Tuesday, March 19, 2013

Boiling the Frog

Progressives use the phrase boiling a frog in the NY Times for climate change legislation and the economy. Conservatives use it on websites for the erosion of the Constitution. The first is a lame use of the phrase, which is more a visual garnish to a crappy Krugman column. The second is more applicable. Let's talk about two long term frogs who really are one frog that has been boiled for decades. It has been a slow boil by the elite class with plenty of help from the sous chef media and academia. That white, middle class frog needs just a few more years before it is boiled alive, and without debt restructuring and an end to immigration, the lid and that frog's fate will be sealed.

The metaphor of boiling a frog alive is that if you place a live frog in a pot and slowly turn up the heat, the frog will boil to death before realizing it. In the 1970s, the US economy was ending a long post-W2 boom that had been dislocated by LBJ's escalation of Vietnam and LBJ's Great Society. That created a currency problem that Nixon and Kissinger resolved by closing the gold window of gold convertibility and creating the petrodollar. The decade of the '70s was basically the rest of the world trying to resolve the destruction of the Bretton Woods currency arrangement. Throughout this inflationary period Americans received wage increases. There was cost push inflation that Joe Six Pack could use in wage negotiations to demand more money. This ended with Volcker raising interest rates to create a recession and kill inflation. This also started the period of low inflation and fear of inflation, yet inflation of financial assets and mortgage debt. Americans felt more prosperous and did enjoy a rising living standard but it was on debt. Few cared about debt because of all the goodies it bought us. Now the deflationary moment is upon us and we've seen our jobs go to foreign countries, our houses be mortgaged with no relief and debts everywhere piled up with no relief in sight. As Thomas Jefferson put it, "If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered."

Debt and wealth controlled by the few can be rectified with legislation and tax policies if the groundswell of voting is there to put people in place or threaten lame politicians whoa re scared to lose their seat. This is a much harder thing to accomplish when the party aligned with the 1% wealth holders and big banks is the party that benefits from immigration. It started as just a problem for California and border towns. Amnesty in 1986 was meant to help those unfortunate souls. More souls crept in with anchor babies, social welfare use and other odd benefits like in state tuition. Blacks felt the hit first due to neighborhood infiltration and competition in working class jobs. This is all while the media performed a basic shame game on anyone daring to notice it and a brown out of the widespread invasion by our Mexican neighbors. The 'racism' charge will be hurled by those daring to oppose more immigration, and even the right has suicidal leaders willing to hispander. Eventually, enough immigrants from the Leninist country to our south will enter the country to turn former swing states like Nevada and Colorado into solid blues and former reds into swings.

It took several decades and will take more, but that frog will be cooked. What is left of the middle class, which let us be honest looking at income statistics in 1965 was nearly all white, may actually grasp the situation and try to do something about it. By then, they will be broke and just another constituency for the elite to throw crumbs to. Our elite will do their best impersonation of the Brazilian or Indian elite and keep just enough money to keep just enough of the peasantry happy and willing to do their bidding should any poor slice of the nation get angry and start having any ideas. America will slide to a lower standing, if she remains whole, and we will need to have enough order to supply raw materials and food for China. That is not a civilization but a raw material source. It does not have to be this way. Break up the big banks, restructure debt and end immigration. A healthy middle class is the best way to build and maintain a civilization, not maintain a lecherous government.

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