Trump plays reckless with the world's trust

 

President Trump invested much into the promotion of his image as a peace president. But his intellectual weakness and consequent susceptibility to 'expert' opinion, coupled with the fact of neocon dominance of US foreign policy and military mindset these last few decades, plus other factors no doubt, have all worked together to seduce Trump into an egregiously distorted view of US military power, and into acceptance of the erroneous "peace through strength" mantra. I believe this claim despite what follows in the next paragraph.

Israel's ongoing strike on Iran appears for the moment to have been very effective, intelligent, and well executed. On the evidence available so far – one part of which is Iranian silence – it looks to be a mighty blow, one Israel is well placed to capitalise on over coming days and weeks. Iran is already under pressure to successfully weather this onslaught.

And yet attacks of this character – surprise, pyrotechnic, awesome, comprehensive – often begin neocon/Israeli wars, or more accurately the military phase of neocon projects (Project Ukraine required a different approach; Russia is a peer rival). But for all their might, intelligence and detailed planning, what follows on their heels has yet to be a stabilisation of the region involved, let alone some manner of 'victory' that reshapes the world such that the US reigns more supremely as a consequence. Over the last four decades of neocon foreign-policy dominance, we have seen an unmistakable evaporation of both US hard and soft power, as well as a decline of its relative economic supremacy. Of course there is more to this story than neocon adventurism, but that in fact underscores the point I'm making. No person or group controls everything.

Even if Israel topples the current Iranian government, what happens next? The BRICS-based world can easily interpret current events as proof positive that the US is utterly untrustworthy. Perhaps tentative trust in Trump was used to deceive Iran and Russia into a false sense of the authenticity of US intentions to reach a deal on the Iranian nuclear-power and nuclear-enrichment programmes. Considering the West's casual disregard of Minsk I and Minsk II, considering its influence on Zelenskyy to walk away from the April/May 2022 peace talks with Russia in Istanbul, and other chicanery besides, all trust is gone. If Iran is toppled, I predict it will be a Pyrrhic victory. Fear holds things stable for a while, but only for a while.

As I've said before, when all you have is an army, everything looks like a war. The militaristic mindset that pervades the neocon perspective, which is in essence little more than "might makes right", is akin to an army, or an intellectual/psychological filtering process that may as well be an army. "Do as we say, or else" is the neocon way. President Trump's 'diplomacy' in the Truth Social post that heads this article oozes that mentality. So much so, the President comes across to me as a boy among (deranged) adults, a boy defenceless against their wiles and psychopathically resolute determination to have the world their way. But all of it is, in my view, in fact the way to ruin.

Roughly the first 50 days of the Trump presidency were hopeful, in my opinion. I believed they were sufficiently strongly anti-war to carry the day. I was wrong. We are now back to the reckless uncertainty of the Biden administration. Permanent-state inertia and ivory-tower arrogance have overcome what I suspect were sincere intentions on Trump's part to do things differently. But Trump's impatience with detail, his insecurities, his lack of intellectual courage, his over-reliance on the wildly unpredictable manner of his social-media 'diplomacy', have hamstrung those intentions, such as they were. It has been one embarrassing gaffe after another, and I am grossly understating the ugliness of what we have witnessed over the last couple of months.

I cannot see how the MAGA movement can continue to support Trump for much longer. I anticipate a split between the populist forces behind Trump on the one hand, and his presidency on the other, as his presidency sinks deeper and deeper under neocon waves. Furthermore, BRICS nations, and especially Russia and China, cannot tolerate a broken Iran. Therefore, the risks of a nuclear conflagration if Iran recovers sufficiently to weather the initial weeks of this strike, especially if Israel then comes to feel existentially threatened by Iran's recovery, are significantly above zero. 

One part of my broader analysis is the faint expectation that a powerfully cohering awakening among the US population – namely to realise that the US permanent-state and intelligence establishment does not have The People's best interests at heart, and that this conglomeration includes US media outlets for the most part, not to mention British and other Western European outlets – might be triggered by a great disillusionment with Trump the Myth, as previously stated in Econosophy pages. But much else would have to hold for this to actually happen. The riots in LA look to be but one part of a broad destabilisation effort aimed at dragging Trump's final term deep into the belly of the neocon beast. Other actions of this type might well be in the works. Coupled with continued degradation of the US economy as AI-rooted technological unemployment gathers pace over coming months and years, could well mean such an awakening of this type has little to no chance of gaining any meaningful momentum.

And yet these are interesting times, one way or the other. Life has about it an irrepressible power to surprise, to deliver the unexpected. This power is deeper than the sort of glittering intelligence that characterises neocon cunning; none of us can be sure what the future will bring. This is an epochal historical moment. Trump's role has proved not be peace maker; he lacks the strength of character and richness of wisdom to do that noble undertaking justice. But this does not mean war will destroy us all, or turn out as its adherents expect. There is many a slip twixt cup and lip, and reality always bats last.

Why I ‘support’ Trump over Biden

From what little I know of Trump the man, I wouldn’t trust him as far as I could throw him. From what I’ve seen of the distance between the Trump myth and the reality it conceals, I wouldn’t put money on him “draining the swamp” any time soon – not if left to his own devices. He seems to me a creature of the establishment, albeit with a heavy slice of the jester or imp about him. What I’ve seen of Biden, man and myth, alarms me. The more I learn, the more alarmed I become.

But neither observation matters all that much, and that is one part of what this post is about. To put it succinctly, I’ve been wholly unengaged in left- and right-wing ideologies and politics for about 20 years. What matters to me is what makes most sense beyond ideology, if such is possible. For the record, I think such is possible, though to a somewhat limited degree. The attempt to remain free of ideology is itself partly ideological. Anything that patterns our approach to politics and societal governance is going to have a slice of ideology to it. As we confront the devilish details when applying that pattern in daily life, politics enters the scene, heavily, awkwardly, and won’t go away. When we deal with Other, compromise is the name of the game. Loving, creative compromise keeps the game healthy. That takes courageous transparency. And transparency is one thing we need a lot more of.

Trump’s myth attracts my attention regardless of how true it is. Not because I’m attracted to it per se – it’s too cartoonish for me –, but because “draining the swamp” is sorely needed. There is corruption aplenty in every nation on earth. How could it be otherwise; power corrupts. Power attracts those who hunger for power, a civilisational dynamic we must live with. So evidence of voter fraud, properly exposed, would flush out much corruption. So much so, in fact, that few of the horrifically partisan mass-media outlets, social and conventional, will escape unwounded, and many might perish. 

The promising opportunity I see here lies in a Trump victory. His victory would necessarily be accompanied by exposure of massive voter fraud. Once out, this cat will not go back in the bag. The chance We, The People would then have to wrest narrative control from the globalists would be far larger than it is now. And the shock would wake many from the Stockholm Syndrome slumber cocooning them, blinding them.

I want neither the Old Normal, nor the New Normal so aggressively pushed by globalists. The latter seems appealing only because it’s shinier than the ugly chaos erupting all around us. But squeaky-clean totalitarianism isn’t the only alternative. We can do better than total surveillance, total servitude, total serfdom, in short total subjection to The Powers That Be. And we can also do better than the Old Normal that led inexorably to this mess. More on that “better” a little down the page.

Obviously, those selling snake oil of totalitarian flavour want total control. Those who want total control should not be in charge of anything, let alone the whole planet. It’s a soul sickness nothing can satisfy, not least the illusion of total control that must always remain out of reach, pulling its acolytes forwards to their destructive demise via some unknowable number of illusory victories along the way. The Book of Revelation is a mythical roadmap that describes this process. 666, the number of the beast, symbolises total control, six being the number of order, of mechanical perfection.

In other words, in Trump’s case it’s the myth that matters; a Trump victory combined with a sufficiently large shock would mean the direction of travel then chosen will be exposure of ever more corruption. If Biden wins, We, The People are far more likely to be sleep-walked to a nasty – though nice and tech-shiny – dystopian future very few of us actually want. Even if our fear tells us we do.

All that said, the ideological divide – a false dichotomy in my view – is not going to dissolve into peace and harmony this side of a painful cultural catharsis. Regardless of how the election aftermath shakes out, bad actors will remain in charge, bad blood will be boiling and vested interests will continue to push our buttons and pull our strings, shepherding us whither they will. The point here is the window of opportunity a Trump victory might afford us. We will make best use of that window by staying calm but firm, persistent but polite, open but skeptical. In short, by remaining loving.

Back to the promised “better”. An enormous improvement on all the above can be the only consequence if loving level headedness prevails. The path that improvement will be – the journey is the destination – opens when we commit to love. Those still lost to the dark spell cast so perniciously over humanity will need help and guidance. The route out will not be obvious and likely longer than we would like, possibly decades. Thus the more sobriety and joy we bring to this grave challenge the more rewarding it will be.

My next post will examine in detail the nature of that challenge.

Sketches of money systems

I've been trying to gather into crude shape my learning thus far on what money is and how systems which use it might work. I found myself drawing diagrams to clarify my position, and feel I have learned a little from the process. Here they are for comment and analysis. I'm only looking at fiat, not commodity-backed money, because I believe there's no real functional difference between them when pondering what money actually does in an economy. [With enormous thanks to my brother for pointing out my embarrassingly bad maths -- this blog has been edited since it first appeared!]

Scenario 1



The simple world of this sequence, made up only of companies for illustrative purposes, is loaned 10bn by 1Bank to crank the system into life and get the game moving. Awkwardly, because of interest, World has to pay back to 1Bank 10.5bn. This is of course impossible, because only 1Bank is allowed to create money, and furthermore only creates money as an interest bearing loan at 5%. Even if 1Bank employs extra people to do hitherto unnecessary tasks, like polish its current employees' shoes, thereby returning money back into the economy, there is simply not enough money in the total money pool to cover the interest. The only way to sustain this simplistic system beyond round 1 is to loan the world more money to cover the outstanding interest. However, in this crude scenario and to illustrate a point about the necessity of lubrication, the amount of money in circulation slowly diminishes with each passing month and 1Bank extends no further credit. Companies that do best are able to make their repayments with their larger share of the available pool of money (profit), while companies that fare worse go quickly bust. Unemployment soars -- there is never enough money to pay workers -- as 1Bank inexorably retrieves from the economy the money it loaned World. When the debt is expunged it is game over, or system reset.

Scenario 2



In this improved and fairly realistic scenario we have 1Bank loaning a total of 10bn to 5 commercial banks (CB1...CB5). Government, as a borrower, is hidden in World. The commercial banks have the right by law to loan out money (create new money) at the ratio of 10:1. This means that the injected 10bn can become 90bn in the economy. Again, since in Scenario 2, as in Scenario 1, all money is created as interest bearing debt, there can never be enough money in the economy to pay back to the lending institutions the loan plus the interest. In this total money pool we have 100bn in principal (to be expunged upon repayment), but owed to the banks is 107.7bn. The system is therefore 7.7bn short of necessary lubrication. For the banks to be able keep the system from collapse (only they can), accruing as they do 'real,' durable money from the economy (interest payments), they must pump back into the system their earnings (the interest). For any kind of balance to occur, the combined action of defaults, plus bank spending in the economy (via its employees and otherwise), plus new loans and rolled over debt, must keep the amount of money in the system equal to the task of lubricating the economy to some sufficient degree. Theoretically it must be more or less possible to keep this system going indefinitely, depending on what we mean by “to some sufficient degree.” In the philosophy of the people who favour this system, poverty is a necessary evil, as are defaults of course, both of which act as a spur to keep us working, to keep us motivated. Put simply, success is good, failure is bad. Here Smith's Invisible Hand can be faintly detected keeping the system tuned automatically. Look, no governmental interference needed!

Scenario 3



Scenario 3 is a little like MMT (Modern Monetary Theory) as I have understood it. In this model Government has emerged from World as an institution that can also create money, but, in contradistinction to the banks, may do so as spending, which means no interest is charged. Government may choose to tax money out of the economy, or it may not, its decisions in this regard being guided by inflationary/deflationary pressures. (I include no arrow for taxation because the picture would have suffered in clarity.) In this theory we have a situation where defaults and financial ruin are not necessary parts of the system staying in some sort of balance. Government acts as a dynamic stabilizer, injecting and retracting money as the situation demands. Is this, potentially, monetary Nirvana? Seeing as there is no such thing as Nirvana, I very much doubt it.

So much for the theory. To please Bill Black (and myself) my final chart adds a little real world colour in the form of corruption.

Scenario 4



Included in corruption are human imperfection, mistake making, fraud, crime and so on. Also, not represented is that systemically there is constant pressure towards corruption, simply because being rich is better than being poor. So at each place where corruption can occur, there is pressure to ensure it will occur. Such occurrences destabilize the system to some degree.

One of the features of money that so fascinates me is its logical bond with scarcity, and its ability to act as power-lever. Those who control it control the system's functioning. Money can, in my view, never be only a medium of exchange, the simple and pure lubricant of those systems which depend upon it. All diagrams, models, and theories which do not take this into consideration are therefore flawed as far as I can tell. At those points of the system where corruption can occur it will, and this compromises the system's long term integrity, before we even think about problems of inflation, trade, currency exchange etc.

In the circle representing World is a massive amount of detail no picture can convey, while the flow of money round and round represents, of course, only a tiny fraction of what really takes place in human civilization. However, as broad-stroke sketches, such images have some use in representing the simple maths of money creation, and the nature of the systems we might create that depend on money for their functioning. How important are the threats of poverty and default as systemic motivators? How beneficial/dangerous is full employment? How effective can government be at establishing the correct tax policy in a system prone to corruption? If we were to leave government out of it, how effectively could 'The Market' take care of corruption, or of roads, laws, education, the health of humans everywhere?

Finally, also not represented is change. Change is the only constant. The models I have sketched, which broadly represent the choices of monetary systems available to us -- at the functional level -- do not take technological unemployment into consideration, nor production-consumption at levels that threaten the health of the ecosystem which supports those money systems in the first place, nor technological advances which offer us abundance, nor the coming beginning of global population decline. In the final analysis, money is a tool which solves particular problems, but, as all solutions do, also brings new problems with it, such as corruption and entrenched societal divisions. And because scarcity is assumed as an eternal problem solved only with money, we have war as an inevitability too.

Is there really no other way?

'Free' Markets = Corrupt Markets?

An economy — whether local, national or global — is just a system, as are all other multi-component, cohesive processes we know of. As such economies are subject to internal and external forces acting upon them, affecting their behaviours, shaping the manner of their operations. The discipline of economics studies economic systems, but, sadly, comes to the task with a raft of core assumptions about the ground rules governing economic operations — such as rational buyers and sellers, unlimited wants and scarce resources (though, strangely, energy is assumed to be infinite in some regards!) — all of which are, at least in the mainstream, out of bounds when it comes to what may be discussed. These assumptions shape socioeconomic policy generally, which shapes our lives. I refer the reader to Steve Keen’s “Debunking Economics” for a forensic analysis of the internal inconsistencies and logical contradictions of the dismal science (it really is not a science), my focus here is on the discipline’s blinkered attitude to corruption, an observation I first heard made by William K Black. Generally speaking, according to the professor, economics fails to consider corruption at all.

For me the best sentence I have read so far highlighting the systemic pressure to corruption inherent in economic systems was written by Jacque Fresco (from “The Best That Money Can’t Buy”):

“In a monetary system there is an inherent reason for corruption and that is to gain a competitive advantage over someone else.”

A core assumption that arises from the perception of unlimited desires having to deal with limited resources is eternal competition. In economic theory rational market participants are also “law-abiding” market participants (though laws are not really considered), so this endless competition should produce efficiency everywhere it is allowed full scope. The real world, that messy, recalcitrant thing, makes this assumption laughable. Here some quotes from a recent discussion at Financial Armageddon:

“Don’t forget the Dow is fake also. They took out GM and Citibank from the Dow. Those are two zeros and they put in Travelers and Cisco…that’s 640 Dow points that were added because they swapped GM and Citi for Travelers and Cisco.”

and

“Those trades [in Citi, Bank of America, AIG and Wells Fargo] are 80% of all trades in the market and the total market volume is less than half of what it was back then [2007]. In other words, you’ve got half the market participation of what it was and of that half, 80% of it is concentrated in less than half a dozen financial firms.”

Some observers are resolutely opposed to the idea that the markets are manipulated by powerful market players, but we need only recall that economic systems have built in to them a constant and unending pressure to corruption, for the idea of corruption to become more than predictable. We then see corruption as inevitable. There is crime (of which some 90% is economic), humans are capable of a great variety of behaviours — that is, they are not the robotic, homogenous, mechanical components of economic engines economics theory needs them to be — consequently it is silly to assume all who are motivated to become ever richer are nice human beings. If they were we would need no laws in this scarcity-based system. That we have laws, and that laws cannot be perfect, says enough.

And of course the world is vastly more complex than a ragtag of markets efficiently distributing scarce goods and services via the price mechanism. We poor saps watch the voodoo of stock markets in hushed awe, feeling good when it rises, and concerned when it drops. In Ellen Brown’s “The Web of Debt” I came across a wonderful analogy for the importance of stock market performance; the Dow is a dead military dictator propped up in the castle window, his arm moved reassuringly up and down by some mechanical device to pacify the troubled crowds outside. So not only do we have internal, get-rich-quick motivations to corruption, we have external, socioeconomic and political pressures to corruption. Economic systems experience constant internal and external pressure towards corruption, and yet in the mainstream the idea that markets are even manipulatable is a virtual heresy. ‘Free’ markets are the panacea for all ills. Just leave markets alone to work their magic and all will be fine.

But at last there are the beginnings of a serious attempt to address this woeful shortcoming of economic theory, and the fallout of this on socioeconomic practices. From the abstract of a recent paper at www.voxeu.org (hat tip nakedcapitalism):

“How does economic theory need to adjust in light of the global financial crisis? This column presents a new insight on how innovation leads to rent capture, which in turn is a sign of a potential crisis. This stems from asymmetric information in the financial sector. To avoid a repeat of the crisis, policymakers need to increase transparency.”

Asymmetric information is anathema to perfect (and free) markets, in which all participants need to be perfectly informed about what’s going on, for price to be fair and distribution to be efficient. Of course, to the untrained eye, such a market is impossible right from the get-go, but here, in the rarefied air of economics academia, we must look at particular instances of a particular sector of the economy (finance), rather than at the very foundations. Such is change of established institutions; a painfully slow nibbling at the edges.

The article looks at the arcane complexities of CDSs, asserting the sellers are privy to more information than the buyers, and as such possess too much power in the transaction, favouring them greatly over the buyer. The authors extrapolate from CDSs to the financial market as a whole, arguing that the entire sector benefits the sellers with asymmetric information advantages that destabilise the entire economy over time.

What is important about this is that the holders of the keys of current orthodoxy, that elite shouting loudest about the beauties of ‘free’ markets, are suddenly under the microscope being exposed as the least ‘free’ sector. A small beginning it may be, but it has the potential to weaken considerably the paradigm-controlling power of financial institutions. Hopefully the debate about the ongoing crisis will widen as a consequence of this, and other, research.

Meanwhile, it must still be only at the extreme fringes that scarcity itself is viewed as an outdated assumption. Once momentum builds around open and unbiased discussions of scarcity and its fallout, then the idea of a resource-based economy might take hold in the public’s imagination. So much of what we ‘know’ about life on Earth arises from this key assumption. Tackling it will prove, I feel, to be humanity's greatest challenge to date.