants failed, the government absorbed the debt, called it 'AAA delicious', and rolled over their Marks as they had established a good Rube environment in the west.  To this day you hear about how 'China is a world beater' and then hear about them having enough empty rental property to house the entire US population (Source: Marketwatch, 03 AUG 2010).  China has overbuilt entire cities expecting ever increasing wealth, and yet cannot find people to occupy them (Source: Kris Cyganiak at BuyRIC, 08 MAR 2010) even though the government assures everyone that their people are growing so rich, so quickly, that they just don't have time to move to them (Source: WSJ, Andrew Batson, 12 MAY 2010).

If that last bit sounds a lot like a Con Man trying to convince the Rubes that the game is working, and even better than expected, then join the club.  The problems of China go far beyond industry and have to do with the population, demographics, and just sheer size of China.  Yes China is the world's second largest economy.  Just as it was in 1900.  Size will get them there even on absolute poverty as the median for standard of living.  The problem is that with the debt come due, the current Marks wanting to be paid, and having put so much into so much useless building, China has nothing to repay with.  The cost of labor in China has increased, due to the cost of overhead, in turn that is due to the over-building and speculation that has gone on, which, in its turn, is based on bad debt.  When the debt gets called in the rest falls apart, and building gleaming new apartment complexes with no one to fill them does not a modern city make.  This is repeated in the commercial sector, with empty shopping malls created via crony construction companies, and private real estate via the same system and bundling together of bad loans with the AAA perfume. 

 

In the near future we may come to the point where any 'security' even glanced at by a government will be assumed to be junk in its status, and it won't matter which government it is, either on a global basis as they will all be assumed to be in bed with their cronies running a con game on their people.

And when China slips below the waves of solvency, just where will Wal-Mart get its stuff?

Probably Indonesia, Vietnam and a few other places... but that lovely market that everyone talked about in the 1970's... you remember the one that would see the glorious infusion of western capital to build up a wonderful system as part of the global trade concept... what happens when that drops of the radar screen of fiscal solvency?  The US can't save it as we are nearly there, ourselves, just not going at the fast rate of China.  And we can't solve the problem by spending more money.

The source of the problem, if you haven't guessed it, is not the small time cons like Madoff or even Enron, both bad enough, and, for the horror of it all, the penetration of our international financial system by organized crime.  That latter is horrific, but cannot be matched by the willingness of Nation State political systems to rip off their own people under multiple guises and not be held accountable for their actions until it is too late.  The problems in China, alone, dwarf anything that any organized crime organization could even dream of due to the scale of the population involved.  Even the Daly Machine in Chicago realized it needed to pick up trash regularly to have the patina of 'working' on its side.  Nation States are only under that much obligation to the extent they allow their people a say in their own systems, which is why it is necessary to have Plants to encourage the Rubes to buy into a scheme to become Marks... or to force them into the scheme, anyway, even if they don't buy into it.

Nice how governments over-ride good sense, isn't it?  Notice how that is also the pre-requisite to running a con game?

 

How do you identify a con game?

Whenever you approach a situation, and it doesn't matter if it is a proposal from government or an offer from Luigi down the street to do your windows, the question you first have to ask is: who is going to really benefit from this?  They may tell you that you will benefit, but you then have to ask who besides you will benefit?  Now with Luigi that's just a contract situation of money for services.  For a government it is taxes for a whole slew of things, that just keep on getting longer, many of which have no benefit to you, whatsoever.  If what you hear is that it is you, and only you, that will benefit, and this is not God talking to you, then you have properly identified a con game. 

Get rich quick?  A con game. 

Easy money? A con game.

A sure way to pick the ponies learned in ten minutes? A con game.

Retire with assured benefits that no one in the market can guarantee?  A con game.

A majority services economy makes everyone rich without making anything? A con game.

Do you see how this works?  Unrealistic expectations guaranteed to come true.  That is a con game.  When perpetrated as part of a system to separate you from your money it is called either fraud or taxes.

Some systems are set up by well meaning Rubes that then turn into a con game with no one running it save a bureaucracy. That is SSA, Fannie, Freddie, Sallie, Ginnie, etc. and while SSA can't lobby Congress, the others can and do so for their own bureaucratic interests.  Of course the bureaucracy has an innate goal of perpetuating a con game once it starts, and they will deny any concept that they are running a con game, even to themselves.  Pournelle's observation on bureaucracies is that in all bureaucracies you have those wanting to do their jobs and those wanting to grow the power of the bureaucracy, and the latter always come to dominate the former.  Thus no matter how 'good' a bureaucracy starts out, it quickly morphs into a large, power-hungry, cash driven organization wanting more and more at each step along the way.

 

Once you identify the con game, you then have to ask: who is the Mark?

You are the moment you realize you must ask that question, especially if it is in the middle of a con game.

You are the Mark.

You are being defrauded and you may already have paid a lot of money into a system that 'promises' to pay you back.

The system will only pay you anything so it can turn you into a Plant, to continue the patina of legitimacy it has.  Most Marks never get a chance to become Plants, unless it is a truly huge fraud scheme.  For the most part you have a low likelihood of becoming a Plant as a proliferation of Plants shows that the scheme is about to be revealed.

Have I mentioned that SSA is running in the red?

When you are the Mark in any normal scheme, you must stop paying into it.  There are very few schemes where you can out-swindle the swindlers and maybe get some justice, if not your money back, but those are so rare they need fictional accounts to glamorize them as they don't happen that often in daily life.

If you can't stop paying, say the government requires you to pay into a system involuntarily, then you must recognize that you have losses of throwing good money after bad that will, most likely, never come back.  Everything you paid into the system is gone: you have been swindled.

You are the Mark, the target of the swindle.

If you have any say into the system, at all, you must exercise it to end the fraud and cease the swindling.

The Rubes will attack you as mean, stupid, vicious, hating people, unrealistic, heartless, cold, cruel... remember that before you thought about it you were a Rube, once, too.  The willing Mark is the worst sort of Rube as they want to deny reality and want to willingly live in a fantasy land to their last breath.  Or their last dollar, which will probably come first. 

If you try to ignore the problem, you become a Plant to give shade to the Rubes who continue to push Marks into the system.  And if you worry about the other Marks or those Plants who can still become Marks, you do them no good whatsoever by creating more of them by letting the system go on with your nodding assent.  And that doesn't help your situation, as you are still being swindled, nor the situation of the other Marks, and while you feel sorry for the plants you could certainly find a better way to tend to the ends you desire than via the con game you are in.

Remember that in all cases, you are the Mark: you are the victim of this fraud.

You were born Free.

You can get back to being Free by ending the con game.

Your choices are:

1) The Plant - Hoping you get in on the game early enough to get out of it and offer the game an air of legitimacy.  That makes you culpable for continuing the game, however.

2) The Rube - The mindless repeaters, nodders, those agreeing to the game without thinking and those shouting down the critics of the con game.  They are the backers of legitimacy, and can't believe that they will ever be a Mark.

3) The Mark - The sucker.  The person who gets swindled. The loser. The target of the fraud.

4) The Free - Those who ensure their freedom by the hard task of guarding it, thinking about what they do, and trying to end fraud high and low when it is perpetrated upon them and their fellow citizens.  This is the hardest to do.

The choice of what you are is up to you, once you identify a con game.

Getting to Free is painful.

Waiting for the game to come apart even more painful.

You can either end it and gain Freedom, or wait for it to be ended and continue to the The Mark.

Technobabble, Bureauratese and Elitism

When reading Angelo M. Codevilla's piece on America's Ruling Class -- And the Perils of Revolution at the American Spectator (JUL-AUG 2010 issue) I got to thinking about some concepts that had been present in my past work with other aspects of society: the science-fiction, science and technical communities.  One of the main aspects of them deals with words, jargon and how they dove-tail in creating communities.

From Wikipedia, YMMV:

Technobabble (a portmanteau of technology and babble), also called technospeak^[1], is a form of prose using jargon, buzzwords and highly esoteric language to give an impression of plausibility through mystification, misdirection, and obfuscation. Someone who does not understand a technical description that necessarily contains many technical terms may describe it as technobabble,^[2] but it also can describe prose intentionally made obscure through gratuitous technical terms and technical slang.

From Merriam-Webster online:

bu·reau·crat·ese

Pronunciation: \ˌbyu̇r-ə-(ˌ)kra-ˈtēz, -ˈtēs, ˌbyər-\

Function: noun

Date: 1949

: a style of language held to be characteristic of bureaucrats and marked by abstractions, jargon, euphemisms, and circumlocutions

I've had to partake of both of those worlds of jargon-speak, plus a number of other venues in the science fiction and fantasy realms that feature such word use and creation (like Treknobabble).  The use and utility of words in the english language means that new words formed by the importation of words from other languages and the contraction or compounding of older words or the creation of acronyms (like RADAR) allow for the language to be highly fluid and adaptable to new situations.  While the French try to keep their language 'pure' via an official government committee, those who speak english in a varieties of dialects, pidgins and other culturally derived forms (ex. Spanglish) means that speakers of english can call a CD-ROM as a 'CD' and think nothing of it, while the official French language (as opposed to common, everyday, on the ground spoken french) does not allow 'le CD'.  English, as a language, picked up traits from other languages (like the propensity of German words to just add in entire other words until you have to contract them down to something you can say in a single breath) and the use of linguistic short-hand allows for the entire richness of english to have humor types that aren't even conceived of in other languages ('time flies like an arrow, fruit flies like a banana').

The massive downside of that is in the realm of specialization, and it doesn't matter if it is scientific, religious, political, or the type of wine or beer you like, the jargon of any specialized field can sound very authoritative and important to an outside, while being relatively innocuous for those who are 'in the know'.  Thus 'Anthropogenic Global Warming' sounds very important but is, in actuality, a hypothesis that the tiny amount of carbon dioxide increase seen during the span of man on the planet means we are all going to die as everything is flooded out and choked to death by poison.  Don't mind the fact that the planet has had far more carbon dioxide in its atmosphere in the past and that this has never happened (because we are here to talk about it), and that such things as solar radiance, cloud cover, and the relatively shallow ocean basins and lack of circumglobal oceanic currents from the creation of the Isthmus of Panama have put us into a cyclic and somewhat chaotic glaciation cycle that won't abate no matter if we burn every last hydrocarbon on the planet.  The technobabble and very important looking graphs with misleading scales and representation standards make it all sound very convincing because, you know, a scientist said it.  And scientists were taken in by Piltdown Man and created a lovely, and utterly backwards system of science in the USSR called Lysenkoism because it catered to politicians, not due to it having any basis in science, at all.  Carbon dioxide is used by plants to grow, a necessary inert gas that helps us breathe and relatively innocuous (unlike that evil dihydrogen monoxide).

Technobabble serves as an 'in-group' identifier, a means to show you actually are part of some group and hold similar beliefs to it by being able to talk in its jargon.  Speak the lingo in a passable fashion and you get accepted.  Nodding your head in agreement helps bunches, too.

Because it is an 'in-group' linguistic system it can also be used to stonewall those outside the 'in-group' by claiming that they 'don't understand what they are talking about'.  To learn the jargon you must accept the premises of such groups so as to understand what they are getting at, even if the jargon is nonsensical as created and applied.  That is how AGW, Piltdown Man and Lysenkoism actually got anywhere: they purported to show certain findings and correlations while, in fact, they were doing no such thing and yet utilized a variant of existing jargon to give some foundation to their outlooks.  Of course scientific fraud has a relatively short shelf-life as it requires repeatability to it, that is you can repeat the exact, same experiment with the exact, same conditions and come up with the exact, same results (+/- 10% due to measurement error).  Lysenkoism fell apart when Communist Genetics proved not to work in any way that was meaningful, for which we are all deeply thankful.  Piltdown Man went down under analysis of the actual bones to show they were not only not of the same individual, not of the same species but not of the same time period.  AGW is coming apart as the very basic concept of 'being able to show one's base data without any corrections done to it' cannot be met, and entire global datasets now have to be rebuilt from scratch due to the non-diligence and obfuscation of the researchers in the field.

While Lysenkoism only side-tracked Soviet genetic research, AGW is aimed directly at the heart of the industrial system to deny it energy production that isn't 'sustainable'.  Don't ever ask what 'sustainable' actually means, or the time frame of it, because there is no, zero answer to that.  When the answers vary from 'now, immediately! if not sooner!!!' to 'over the next thousand years or so', you know you are no longer talking about science, technology, economics, nor any other aspect of meaningful lingo.  'Sustainable' is a feel-good term that is too fluid to mean much of anything when applied to economics, science or technology.  If using fossil fuels, mining for ore and doing anything other than growing plants, and then only 'sustainable plants' is an objective, then the entire planet was absolutely sustainable in the late Neolithic period.  Save for all that wood burning, of course, we would have to drop that and get to mankind before the taming of fire.  That was perfectly 'sustainable'.  Miserable in the extreme with short life spans, rampant disease, high infant mortality rates, and so on and on.

Blending alarmism into technobabble gets you emotionally laden terms that mean very little.  This has happened in religion where personal salvation, standing before your creator after you die to account for your life, is replaced by group-think or collective salvation where everyone must think alike, act alike and be controlled alike to be saved...too bad accountability is on a retail, not wholesale business level, huh?  Collectivism is a creation of not only religious groups but of followers of Marx who believe in some 'will of the collective' to guide society.  Using such concepts creates an 'in-group' that then talk about all sorts of lovely things to be done to 'save' the 'poor' by depriving ordinary citizens of the fruits of their labors so that the poor can be 'uplifted' from poverty.  You know, steal a fish from one man to make him go hungry so you can feed another to keep him indebted to you, so the two of you can gang up on the first man to enslave him?  That sort of thing.  This only works by the importation of emotionally laden terms of 'wealth' and 'rich' and 'wealthy' that most people don't believe applies to them, yet those wishing to do the stealing tell you its on the upper X% of society.  That X factor is always, without fail, no matter what is said, 49.  Basically if the lowest 1/8th of the wealthiest (that 49%) can be convinced that they aren't 'wealthy' then the scam is on.  And when the top 3-5% join in as they have so much that losing 15% more won't matter to them, you then have a 'majority' to steal from those able to create wealth to give to the poor who can't.  Thus everyone gets poorer as those able to create wealth stop doing so because there is no pay-off in it for them, which then leaves the top 3-5% with any left-over wealth which which to rule everyone else as they beg for scraps.

But you meant to 'save the poor' and 'create a sustainable economy'!  And you did!  When 97% of the population is poor and the economy is ruled by a handful, that is sustainable for, oh, a decade or two, unless you have an beholden servant class and dedicated military class to keep the masses down.  That worked for thousands of years for Hydraulic Empires (Egypt, Babylon, China and other Nations having a major waterway) and can even be semi-benign due to the crushing poverty involved.  As technology goes up the sustainability of such societies must shift to the technocrats and military classes, so that Modern China revolves around the leadership, the crony capitalists beholden to the technocrats administering State guidance, and the ever present threat of military crackdown if you happen to think freedom is a neat idea.  That sort of thing aptly describes: Libya, Cuba, North Korea, Syria and Zimbabwe.  The proportions between adhering bureaucrats and technocrats to military varies, but they are, in sum total, higher than in feudal States of Europe (where 1 in 100 were in the nobility and aristocracy).  This gets closer to the Japanese culture when they closed off their contact with other cultures due to the higher percentage of their elite (1 in 10 for feudal Japan until Admiral Perry came along and even that didn't change things much until WWII).

The concept of being able to dictate from the Nation State level down to its population to get an adoring, or at least obedient or subservient people, is a common one across all cultures.  It is always presented as a 'solution' to social ills, and the programs used to mask it vary from the Kulturkampf against Roman Catholics to Gramsci's concepts of cultural hegemony that seeks to make 'common sense' not based on what one sees but on one's culture and a rising of 'class consciousness' to political consciousness which, instead of putting forward that all people are equal, puts forward that there are repressive groups in society and those that are repressed by them.  Each of these puts forward that there is an 'evil' in society (Roman Catholicism, capitalism and capitalism... yes the last two are depressingly the same thing) and that the only way to go after these 'evils' are via State based power.  By being able to put forward that there is a minority that 'controls' society to its own benefit and that a cultural reaction that seeks to put down that minority so as to gain 'authentic' majority control is then put forward with those doing so being the political class (or elite class) seeking to gain more power via villainization of a segment of society.  If you would just reject the minority and give more power to the rulers of the 'majority' then all will be well!  The White Knight, the One True Leader of the movement will then lead you into a land without repression and with lots of love, peace and prosperity!

Don't mind the repression from the military and police set up by these 'winners', their crushing laws applied to everyone and the poverty that ensues as the State seeks to subsume private wealth for the 'public good'.  Tens of millions have died following this fruitless dream that more power to the State yields a better life, peace and prosperity.  They are usually the ones elected to office and who seek to rig and game the system so as to never get challenged in their beliefs by marginalizing segments of populations via things like limiting representation and gerrymandering districts.  Why we never see THAT going on in the good old US of A, right?  Politicians who see their elected seat as THEIRS and not that of the people... who see fit to found political dynasties built upon the public coffers and handing out goodies to selected portions of the population instead of looking after the good of everyone.  Couldn't happen here, right?

That is what Mr. Codevilla is getting after: it is a cultural imperative of the elite class (usually self-defined as we don't cotton on to warlords and such these days) who then need to convince you that they are smarter/better/more worthy than the average Joe to sit in the seats of power.  They can cite lovely scholars, whip up graphs to show that more taxation leads to prosperity and back 'science' that then empowers them to tell you just how awful you are to lovely Mother Earth and that you really need to be punished for being healthy and wealthy.  That has worked as an ongoing meme for over a century, now, and what is on the horizon is what comes to any Nation that puts bureaucrats ahead of good sense and thinking that you can regulate your way to prosperity: special police, adherent political militants, political crimes, and repression of those who disagree that those who rule are, actually, unfit to rule.  Yup, bureaucrats, technocrats, police and military all set up by those in charge to make sure that they get what you make and you are enslaved because they are so much smarter than you... though far, far less competent in anything but grabbing power.

Flipping the side from the Ruling or Elite Class gets you Mr. Codevilla's Country Class.

This Country Class is not associated with 'populism', as 'populism' is a form of cultural political movement to address some 'evil' of society... in other words it is a ruse used to demonize some group/problem/ill by the Elite to get some popular fervor so as to pass laws and changes that invest more power to a centralized government, after which the fervor dies down as the laws 'changed things'.  Until, of course, the next big 'problem' arises that the new laws didn't address, which is the reason why we hear that the answer to failed regulations is: more regulation!  Perhaps what was regulated was not suitable to regulation in the first place?  How rare we ever hear that little question.  So the Country Class does not rely on nor descend from 'populism' or 'populist' movements, although members of it may join such things they do not consider such movements self-defining.  So just who is in the Country Class?

The description Mr. Codevilla gives is one that is very similar to others I've presented (bolding mine, throughout):

Describing America's country class is problematic because it is so heterogeneous. It has no privileged podiums, and speaks with many voices, often inharmonious. It shares above all the desire to be rid of rulers it regards inept and haughty. It defines itself practically in terms of reflexive reaction against the rulers' defining ideas and proclivities -- e.g., ever higher taxes and expanding government, subsidizing political favorites, social engineering, approval of abortion, etc. Many want to restore a way of life largely superseded. Demographically, the country class is the other side of the ruling class's coin: its most distinguishing characteristics are marriage, children, and religious practice. While the country class, like the ruling class, includes the professionally accomplished and the mediocre, geniuses and dolts, it is different because of its non-orientation to government and its members' yearning to rule themselves rather than be ruled by others.

Even when members of the country class happen to be government officials or officers of major corporations, their concerns are essentially private; in their view, government owes to its people equal treatment rather than action to correct what anyone perceives as imbalance or grievance. Hence they tend to oppose special treatment, whether for corporations or for social categories. Rather than gaming government regulations, they try to stay as far from them as possible. Thus the Supreme Court's 2005 decision in Kelo, which allows the private property of some to be taken by others with better connections to government, reminded the country class that government is not its friend.

It is a class that believes, then, that the best government is that which provides equal treatment under the law for all citizens and tries to not correct the wrongs that come about due to discrepancies in talent and capability.  When government attempts to do so it then moves from equality of treatment to seeking some form of 'justice' in outcome, thusly government becomes an institutionalized affliction for a certain group or class based on temporary problems.

What else is seen as defining?  Meritocracy, not bureaucracy:

Members of the country class who want to rise in their profession through sheer competence try at once to avoid the ruling class's rituals while guarding against infringing its prejudices. Averse to wheedling, they tend to think that exams should play a major role in getting or advancing in jobs, that records of performance -- including academic ones -- should be matters of public record, and that professional disputes should be settled by open argument. For such people, the Supreme Court's 2009 decision in Ricci, upholding the right of firefighters to be promoted according to the results of a professional exam, revived the hope that competence may sometimes still trump political connections.

It is, culturally, a standpoint that to do right one must do good and that doing good requires not only the want of doing good, which is supported by the Elite in all they do, but that one must understand what they are doing and do it well so that something is done right.  Doing something right by oneself to one's own liberty is upholding the greater rightness of society where we advance through capability, not adhering to Elitist word games and socialist equivalence.  When each is according to their ability and need, and the absolute minimal needs of survival in society are few, then applying one's ability falters to a lowest common denominator: whatever it takes to get by.  That is seen as a social inversion of doing right by doing good, and by creating a system in which there is no difference in mankind's efforts from beginning to end then mankind cannot advance nor self-improve as only base needs are met no matter what the effort.  Promotion by skill and merit requires application of skills and ability and working at them to hone them and improve them, and the reward is fruits of one's liberties in better pay, advancement and recognition of the worth of the skills and the character necessary to get them.  It takes character to build skills and society, and when character is removed through a grand equivalence of everyone, that all work is equal and therefore meaningless, then society falls backwards and humans no longer care about the maintenance of it through doing good work.  From that meritocracy and rewarding good work because it is good work is paramount not only to improve the character of others but to show that good, hard and skillful work is its own reward.

The country class actually believes that America's ways are superior to the rest of the world's, and regards most of mankind as less free, less prosperous, and less virtuous. Thus while it delights in croissants and thinks Toyota's factory methods are worth imitating, it dislikes the idea of adhering to "world standards." This class also takes part in the U.S. armed forces body and soul: nearly all the enlisted, non-commissioned officers and officers under flag rank belong to this class in every measurable way. Few vote for the Democratic Party. You do not doubt that you are amidst the country class rather than with the ruling class when the American flag passes by or "God Bless America" is sung after seven innings of baseball, and most people show reverence. The same people wince at the National Football League's plaintive renditions of the "Star Spangled Banner."

Unlike the ruling class, the country class does not share a single intellectual orthodoxy, set of tastes, or ideal lifestyle. Its different sectors draw their notions of human equality from different sources: Christians and Jews believe it is God's law. Libertarians assert it from Hobbesian and Darwinist bases. Many consider equality the foundation of Americanism. Others just hate snobs. Some parts of the country class now follow the stars and the music out of Nashville, Tennessee, and Branson, Missouri -- entertainment complexes larger than Hollywood's -- because since the 1970s most of Hollywood's products have appealed more to the mores of the ruling class and its underclass clients than to those of large percentages of Americans. The same goes for "popular music" and television. For some in the country class Christian radio and TV are the lodestone of sociopolitical taste, while the very secular Fox News serves the same purpose for others. While symphonies and opera houses around the country, as well as the stations that broadcast them, are firmly in the ruling class's hands, a considerable part of the country class appreciates these things for their own sake. By that very token, the country class's characteristic cultural venture -- the homeschool movement -- stresses the classics across the board in science, literature, music, and history even as the ruling class abandons them.

The country class supports the military absolutely as it is necessary for the security of a free Nation and to safeguard us all within the Nation State.  They normally do not vote lock-step Republican even when they do not vote Democratic, thus they are 'Independent' in word and deed.  For us to have a Nation together there is no political ideology that is seen as 'correct' and the greatest good of the Nation is done by its people, not its government.  Culturally the country class is very much a 'back to basics' view, so that which is good and has worked is cherished and the new only adopted when it has demonstrated its worth and value and does not contradict prior good teachings and work.  The art of reconciling the 'new' to culture is not done from government, business or marketers, but at home and amongst family and friends.  It is the individual that must find a good way to apply what is new under the sun and then ensure that it is understood and implemented to the benefit of all.  To do that the good, old ways must be taught, understood and cherished, which means that new 'teaching methods' that short-change history and accomplishment in understanding are rejected, often completely rejected, and parents take up Do It Yourself schooling.

What is this country class?  If you are an Elite this is an alien culture as they do not depend on the prism of race, class, politics, foreign affairs or any of the touchstones of the Elite to determine what needs to be done by individuals so as to guide society from the bottom up.  Elite schools, elite culture and elite politics are all, in every instance, top-down structures and authorities at the top are not questioned to hold them accountable for what they say or do.  Elitists must divide the rest of society and then push forward their notions of what is 'good' for a privileged sector so as to gain permanent power at the highest levels of government for a ruling class that becomes more and more archaic and brittle over time.  To an Elite member of the select class (or those attempting to cast themselves into it by shutting down their minds to thoughts of human liberty as individuals) the tools of the trade are:  attack, condemn, belittle and twist any fact to fit a pre-defined outlook that does not and cannot adjust to 'facts on the ground'.  If they could adjust to what is actually happening in the world without a prism applied to it, then the ideology would fall to pieces as it cannot withstand actual results that are not what is expected.  What is 'new' or 'good' to an Elitist is to remove power to the bureaucratic class and ruling class as these appointed members are best utilized in 'guiding' society via regulations in every aspect of life.  It is the concept of the perfectibility of man and it always, without fail, comes at a high cost of human liberty, life and blood wherever it is applied.

If the ideology of the Elite class is apparent because it is used as a tool to demean and belittle citizens at every turn so as to invest power in government, then the country class seeks to invert that so that civil discourse and coming to term with honest disagreements can lead to a better society that has little need of oversight or regulation from government at any level.  By keeping to the Framing and Founding documents of the Nation, and their outlooks that are invested in them, the country class feels little need to justify their concepts of a 'leave me alone' attitude towards government as it is a tried and true way to win a good life by one's hard work.  Even such as 'reformers' of government become distrusted as they attempt to add more apparatus into government to 'correct' its problems, but those only serve to increase the size, power and scope of government at each and every turn.  There is no 'good' that can be done by government, save their being less of it.  It is hard to get a spokesman for these beliefs, and yet a few (very few) have cropped up in our history after the Founding.  For this I need not travel back far, at all, in my own postings to come up with this document and these words from a past President of the United States:

It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes. Distinctions in society will always exist under every just government. Equality of talents, of education, or of wealth can not be produced by human institutions. In the full enjoyment of the gifts of Heaven and the fruits of superior industry, economy, and virtue, every man is equally entitled to protection by law; but when the laws undertake to add to these natural and just advantages artificial distinctions, to grant titles, gratuities, and exclusive privileges, to make the rich richer and the potent more powerful, the humble members of society-the farmers, mechanics, and laborers-who have neither the time nor the means of securing like favors to themselves, have a right to complain of the injustice of their Government. There are no necessary evils in government. Its evils exist only in its abuses. If it would confine itself to equal protection, and, as Heaven does its rains, shower its favors alike on the high and the low, the rich and the poor, it would be an unqualified blessing. In the act before me there seems to be a wide and unnecessary departure from these just principles.

Nor is our Government to be maintained or our Union preserved by invasions of the rights and powers of the several States. In thus attempting to make our General Government strong we make it weak. Its true strength consists in leaving individuals and States as much as possible to themselves-in making itself felt, not in its power, but in its beneficence; not in its control, but in its protection; not in binding the States more closely to the center, but leaving each to move unobstructed in its proper orbit.

Experience should teach us wisdom. Most of the difficulties our Government now encounters and most of the dangers which impend over our Union have sprung from an abandonment of the legitimate objects of Government by our national legislation, and the adoption of such principles as are embodied in this act. Many of our rich men have not been content with equal protection and equal benefits, but have besought us to make them richer by act of Congress. By attempting to gratify their desires we have in the results of our legislation arrayed section against section, interest against interest, and man against man, in a fearful commotion which threatens to shake the foundations of our Union. It is time to pause in our career to review our principles, and if possible revive that devoted patriotism and spirit of compromise which distinguished the sages of the Revolution and the fathers of our Union. If we can not at once, in justice to interests vested under improvident legislation, make our Government what it ought to be, we can at least take a stand against all new grants of monopolies and exclusive privileges, against any prostitution of our Government to the advancement of the few at the expense of the many, and in favor of compromise and gradual reform in our code of laws and system of political economy.

This is a succinct enunciation of the outlook of Mr. Codevilla's country class and that President is condemned by the Elite class for the outcomes of actions he started but succinctly said he did not wish to start in the first place and warned of the consequences of not using reason and accommodation to work out mutual problems.  That is President Andrew Jackson and the quoted section, above, comes from his Bank Veto message of 1832 which was the last time a massive part of the federal government's work to 'guide' the economy was rejected and dismantled.  That lasted for 80 years until President Wilson signed the Federal Reserve into being.  As for the Elitist imputation that Andrew Jackson was a genocidal racist, they cannot square his actions of adopting a native child as his son nor his words and deeds to ensure that we had good relations with Indian tribes that did work with us and went so far as to castigate Congress for letting those accounts fall into disrepair.  Racial genocide cannot be squared with those words, deeds and the meanings behind them, and yet to divide the people from those outlooks and actions (good and bad) they misrepresent the bad, hype it up to a high degree and then seek to say that is the sum total of the man.  If that were the case he would not have taken the actions he did, give the warnings he did, attempt to avert the problems as best he could and then, only in failure, still try to find a good end to what was a very bad situation in which lives were being lost.

No matter how vilified the man is, his outlooks, rooted in the basics of human individualism as the source of strength for society and prosperity, continue to this day.  Mr. Codevilla is not the first to highlight these people, and another writer took up that task nearly a decade ago:

The new Jacksonianism is no longer rural and exclusively nativist. Frontier Jacksonianism may have taken the homesteading farmer and the log cabin as its emblems, but today’s Crabgrass Jacksonianism sees the homeowner on his modest suburban lawn as the hero of the American story. The Crabgrass Jacksonian may wear green on St. Patrick’s Day; he or she might go to a Catholic Church and never listen to country music (though, increasingly, he or she probably does); but the Crabgrass Jacksonian doesn’t just believe, she knows that she is as good an American as anybody else, that she is entitled to her rights from Church and State, that she pulls her own weight and expects others to do the same. That homeowner will be heard from: Ronald Reagan owed much of his popularity and success to his ability to connect with Jacksonian values. Ross Perot and Pat Buchanan in different ways have managed to tap into the power of the populist energy that Old Hickory rode into the White House. In both domestic and foreign policy, the twenty-first century will be profoundly influenced by the values and concerns of Jacksonian America.

[..]

Jacksonian America’s love affair with weapons is, of course, the despair of the rest of the country. Jacksonian culture values firearms, and the freedom to own and use them. The right to bear arms is a mark of civic and social equality, and knowing how to care for firearms is an important part of life. Jacksonians are armed for defense: of the home and person against robbers; against usurpations of the federal government; and of the United States against its enemies. In one war after another, Jacksonians have flocked to the colors. Independent and difficult to discipline, they have nevertheless demonstrated magnificent fighting qualities in every corner of the world. Jacksonian America views military service as a sacred duty. When Hamiltonians, Wilsonians and Jeffersonians dodged the draft in Vietnam or purchased exemptions and substitutes in earlier wars, Jacksonians soldiered on, if sometimes bitterly and resentfully. An honorable person is ready to kill or to die for family and flag.

[..]

The underlying cultural unity between African Americans and Anglo-Jacksonian America shaped the course and ensured the success of the modern civil rights movement. Martin Luther King and his followers exhibited exemplary personal courage, their rhetoric was deeply rooted in Protestant Christianity, and the rights they asked for were precisely those that Jacksonian America values most for itself. Further, they scrupulously avoided the violent tactics that would have triggered an unstoppable Jacksonian response.

Although cultures change slowly and many individuals lag behind, the bulk of American Jacksonian opinion has increasingly moved to recognize the right of code-honoring members of minority groups to receive the rights and protections due to members of the folk community. This new and, one hopes, growing feeling of respect and tolerance emphatically does not extend to those, minorities or not, who are not seen as code-honoring Americans. Those who violate or reject the code—criminals, irresponsible parents, drug addicts—have not benefited from the softening of the Jacksonian color line.

[..]

Jacksonians are instinctively democratic and populist. Hamiltonians mistrust democracy; Wilsonians don’t approve of the political rough and tumble. And while Jeffersonians support democracy in principle, they remain concerned that tyrannical majorities can overrule minority rights. Jacksonians believe that the political and moral instincts of the American people are sound and can be trusted, and that the simpler and more direct the process of government is, the better will be the results. In general, while the other schools welcome the representative character of our democracy, Jacksonians tend to see representative rather than direct institutions as necessary evils, and to believe that governments breed corruption and inefficiency the way picnics breed ants. Every administration will be corrupt; every Congress and legislature will be, to some extent, the plaything of lobbyists. Career politicians are inherently untrustworthy; if it spends its life buzzing around the outhouse, it’s probably a fly. Jacksonians see corruption as human nature and, within certain ill-defined boundaries of reason and moderation, an inevitable by-product of government.

From Walter Russell Mead's The Jacksonian Tradition, put out in the fall 1999/2000 issue of the National Interest (archived here by Steven Den Beste).

From Mr. Codevilla's outlook of 'what if the country class took power in Congress and most Statehouses?' he clearly puts forward that the top-down methodology of the current ruling Elite class cannot serve as it is inherently Statist, not individual oriented:

Achieving the country class's inherently revolutionary objectives in a manner consistent with the Constitution and with its own diversity would require the Country Party to use legislation primarily as a tool to remove obstacles, to instruct, to reintroduce into American life ways and habits that had been cast aside. Passing national legislation is easier than getting people to take up the responsibilities of citizens, fathers, and entrepreneurs.

Reducing the taxes that most Americans resent requires eliminating the network of subsidies to millions of other Americans that these taxes finance, and eliminating the jobs of government employees who administer them. Eliminating that network is practical, if at all, if done simultaneously, both because subsidies are morally wrong and economically counterproductive, and because the country cannot afford the practice in general. The electorate is likely to cut off millions of government clients, high and low, only if its choice is between no economic privilege for anyone and ratifying government's role as the arbiter of all our fortunes. The same goes for government grants to and contracts with so-called nonprofit institutions or non-governmental organizations. The case against all arrangements by which the government favors some groups of citizens is easier to make than that against any such arrangement. Without too much fuss, a few obviously burdensome bureaucracies, like the Department of Education, can be eliminated, while money can be cut off to partisan enterprises such as the National Endowments and public broadcasting. That sort of thing is as necessary to the American body politic as a weight reduction program is essential to restoring the health of any human body degraded by obesity and lack of exercise. Yet shedding fat is the easy part. Restoring atrophied muscles is harder. Reenabling the body to do elementary tasks takes yet more concentration.

The grandparents of today's Americans (132 million in 1940) had opportunities to serve on 117,000 school boards. To exercise responsibilities comparable to their grandparents', today's 310 million Americans would have radically to decentralize the mere 15,000 districts into which public school children are now concentrated. They would have to take responsibility for curriculum and administration away from credentialed experts, and they would have to explain why they know better. This would involve a level of political articulation of the body politic far beyond voting in elections every two years.

If self-governance means anything, it means that those who exercise government power must depend on elections. The shorter the electoral leash, the likelier an official to have his chain yanked by voters, the more truly republican the government is. Yet to subject the modern administrative state's agencies to electoral control would require ordinary citizens to take an interest in any number of technical matters. Law can require environmental regulators or insurance commissioners, or judges or auditors to be elected. But only citizens' discernment and vigilance could make these officials good. Only citizens' understanding of and commitment to law can possibly reverse the patent disregard for the Constitution and statutes that has permeated American life. Unfortunately, it is easier for anyone who dislikes a court's or an official's unlawful act to counter it with another unlawful one than to draw all parties back to the foundation of truth.

The cutting of the size of government can be done either piecemeal, as Mr. Codevilla suggests, or via the concept of a 'Grand Bargain' like much of what the Progressives propose again and again.  A reduction in government 'Grand Bargain' attacks the root of the government's intervention in the lives of Americans and would address not just the wastrel spending at Education, Energy, Agriculture, the various 'arts', and so on, but would introduce the dismantling of the government welfare state in a way amenable to any American.

That can be done by, firstly, letting those know who currently draw on Social Security that they can continue to do so.  Second that those who paid into the system can then utilize their 'invested' funds to cut their own taxes.  Third FICA goes away as SSA becomes a direct funding for those left in it, and no new individuals will be let into it.  Fourth Medicare/Medicaid are added up, divided by two, apportioned to the States by population and phased out over 5 years.  SSA, Medicare and Medicaid now eat up all income of the federal government and all else, including interest on the National Debt is paid off in loans.  To working Americans this offers a double tax-cut that will last for some years as withholding from earnings plummets by 15-20%, which puts more money into the pockets of ordinary Americans, and by using SSA funds 'paid into' the system many people can live essentially tax free for some years.

That requires a 'cut to the bone' government which has already, at that point, agreed to remove the bulk of HHS and all of many Departments and Agencies.

The final piece, and really should be done, is to remove the 1911 Public Law setting the size of the House at 435 seats.  That is anti-representative in the extreme and needs to end.  For Americans to be represented in our diversity we need deep and diverse representation.  A Maximum House of 10,000 or may be unachievable (though very Constitutional) and the concept is that the problem of corruption is not the amount of money seeking to corrupt, but too few and easily corruptible.  If the Representative position is turned into a job with no real forward motion from it to higher office, then turn-over will be often for those seats as even minor demographic change impacts representation between each census.  That can be done by a majority in both Houses and either a Presidential signature or a veto over-ride.

The 'Grand Bargain' is that Americans, in a time of economic trouble, look to each other and to get the government out of doing ill to all of us, first, and then reducing the size, scope, power and cost of inefficient and incompetent government and making sure that each American is on a level playing field unfettered by heinous taxation.  The concept of being on a road to fiscal rectitude by paying down our debt with a goal of paying it off rang true after the Revolution as President Jackson made sure that he was the first President of a debt-free Nation.  That didn't last past his administration.  Now with the de-bunking of Keynesian economics and the bad examples set in Europe, the US can see its National budget like its household one and know that being in debt and facing bankruptcy is not at all good.  That can be made to stick as it is compelling and offers a ready exemplar of how you manage your own fiscal house.

It starts with pulling out the underpinnings for the massive federal government and its intervention into our economy (via the Federal Reserve, Fannie, Freddie, Ginnie and Sallie) plus ending the insane proposition of the ponzi scheme of SSA and the demographic black hole of federally subsidized health care.  It ends with increased representation, smaller government and much, much lower taxation aimed at setting us free of debt.

That cannot be done in one session of Congress.

Yet it must be done to retain liberty and freedom for all Americans rich and poor alike.