The incipient “Great Reset” is a multi-faceted beast. We talk a lot about vaccine passports and lockdowns and the Covid-realated aspects – and we should – but there’s more to it than that.
Remember, they want you to “own nothing and be happy”. And right at the top of the list of things you definitely shouldn’t own, is your own home.
The headlines about this have been steady for the last few years, but it has picked up pace in the wake of the “pandemic” (as has so much else). An agenda hidden on back pages, behind by Covid’s meaningless big red numbers, but perhaps no less sinister.
You can find articles all over the net talking up renting over owning.
Last month, for example, Bloomberg ran an article headlined:
America Should Become a Nation of Renters”
Which praises what they call “the liquefaction of the housing market” and gleefully expounds on the idea that “The very features that made home buying an affordable and stable investment are coming to an end.”
Other publications go more personal with it, with anecdotal columns about ignoring financial advice and refusing to buy your home. Vox, never one to sell their agenda with any kind of subtlety, have a piece titled:
Homeownership can bring out the worst in you
Which literally argues that buying a house can make you a bad person:
It’s the biggest thing you might ever buy. And it could be turning you into a bad person.
So what exactly is the narrative here? What’s the story behind the story?
The short answer is fairly simple: It’s about greed, and it’s about control.
It almost always is, in the end.
The longer answer is rather more complicated. Major investment firms such as Vanguard and Blackrock, along with rental companies such as American Homes 4 Rent, are buying up single-family homes in record numbers – sometimes entire neighbourhoods at a time.
They pay well over market value, pricing families who want to own those homes out of the market, which forces the housing market up whilst the Lockdown-created recession is lowering wages and creating millions of newly unemployed.
Of course, this is motivating people to sell the houses they already own.
People all across America have been saddled with houses worth less than they bought them for since the 2008 economic crash, and are eager to take the cash from private investment firms paying 10-20% over market value. Combine an economic recession with a created housing boom and you have a huge population of motivated sellers.
Of course, many of these sellers don’t realise, until it’s too late, that even if they attempt to downsize or move to a cheaper area, they may be priced out of the market completely, and forced to rent.
As such, in the last year, the private investment share of single-family home purchases is estimated to have increased ten-fold, going from 2% in 2018 to over 20% this year.
As more and more people are forced to rent, of course, rental properties will be in higher and higher demand. This in turn will drive the cost of renting up.
Which means, this weekend, while Senators adjourn to the summer homes they probably don’t rent, the ban will officially end and a lot of people are likely to have their houses foreclosed or their landlords kick them out.
The newly empty buildings will be a feeding frenzy for the massive corporate landlords. Who will descend on the banks like starving hyenas to snap up the foreclosed properties for pennies on the dollar. Just like they did in 2008.
Yield-chasing investors are snapping up single-family homes, competing with ordinary Americans and driving up prices
However, since then, something has clearly changed. The propaganda machine has kicked into gear to defend Wall Street from any backlash.
No better example of this shift can be found than The Atlantic, which ran this story in 2019:
WHEN WALL STREET IS YOUR LANDLORD With help from the federal government, institutional investors became major players in the rental market. They promised to return profits to their investors and convenience to their tenants. Investors are happy. Tenants are not.
BLACKROCK IS NOT RUINING THE US HOUSING MARKET The real villain isn’t a faceless Wall Street Goliath; it’s your neighbors and local governments stopping the construction of new units.
Wall Street isn’t to blame for the chaotic housing market
Which ran just a few days after the Atlantic article, and is practically identical.
Both these (oddly similar) articles argue that Wall Street and private equity firms can’t be blamed for buying up houses, and that the real problem is the lack of supply to meet demand.
You see, all the “selfish” people who already own homes (they did say it makes you a bad person) are blocking the construction of new houses, and thus driving up the cost of property through scarcity.
This has been a logically flawed argument around the housing market for decades.
That there aren’t enough houses for people to buy is patently absurd when the US census data says that there are over 15 million houses currently standing empty. That’s enough to house all of America’s roughly 500,000 homeless people 30x over.
There’s plenty of houses, there’s just not enough money to buy them.
For decades now, wage increases have lagged behind increases in the cost of living. In the 1960s one full-time job could afford a decent standard of living for a family of four or more. These days both parents work, sometimes multiple jobs each.
It was huge amounts of financial de-regulation which created this situation. So, whether you believe Vox’s BlackRock apologia or not, one way or another Wall Street very definitely is to blame.
But this isn’t just about money. It never is. Just as the war on cash isn’t just about efficiency, and the environmental push isn’t just about climate change. Ditto veganism. It’s about control. Just like vaccines, lockdowns and masks.
It always comes down to control.
It’s an oft-used cliche, but no less true for that, that homeowning “gives people a stake in society”. A family-owned house is a source of security for the future and something to leave your children. It is also sovereignty and privacy. Your own space that no one else can control or take away.
In short: A homeowner is independent. A renter is not. A renter can be controlled. A homeowner can not.
It’s the same reasoning behind the way working people were encouraged to take out loans and become debt slaves. If you limit people’s options, if you make them rely on you for a roof over their heads, you have control over them.
Under Feudalism, land wasn’t owned by the working class, but provided to them by landed barons, hence the term “Land Lord”. If you disrespected your Lord, or broke his rules, or he perceived another peasant/farm animal/crop would be a better use of the land, he could take it back.
Essentially, the behaviour of serfs was kept in check by their reliance on the nobility for a place to live. That’s very much the dynamic they’re going for here.
Rental agreements can be full of any terms and conditions the landlord wants, and the more desperate people get the more of their consumer rights they will sign over.
Maybe you’ll agree to smart meters which monitor your internet or power-usage habits, and then sell the data to behavioural modellers and viral marketers.
Maybe you’ll have to agree to certain power limitations or water shortages in order to “fight climate change”.
Maybe it will get worse than that.
Maybe they’ll go full Black Mirror style corporate dystopia. Maybe, through affiliation programs, the mega-equity firm which owns your rental house has ties to McDonald’s, and as such will require you to not eat at any competing fast-food franchises, or demand you observe at least ninety seconds of Disney advertisements per day.
Maybe it will be as simple as including vaccine status in the tenancy agreement, making it impossible for the unvaxxed to find a home.
Maybe they just want to make poor people miserable.
After all, the super-wealthy have got all the money they could ever need, and all the luxury they could ever use. Their living standards are as high as physically possible. So maybe the only way they can keep “winning”, is to start driving the living standards of us proles down.
The United States suffered through two lethal waves of contagion in the past year and a half. The first was a viral pandemic that killed about one in 500 Americans—typically, a person over 75 suffering from other serious conditions. The second, and far more catastrophic, was a moral panic that swept the nation’s guiding institutions.
Instead of keeping calm and carrying on, the American elite flouted the norms of governance, journalism, academic freedom—and, worst of all, science. They misled the public about the origins of the virus and the true risk that it posed. Ignoring their own carefully prepared plans for a pandemic, they claimed unprecedented powers to impose untested strategies, with terrible collateral damage. As evidence of their mistakes mounted, they stifled debate by vilifying dissenters, censoring criticism, and suppressing scientific research.
If, as seems increasingly plausible, the coronavirus that causes Covid-19 leaked out of a laboratory in Wuhan, it is the costliest blunder ever committed by scientists. Whatever the pandemic’s origin, the response to it is the worst mistake in the history of the public-health profession. We still have no convincing evidence that the lockdowns saved lives, but lots of evidence that they have already cost lives and will prove deadlier in the long run than the virus itself.
One in three people worldwide lost a job or a business during the lockdowns, and half saw their earnings drop, according to a Gallup poll. Children, never at risk from the virus, in many places essentially lost a year of school. The economic and health consequences were felt most acutely among the less affluent in America and in the rest of the world, where the World Bank estimates that more than 100 million have been pushed into extreme poverty.
The leaders responsible for these disasters continue to pretend that their policies worked and assume that they can keep fooling the public. They’ve promised to deploy these strategies again in the future, and they might even succeed in doing so—unless we begin to understand what went wrong.
The panic was started, as usual, by journalists. As the virus spread early last year, they highlighted the most alarming statistics and the scariest images: the estimates of a fatality rate ten to 50 times higher than the flu, the chaotic scenes at hospitals in Italy and New York City, the predictions that national health-care systems were about to collapse.
The full-scale panic was set off by the release in March 2020 of a computer model at the Imperial College in London, which projected that—unless drastic measures were taken—intensive-care units would have 30 Covid patients for every available bed and that America would see 2.2 million deaths by the end of the summer. The British researchers announced that the “only viable strategy” was to impose draconian restrictions on businesses, schools, and social gatherings until a vaccine arrived.
This extraordinary project was swiftly declared the “consensus” among public-health officials, politicians, journalists, and academics. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, endorsed it and became the unassailable authority for those purporting to “follow the science.” What had originally been a limited lockdown—“15 days to slow the spread”—became long-term policy across much of the United States and the world. A few scientists and public-health experts objected, noting that an extended lockdown was a novel strategy of unknown effectiveness that had been rejected in previous plans for a pandemic. It was a dangerous experiment being conducted without knowing the answer to the most basic question: Just how lethal is this virus?
The most prominent early critic was John Ioannidis, an epidemiologist at Stanford, who published an essay for STAT headlined “A Fiasco in the Making? As the Coronavirus Pandemic Takes Hold, We Are Making Decisions Without Reliable Data.” While a short-term lockdown made sense, he argued, an extended lockdown could prove worse than the disease, and scientists needed to do more intensive testing to determine the risk. The article offered common-sense advice from one of the world’s most frequently cited authorities on the credibility of medical research, but it provoked a furious backlash on Twitter from scientists and journalists.
The fury intensified in April 2020, when Ioannidis followed his own advice by joining with Jay Bhattacharya and other colleagues from Stanford to gauge the spread of Covid in the surrounding area, Santa Clara County. After testing for Covid antibodies in the blood of several thousand volunteers, they estimated that the fatality rate among the infected in the county was about 0.2 percent, twice as high as for the flu but considerably lower than the assumptions of public-health officials and computer modelers. The researchers acknowledged that the fatality rate could be substantially higher in other places where the virus spread extensively in nursing homes (which hadn’t yet occurred in the Santa Clara area). But merely by reporting data that didn’t fit the official panic narrative, they became targets.
Other scientists lambasted the researchers and claimed that methodological weaknesses in the study made the results meaningless. A statistician at Columbia wrote that the researchers “owe us all an apology.” A biologist at the University of North Carolina said that the study was “horrible science.” A Rutgers chemist called Ioannidis a “mediocrity” who “cannot even formulate a simulacrum of a coherent, rational argument.” A year later, Ioannidis still marvels at the attacks on the study (which was eventually published in a leading epidemiology journal). “Scientists whom I respect started acting like warriors who had to subvert the enemy,” he says. “Every paper I’ve written has errors—I’m a scientist, not the pope—but the main conclusions of this one were correct and have withstood the criticism.”
Mainstream journalists piled on with hit pieces quoting critics and accusing the researchers of endangering lives by questioning lockdowns. The Nation called the research a “black mark” for Stanford. The cheapest shots came from BuzzFeed, which devoted thousands of words to a series of trivial objections and baseless accusations. The article that got the most attention was BuzzFeed’s breathless revelation that an airline executive opposed to lockdowns had contributed $5,000—yes, five thousand dollars!—to an anonymized fund at Stanford that had helped finance the Santa Clara fieldwork.
The notion that a team of prominent academics, who were not paid for their work in the study, would risk their reputations by skewing results for the sake of a $5,000 donation was absurd on its face—and even more ludicrous, given that Ioannidis, Bhattacharya, and the lead investigator, Eran Bendavid, said that they weren’t even aware of the donation while conducting the study. But Stanford University was so cowed by the online uproar that it subjected the researchers to a two-month fact-finding inquiry by an outside legal firm. The inquiry found no evidence of conflict of interest, but the smear campaign succeeded in sending a clear message to scientists everywhere: Don’t question the lockdown narrative.
In a brief interlude of journalistic competence, two veteran science writers, Jeanne Lenzer and Shannon Brownlee, published an article in Scientific American decrying the politicization of Covid research. They defended the integrity and methodology of the Stanford researchers, noting that some subsequent studies had found similar rates of fatality among the infected. (In his latest review of the literature, Ioannidis now estimates that the average fatality rate in Europe and the Americas is 0.3 to 0.4 percent and about 0.2 percent among people not living in institutions.) Lenzer and Brownlee lamented that the unjust criticism and ad hominem vitriol had suppressed a legitimate debate by intimidating the scientific community. Their editors then proceeded to prove their point. Responding to more online fury, Scientific American repented by publishing an editor’s note that essentially repudiated its own article. The editors printed BuzzFeed’s accusations as the final word on the matter, refusing to publish a rebuttal from the article’s authors or a supporting letter from Jeffrey Flier, former dean of Harvard Medical School. Scientific American, long the most venerable publication in its field, now bowed to the scientific authority of BuzzFeed.
Editors of research journals fell into line, too. When Thomas Benfield, one of the researchers in Denmark conducting the first large randomized controlled trial of mask efficacy against Covid, was asked why they were taking so long to publish the much-anticipated findings, he promised them as “as soon as a journal is brave enough to accept the paper.” After being rejected by TheLancet, TheNew England Journal of Medicine, and JAMA, the study finally appeared in the Annals of Internal Medicine, and the reason for the editors’ reluctance became clear: the study showed that a mask did not protect the wearer, which contradicted claims by the Centers for Disease Control and other health authorities.
Stefan Baral, an epidemiologist at Johns Hopkins with 350 publications to his name, submitted a critique of lockdowns to more than ten journals and finally gave up—the “first time in my career that I could not get a piece placed anywhere,” he said. Martin Kulldorff, an epidemiologist at Harvard, had a similar experience with his article, early in the pandemic, arguing that resources should be focused on protecting the elderly. “Just as in war,” Kulldorff wrote, “we must exploit the characteristics of the enemy in order to defeat it with the minimum number of casualties. Since Covid-19 operates in a highly age specific manner, mandated counter measures must also be age specific. If not, lives will be unnecessarily lost.” It was a tragically accurate prophecy from one of the leading experts on infectious disease, but Kulldorff couldn’t find a scientific journal or media outlet to accept the article, so he ended up posting it on his own LinkedIn page. “There’s always a certain amount of herd thinking in science,” Kulldorff says, “but I’ve never seen it reach this level. Most of the epidemiologists and other scientists I’ve spoken to in private are against lockdowns, but they’re afraid to speak up.”
To break the silence, Kulldorff joined with Stanford’s Bhattacharya and Sunetra Gupta of Oxford to issue a plea for “focused protection,” called the Great Barrington Declaration. They urged officials to divert more resources to shield the elderly, such as doing more tests of the staff at nursing homes and hospitals, while reopening business and schools for younger people, which would ultimately protect the vulnerable as herd immunity grew among the low-risk population.
They managed to attract attention but not the kind they hoped for. Though tens of thousands of other scientists and doctors went on to sign the declaration, the press caricatured it as a deadly “let it rip” strategy and an “ethical nightmare” from “Covid deniers” and “agents of misinformation.” Google initially shadow-banned it so that the first page of search results for “Great Barrington Declaration” showed only criticism of it (like an article calling it “the work of a climate denial network”) but not the declaration itself. Facebook shut down the scientists’ page for a week for violating unspecified “community standards.”
The most reviled heretic was Scott Atlas, a medical doctor and health-policy analyst at Stanford’s Hoover Institution. He, too, urged focused protection on nursing homes and calculated that the medical, social, and economic disruptions of the lockdowns would cost more years of life than the coronavirus. When he joined the White House coronavirus task force, Bill Gates derided him as “this Stanford guy with no background” promoting “crackpot theories.” Nearly 100 members of Stanford’s faculty signed a letter denouncing his “falsehoods and misrepresentations of science,” and an editorial in the Stanford Dailyurged the university to sever its ties to Hoover.
The Stanford faculty senate overwhelmingly voted to condemn Atlas’s actions as “anathema to our community, our values and our belief that we should use knowledge for good.” Several professors from Stanford’s medical school demanded further punishment in a JAMA article, “When Physicians Engage in Practices That Threaten the Nation’s Health.” The article, which misrepresented Atlas’s views as well as the evidence on the efficacy of lockdowns, urged professional medical societies and medical-licensing boards to take action against Atlas on the grounds that it was “ethically inappropriate for physicians to publicly recommend behaviors or interventions that are not scientifically well grounded.”
But if it was unethical to recommend “interventions that are not scientifically well grounded,” how could anyone condone the lockdowns? “It was utterly immoral to conduct this society-wide intervention without the evidence to justify it,” Bhattacharya says. “The immediate results have been disastrous, especially for the poor, and the long-term effect will be to fundamentally undermine trust in public health and science.” The traditional strategy for dealing with pandemics was to isolate the infected and protect the most vulnerable, just as Atlas and the Great Barrington scientists recommended. The CDC’s pre-pandemic planning scenarios didn’t recommend extended school closures or any shutdown of businesses even during a plague as deadly as the 1918 Spanish flu. Yet Fauci dismissed the focused-protection strategy as “total nonsense” to “anybody who has any experience in epidemiology and infectious diseases,” and his verdict became “the science” to leaders in America and elsewhere.
Fortunately, a few leaders followed the science in a different way. Instead of blindly trusting Fauci, they listened to his critics and adopted the focused-protection strategy—most notably, in Florida. Its governor, Ron DeSantis, began to doubt the public-health establishment early in the pandemic, when computer models projected that Covid patients would greatly outnumber hospital beds in many states. Governors in New York, New Jersey, Pennsylvania, and Michigan were so alarmed and so determined to free up hospital beds that they directed nursing homes and other facilities to admit or readmit Covid patients—with deadly results.
But DeSantis was skeptical of the hospital projections—for good reason, as no state actually ran out of beds—and more worried about the risk of Covid spreading in nursing homes. He forbade long-term-care centers to admit anyone infected with Covid and ordered frequent testing of the staff at senior-care centers. After locking down last spring, he reopened businesses, schools, and restaurants early, rejected mask mandates, and ignored protests from the press and the state’s Democratic leaders. Fauci warned that Florida was “asking for trouble,” but DeSantis went on seeking and heeding advice from Atlas and the Great Barrington scientists, who were astonished to speak with a politician already familiar with just about every study they mentioned to him.
“DeSantis was an incredible outlier,” Atlas says. “He dug up the data and read the scientific papers and analyzed it all himself. In our discussions, he’d bounce ideas off me, but he was already on top of the details of everything. He always had the perspective to see the larger harms of lockdowns and the need to concentrate testing and other resources on the elderly. And he has been proven correct.”
If Florida had simply done no worse than the rest of the country during the pandemic, that would have been enough to discredit the lockdown strategy. The state effectively served as the control group in a natural experiment, and no medical treatment with dangerous side effects would be approved if the control group fared no differently from the treatment group. But the outcome of this experiment was even more damning.
Florida’s mortality rate from Covid is lower than the national average among those over 65 and also among younger people, so that the state’s age-adjusted Covid mortality rate is lower than that of all but ten other states. And by the most important measure, the overall rate of “excess mortality” (the number of deaths above normal), Florida has also done better than the national average. Its rate of excess mortality is significantly lower than that of the most restrictive state, California, particularly among younger adults, many of whom died not from Covid but from causes related to the lockdowns: cancer screenings and treatments were delayed, and there were sharp increases in deaths from drug overdoses and from heart attacks not treated promptly.
Chart by Jamie Meggas
If the treatment group in a clinical trial were dying off faster than the control group, an ethical researcher would halt the experiment. But the lockdown proponents were undeterred by the numbers in Florida, or by similar results elsewhere, including a comparable natural experiment involving European countries with the least restrictive policies. Sweden, Finland, and Norway rejected mask mandates and extended lockdowns, and they have each suffered significantly less excess mortality than most other European countries during the pandemic.
A nationwide analysis in Sweden showed that keeping schools open throughout the pandemic, without masks or social distancing, had little effect on the spread of Covid, but school closures and mask mandates for students continued elsewhere. Another Swedish researcher, Jonas Ludvigsson, reported that not a single schoolchild in the country died from Covid in Sweden and that their teachers’ risk of serious illness was lower than for the rest of the workforce—but these findings provoked so many online attacks and threats that Ludvigsson decided to stop researching or discussing Covid.
Social-media platforms continued censoring scientists and journalists who questioned lockdowns and mask mandates. YouTube removed a video discussion between DeSantis and the Great Barrington scientists, on the grounds that it “contradicts the consensus” on the efficacy of masks, and also took down the Hoover Institution’s interview with Atlas. Twitter locked out Atlas and Kulldorff for scientifically accurate challenges to mask orthodoxy. A peer-reviewed German study reporting harms to children from mask-wearing was suppressed on Facebook (which labeled my City Journalarticle “Partly False” because it cited the study) and also at ResearchGate, one of the most widely used websites for scientists to post their papers. ResearchGate refused to explain the censorship to the German scientists, telling them only that the paper was removed from the website in response to “reports from the community about the subject-matter.”
The social-media censors and scientific establishment, aided by the Chinese government, succeeded for a year in suppressing the lab-leak theory, depriving vaccine developers of potentially valuable insights into the virus’s evolution. It’s understandable, if deplorable, that the researchers and officials involved in supporting the Wuhan lab research would cover up the possibility that they’d unleashed a Frankenstein on the world. What’s harder to explain is why journalists and the rest of the scientific community so eagerly bought that story, along with the rest of the Covid narrative.
Why the elite panic? Why did so many go so wrong for so long? When journalists and scientists finally faced up to their mistake in ruling out the lab-leak theory, they blamed their favorite villain: Donald Trump. He had espoused the theory, so they assumed it must be wrong. And since he disagreed at times with Fauci about the danger of the virus and the need for lockdowns, then Fauci must be right, and this was such a deadly plague that the norms of journalism and science must be suspended. Millions would die unless Fauci was obeyed and dissenters were silenced.
But neither the plague nor Trump explains the panic. Yes, the virus was deadly, and Trump’s erratic pronouncements contributed to the confusion and partisanship, but the panic was due to two preexisting pathologies that afflicted other countries, too. The first is what I have called the Crisis Crisis, the incessant state of alarm fomented by journalists and politicians. It’s a longstanding problem—humanity was supposedly doomed in the last century by the “population crisis” and the “energy crisis”—that has dramatically worsened with the cable and digital competition for ratings, clicks, and retweets. To keep audiences frightened around the clock, journalists seek out Cassandras with their own incentives for fearmongering: politicians, bureaucrats, activists, academics, and assorted experts who gain publicity, prestige, funding, and power during a crisis.
Unlike many proclaimed crises, an epidemic is a genuine threat, but the crisis industry can’t resist exaggerating the danger, and doomsaying is rarely penalized. Early in the 1980s AIDS epidemic, the New York Times reported the terrifying possibility that the virus could spread to children through “routine close contact”—quoting from a study by Anthony Fauci. Life magazine wildly exaggerated the number of infections in a cover story, headlined “Now No One Is Safe from AIDS.” It cited a study by Robert Redfield, the future leader of the CDC during the Covid pandemic, predicting that AIDS would soon spread as rapidly among heterosexuals as among homosexuals. Both scientists were absolutely wrong, of course, but the false alarms didn’t harm their careers or their credibility.
Journalists and politicians extend professional courtesy to fellow crisis-mongers by ignoring their mistakes, such as the previous predictions by Neil Ferguson. His team at Imperial College projected up to 65,000 deaths in the United Kingdom from swine flu and 200 million deaths worldwide from bird flu. The death toll each time was in the hundreds, but never mind: when Ferguson’s team projected millions of American deaths from Covid, that was considered reason enough to follow its recommendation for extended lockdowns. And when the modelers’ assumption about the fatality rate proved too high, that mistake was ignored, too.
Journalists kept highlighting the most alarming warnings, presented without context. They needed to keep their audience scared, and they succeeded. For Americans under 70, the probability of surviving a Covid infection was about 99.9 percent, but fear of the virus was higher among the young than among the elderly, and polls showed that people of all ages vastly overestimated the risk of being hospitalized or dying.
The second pathology underlying the elite’s Covid panic is the politicization of research—what I have termed the Left’s war on science, another long-standing problem that has gotten much worse. Just as the progressives a century ago yearned for a nation directed by “expert social engineers”—scientific high priests unconstrained by voters and public opinion—today’s progressives want sweeping new powers for politicians and bureaucrats who “believe in science,” meaning that they use the Left’s version of science to justify their edicts. Now that so many elite institutions are political monocultures, progressives have more power than ever to enforce groupthink and suppress debate. Well before the pandemic, they had mastered the tactics for demonizing and silencing scientists whose findings challenged progressive orthodoxy on issues such as IQ, sex differences, race, family structure, transgenderism, and climate change.
And then along came Covid—“God’s gift to the Left,” in Jane Fonda’s words. Exaggerating the danger and deflecting blame from China to Trump offered not only short-term political benefits, damaging his reelection prospects, but also an extraordinary opportunity to empower social engineers in Washington and state capitals. Early in the pandemic, Fauci expressed doubt that it was politically possible to lock down American cities, but he underestimated the effectiveness of the crisis industry’s scaremongering. Americans were so frightened that they surrendered their freedoms to work, study, worship, dine, play, socialize, or even leave their homes. Progressives celebrated this “paradigm shift,” calling it a “blueprint” for dealing with climate change.
This experience should be a lesson in what not to do, and whom not to trust. Do not assume that the media’s version of a crisis resembles reality. Do not count on mainstream journalists and their favorite doomsayers to put risks in perspective. Do not expect those who follow “the science” to know what they’re talking about. Science is a process of discovery and debate, not a faith to profess or a dogma to live by. It provides a description of the world, not a prescription for public policy, and specialists in one discipline do not have the knowledge or perspective to guide society. They’re biased by their own narrow focus and self-interest. Fauci and Deborah Birx, the physician who allied with him against Atlas on the White House task force, had to answer for the daily Covid death toll—that ever-present chyron at the bottom of the television screen—so they focused on one disease instead of the collateral damage of their panic-driven policies.
“The Fauci-Birx lockdowns were a sinful, unconscionable, heinous mistake, and they will never admit they were wrong,” Atlas says. Neither will the journalists and politicians who panicked along with them. They’re still portraying lockdowns as not just a success but also a precedent—proof that Americans can sacrifice for the common good when directed by wise scientists and benevolent autocrats. But the sacrifice did far more harm than good, and the burden was not shared equally. The brunt was borne by the most vulnerable in America and the poorest countries of the world. Students from disadvantaged families suffered the most from school closures, and children everywhere spent a year wearing masks solely to assuage the neurotic fears of adults. The less educated lost jobs so that professionals at minimal risk could feel safer as they kept working at home on their laptops. Silicon Valley (and its censors) prospered from lockdowns that bankrupted local businesses.
Luminaries united on Zoom and YouTube to assure the public that “we’re all in this together.” But we weren’t. When the panic infected the nation’s elite—the modern gentry who profess such concern for the downtrodden—it turned out that they weren’t so different from aristocrats of the past. They were in it for themselves.
For many people desperate to see a return to a life that is more familiar, it is still easy to believe that the upheavals we have experienced since March 2020 and the changes that have been wrought in their train are ‘temporary’, even if they are starting to ‘drag on’ somewhat longer than hoped.
However, anyone who is paying attention to what is taking place in the background is well aware that the life we knew before 2020 has already ended and what is being systematically put in its place as the World Economic Forum (WEF) implements its ‘Great Reset’ will bear no comparison to any period prior to last year. See ‘Killing Democracy Once and for All: The Global Elite’s Coup d’état That Is Destroying Life as We Know It’.
Of course, those of us who qualify as ‘ordinary people’ have had no say in the shape of what is being implemented: that shaping has been the prerogative of the criminal global elite which is now implementing a plan that has been decades in the making and built on hundreds of years of steady consolidation of elite power.
Also, of course, there is nothing about this shaping that is good for us. In simple terms, it is reshaping the human ‘individual’ so that previously fundamental concepts such as human identity, human liberty, human rights (such as freedom of speech, assembly and movement), human privacy and human volition are not just notions of the past but are beyond the comprehension of the typical ‘transhuman’. At the same time, the global elite is restructuring human society into a technocratic dystopia which is a nightmarish cross between ‘Brave New World’, ‘1984’ and the Dark Age. See ‘Strategically Resisting the New Dark Age: The 7 Days Campaign to Resist The Great Reset’.
The only question remaining is this: ‘Can we mobilize adequate strategic resistance – that is, resistance that systematically undermines the power of the global elite to conduct this coup and restores power to ordinary people – to defeat this coup?’
But before I answer that question, I wish to highlight just one element of the elite coup that is taking place and outline the profound changes that are being left in its wake unless we stop them.
These changes are essentially related to the capacities of computerized technologies to deprive us of what little we have left of our financial autonomy, including because any notion of privacy is rapidly vanishing.
Vanishing Money
One reason for highlighting the issue of money is because while it is good to see increasing critical attention being paid to the ‘injectables’ program, with its devastating consequences for humanity, far too little attention is being paid to the profoundly important transformation being wrought under cover of the elite-driven narrative which has virtually all people’s attention distracted from this deeper agenda. And while this deeper agenda entails a great many aspects, one subset of these is related to the way in which the global financial system is being re-engineered to play its role in fully controlling the human population.
However, these reports are contradicted by other research and the ongoing evidence that cash is vanishing. Most importantly, there is no doubt about the elite intention in this regard. They want cash gone.
The digitization of money has been occurring for decades and it is now being accelerated dramatically.
Notably, in this respect, the ‘Better Than Cash Alliance’ has 78 members ‘committed to digitizing payments.’ If you think that this is a grassroots initiative set up by people like you and me, you will be surprised to read that the Bill & Melinda Gates Foundation is a ‘Resource Partner’ to the initiative along with some UN agencies, many national governments and corporations such as Mastercard and Visa.
So while the trend toward a cashless society has been progressing steadily for some decades, with countries like Denmark, Norway and Sweden already virtually cashless and India rapidly moving in that direction – see ‘India’s PM Modi defends cash ban, announces incentives’ – the so-called ‘Covid-19 pandemic’ was contrived partly to provide a pretext for further accelerating the move from cash to cards and apps, with increasing numbers of people using the digital methods, even for small sums, partly because some people were scared into believing that the ‘virus’ could be transmitted by bills and coins.
But there is more. In addition to measures not mentioned here, other plans include the use of a facial scan that records your entry to a store and is linked to artificial intelligence that identifies you and your credit rating. This then enables, or otherwise, your ability to pay for goods and services based on this facial scan.
‘Does all of this matter’, you might ask. Well the convenience of cards and apps has two significant costs: your privacy and your freedom. You lose both simply because while paying with cash is anonymous, paying by card or app leaves a digital trail that is as difficult to follow as an elephant whose tail you are already holding. And this digital trail forms a vital part of the surveillance grid that enables all of those who are tracking and documenting your movement, your payments and your behaviour to do so without leaving the comfort of their chairs. For more detail on this, watch ‘Cash or card – will COVID-19 kill cash?’ which is embedded in the article ‘Cash or Card – Will COVID-19 Kill Cash? Leaving a Digital Footprint With Every Payment’.
But it goes beyond this. As touched on above in relation to privacy and explained at some length by Whitney Webb, ‘there is a related push by WEF partners to “tackle cybercrime” that seeks to end privacy and the potential for anonymity on the internet in general, by linking government-issued IDs to internet access. Such a policy would allow governments to surveil every piece of online content accessed as well as every post or comment authored by each citizen, supposedly to ensure that no citizen can engage in “criminal” activity online.
‘Notably, the WEF Partnership against Cybercrime employs a very broad definition of what constitutes a “cybercriminal” as they apply this label readily to those who post or host content deemed to be “disinformation” that represents a threat to “democratic” governments. The WEF’s interest in criminalizing and censoring online content has been made evident by its recent creation of a new Global Coalition for Digital Safety to facilitate the increased regulation of online speech by both the public and private sectors.’ See ‘Ending Anonymity: Why the WEF’s Partnership Against Cybercrime Threatens the Future of Privacy’.
But to get back to cash: Unfortunately for us, the global elite does not intend to leave the abolition of cash to our ‘preference for the convenience of cards’ and other moves to entice us to switch to digital payment. It fully intends to force us to accept digital methods as the only means of payment.
But, in this instance, even profitability is at the trivial end of the elite motivation spectrum.
Cash is being forced out of existence because it undermines the elite agenda to take all power from ordinary people.
So, in parallel with other regressions over the past 18 months as the elite coup to take complete control of our lives has continued to unfold, there have been ‘warnings’ from various institutions – including the World Economic Forum and the Carnegie Endowment for International Peace – about the possibility of an ‘allegedly imminent cyber attack that will collapse the existing financial system’.
Following a simulation in 2020, in which the World Economic Forum along with the Russian government and global banks conducted a high-profile cyberattack simulation that targeted the financial industry, another simulation was held on 9 July 2021 involving the World Economic Forum and the Russian government-owned Sberbank as well as other key financial agents. See ‘Cyber Polygon’ and ‘Cyber Polygon 2021’. In reality, of course, such a collapse of the financial system would constitute ‘the final yet necessary step’ to implement the World Economic Forum’s desired outcome of forcing a widespread shift ‘to digital currency and increased global governance of the international economy’.
If this financial collapse happens, the ‘solution’ suggested by key agencies – ‘to unite the national security apparatus and the finance industry first, and then use that as a model to do the same with other sectors of the economy’ – will ensure that we lose what little control is left in our lives, not just in relation to our financial resources but in all other domains as well. For a full explanation, see ‘WEF Warns of Cyber Attack Leading to Systemic Collapse of the Global Financial System’.
And for another account of the deeper agenda and its financial impacts already, including its ‘economic genocide’, as well as what is yet to happen, watch this interview of Catherine Austin Fitts: ‘Globalist Central Banking New World Order Reset Plan’.
In response to concerns in the United States that businesses that refuse cash will disadvantage communities with poor access to traditional banking systems, there are signs that ‘a national movement protecting consumers’ ability to pay in cash may be emerging’ with a number of states and cities already outlawing cashless outlets. See ‘Cash or Credit? State and City Bans on Cashless Retailers Are on the Rise’.
Realistically, however, given what is at stake, considerable elite pressure will be applied to reverse these decisions in time. So we need our defense to be more rigorous and less reliant on agents who are unlikely to be tough enough to defend our interests or will be sidelined or killed for doing so, as at least two national presidents who resisted the elite intention last year have since been killed. See ‘Coronavirus and Regime Change: Burundi’s Covid Coup’ and ‘John Magufuli: Death of an African Freedom Fighter’.
Moreover, given the likelihood that the financial system will be deliberately crashed at some point – and possibly soon – we need to employ a variety of tactics, that build resilience into our resistance, to defeat this initiative.
Hence, storing and paying with cash, moving your accounts to local community banks or credit unions (and away from the large corporate banks) and making the effort to become more self-reliant, particularly in food production, will increase your resilience, as will participating in local trading schemes, whether involving local currencies or goods and services directly.
As with all elements of the defense we implement, it will need to be multi-layered and integrated into the overall defense strategy. The elite intends to kill off many of us – as the depopulation measures within the coup, including the destruction of the global economy throwing 500,000,000 people out of work and killing millions as a result, as well as the ‘injectables’ program already killing tens of thousands, make perfectly clear – and enslave the rest.
For an integrated strategy to defeat the elite coup, see the ‘We Are Human, We Are Free’ campaign, which has 29 strategic goals for defeating the coup including meaningful engagement with police and military forces to assist them to understand and resist, rather than support, the elite agenda.
One of the interesting challenges about the current ‘Covid-19 Crisis’ is that it continues to very successfully distract most people from awareness of the deeper agenda: the Global Elite’s ‘Great Reset’ and related initiatives, such as that discussed above in relation to money.
Hence, apart from the perennial problem of raising awareness and mobilizing resistance among those still believing the elite-driven propaganda, we face two key strategic hazards.
The first hazard is a longstanding one: while virtually all people believe that elite agents – in this case, governments – are controlling events, much ‘resistance’ will focus on begging governments, through such things as petitions and protest demonstrations, to ‘fix it’ for us. The elite has long dissipated our dissent by having us direct it at one or other of its agents. This case is no different. And while we are not using our occasional large rallies to inform people how to resist powerfully every day of their life, these rallies are a waste of time whatever solidarity they build in the short term. History is categorically instructive on that point.
A second strategic hazard we face is that resistance to the ‘vaccine’ and the ‘vaccine’ passport might be ‘successful’ (in the sense that concerted actions stall some government implementation of some measures in relation to these two initiatives) and leave most people believing that they have ‘won’, while the deeper agenda remains in the shadows with virtually no-one resisting.
It is important, therefore, that those who are aware of the deeper agenda continue to provide opportunities for others to become aware of this too and the fundamental threat it poses to us all while also sharing how we can resist its key dimensions in a way that makes a difference. It is not enough to complain about elite agents, such as governments, the medical and pharmaceutical industries, and the corporate media.
We must strategically resist the elite coup itself with actions such as those in the 7 Days Campaign to Resist The Great Reset before we find ourselves locked in a technocratic prison without the free-willed minds necessary to analyze, critique, plan and act.
Robert J. Burrowes has a lifetime commitment to understanding and ending human violence. He has done extensive research since 1966 in an effort to understand why human beings are violent and has been a nonviolent activist since 1981. He is the author of ‘Why Violence?’ His email address is flametree@riseup.net and his website is here.
Perhaps we should update Marie Antoinette’s famous quip of cluelessness to: “Let them eat space tourism.”
As billionaires squander immense resources on self-glorifying space flights, the corporate media is nothing short of worshipful. Millions of average citizens, on the other hand, wish the self-glorifying billionaires had taken themselves and all the other parasitic, tax-avoiding, predatory billionaires with them on a one-way trip into space.
Have we reached Peak Self-Glorifying Billionaire? If so, where does the downhill slide take us? Let’s start with a bit of history. Correspondent Jim B. summarized historian Arnold Toynbee’s study of the rise and fall of civilizations thusly: “Civilizations fail when their elites change from an admired dynamic creative class to a despised Establishment of corrupt rentiers, an entrenched governing class unfit to govern.”
The 2013 book Why Nations Fail: The Origins of Power, Prosperity, and Poverty discusses the differences between failed states and successful states, and concludes that the failed states are fundamentally kleptocracies that answer to a self-serving elite while successful states are answerable to the broad populace.
To summarize: When the few benefit at the expense of the many, the resulting kleptocracy ends up a failed state. When states maintain meaningful, transparent ways of responding to public needs and demands, the result is a successful state.
This is of course a simplification. The perverse effects of colonialism linger, the development of civic organizations public institutions, values and identities that make up what I call the social ontology are not pre-ordained, and nations with low-cost surplus energy can be quite successful kleptocracies until their energy surplus runs out.
But in the main, the question remains: How did previously successful political, social and economic systems change such that they no longer generated beneficial synergies but slid into fatal synergies?
From the point of view of how systems fail to maintain dynamic stability, three factors pop out:
1. Elites become too successful in sluicing the nation’s income, wealth and political power into their own hands.
2. Since the system continues to thrive despite their dominance, then there is obviously no need to change anything–especially if it reduces their share of the nation’s wealth and political power.
3. The elites ignore the intangible decay of leadership, the real-world dynamics of scarcity and over-estimate their own capabilities and the resilience of the system.
I recently described the feedback loop that occurs when a wealthy elite can purchase political power:“as a result of their campaign contributions and lobbying, the elites’ wealth continues expanding, enhancing their political power to further expand their wealth, and so on.”
In a healthy system, there are mechanisms that limit elite ownership of wealth and political power to what the system can bear. Over time, the feedback I described increases elite wealth and power to a point where the limits are crushed and the elite feedback gathers momentum.
With institutional limits no longer in the way, the elite reaches the point where the political system no longer responds to the broad public at all, and the vast majority of income-producing wealth is already in the hands of the elite.
This dominance throws the system out of balance such that, as David Parsons recently put it: (Elite-dominated) “Capitalism makes everyone homeless and then makes award-winning movies about how resilient people are for living in their cars.”
The apparent success of the system even as it grows ever more imbalanced generates a self-serving confidence in the Elites that their dominance is not only benign but permanent.
But this self-serving view is illusory. Beneath the surface, major subsystems are attempting to re-establish stability, but the instability is so extreme that the measures being deployed are also extreme.
These policy extremes only push the system further out of balance in other directions, creating fatal synergies as mutually reinforcing imbalances pile up.
See the chart below of money supply as one example of many.
But the elite is blinded by their confidence and greed to these accelerating imbalances. They reckon that managing the narratives (a.k.a. propaganda), minor policy tweaks and creating more currency and credit are all that’s needed to maintain what they consider the optimal form of stability: they own 99% of political power and 97% of all the income from capital.
Monopoly Versus Democracy: How to End a Gilded Age: “Ten percent of Americans now control 97 percent of all capital income in the country. Nearly half of the new income generated since the global financial crisis of 2008 has gone to the wealthiest one percent of U.S. citizens. The richest three Americans collectively have more wealth than the poorest 160 million Americans.”
I’ve often noted that the wealth of Rome’s political and economic elite went from being 20 times the wealth of a landowning farmer or craftsman to 200,000 times the commoners’ wealth at the end of the Western Empire. Now that three individuals own more wealth than half the American populace, and the top 0.1% hold more wealth than the bottom 80%, I think we can safely declare we’ve reached the same extreme.
The first tranche of American presidents left office less wealthy than when they entered because serving in public office was understood as a noble and valued sacrifice of time and wealth. Now presidents leave office far wealthier than when they entered public service.
Per #3, the elite no longer sees any compelling reason to sacrifice their income, wealth and power to stabilize the system or benefit the common good. In the view of the billionaires, if any sacrifices are necessary, then they should be borne by the bottom 95%, or failing that, the bottom 99.5%.
Given their dominance, their willingness to use their wealth and power to protect their dominance dooms the system to destabilization and collapse, as the resources and value system required to successfully navigate eras of instability and scarcity are no longer available to the state or public.
In effect, the elite uses its power not to restabilize the system but to maintain its extreme dominance and protect it from any political threats.
A once vibrant ecosystem has become a monoculture whose stability is far more precarious than it appears on the surface, as the resilience of monocultures is entirely artificial.
Two recent books illuminate corners of this destabilizing inequality:
We are in the final stages of this accelerating destabilization: the refusal of the elite to sacrifice any meaningful share of their wealth and power to save the system from fatal synergies guarantees collapse.
Perhaps we should update Marie Antoinette’s famous quip of cluelessness to: “Let them eat space tourism.” We all know where this cluelessness ultimately leads.
Maintaining the illusion of confidence, permanence and stability serves the interests of those benefiting from the bubbles and those who prefer the safety of the herd, even as the herd thunders toward the precipice.
The misconception that collapse is an all or nothing phenomenon is common: Either the system rights itself with a bit of money-printing and rah-rah or it collapses into post-industrial ruin and gangs are battling over the last stash of canned beans.
Neither scenario considers the fragility and resilience of the socio-economic system as a whole. It is both far more fragile than the believers in the permanence of the waste is growth model grasp and more resilient than the complete collapse prognosticators grasp.
The recent relatively mild logjams in global supply chains of essentials are mere glimpses of precariously fragile delivery-supply systems. These can be understood as bottlenecks that only insiders see, or as unstable nodes through which all the economy’s connections run. Put another way, the economy’s as a network appears decentralized and robust, but this illusion vanishes when we consider how the entire economy rests on a few unstable nodes.
One such node is the delivery of gasoline and fuels. It’s such an efficient and reliable system that 99.9% of us take it for granted: there will always be plenty of gasoline at every station, the tanks of jet fuel will always be topped off, and so on.
The 0.1% know that this system, once disrupted, would knock over dominoes all through the economy.
Hyper-efficiency and hyper-globalization has reduced the number of producers of essentials to the point that disruptions cannot be overcome with redundant sources. We see this everywhere in the global economy: a handful of plants and companies (sometimes a single source of essential components) process or manufacture essential components in much larger systems.
This is how you end up with thousands of newly manufactured vehicles parked in lots awaiting one critical part that is in short supply.
Another key weakness is the entire system’s reliance on debt, leverage and speculation. Few seem to understand that physical production and delivery systems can grind to a halt for financial reasons–for example, lines of credit being pulled, a counterparty to some arcane commodity swap goes under, taking the presumably solvent corporation down with it, and so on.
The more debt that’s been piled up, the greater the instability of the entire system. Risk always appears low until the system destabilizes, and then all the hedges fail and risk breaks out, flooding through the entire financial system.
Leverage is great fun on the way up, as it magnifies gains. Since the Federal Reserve implicitly guarantees that “buy the dip” will generate massive gains, why not ramp up leverage ten-fold to maximize those Fed-guaranteed gains?
Leverage is less fun on the way down. When the underlying collateral has shrunk to 20% of the leveraged bets being made, a 21% decline in the asset wipes out all the collateral holding up the palace of leveraged debt.
The Fed can print money but it can’t create collateral, nor can it make insolvent entities solvent. All the Fed can do is increase the debt and leverage, which is not the solution, it’s the problem.
Speculation is also inherently unstable, as the euphoric herd, once startled, turns in panic and stampeded in fear. Markets which appeared liquid–i.e., sellers could count on someone buying as many millions of shares as they desired to sell–become illiquid, as buyers vanish like mist in Death Valley. With buyers gone, prices plummet to levels the herd reckoned “impossible” just days before.
The Fed’s entire strategy in the 21st century has been to inflate asset bubbles that generate the illusion of wealth–the so-called wealth effect which is presumed to inspire voracious borrowing and spending.
Unfortunately for the Fed, most of the gains flowed to the top 0.1%, and an economy based on a handful of billionaires buying super-yachts and spaceships is a line of dominoes awaiting the inevitable “accident.” So there are two systemic problems with relying on asset bubbles to generate “wealth”: 1) since 90% of the assets are owned by a thin slice of the populace, bubbles increase destabilizing inequality, and 2) bubbles are intrinsically unstable. So the U.S. economy, dependent on the Fed for the “juice” of monetary stimulus, is now dependent on incredibly unstable bubbles in assets, debt and leverage, bubbles which have generated extremes of wealth/income inequality that are destabilizing the social and political orders.
As the three charts below illustrate, the fragility and instability are well hidden until it’s too late: bubbles, debt, leverage, budgets and revenues can only click higher because the system breaks down if there is any sustained decline (the rising wedge model of breakdown). Once the subsystems fail, there’s no putting the eggshell back together.
The second chart depicts how buffers thin beneath the surface, masking the systemic fragility. The loss of redundancy, the decay of maintenance, the loss of experienced workers–all of these are hidden from public view until the system breaks down.
The third chart tracks the S-curve of expansion, confidence, complacency, delusion and collapse followed by human systems, from nations to empires to corporations: as the buffers thin and the rising wedge reaches an apex of vulnerability, the leadership evinces a delusional confidence in the permanence and stability of increasingly fragile, unstable systems.
Maintaining the illusion of confidence, permanence and stability serves the interests of those benefiting from the bubbles and those who prefer the safety of the herd, even as the herd thunders toward the precipice.
This is how breakdowns in apparently stable subsystems triggers the fall of dominoes throughout the larger system, leading to a collapse that was widely viewed as “impossible.” Such is the power of complacency and delusion.
President Calvin Coolidge said, “The business of America is business.” The expression is memorable because it always rang true. But nearly 100 years later an old trite saying has taken on an ever more terrifying meaning.
The ruling class wield their power more blatantly than ever. There is little effort to conceal their determination to rule over the people and to control the politicians who are now little more than their personal minions.
When the people get a little help, as happened with additional stimulus funds for the unemployed, politicians across the country took up arms for the ruling class and turned down free money just to stay in the good graces of their bosses.
Currently 25 states out of 50 have rejected additional help for the unemployed. The money came from the federal government and didn’t impact state budgets, but politicians know who calls the shots. When called upon to help struggling people they chose to do just the opposite. They helped their exploiters and, in the process, made a mockery of what passes for democracy.
There is no labor shortage in this country. Instead, there is a shortage of jobs that pay a living wage and that is because of the power of capitalists. They have grown richer precisely because they have forced workers to live in a constant state of precarity, and now it is quite literally better to stay home than to work for a pittance.
Of course, the richest man in the world, Amazon’s Jeff Bezos, is a master at coming up with new ways to subjugate workers. Any reports of job growth should be viewed with a very jaundiced eye as predatory capitalism has driven down wages and created a dystopia for workers. Bezos has mastered squeezing the most and giving the least.
Amazon warehouse workers suffer from injuries at higher rates than other employees in similar jobs but the injuries are part of the cost of doing business. It is expected that the grueling working conditions will create high turnover which is exactly what Amazon wants. A revolving door of employees serves their needs quite nicely. Bezos made a big deal about a $15 per hour starting salary but he could certainly afford to pay a lot more, a real living wage. The tight-fisted billionaire who could potentially become a trillionaire got rich the old fashioned way. He cheats workers.
Bezos also comes up with new and ingenious ways to spread the suffering. Amazon Flex delivery drivers are hired by apps and fired by algorithms. They have no interaction with human resources or any humans at all and they must pay a $200 fee to contest terminations that are rarely decided in their favor.
Even when American workers lose their jobs they are still at the mercy of corporate giants. ID.me contracts with states to provide public access to web sites such as those used for unemployment claims. Their facial recognition software doesn’t verify everyone properly and desperate people wait days and weeks for their unemployment payments to arrive. As with Amazon there is no one to speak to for help. But state governments turn over millions of dollars to ID.me in order to cheat people out of benefits they have earned. Currently 30 states contract with ID.me to make sure that the most vulnerable are kicked while they are down.
The algorithm hirings and firings and the facial recognition technology problems are not bugs in the system. They are features. They are doing precisely what they are intended to do, keep workers poor, desperate, and at the mercy of capitalists. Cruelty is the point.
One might ask who speaks for the people. Workers in several states had their unemployment saved by court decisions but those are few and far between. Politicians are as blatant as their corporate bosses and openly side with them against their constituents.
There is no way to reform this system. Democrats and republicans are equally eager to act at the behest of corporate interests. The people either vote in hopes of change that never comes or are apathetic because they see that the odds are against them.
The workers who refuse low pay under dangerous conditions are moving in the right direction. Whether they know it or not they are potentially building a new movement. A general strike is what the country needs. Of course that is why the hammer fell in an attempt to nip any resistance in the bud and get the cogs back into the machine. But the direction we must move in is clear. There is no salvation from a Biden or a Harris or any other name being floated. The people will have to move in a different direction if they are to save themselves.
Is inflation “transitory” in your household budget? Really? Where?
The Federal Reserve has been bleating that inflation is “transitory”–but what about the real world that we live in, as opposed to the abstract funhouse of rigged statistics? Here’s a simple test to help you decide if inflation is “transitory” in the real world.
Let’s start with some simple stipulations: price is price, there are no tricks like hedonics or substitution. Nobody cares if the truck stereo is better than it was 40 years ago, the price of the truck is the price we pay today, and that’s all that matters.
(Funny, the funhouse statistical adjustments never consider that appliances that used to last 30 years now break down and are junked after 3 years–if we adjusted for that, the $500 washer would be tagged at $5,000 today because it has lost 90% of its durability over the past 30 years.)
Second, inflation must be weighted to “big ticket” nondiscretionary items. The funhouse statistical trickery counts a $10 drop in the price of a TV (which you buy every few years at best) as equal to a $100 rise in childcare, which you pay monthly. No, no, no: a 10% rise in rent, healthcare insurance and childcare is $400 a month or roughly $5,000 a year. A 10% decline in a TV you buy every three years is $50. Even a 50% drop in the price of a TV ($250) is $83 per year–absolutely trivial, absolutely meaningless compared to $5,000 in higher big-ticket expenses.
You can forego the new TV but not the rent, childcare or healthcare. That’s the difference between “big ticket” nondiscretionary and discretionary (meals out, 3rd TV, etc.).
Third, we jettison the painfully obvious manipulation of “owners equivalent rent” for housing costs. Housing costs are the prices we pay for rent, owning a home and paying property taxes, insurance and maintenance costs to own the home. (Have you priced having a new roof put on your house by a licensed, reputable contractor? No? Well, it’s become a lot more expensive than it was a few years ago. Where is that enormous price leap in “owners equivalent rent”? Just how stupid does the Fed reckon we are?)
OK, here’s the test: let’s say markets finally take a deflationary dive from overvalued heights. Housing, stocks and other risk assets fall 30%. Trillions of dollars in “wealth” (that didn’t exist prior to the Everything Bubble inflating) has vanished, generating a reverse wealth effect as all the owners of these assets feel poorer and less inclined to borrow and spend. This is classically considered highly deflationary: demand drops, prices drop.
The three billionaires who own more assets than the bottom 50% of Americans (165 million Americans) will be crying, but how does life change for the 165 million Americans who own a vanishingly thin slice of these assets? Does their rent drop? No, for the reasons I explained in The Fed Is Wrong: Inflation Is Sticky: the big corporate landlords have to keep rents high to placate their lenders. (And let’s not forget greed: the greedy never want to lower prices, preferring to cling to the Fed’s fantasy of “transitory” trouble.)
Now let’s ask about the higher-income 150 million Americans who own homes and pay property taxes, who pay healthcare insurance, college tuition and fees, childcare and elderly care. Even if there is a deflationary crash in stocks and housing, what are the odds the overall costs of owning and maintaining your home will drop significantly?
What are the odds that local government will let property taxes drop with valuations? Shall we be honest and say zero? If real estate valuations plummet, then property tax rates will rise to compensate. Or other “creative” fees will be imposed to make up the shortfall in tax revenues.
What about childcare? What are the odds that childcare costs will drop 30%? Shall we be honest and say zero? The costs paid by childcare providers only go up, and so those who don’t charge enough (marginal providers) will close down, generating a shortage of supply that elevates prices.
What about elderly care? Will assisted living facilities suddenly drop 30% just because asset bubbles pop? No. The costs of assisted living march higher regardless of what asset valuations and interest rates do.
What about healthcare? Will all those costs drop 30% because assets declined? No. Everyone exposed to real-world pricing of healthcare will be paying more.
But what about the roofing contractor? Won’t they charge 30% less? The biggest expenses for the contractor are workers compensation insurance, liability insurance, disability insurance, FICA (Social Security and Medicare) and healthcare insurance, and none of those will drop a single dollar even if stocks drop 30%.
Just as 85% of local government expenses are labor-related, most of the expenses of the roofing contractor are labor-related. The roofing materials dropping a few bucks might lower the cost by a few percentage points, but the material costs are based on the costs of the manufacturers, distributors, truckers, etc., and these are also based on labor-related expenses, taxes, insurance and healthcare–none of which will drop a dime, regardless of what asset prices do.
Economist Michael Spence elucidated the difference between tradable and untradable goods and services. If you want your washer repaired, that service in untradable, as shipping your broken washer to China for repair is not financially viable. As labor costs rise in China and other offshore economies, that raises costs even for tradable goods.
The majority of essential services are untradable and the costs are dependent on “big ticket” expenses which cannot go down without imploding the economy and government: taxes, insurance, healthcare, childcare, elderly care, etc. cannot drop 30% because they’re based on labor costs, highly profitable systemic friction (Big Pharma, the Higher Education Cartel, Big Ag, healthcare and other quasi-monopolies) and the need for ever-higher tax revenues to provide services which the public demands.
Let’s also ponder the consequences of the extreme concentration of wealth and income in the top 5% of U.S. households. The top 10% own roughly 85% of all wealth, and the top 1% own more than half the financial wealth.
Any significant drop in financial assets will have almost no effect on the bottom 90% because they don’t own enough of these assets to be consequential. So the deflationary effect of the reverse wealth effect will be concentrated in the discretionary spending of the top 10%: the luxury imported vehicles, the $100 per plate dinners (those $60 bottles of wine add up), the $500/day resort vacation, the $2,500/week AirBnB rental, etc.
The declines in the cost of these discretionary luxuries may well be noteworthy, but there are thresholds below which prices cannot drop. The high-end restaurant has equally high-end expenses, and so marginal providers will close, leaving only those few who can maintain profitability as demand for luxury dining craters.
The resort has high expenses as well, and once profitability has been lost, resorts will close just like other marginal providers. Supply shrinks along with demand, and the survivors keep prices high enough or they too will close.
So the essential “big ticket” costs will keep rising and the discretionary luxuries only the top 10% can afford will drop–but not by much as all those luxury providers have the same high fixed costs.
So to recap the test: what are the odds of these “big ticket” expenses dropping 30% if asset prices drop 30%?
Taxes: zero.
Healthcare: zero.
Childcare: zero.
Elderly care: zero.
Costs of doing business: zero.
As for housing: the mortgage doesn’t drop if the market value of the house drops 30%, and any declines in insurance will be modest. The costs of maintenance won’t drop much, either, and might actually increase as the supply of skilled workers declines. (Nothing is more expensive than the “cheap” repair that has to be redone correctly.)
Rents may drop in areas nobody wants to live anymore, but rents will rise in places people do want to live.
The larger point here is the long economic cycles have turned. The 40-year decline in interest rates has turned, whether we admit it or not. The 40-year decline in the prices of goods due to financialization (lower interest rates, higher speculative assets) and globalization has turned. The 40-year expansion of the workforce has turned. The 40-year decline of oil/fuel/resources prices has turned. The 40-year fantasy that we can depend on other nations for our essential resources and components is drawing to a close.
Untradable goods and services, cost thresholds, resource security, the end of financialization / globalization and declining interest rates matter. The fantasy that the top 10% can prop up the economy by borrowing and spending the phantom wealth of insanely overvalued asset bubbles is drawing to a close.
Is inflation “transitory” in your household budget? Really? Where?
My recent posts have focused on the systemic financial risks created by Federal Reserve policies that have elevated moral hazard (risks can be taken without consequence) and speculation to levels so extreme that they threaten the stability of the entire financial system.
These risks are well known, though largely ignored in the current speculative frenzy.
But there is another systemic risk which few if any see: the collapse of social cohesion.
President Carter was prescient in his understanding that a nation’s greatest strength is its social cohesion, a cohesion that America’s unprecedented wealth / income / power inequalities has undermined. Consider this excerpt from his 1981 Farewell Address:
“Our common vision of a free and just society is our greatest source of cohesion at home and strength abroad, greater even than the bounty of our material blessings.”
In other words, a nation’s strength flows not just from its material wealth but from its social cohesion–a term for something that is intangible but very real, something that doesn’t lend itself to quantification or tidy definitions.
Here is my definition: Social cohesion is the glue binding the social order; it is the willingness of the citizenry to sacrifice individual gains for the common good.
Social cohesion is the result of the citizenry sharing a common purpose and identity and working toward the common good even at personal cost. Social cohesion arises from a national identity based on shared values and sacrifices.
To maintain social cohesion, opportunities to better their circumstances must be open to all (the social contract of social mobility) and sacrifices must be shared by the entire citizenry. If the privileged elites evade their share of sacrifice, social cohesion is lost and the entire social order unravels.
The glue binding the privileged elites to shared sacrifice is civic virtue, a moral code that demands elites devote a greater share of their own resources to the public good in exchange for their political and financial power.
Though no one dares confess this publicly, America is now a moral cesspool. As a result, the moral legitimacy of the nation’s leadership has been lost. Every nook and cranny of institutionalized America is dominated by self-interest, and much of the economy is controlled by profiteering monopolies and cartels which wield far more political power than the citizenry.
Civic virtue has been lost. What remains is elite self-interest masquerading as civic virtue.
In his Farewell Address, President Carter explained that “The national interest is not always the sum of all our single or special interests. We are all Americans together, and we must not forget that the common good is our common interest and our individual responsibility.”
Social cohesion, civic virtue and moral legitimacy are the foundation of every society, but they are especially important in composite states.
America is a composite state, composed of individuals holding a wide range of regional, ethnic, religious and class-based identities. The national identity is only one ingredient in a bubbling stew of local, state and regional identities, ethnic, cultural and religious identities, educational/alumni, professional and tradecraft identities, and elusive but consequential class-based identities.
Composite states are intrinsically trickier to rule, as there is no ethnic or cultural identity that unifies the populace. Lacking a national identity that supersedes all other identities, composite states must tread carefully to avoid fracturing into competing regional, ethnic or cultural identities.
Composite states must establish a purpose-based identity that is understood to demand shared sacrifice, especially in crisis. In the U.S., the national purpose has been redefined by the needs of the era, but never straying too far from these core unifying goals: defending the civil liberties of the citizenry from state interference, defending the nation from external aggressors, and serving the common good by limiting the power of special interests and privileged elites.
We’ve failed to limit the power of privileged elites, failed to demand greater sacrifices of the wealthy in exchange for power, and so the moral legitimacy of the regime has been lost. And with the ascendance of self-interest and the elite’s abandonment of sacrifice, social cohesion has been lost.
This loss is reflected in the bitter partisanship, the increasingly Orwellian attempts to control the mainstream and social media narratives, the debauchery of “expertise” as dueling “experts” vie for control, the fraying of social discourse, the substitution of virtue-signaling for actual civic virtue, the institutionalization of white-collar crime (collusion, fraud, embezzlement, etc.), the increasing reliance on Bread and Circuses (stimulus, Universal Basic Income) as real opportunity dissipates, and the troubling rise in shootings, crime, random violence and plummeting marriage and birth rates.
The unraveling of social cohesion has consequences. Once social cohesion unravels, the nation unravels.
What’s the solution? At the national level, all that has been lost will have to be restored: civic virtue, moral legitimacy, the social contract of opportunity, shared sacrifice that falls most heavily on the wealthiest and most powerful, and a renewed national purpose centered on serving the common good.
Is such a restoration of moral legitimacy and shared purpose even possible? No one knows. If history is any guide, such a renewal is only possible after the empire of rampant self-interest implodes.
So what do we do in the meantime? Nurture our own social cohesion by living purposefully and sharing sacrifices and bounties with those we trust and admire–those in the lifeboat we chose to join.
After the Crash 