Thursday, February 07, 2013

End the FED, Break up Wall St, Wound Liberalism

How do we do it? Many on the alt-right know what the problem is, but how do we start working towards a solution? Much is being made about the stupidity of the GOP senators who are crossing the aisle to work on a new illegal immigration amnesty plan. This will destroy the GOP. Sen. Rubio is being a useful idiot for the left. GOP voters don't want this, and many independent and Democrats don't want an amnesty. This is frustrating, but oftentimes the left can use a GOP figurehead to accomplish something that helps them long term. It does help our elites who want more and more cheap labor, so maybe we little people are being too harsh on the GOP leaders supporting amnesty. Can the GOP find a policy approach or move that will hurt or destroy the left that the little people on the left love? Can the GOP trick them? If the GOP were to break up the Wall St banks and end the FED, the right would be sacrificing the special relationship that the public thinks Wall St (and by proxy the uberrich) has with the GOP for the good of everyone. The trick is that by ending or decentralizing the FED's power and breaking up Too Big To Fail Wall Street banks, the right will destroy the artificially low interest rate borrowing costs of the government and force a crisis and resolution faster. Without cheap money, liberalism will shrivel into an aging spinster.

I've typed here that the Wall Street banks performed a coup on the government and economy starting slowly with the deregulation push of the '80s and blew by the posted speed limits when Robert Rubin linked Wall Street money to Bill Clinton and his Democrat Leadership Council wing of New Democrats. These Democrats are banker funded technocrats like Evan Bayh and Mark Warner. NAFTA and many of the pro-banker reforms and regulation changes that caused our Great Depression 2.0 happened under Rubin's guiding hand when he worked in the Clinton administration. In the run up to the 2012 election, I constantly told people that looking at campaign contributions might show how individuals working at Wall St banks feel about Romney or Obama but how the market behaves in the month of October will reveal who Wall St and hedge fund leadership supports. They can tank the market to swing public opinion if they want to, just as they did in '08. Track McCain/Obama polls through the summer and fall along with the stock market. In 2012, the markets stayed high through the election. Lion of the Blogosphere has posted on how the uberrich vote Democrat, and this is part of the barbell voting coalition that the Dems enjoy (large majority of the filthy rich + lower underclass, very little of the middle). Obama may demonize the banks verbally, but he protects them legally. The Faceborg fools do not realize it. If they do, they do not mention it.

The GOP needs to realize that the banks are their enemies. The big banks and the cathedral are natural buddies for obvious reasons. Marx said the first thing a commie nation should do is create a central bank. Financial interests first linked up with progressives under President Wilson, who created the FED and started the first federal income tax as president. The merchant banks and Rockefeller's bank pushed FDR to implement Glass Steagall to strike at JP Morgan (partly as revenge for breaking up Standard Oil). First, if you control money and capital allocation, you control people's behavior. Nothing bends a person or group to your views like controlling their pocket book. Second, low interest rates make the federal government leviathan possible. Third, shifting the source of government funding back to taxpayers and away from government debt holders means the feds have to listen to the taxpayers more than the parasites. Breaking up the big banks and dismantling or decentralizing the FED would remove the artificial cap that exists on US debt yields. As all US debt yields are tied to their relationship to the US treasury market, we'd see munis and state government debt jump as well, causing pain and reaction at a local level immediately due to their budget laws. Similar to President Andrew Jackson's move against the first Bank of the US, it would remove a spigot of credit that corrupts men. Even just a few % point back up of rates would create a debt and currency crisis. This would change the existing monetary order. If the right wants to deflate the government and destroy liberalism, it has to go after the source of funding.

If US federal government debt had to face real interest rates on the debt we've already run up, true austerity would be forced to happen. The government teat would be restricted, and how fast would Americans fight for what things they absolutely can't live without versus the nice (graft) additives, grants (graft), programs (graft), and services (graft). Do we need an FDA? If you trust a government authority to make sure drugs and food are safe, then yes. Do we need the Pentagon? Yes, for national defense, but how much force projection and global policing do we need to do when we have nukes for continental protection? Americans are pretty isolationist, and much more isolationist than our political class. Means testing for retiree services, medicare sink holes, never-ending additional funds for education, and every other bit of spending would be touched. We'd have to have serious conversations. We might have to approach some of our problems from a different point of view or completely different manner from today like ending the "Invade the world, invite the world, in debt to the world" policies that Steve Sailer mocks. Imagine dealing with Muslim terrorism by suspending immigration from Muslim countries or any foreign Muslims. Fortress America! Americans would also have to throw out some if not many of the government programs that have been papering over the terrible social costs of liberalism.

The voices constantly chanting with the drums of progressive causes would have to change their chants and volume. In 2011 (using rough Wiki numbers), the government spent $3.63 trillion while collecting $2.3 trillion in taxes. These numbers did shift, but this will suffice. This means that 36% of all spending was funded by borrowing, which is at record or near record low interest rates. It's actually higher due to the interest expense built into our budget (part of spending is just paying interest). When borrowing makes up higher chunks of your funding, you must kow-tow more to your lenders (FED, primary dealers, foreigners). More importantly, you are dependent on the people who can manipulate your interest rates: the FED and primary dealer, Wall St. banks. When borrowing makes up a low percentage of your funding or none, you are more beholden to taxpayers. This is similar to the bondholders vs. shareholders friction that can happen in companies that use debt for tax advantages in their operations. If the federal government has to listen to the views of taxpayers more than the parasitic federal benefit recipients (excluding elderly SS recipients), policy will begin to align more with the right.

A counterargument would be that we'd jack up taxes and cut defense spending to keep the welfare state afloat or that no republican will do this. The military-industrial complex will not stand for that and has plenty of Democrat as well as Republican senators on their heavy contributions list (Connecticut has two). Underclass dysfunction is widespread enough now that newspaper website comments are either shut off or moderated with truncheons to keep the folks in line. What if the pacification programs are removed? We do have to admit that the welfare state does keep a lid on some violence and crime, at the margin. It won't be pretty, and it won't be easy to hide or 'erace' stories as they pile on. If the Democrats keep harping on the GOP as the party of white people, what happens when non-Asian minority dysfunction goes supernova? Welfare programs would take a hit, and the knock on consequences would be visible, and those offenders are standard bearers for the Democrat voting coalition. Some promises to the old will be reneged on, but so will some promises to the weak willed and dysfunctional. Only Nixon could go to China, and when financial regulator veterans like Neil Barofsky work with a supposed liberal like Obama and are disappointed that Obama didn't attack the banks, then you know they own the game and run the show. Let the low information voters associate Wall St with your party, and then knife them. opponents can't attack you, and you slide the middle your way. It's going to take a cross between George Bailey and Dirty Harry with an eye on the nation and not just re-election to do it.

The Moldbug fans, reactionaries, alt-right writers, traditionalists and common folks who see the decay and decline of civilization know the problem and the trouble with our system, but no one knows where to start. There is too much social decay, familial breakdown and welfare state invasion by third worlders to overcome, and too strong of a PC environment to properly deal with it even if given the power in government. When simple, common sense proposals like voter ID requirements get smeared by the media as racist and overturned in the courts by progressive judges, how would we ever limit the vote to a homeowner based timocracy? It might take a systemic shock like a currency crisis to open enough eyes. i titled this 'wound liberalism' because in our current system, there is no killing it. The right is going to have to find a way to trick the left. Let us appear to be bending to the will of the left and destroy a target that they have their sights on, which will be a public relations coup as well as strike them in the heart that they do not know exists. We would be like Delilah cutting off Sampson's hair, only doing so because Sampson considered his long hair unruly and didn't know that it was the secret to his strength. Let's start with the big banks and the FED since they hold the purse strings and the spider web of finance that is keeping the current system afloat. The rest of liberalism will unravel.

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