Why don’t we see the New America being built around us?

Summary:  The Internet has become increasingly dominated by engines of misinformation disseminating politically filtered views of the world largely consisting of errors of omission and exaggeration, plus outright lies. These suit a nation of sheep (how do you speak to sheep and children?). The daily thousand words on the FM website attempt something different, to see the reality underneath the masks of political fabrication. The struggle carries into the comments. Today we show a clash of views, clear and analytic. Read and choose which you share. Post your comments.

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Jay Schmidt's Free-Dumb
Jay Schmidt’s Free-Dumb

Round One

The FM website has had 4.5 million views since 2007, but much of the action resides in the 30 thousand comments (it’s been that way since the start). Today we have another example, from Pluto — a long-time and insightful commenter — in reply to Delusions of the well-educated and intelligent on the Left and Right leave us nowhere to hide.

I suspect the problem you are facing is that reality is moving faster than nearly everybody’s OODA loop can handle.

Briefly summarizing part of John Boyd’s theory (and probably stating it poorly), people adapt to changing circumstances at a rate which differs among individuals. They become more confident when their adaptations to changing circumstances become more effective. Conversely they become less confident when their adaptations to changing circumstances become less effective.

Thus we have the 1% seeing their wealth rising at remarkable rates just for existing. This is dramatically increasing their self-confidence.

This is the economic version of the Tactics of Mistake by Gordon Dickson and the human race has done it many times before. This time is NOT different.

The “tactics” of Dickson’s 1981 novel were a planned program to produce mistakes in an opponent. The protagonist explains:

I need to get him involved with me so I can make use of him. Unless I can make him annoyed enough to thrust, I can’t parry. And only by successfully continuing to parry every attempt he makes can I finally get his whole attention.

… The fencing tactic is to launch a series of attacks, each inviting ripostes, so that there’s a pattern of exchanges and disengages of your blade with your opponent’s. your purpose isn’t to strike home with any of these preliminary attacks, but to carry your opponent’s bade a little more out of line with each disengage so gradually he doesn’t notice you’re doing it. Then, when his blade has been drawn completely out of line, you thrust home against an essentially unguarded man.

… {My goal is} to trap deCastries into a personal fencing match with me, so that I can gradually lead him into larger and larger conflicts — until he commits himself completely in a final encounter where I can use his cumulative errors of judgement to destroy him.

This is not what the 1% are doing. They are doing something different, with few or no precedents in history. History is short, and this is an age of wonders.

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The New American
The New American, plugged-in & controlled

During the past several generations the 1% has launched well-funded long programs of disinformation and political advocacy. They built engines of misinformation, such as Heritage Foundation (1973). The Reagan and Bush Jr revolutions are the result of these generations of patient capital investments. The 1% are reaping their just reward.

This is the greatest of open source insurgencies (as defined by John Robb).

Here are three documents — in 1971, 1976, 1978 — showing the nature of these plans, whose results have shaped America.

(a) The Powell Memorandum: Sent by Lewis F. Powell, Jr. on 23 August 1971 (2 months before his nomination to Supreme Court) to Eugene B. Sydnor, Jr., Chairman of the Education Committee of the U.S. Chamber of Commerce. Titled Attack On American Free Enterprise System, it outlined a strategy for large corporations to rollback much of the New Deal reforms on business.

(b) The article creating the mythology of tax-cuts as the magic elixir: “Taxes and a Two-Santa Theory“, Jude Wanniski, National Observer, 6 March 1976

(c) In his 14 July 1978 testimony to Congress (9 years before becoming Fed Chairman), Alan Greenspan first described the “starve the beast” strategy: “Let us remember that the basic purpose of any tax cut program in today’s environment is to reduce the momentum of expenditure growth by restraining the amount of revenue available and trust that there is a political limit to deficit spending.”

As always, the people are more important than the actions. The 1% find, fund, and nurture the careers of people like Powell, Wanniski, and Greenspan. The Shame Project unknowingly documents this patient, well-funded construction of a counter-revolutionary movement. With them they built organizations to promulgate their ideological goals. This is patient investment, intelligently planned, of the kind that reshapes nations.

So long as we keep our heads in the sand, resigned that these things “just happen”, the 1% will continue to win. Also note Pluto’s conclusion:

… Eventually we will hit a tipping point where too many people are guided by concepts of reality that are too badly outdated and everything starts going wrong, especially for the wealthy as they will have the most to lose and too many of them will be guided by out of date concepts of reality.

Passively waiting for the great day when the walls come tumbling down is a guarantee of victory for the 1%. Dreams of the apocalypse are the opiate of the masses. Also, it’s probably false. I see little evidence that the 1% share the delusions of their pawns and sheep. In fact Our fears are unwarranted. America is in fact well-governed. But governed in their interest, not our interest.

Round Two

Pluto responds:

My problem with the ideas presented in the Tactics of Mistake is that it requires 3 things to work:

  1. The right opponent who doesn’t see through your plans or do the unexpected at the wrong moment that wrecks your plans
  2. The right leader who clearly sees reality even as they distort reality for their opponent
  3. The right subordinates who are willing to follow the right leader despite the fact that the reality they see does not appear to support their leader’s plan and prediction of victory.

To the contrary, those three things describe America during the past 40 years.

(1)  The 1% have planned and executed in plain sight. Yet there has been little recognition of their program (although I and many others have pointed this out). And only minimal resistance.

(2)  The 1% are a leadership class. It need not be “one leader”; that’s a trope of fiction. Many large movements have no single leader. From large social movements like the American. French, and Russian revolutions — to small-scale activities (e.g., most pirate ships were co-ops) — all have a leadership cadre, no Leader.

(3)  Money creates loyal and obedient subordinates. As mentioned above, the bios in the SHAME Project show how the  1% recruit, train, and employ their activists.

Two generations into this and people still don’t see the program. Q.E.D. We snooze; we lose.

Pokemon machine
A complex device to change the nation

For More Information

About the New America, now under construction:

  1. Origins of what may become the 3rd American Republic (a plutocracy), 8 April 2011
  2. Why Americans should love Tolkien’s Lord of the Rings – we live there, 13 December 2011
  3. The new American economy: concentrating business power to suit an unequal society, 27 April 2012
  4. Why liberals lose, 1 July 2012
  5. The voice of plutocrats yearning for dominance and control, 16 September 2012
  6. Glimpses of the New America being born now, 18 June 2013
  7. Why Elizabeth Bennet could not marry Mr. Darcy. Nor could your daughter., 12 July 2013
  8. Watch as plutocrats mold us into a New America, a nation more pleasing to their sight, 18 July 2013
  9. Billionaires mold our schools to produce better help in a New America, 20 July 2013
  10. Why the 1% is winning, and we are not, 26 July 2013

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60 thoughts on “Why don’t we see the New America being built around us?

    1. mmm…I would go back to the other image. the lack of labels is more indicative of the intermodulation between the sectors. in reality it is more like a knot…but these are simply visualization tools not truth

    2. humans are coming up on a crisis that will force a choice between recollection and repetition. symbolic reality is running more like the trilemma above and increasingly so as we approach the night of the world. the relationship to this post is that within a closed rational system you will always find the right answers

    3. you should put the main image back to wikipedia image or delete it entirely because the trilemma is occurring pre-finance…it is a truth in the form of a lie…the image as is leaves an inaccurate impression

  1. the human being is like any self-correcting system which has lost its governor; it spirals into never-ending but always systematic distortion.

    1. that would be the signifying chain that emerges in the word ‘just’ in your quotation of “just happen”
      the universal justification is decomposing back to the original fantasy which is the fantasy of origin. all fantasies that follow are a desperate attempt to form a genetic narrative. the continual crises that are occurring at this time are a symptom of clashing fantasies not politics. double binds compile in the memory over time. memories that are encoded together fire together

  2. Thanks for the plug, FM. Now to get back to our discussion.

    FM: “The 1% are a leadership class. It need not be “one leader”; that’s a trope of fiction. Many large movements have no single leader. From large social movements like the American. French, and Russian revolutions — to small-scale activities (e.g., most pirate ships were co-ops) — all have a leadership cadre, no Leader.”

    You are right that quite a number of large movements have started without a single leader. But how many of them have successfully finished without a single governing body (either a person or a group of people)? The American Revolution had the Continental Congress, the French Revolution had Napoleon in the end because it essentially failed for reasons I will document later. The Russian Revolution ended with Lenin in charge because it also failed. OWS also started leaderless, where did it end?

    Let’s look at your pirate ship example. Yes, they were run in a surprisingly democratic fashion with elected leaders. But the lines of authority and responsibilities were clearly spelled out. The goal and the method to accomplish to the goals were clearly defined. That really doesn’t match the situation you are describing with the 1%.

    Another good comparison is with American Women Suffragette movement.which was composed of several different organizations (primarily the National Woman Suffrage Association the American Woman Suffrage Association, and a number of Temperance and religious organizations) that decided to unify around a single goal, getting women the vote. They put strong leaders in obvious positions of authority and the rest, after considerable turmoil and struggle, was history.

    I know less about the Civil Rights movements of the 1950’s and 60’s but I believe they followed a similar pattern.

    Failure to have a unified public position and leadership will eventually doom any open source movement.

    I will give you an example from my personal experience that I feel describes the eventual fate of your 1% semi-secret cartel. I once worked for a privately held company that was conglomeration of about 10 different smaller organizations, some of which had overlapping goals. Although the company had very smart, successful individuals in charge, there was only one real rule within the company; each department should do whatever it could to earn as much as possible.

    Does this sound like the 1%? If not, please cite recent cases where a member of the 1% publicly chose to avoid tackling another member when they thought they had a competitive advantage.

    Getting back to my experience, you can easily foresee what happened. Each department considered themselves the one true version of the company and increasingly viewed the other departments are obstacles to their success. This started with infighting and lack of cooperation, led to departments underbidding each other (much to the amusement of our clients), and eventually led to outright theft of people and assets. The company, in spite of considerable advantages over its competitors on paper, self-destructed.

    (1 of 2)

    1. Pluto,

      Your comments are interesting, but really missing the point. What’s fascinating is that you repeat the same errors, no matter how often I point out the mistake. You impose imaginary features on the narrative so that it fits your preconceived view and so dismiss it.

      (1) “your 1% semi-secret cartel.”

      There is nothing remotely secret about this. It’s all in the open.

      “Cartel” is an absurd description. It’s the essence of America, people banding together to improve the nation.

      (2) “There is a conspiracy (public or private, doesn’t matter) among the wealthy that has existed for generations that has the specific goal of ruling the United States.”

      Is the Rotary a conspiracy? Your local political parties, and their associated social clubs (e.g., the Republican Women)? The thousands of foundations and advocacy organizations.

      That you don’t agree with what these rich people are doing does not justify you demonizing their activities. They have the same rights as you and I.

      (3) “But how many of them have successfully finished without a single governing body (either a person or a group of people)?”

      Most of them. You are confusing revolutionary movements to take over a State with social reform movements.

    2. Pluto,

      “your 1% semi-secret cartel.”

      That the three planning documents I mention are so well known — two of which were public — suggests that your belief is incorrect that this movement is secret.

      Ditto for the public nature of the major institutions involved see “List of MAJOR Conservative Foundations & Non-Profits“, Daily Kos, 9 August 2013. They show a map with one perspective on the institutions reshaping America. No secret members, no meetings in caves, no secret handshakes. Closing your eyes does not make these go away. Excerpt (click to enlarge the graphic):

      Click here for a larger, interactive version of this map. Beneath the interactive map you will find an interactive list of each item showing on the map. This is an amazingly powerful research tool. I open two windows, one with the map, and another with the map that I use to click on any one item on the map to see what the connections for an item might be, providing greater insight.

      .
      Conservative Foundations

      “Reality is that which, when you stop believing in it, doesn’t go away.”
      — From Philip K. Dick’s speech “How To Build A Universe That Doesn’t Fall Apart Two Days Later” (1978)

    3. FM: “Pluto,
      Your comments are interesting, but really missing the point. What’s fascinating is that you repeat the same errors, no matter how often I point out the mistake. You impose imaginary features on the narrative so that it fits your preconceived view and so dismiss it.”

      Oddly enough, I would respectfully say the same about you. But let’s briefly visit your response to my comment.

      FM: “(1) “your 1% semi-secret cartel.”
      There is nothing remotely secret about this. It’s all in the open.
      “Cartel” is an absurd description. It’s the essence of America, people banding together to improve the nation.”

      Okay, bad word choice on my part. It’s out in the open. Happy? Also I wasn’t happy with the word “Cartel” but I was strapped for time and couldn’t think of a better one. Does that make you any happier?

      FM: “Is the Rotary a conspiracy? Your local political parties, and their associated social clubs (e.g., the Republican Women)? The thousands of foundations and advocacy organizations”

      Um, as far as I know, you aren’t claiming that the Rotary is trying to take over the US. The organizations you cite try to influence government at various levels. not take it over, that’s nothing new. You are claiming that the 1% are “doing something different, with few or no precedents in history. History is short, and this is an age of wonders.”

      All I’m saying is that the evidence presented so far can be viewed in multiple ways and Occam’s Razor says that in this situation you should choose the simplest explanation that fits the facts. In my view, the simplest explanation is that the 1% are greedily accumulating power and resources without regard for long-term consequences. I don’t see any evidence that suggests that there is a master plan in action.

      As I noted earlier, that is more terrifying than the thought that a master plan is in place because implies that the 1% (a leadership class, as you noted earlier) are in the process of disabling the other potential drivers of the bus and refuse to drive it themselves.

      FM: “(3) “But how many of them have successfully finished without a single governing body (either a person or a group of people)?”
      Most of them. You are confusing revolutionary movements to take over a State with social reform movements.”

      I’m afraid you’re going to have to name some to convince me. All of the examples I could think of either had a governing body at some point in the struggle or failed.

      Phillip K. Dick: ““Reality is that which, when you stop believing in it, doesn’t go away.”

      I agree completely. In my next post I’ll propose a way to test my theory.

    4. Pluto,

      (1) “Um, as far as I know, you aren’t claiming that the Rotary is trying to take over the US. The organizations you cite try to influence government at various levels. not take it over, that’s nothing new. You are claiming that the 1% are “doing something different, with few or no precedents in history. History is short, and this is an age of wonders.”

      I do not understand why you are deliberately mis-stating what I said. There was nothing — absolutely nothing — in my post here or elsewhere that implied the 1% is “taking over the US” in any non-Constitutional sense. The documents I cite say no such thing. That’s a heavy charge, so I assume you have strong evidence for it.

      The 1% are attempting to gain political power through means legitimate under our system.

      I specifically stated the “something different” methods, and those are also quite legitimate methods — recruit, train, and support activists — and build organizations to convince people about the rightness of your cause.

      (2) “I’m afraid you’re going to have to name some to convince me. All of the examples I could think of either had a governing body at some point in the struggle or failed.”

      Look at the major social movements in US history: abolitionism, unions, progressives, temperance, civil rights. None had a single “governing body”. Most had loose coordinating bodies at various points, which seldom included all the major groups — but the individual groups retained their autonomy. Such as the AFL in 1886.

      In fact we have two such organizations: the GOP and Democratic Party. They’ll work quite well as coordinators once the 1% take control. They already appear to have operational control of the GOP.

    5. So the big question is whether the events of the last 40 years have been influenced by
      a) a masterful ruling class working in plain sight according to a master plan or

      b) a bunch of short-sighted people taking advantage of events as they occur without much consideration for long term consequences

      You and I have had several discussions about the role of the Tea Party in these events. You maintain that they are stormtroopers and that they can be easily brought under control or dismissed.

      I agree that they are unwitting stormtroopers for the 1% but say that they are in rebellion against the Mainstream Republicans (aka the Country Club Republicans) over the failure to block Obamacare and the Mainstream Republicans willingness to compromise with the Democrats to avoid defaulting on our debt.

      The test is simple: if the Tea Party successfully interferes with Republican primaries of 2014 and drives the party into adopting ever more radical policies which alienates younger and non-white voters, we can infer that I am right.

      If, on the other hand, the Tea Party fizzles out and is not a major force in the Republican primaries, I will admit that this is evidence of masterful leadership you see.

      I have one more post after this, on a slightly different topic.

    6. Pluto,

      I disagree. You are thinking too small. The greatest victory is to have both parties on your side. That is the scale of the 1%’s win.

      Using the Tea Party as shock troops, they pulled the GOP to the Right. This dragged the Democratic Party to occupy the Center-Right, a dominant position — abandoning the Left.

      So long as they fight over the Center-Right, the 1% wins.

      For details see:

      http://fabiusmaximus.com/2013/02/19/democratic-republican-madness-48918/

    7. Me: “… Eventually we will hit a tipping point where too many people are guided by concepts of reality that are too badly outdated and everything starts going wrong, especially for the wealthy as they will have the most to lose and too many of them will be guided by out of date concepts of reality.”

      This really raised your hackles and it didn’t need to. The fault is mine because I didn’t explain clearly enough what I meant and you took mean something other than I intended.

      I think we can agree that the 1% have really been on a roll for the last 40 years. Their wealth and power has massively increased but they are beginning to encounter friction (and I’m speaking in Clauswitzian terms here).

      People are beginning to resent them. Jay Leno is beginning use their conspicuous consumption as punchlines for his jokes. In spite of the incessant propaganda, there’s an increasing awareness of how unequal things truly are (take a bow, FM, you’ve been part of that). Movies plots are increasingly featuring wealthy people as evil or uncaring (and we’re talking about dozens, maybe hundreds of movies per year). OWS, in spite of its failures did a nice job of putting the 1% in the spotlight and they are still mostly there.

      People like Warren Buffet keep offering pungent and accurate quotes about what is going on. There’s infighting in the ranks of the 1%. Some feel like they’ve gained enough while others want to go much farther. Yet others feel like they’ve already won and are now viewing their erstwhile allies as targets causing additional friction.

      This struggle isn’t over, in some ways it hasn’t really begun. The main opposition is soft social power; it is very slow to get started, and hard to aim (you’d know all about that) but it is pervasive, and will eventually become overwhelming as long as people like you keep up the fight.

      I’m not advocating just sitting back and assuming that things will naturally fall into place, ala Asimov’s Foundation series. I’m assuming that in spite of the lack of perceptible response to your call to arms, you are having an effect. As a matter of fact, I KNOW you are having an effect because I’ve been busy spreading the word for the last few years on your behalf.

      What may surprise you is that for the last year or so I’ve been encountering far more agreement with your concerns than skepticism (which was the overwhelming earlier response).

      Sometimes silence means agreement rather than lack of caring.

      The big question I was attempting to answer with the quote above, is what happens after social soft power grinds the 1%’s gains to a halt. As I’ve indicated earlier, I do not believe they have a master plan, so I posited that their OODA loop becomes outdated because they are overconfident in their understanding of what is really going on and respond too late, too heavy handed, and too ineffectively.

    8. Pluto,

      You might be correct about political trends.

      I have a good forecasting record although I am not good at it because I make forecasts only when I am sure.

      My key point — with which almost nobody agrees — is that the primary reason that the 1% is winning is because we are not trying. Perhaps we now consider the burden of self-government more than we wish to bear.

      Should that change, we can win. Certainly if not easily.

    9. FM:”I do not understand why you are deliberately mis-stating what I said. There was nothing — absolutely nothing — in my post here or elsewhere that implied the 1% is “taking over the US” in any non-Constitutional sense. The documents I cite say no such thing. That’s a heavy charge, so I assume you have strong evidence for it.”

      Actually, no, I don’t. But you misread my statement. I didn’t say that the 1% were using non-Constitutional means. I agree with you that they are using Constitutional means although that sometimes means applying the best justice that money can buy. Which is particularly constitutional in light of the Citizens United decision.

      FM: “Look at the major social movements in US history: abolitionism, unions, progressives, temperance, civil rights. None had a single “governing body”. Most had loose coordinating bodies at various points, which seldom included all the major groups — but the individual groups retained their autonomy. Such as the AFL in 1886.”

      I think we are assigning different wording to the same situations. When I said “governing body” I didn’t mean that the organizations had to be in lock-step with each other but they did need to coordinate with each other on strategy and to avoid conflict. For example, unions not in contract disputes would frequently go on sympathy strikes to aid their fellow unions. The fact that the union leaders talked to each other fulfilled my definition of a “governing body.”

      FM: “and this is an age of wonders.”

      I agree. Historians, economists, sociologists, and political scientists will be mining this era for data for centuries but I do not yet know what they will think of us other than we were a little crazy.

    10. Pluto,

      Let’s play the tape.

      Me: “The 1% are a leadership class. It need not be “one leader”; that’s a trope of fiction. Many large movements have no single leader. {they} have a leadership cadre, no Leader.”

      Pluto: “You are right that quite a number of large movements have started without a single leader. But how many of them have successfully finished without a single governing body (either a person or a group of people)?”

      Pluto: “When I said “governing body” I didn’t mean that the organizations had to be in lock-step with each other but they did need to coordinate with each other on strategy and to avoid conflict.”

      Yes, they talk with each other. In 1870 that required semi formal organizations and formal meetings. Now we have a wide range of e-media. The ease of communication makes open-source movements possible.

      But success in open-source movements requires great resources. The 1% have that. A broad-based popular movement can be open-source if composed of sufficient mass. Today we have neither. Hence we need tight organizations (not one). A governing body, let alone a Leader — is not necessary.

  3. Let’s apply Occam’s razor to your conspiracy theory. By the way, I am NOT arguing with your physical evidence although I find it circumstantial.

    Which is more reasonable?
    1. There is a conspiracy (public or private, doesn’t matter) among the wealthy that has existed for generations that has the specific goal of ruling the United States

    2. That the 1% are a greedy bunch of short-sighted ambitious bastards who want to control as much as possible before they die without regard for the existing rules. Furthermore, they have continually assaulted the rules and regulations that bind them for their own long-term good without regard for future consequences to themselves.

    This continual ripping away at the structure of the rules underlying good government has slowly worn away things that they did not intend to damage such as education and infrastructure projects. They accept this as part of the cost of their ambition and expect somebody else to clean up the mess.

    Looking at the two options, number one is more comforting. It implies that the social order of a new America has been planned out. But I find a major contradiction in it. If these guys are so smart, why do they need to pollute the internet, sabotage the education system, and reduce our infrastructure to rubble?

    Why are they willing to damage the economy (thus shrinking the pie from which they share) and allow other countries (such as China) to gain a competitive advantage? Why would a far-sighted conspiracy rather rule a badly damaged country absolutely than share in ruling an ever-improving nation, vastly expanding the pool of wealth from which they can draw and creating goods and services that the world will want to consume?

    I can take each piece of physical evidence you provide and show that it is the product of short-term gain for a specific faction or individual.

    Yes, I’m willing to admit that there is a general roadmap that the 1% is taking but I do not believe it is the product of a far-sighted conspiracy. I would more term it a rapid evolution whose end result is not yet known.

    1. Pluto,

      “I can take each piece of physical evidence you provide and show that it is the product of short-term gain for a specific faction or individual.”

      You take each piece of evidence, close your eyes, and imagine something bad happening. Not at all the same thing. But it’s a good defense mechanism.

      The comments in reply to my posts about the New America are a wonderful collection of people’s excuses to avoid action. Meanwhile the 1% act. Which is yet another reason the 1% is winning.

    2. all empirical evidence is irrelevant at this time. the only objective standpoint is the antagonism of the real. capitalism itself is in crisis driven by compiled double binds in the ideology that lies behind your thoughts. symptomatically this is leading to splitting within the generating fantasy. some symptoms must be allowed to flourish. some problems do not have solutions. reality is for those who cannot sustain the dream
      http://en.wikipedia.org/wiki/Splitting_(psychology)
      beware of regression toward the mean as you progress through your days
      http://en.wikipedia.org/wiki/Regression_toward_the_mean

  4. As an old professor of mine, Marion Levy at Princeton, was wont to say “Always pray that your enemies be evil.”

    According to Levy, evil has an element of rationality to it. Ergo, the possibility exists that one could out think it. “Against a well-intended, stupid foe, your cause is hopeless,” he added.

    This discussion fails so far to consider that, in the post-1975 era, not only have the 1% prevailed but traditional liberalism self-destructed. A host of increasingly baroque social programs, combined with harsh intolerance of those who question these, marks contemporary liberalism.

    A cynic might wonder whether this increasingly baroque tendency reveals, not any concern with the latest trend de jour but rather a positive desire to help the 1% along ( and it is indeed interesting how hippies so easily morph into corporate lawyers, etc. ).

    1. I once defined political correctness as “adopting a position in liberal guise so lacking in credibility that it actually increases support for conservative causes.”

    2. Duncan,

      “A host of increasingly baroque social programs, combined with harsh intolerance of those who question these, marks contemporary liberalism”

      Color me skeptical that shifts in public views result from the success or failure of public policies. The modern conservative era has resulted in repeated recessions, failed wars, and massive debts. Without visible effect on the ongoing shift to the Right.

      My guess (emphasis on guess) is that your reasoning is the post hoc ergo propter hoc fallacy, as it lacks any operational or factual supporting basis.

      My guess as to one element in the shift is the superior tactics and greater resources of the Right. History suggests that God favors the strong and smart more than the good.

    3. The social policies liberals have pursued since the 1970’s, such as feminism, have been fueled by the inability of a single income to sustain a middle class lifestyle.

    4. Duncan,

      Feminism is a global social phenomenon that has been running since the late 19th century. To attribute it to US economic events of the past few decades would require some fancy dancing — or imagination with closed eyes.

    5. Leaving aside the “conspiracy”, or “open source movement to empower the 1%”, here is my take on the stupid-vs-evil question. I spent all of the Bush II and some of the Obama years asking myself this. Decided not to think so hard about it. It’s both.

      Maybe not “evil” as in sadistic or malicious, but certainly careless, callous, and greedy, in a systematic way. evil-lite? or evil in the second degree? hmm.

      The “stupid” element varies more I think. It isn’t there all the time. Just sometimes, but at key moments, that’s bad enough. Mundane stuff, like drinking one’s own kool-aid (originally cooked up only for PR purposes), short-term focus, “organizational behavior” (infighting, perverse incentives, lowest-common-denominator mode of group intelligence), and in the case of government, corruption ruining efforts that otherwise would’ve had a chance. Could that be the biggest one — good old fashioned corruption?

      I have a feeling that doing anything about the “stupid” side will require tackling the “evil” side first.

    6. Asdf,

      Re: stupid or evil

      My guess: “stupid” is not correct, since the 1% are winning.

      As fo r”evil”, I do not like to use such moral labels unless dealing with clearly immoral behavior, but everybody has their own preference in these things.

    7. moreover, the negative character traits that appear to guide the “invisible hand” (or the “1%”?), appear to be a consequence of the movement to make the world “business-friendly”, or at least the interpretation of that term in the last 30 (??) years. Is this what FM is talking about?

    8. Actually FM, feminism in some form dates at least to the Lysistrata, if not the Amazons.

      But the rise of contemporary feminism, and related politically correct forms of cultural liberalism, coincides with with the stagnation of wage earners since the early to mid 70’s.

      This is well documented and well known.

    9. Duncan,

      Saying feminism goes back to Ancient Greece is a bit absurd, given the 2 millennia pause with little change between then and 1800.

      My date of late 19th C is operationally relevant, as we have had sequential waves of feminism since then.

      As for “well documented”, can you give some cites? I am familiar in a light fashion with the social science literature on the subject, and do not recall any such “documentation”.

    10. asdff:

      The rise of conservatism, corporatism, and politically correct social liberalism coincides with the rise of Black–Scholes.

      All of these are manifestations of efforts variously to prosper by debasing the New Deal era working class. Current wails about the decline of the middle class are nothing more than a realization by many cultural liberals that their 2 income / 401(k) lifestyles no longer work. The real damage was done during the 70’s; and politically correct liberals then strove to ostracize those who sought efforts to sustain the New Deal.

      Black–Scholes has been shown up by 2008. While the banksters currently appear to prevail; they have been discredited. ( It would be interesting to conduct linguistic research on how and when the term “bankster” developed and spread. ) FM has previously advanced pedantic arguments to the effect that the banksters are fat and happy. So were the Renaissance popes. Expect a similar outcome.

    11. Duncan,

      “coincides with the rise of Black–Scholes.”

      Chronologically correct, but absurd in terms of cause and effect.

      Also, to say that events disprove b-s is silly. It was not intended to be a complete description of markets, although used by the gnomes of Wall Street as such.

    12. Duncan,

      That is a reading FAIL. Try re-reading my comment.

      Also, it is stupid for some editor at the Guardian to say “an equation made Wall Street banks fail”. Did it come to life and control their investments? These were bad investments by highly paid executives, who had more than ample warning of their folly. The people warning them were disregarded or fired.

      More broadly, banks have made almost identical errors every decade since 1970, each time on a larger scale. Each time requiring govt action to bail them out. This suggests there are structural factors at work, perhaps some form of principal-agent problem.

    13. I haven’t read this book, but I’ve heard Warren speak. It’s good enough for present purposes:

      “In this revolutionary exposé, Harvard Law School bankruptcy expert Elizabeth Warren and financial consultant Amelia Tyagi show that today’s middle-class parents are increasingly trapped by financial meltdowns. Astonishingly, sending mothers to work has made families more vulnerable to financial disaster than ever before.

      Today’s two-income family earns 75% more money than its single-income counterpart of a generation ago, but has 25% less discretionary income to cover living costs.

      This is “the rare financial book that sidesteps accusations of individual wastefulness to focus on institutional changes,” raved the Boston Globe. Warren and Tyagi reveal how the ferocious bidding war for housing and education has silently engulfed America’s suburbs, driving up the cost of keeping families in the middle class.

      The authors show why the usual remedies-child-support enforcement, subsidized daycare, and higher salaries for women-won’t solve the problem. But as the Wall Street Journal observed, “The book is brimming with proposed solutions to the nail-biting anxiety that the middle class finds itself in: subsidized day care, school vouchers, new bank regulation, among other measures.” From Senator Edward M. Kennedy to Dr. Phil to Bill Moyers, The Two-Income Trap has created a sensation among economists, politicians, and families-all those who care about America’s middle-class crisis.”

      http://www.amazon.com/The-Two-Income-Trap-Middle-Class-Parents/dp/0465090907

    14. Duncan,

      I agree with the quote.

      It does not even remotely support your statement that “The social policies liberals have pursued since the 1970′s, such as feminism, have been fueled by the inability of a single income to sustain a middle class lifestyle.”

      It does say “sending mothers to work has made families more vulnerable to financial disaster than ever before.” Which discusses the result, not the cause.

    15. Duncan (and FM):

      I think reactionary conservatism and recklessly destructive behavior by business leaders must have been around much longer than modern finance… to be sure, the 2008 crisis was sped along by too much faith in “risk free” financial instruments.

      From what I can tell, Black–Scholes, which I haven’t studied, is more specific than all that — a theory with specific assumptions, which weren’t always true, but the theory still was useful. I have no idea if the industry misapplied the theory or merely found its limits the hard way. What really continues to get at me is the way our country reacted to the resulting disaster: a whole lot of profiteering as far as I can tell.

      I think the real problem runs deeper, but is also less scientific or mathematical. Matters of balance of power, politics, public opinion, dishonesty and corruption. Undoing of compromises between rich, poor, and middle class that didn’t need to be undone. (yes I’m biased). Seems that under Bush II and Obama, this process has really picked up.

    16. asdf,

      I agree with most of your comment.

      (1) “I think reactionary conservatism and recklessly destructive behavior by business leaders”

      Of course to the first. There has always been a full political spectrum in modern western societies, although the center of balance moves.

      Ditto there has always been “reckless” behavior by business leaders. But this time is different. Reckless behavior is rewarded. Look at the senior of banks during the early 1970s (with the near-bankruptcy of NYC in 1975). The Latin America lending debacle in the early 1980s. The early 1980s energy bubble. The 1987 stock market crash (with “portfolio insurance” equations the profitable delusion). The early 1990s real estate bubble, culminating in the S&L crisis. The tech bubble. The mid 2010s real estate bubble.

      Fortunes were made and lost. But not necessarily by the same people. And most of the senior executives at the responsible financial firms did very well indeed.

      (2) “is the way our country reacted to the resulting disaster: a whole lot of profiteering as far as I can tell.”

      Profiteering on the way up and the way down.

      (3) “is also less scientific or mathematical.”

      No more scientific than the crystal ball of the gypsy fortuneteller. The equations serve the same function in the con.

      (4) “Matters of balance of power, politics, public opinion, dishonesty and corruption. Undoing of compromises between rich, poor, and middle class that didn’t need to be undone.”

      Why is the most difficult of questions to answer. We can only guess, but much depends on us guessing correctly.

      (5) “Seems that under Bush II and Obama, this process has really picked up.”

      I don’t know how to find the starting point, but the inflection point in most of these trends is the early 1980s — gathering speed and force gradually since. Since 2000 we are reaping the full force of these trends.

    17. While one would be justified in wondering why FM, who demands so many cites from me, has failed to produce any himself, I nevertheless will proceed to produce more cites:

      Accordingly:
      Did feminism help cause income disparity?
      http://vereloqui.blogspot.com/2009/03/did-feminism-help-cause-income.html
      (see graph)

      Inequality in the Pursuit of Feminism
      http://www.nytimes.com/2013/04/10/world/europe/10iht-letter10.html?_r=0
      Is feminism an elitist preoccupation? A new British study argues that feminism here has failed working-class women by focusing obsessively on equality in the boardroom and the faltering race to break the glass ceiling.

      http://www.the-spearhead.com/2013/08/13/where-feminism-and-class-intersect/
      Higher class women, most of whom are supported by wealthy men, seek to preserve their own good fortune while enacting punitive anti-male policies that target males in lower classes. The result is that the effects of gender feminism are barely felt at the top, while they directly and disproportionately impact lower and middle income men and their families, often doing real harm to them and their children and thereby reinforcing inequality.

      One could go on. But life is short.

    18. Duncan,

      (1). I am not bothering to produce cites because you are the one advocating a theory. It is yours to support.

      If you say there are dragons, intelligent flying fire breathing reptiles on the Earth, I need not produce studies showing there are no such animals. Like most of your comments in this thread, I should not need to point this out.

      (2). Feminism promotes inequality?

      That is IMO quite possible. I showed that exact same graph of men and women college graduation rates four years ago in a post about this very subject (one of the most-read posts on the FM website, 27 thousand hits): Women dominate the ranks of college graduates. What’s the effect on America?, 7 July 2009

      If so, the data suggests effects in the late 1980s, long after the flat-lining of middle class wages — and unrelated to it.

      Associative marriage and related trends do not even remotely support your statement that “The social policies liberals have pursued since the 1970′s, such as feminism, have been fueled by the inability of a single income to sustain a middle class lifestyle.”

    19. Duncan,

      You at not functioning at anything close to your usual level. I will repeat myself.

      “It was not intended to be a complete description of markets, although used by the gnomes of Wall Street as such.”

      Black Scholes was never intended as more than a partial representation of market action, certainly not the uber-equation it was treated as. It was not “disproved”, any more than have convex and concave trading strategies been disproven by the legions who have abused them into ruin (e,g, the 1987 crash).

      These repeated disasters show a structural problem. Pointing to the particular con last used (“home real estate never drops in value”, as we were told in 2007) is to miss the point. There will always be another con so long as the machinery continues in this fashion.

      I cannot imagine why this simple point continues to elude you.

    20. Duncan,

      I do not believe you’re reading my responses. I will not repeat my comment again on these articles about B-S models.

      You appear to believe that equations come to life and walk down the street like Godzilla, and you remain blind to the structural problems that repeatedly produce similar financial crises (e.g., 1987 and 1989 were similar in misuse of mathematical models) — and are just another example of our unwillingness to see the world.

      Note that experts looking at these incidents see these human and institutional problems — from the Brady Commission after 1987 to the plethora of reports after 2008. None of them attribute these failures to equations. Unfortunately the special interests at work are too powerful, and elude reform or adequate regulation.

      I am done here, having had my quota of nonsense.

    21. Another nail in the coffin for Black Scholes:

      Long-Run Effects of Unions on Firms
      http://www.nber.org/digest/may09/w14709.html

      A successful effort to unionize a workplace apparently reduces the market value of affected publicly-traded firms, even if there is no immediate change in their operating performance. In Long-Run Impacts of Unions on Firms: New Evidence From Financial Markets, 1961-1999 (NBER Working Paper 14709), co-authors David Lee and Alexandre Mas estimate that the average effect of a union win at a workplace is to decrease the market value of the affected business by at least $40,500 (in $1998) per worker eligible to vote, based on monthly stock prices for 24 months before and after a vote to unionize. Their simulations suggest that a policy-induced doubling of unionization in the United States would “lead to a 4.3 percent decrease in the equity value of all firms at risk of unionization.”
      This is an article widely cited by those concerned with “risk of unionization.”

      See also: “Shunting its workers off to temp agencies is just one of the many ways Wal-Mart diminishes what it sees as the risk of unionization.”

      Black Scholes is closely related to risk management:
      “The Black–Scholes model’s assumptions have been relaxed and generalized in a variety of directions, leading to a plethora of models used in derivative pricing and risk management.”

      So we can see that an apparent nexus is arising between Black Scholes, risk management, and union suppression. This obviously demands a lot more elbow grease, but this is only a comment to a post on a blog.

      This is yet another cite which I have provided. FM, for whatever reason, has failed likewise to provide any. Instead, he has resorted to lengthy verbiage, including, I regret to say, the logical fallacy of the argumentum ad hominem. But such tactics are not unusual for pro-feminist advocates.

    22. Duncan,

      Black-Scholes and unions

      That article has nothing to say about the validity or effect of Black Scholes. Like slapout, you are just making stuff up — repeatedly, after being called on it several times.

      Also, as I suspected, you have not the slightest idea what Black-Scholes is.

      This is *classic* troll behavior. No more such nonsense please, or future comments will be moderated. There will be no further warnings.

      Like everyplace else on the Internet, trolls are becoming an increasing malign presence in these comments. I play with trolls for a few rounds, but not for long.

  5. I’m on FM’s side on this one Pluto. Rather than a ‘conspiracy’ in the traditional sense it is more a conspiracy of ‘common interests’.

    In other words, you have a group that will act in the same way over certain things, because they believe it is better for them. Simple examples are: Notice any billionaires that advocate higher taxes? Note any financial institution that advocate more financial regulation?

    In these (albeit simple) cases the individuals involved have a common ideology and position about certain key issues, even though they may disagree in many, many other areas. Note that agreement is nearly almost always about more money to them.

    Then there is mutual back scratching, where one will support the other on some issue of importance to one, but not to the other, in the expectation of a reciprocal action at a later date.

    There also also mistakes. Some of these elites get it wrong, supporting (even pushing) an issue which they think will advantage them, but dooms them. The classic example of when we in Australia had our own Reagan and Thatcher time, deregulation, cutting tariffs, et al. The textile manufacturers were all for it … now they are all gone, hari kiri .basically. But they believed it at the time, the workers were more skeptical of course, but nobody was listening to them.

    Just because they are rich and powerful doesn’t mean they are any more intelligent than anyone else.

    These state of affairs last as long as they all basically agree. Which it never does for long. Before too long their irreconcilable differences start to split them apart. For example, Industries that depend on consumer demand (and more importantly the 1% that benefit from the profits) eventually have to face down a wealth extractive and impoverishing financial system or go under.

    Taking a lovely example at the moment, the coming showdown between the US IT industry and the NSA. Up until now they were all quite happy to do the NSA’s business, in return (all that back scratching again) it almost definitely helped them push their own agendas of tax, deregulation, Govt contracts, etc that benefited them. For some it was an ‘in ticket’ to talk to the big boys.

    Therefore they had a common interest, plus the security forces are the front line between them and the proles, which they are in favour of greatly, though they never want to pay for it, creating the great contradiction that the proles are the only ones paying for their own oppression.

    Now of course they are losing sales all over the place and will have to, basically, shut out the NSA to thrive. If they get really hurt then money to politicians will suddenly go elsewhere … then the politicians will kill the NSA (nothing changes a politicians’ mind like a dollar). In a worst, worst case scenario, for the US that is, these people will start to fund things like US separatists movements and so if they get pissed off enough.

    Popcorn time, I so love a good ‘elite’ in-fight. Especially over things like these, noting of course the basic fact that no one is less patriotic than a 1%er (patriotism is for poor people).

  6. “My key point — with which almost nobody agrees — is that the primary reason that the 1% is winning is because we are not trying.” — Fabius Maximus

    Closely related, I think, to something I read earlier today:

    If you care about other people, that’s now a very dangerous idea. If you care about other people, you might try to organize to undermine power and authority. That’s not going to happen if you care only about yourself. Maybe you can become rich, but you don’t care whether other people’s kids can go to school, or can afford food to eat, or things like that. In the United States, that’s called “libertarian” for some wild reason. I mean, it’s actually highly authoritarian, but that doctrine is extremely important for power systems as a way of atomizing and undermining the public.

    That’s why unions had the slogan, “solidarity,” even though they may not have lived up to it. And that’s what really counts: solidarity, mutual aid, care for one another and so on. And it’s really important for power systems to undermine that ideologically, so huge efforts go into it. Even trying to stimulate consumerism is an effort to undermine it.

    […] In the United States, the advertising and public relations industry is huge. Back in the more honest days, they called it propaganda. Now the term doesn’t sound nice, so it’s not used anymore, but it’s basically a huge propaganda system which is designed very extensively for quite specific purposes.

    First of all, it has to undermine markets by trying to create irrational, uninformed consumers who will make irrational choices. That’s what advertising is about, the opposite of what a market is supposed to be, and anybody who turns on a television set can see that for themselves.

    […] The other thing they need to do is […] to create uninformed voters who will make irrational decisions, and that’s what the campaigns are about. Billions of dollars go into it, and the idea is to shred democracy, restrict markets to service the rich, and make sure the power gets concentrated, that capital gets concentrated and the people are driven to irrational and self-destructive behavior.

    […] [O]ne of the first achievements of the U.S. public relations system back in the 1920s […] was to induce women to smoke. […] How many millions of corpses did that create? […] It is just shocking, but PR is a very honored profession, and it does control people and undermine their options of working together. And so that’s Hume’s paradox, but people don’t have to submit to it. You can see through it and struggle against it.

    Noam Chomsky interviewed by Chris Steele

    We are amateurs fighting professionals for control of our own minds. The first step is understanding that it is happening.

  7. Duncan Kinder remarks:

    “The rise of conservatism, corporatism, and politically correct social liberalism coincides with the rise of Black–Scholes.”

    The rise of conservatism, corporatism and politically correct social liberalism also coincides with the rise of My LIttle Pony.

    Clearly, a carrier task force should be dispatched ASAP to neutralized the threat.

    1. Thanks for the info about My Little Pony. I had not heard of it before.

      Regrettably, your comment did not coincide very well with my posting, which almost caused me to overlook it.

      Of course, correlation does not prove causation.

      Rather more specifically, Black Scholes marks the trend toward white collar, information-oriented jobs suited for women and, more specifically feminist types. These advanced at the expense of blue collar jobs.

      How this may relate to My Little Pony at present escapes me, however.

    2. Duncan,

      “How this may relate to My Little Pony at present escapes me, however.”

      Because his correlation is as valid as yours. It is a more clever way of pointing to your post hoc ergo propter hoc fallacy.

    3. FM:

      I did cite the rise of white collarism in my response.

      BTW: Post hoc ergo propter hoc is by no means the only outstanding fallacy.

    4. Duncan,

      This has gone long the past of any interest to me. It’s just another crazy thread, reminding me why I turned off comments.

      *. You are making no coherent case in support of your odd theory, which looks like it was lifted off a right-wing shock jock’s talking points.
      * You have posted nothing remotely relevant in support of it, but have posted a series of increasingly irrelevant materials.
      * This is standard troll behavior, and unlike your past behavior.

      I have no idea what “white collarism” means.

      I never said that post hop ergo prompter hoc was the only logical fallacy. That is just another of the weird statements you have made in this thread.

      I am done here.

  8. I can tell an interesting personal thing about Black Scholes, it illustrates the power of ‘group think’, translated the power of human stupidity even at ‘elite’ levels..

    I did a paper for a conference, basically on a new way forward for investment risk analysis. As a (small) part of it I showed that BS (interesting initials heh?) and all the derivatives of it (deliberate statement) could not work based on actual analysis of data.

    The maths is lovely (albeit simple) but the basic assumptions it is based on are wrong. It took me about an hour to disprove it when I was working on my paper, half that time was downloading data….. My final analysis showed that approach underrated risk levels by as much a 3-4 orders of magnitude. For example you might think you have a risk of going ‘belly up’ of 1:100,000, but it was really more like 1:100 to 1:1000.

    Now I presented the paper (thinking this was going to be my ‘big ticket’ to the mega dollars) and got absolutely zero response, no ‘important’ one would talk to me afterwards.

    Talking to some of the younger analysts later, after a few beers, and most admitted that they thought I was right but that ‘they had to use it because everyone did’.

    So ‘never underestimate human stupidity’, especially in the finance sector.

    Now why is this relevant to this thread, it shows that the ‘elites’, especially the financial ones, are as prone to idiotic errors just as much as anyone else. The majority of the financial sector in the US, UK, lot of Europe, fair number of other places completely stuffed up for years, perhaps decades, before the ‘big crash’. Only immense movements of money by the various Govts and central banks bailed them out and keep them alive today. Without the endless ‘money pump’ of the Federal reserve the big US banks (and quite a few other financial organisations) would go under tomorrow.

    But with no penalty for failure, in fact for many great rewards, they will keep trying until they blow up the entire financial system.

    They wont stop, they will work their 18 hour days, pay off politicians, buy police forces, muzzle (or buy, same thing) media and keep going on and on … right until the very bitter end.

    So in one sense FM you are wrong, this is not a ‘New America’ (or UK, etc) being built, it is a last grasping gasp of the ‘old America’ before collapse (if this trend continues of course).

    Bit like the end of the USSR, I am sure their were many within the system, working diligently and very hard to keep it all going .. right to their very bitter end.

    And all the old rules of elite behaviour. apply. The Marie Antoinette syndrome is alive and well and there are always plenty of (cheap and stupid) thugs available to the elite to smash down protestors and truth tellers .. just to keep the whole mess going on for just a bit longer.

    Sadly when a society resorts to that tactic it actually accelerates its decline and ensures the collapse is worse than it could be. The reason is that you jail/oppress/etc the smart idealists that are capable of creating options and solutions, leaving only smart (or even just the stupid) thugs left. It was no accident that the USSR was taken over after it’s collapse by criminal gangs. Because that was the only organisations (or potential organisations) that existed, since the State had oppressed and smashed any other possible alternatives capable of taking power.

    The future history books will state that the whole US coordinated take out of the OWS movement (FBI/HS/police/etc/etc) was a mistake of the first order. That is after the long decades of much of the country being ruled by criminal (well more criminal than now) gangs and some semblance of a civilised society reemerges.

    And as for the ‘national security State’ people (FBI/CIA/armed forces/NSA/HS and all the rest. It is amazing how history shows they will work for anyone for a dollar when the paychecks from the Govt stop rolling in*. The most ‘patriotic’ are usually the worse.The US’s SEAL’s, Delta Forces and all the rest of the SAS wannbies will do exactly what the USSR’s equivalents did, become high level enforcers for the various criminal gangs that fill the gap (some will take over the gangs of course, but they will still be gangs, just better at it). The average ‘grunts’ in the Army and Marines will become low level enforcers.

    There is credible evidence that the more far sighted gangs in the US (more far sighted than the general population or the ‘elites’) are getting their people into the Army, Marines, etc to get military training.

    * This is happening now, when the heads of the Army and Marines go to Congress and state that ‘personnel costs’ have to be cut, translated pay, benefits, medical costs, pensions and so on then you know the gig is up. Especially when, in real dollar terms the US is spending more on ‘defence’ than it did at the height of the Vietnam war.

    1. Oldskeptic,

      I agree, with one exceptionalism.

      “So ‘never underestimate human stupidity’, especially in the finance sector. Now why is this relevant to this thread, it shows that the ‘elites’, especially the financial ones, are as prone to idiotic errors just as much as anyone else. ”

      True, of course. Axiomatic. The elites are richer, not smarter.

      But that ignores the true role of the B-S and similar equations. They allow construction of money making machines. Their role is essentially that of the story that drives a con.

      People describe these things as stupidity. The people in the financial sector, esp those running it, made fortunes. Today they are richer than on this day in 2007, before the crash.

      The crash was a blip on their road to wealth and power. Their finance sector remains almost unregulated — in terms of restraint, not paperwork — spinning money from the air.

      That is not true of me. Probably not you.

      So who are the fools?

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