The end of politics in America, part 1

I am convinced that the grand key to understanding United States history in the 20th century—and by extension, current events in the 21st—is a deep knowledge of monetary policy and the financial system.

In 1913, two things happened: Congress established the Federal Reserve, and the Constitution was amended to allow for an income tax. This established a new monetary system in direct opposition to the gold standard, which in turn had replaced the bi-metallic standard established by the Constitution. In time, the Federal Reserve system would replace the gold standard altogether, becoming our sole form of legal tender.

Before the Federal Reserve system, every dollar represented a fixed weight of gold—a real, physical asset. Today, what does a dollar represent?

Dollars are created when Washington runs a deficit. The government spends more money than it takes in through taxes, so it has to borrow the difference. It does this by issuing treasury bonds, which it sells to the banks. The Federal Reserve then buys them, but with money that it creates by issuing a check against an account with nothing in it. In other words, the Fed creates money out of nothing to buy our national debt.

These dollars, called “base money,” then trickle down into the banking system as government contractors deposit their money. Through fractional reserve banking, this base money multiplies by ten-fold, or even a hundred-fold or more.

In other words, every dollar in existence represents a dollar’s worth of debt. Some of it is our national debt, owed by current and future generations of taxpayers. The rest of it is owed by private citizens in the form of mortgages, car loans, student loans, credit cards, etc.

But if every dollar represents a debt, where do you get the money to pay the interest?

You borrow it, of course. The only way to create more money is to create more debt. This is why the US dollar has lost 97% of its value since the creation of the Federal Reserve. This is why inflation has been a fact of life for the past century. This is why income inequality has widened so dramatically. And this is why our politics have become so insane.

I titled this post “The end of politics in America” because I’ve come to realize that the greatest problem facing this country is not political, and that no political solution can fix it. The problem is economic. It’s financial.

Our country has bought into a massive Ponzi scheme that we like to call “money.” We measure our wealth in a debt-based currency that steals prosperity from future generations and transfers wealth and power to an elite class of unelected bankers and bureaucrats. As with every Ponzi scheme, it only works so long as new capital enters the system. This happens in three ways: growth, innovation, and serfdom.

Growth is obvious. So long as our economy is growing, debt isn’t a problem because we’re creating more wealth to pay it off with. This is where debt actually makes sense: when it goes towards building future prosperity. An example of this that people often point to are the infrastructure projects of the 1950s.

Unfortunately, when your debt level reaches a certain point, it goes from stimulating growth to inhibiting it. Our debt-to-GDP ratio is now 104.17%. That means that if we took the sum total of all the goods, services, investments, tax revenue, deficit spending, and net exports, and we spent it ALL on paying off the debt, we still couldn’t pay it all off.

Think about that. Your entire paycheck. Warren Buffett’s paycheck, and all the millions he made last year on his investments too. All of the money spent on Amazon. All of our grocery bills. All of the ticket sales for every blockbuster movie, and the production costs as well.

Even with a whole year of that, you still couldn’t pay off the national debt.

Ever since the Great Recession, our GDP has never seen more than 3% annual growth. This, in spite of deficit spending that from 2009 to 2012 was higher than the deficit we ran in World War II! We have gone even deeper into debt than we did to defeat the Nazis, and all we got was this crappy economy.

We’re not going to grow our way out of this debt burden. The debt is the reason the economy can’t grow.

Innovation is, in some ways, another form of growth. Instead of making more mousetraps, you’re building better ones. This is why computers are cheaper now than they were in the 1980s. This is why we have no idea how people survived before mobile phones.

Twenty-five years ago, data storage cost nearly $10,000 per gigabyte. Email was a novelty. Mobile phones were revolutionary. Only the military had GPS. Satellite imagery was top secret spy stuff. “Facebook” was a printed directory of addresses and phone numbers for your local college or high school.

And yet, with all of these incredible innovations in just the past few decades, does it feel that your life has gotten any easier? Is it any easier to make ends meet? Have we entered the leisure society yet?

The truth is that we’re caught in a tug-of-war between inflation and innovation. In some areas, innovation is winning. This is why computers and smart phones are getting cheaper. In other areas, inflation is winning. This is why cars and housing are so much more expensive.

Can we innovate our way out of our national debt burden? Not without fundamentally changing our monetary system first. Until then, we’re just putting patches on a broken operating system. We can delay the inevitable collapse for a while, but not forever.

Which brings us to the third way our Ponzi money stays afloat: serfdom.

I have a lot more to say, but this post has gone long enough and already sucked up way too much writing time. I’ll post part 2 sometime next week, taking the risk that events in Washington will make me regret the post title. But I don’t think that they will. Hopefully you’ll soon see why.

The Gulf Between the Generations (Blast from the Past: February 2012)

Here’s a post I originally wrote in 2012. Given how most political commentary tends to lose relevance over time, it’s remarkable when something from the past is even more relevant now than when it was written.

Not that this post is overly political: more just a series of observations, including some red flags that, at the time, were still on the distant horizon. In recent months, those flags have drawn much closer.

Such a crazy world we live in. Stay safe, and thanks for reading.

I just watched a fascinating interview with a 1960s White House intern who claimed to have an eighteen month affair with President John F. Kennedy. But the most interesting thing wasn’t the affair itself, but the way the President’s staff, the “fourth branch” of government (AKA the media), and the entire general public of 1960s America seemed more intent on keeping the secret than on facing the truth about JFK’s many affairs.

It seems that my parents’ generation had so much trust in their government that nobody would even raise the question—that to raise doubts about the integrity of the man who held the highest office in this country would itself be unconscionable. Rather than face the facts, the American public seemed unwilling to do anything that would shatter the gilded image of the man who led the free world. And that, quite frankly, is a mindset that I simply cannot understand.

In contrast, my own generation has very little trust in our government. We’ve been raised in an age of ambiguity, where the enemy doesn’t wear a uniform or pledge allegiance to a flag, but live quietly among us, until they strap a bomb to their bodies or turn a commercial airplane into a weapon of terror. Or at least, that’s the excuse our government gives us for an increasingly invasive security regime that infringes on our basic liberties, enables the military to hold us in detention indefinitely, and sends our soldiers overseas to fight increasingly senseless wars to “liberate” the people of oil-rich nations who don’t even want us there. As if that weren’t enough, the economic crash has taught us that all that stuff our parents taught us about equality and opportunity is really just a pack of lies—that the rich get bailouts while the rest of us foot the bill, and all that stuff about changing the world and being whatever you want to be… yeah. Lies, all of it.

My Dad had an interesting rebuttal to all this, though. He said that it wasn’t his generation that put the president on a pedestal—it was his generation that tore the pedestal down. During the 60s and 70s, the Vietnam era and the rise of the hippy movement, his generation fought back and made it acceptable for us to question the president, or to criticize the government, or to do all the things that we take for granted today. In fact, he said that we’re the ones who are backsliding into complacency, with our deafening echo chambers, our social media inanities, our reactive attachment to corporate brands and advertising, and our almost religious sense of entitlement.

I’m not totally convinced he’s right, but I do think there’s a fundamental gulf between these three generations. Our grandparents’ was the silent generation, where people were expected to keep to their own business and not rock the boat. Our parents’ generation was one of top-down media, where ABC, NBC, and CBS ruled the airwaves and told us all what to think, buy, and believe. Ours is a much more peer-to-peer generation, but I worry that we’re turning into a collection of mindless herds who are turning the culture wars into a messy riot where we abandon civil dialog and rational thinking for a much more destructive mob mentality that isn’t really building anything, but tearing it all down.

Sometimes, it gets so frustrating that it makes me yearn for the days of the frontier, when you could leave it all behind and reinvent yourself somewhere out in the west. That’s probably why I’m so drawn to science fiction, where space is the final frontier. There really are times when I wish I could go to the stars and escape to it all. Writing about that is the next best thing.

Maybe that’s why I feel so compelled to write Star Wanderers. It’s not all rosy, of course—space can be a cold, dark, and lonely place—but so can this world, when you’re lost and you don’t really know what you’re doing with your life.

I don’t know if I recognize anywhere as my own country anymore. Like Van Gogh, all I can say is the sight of the stars makes me dream.

Is it ever okay to punch a Nazi?

Is the current year between 1939 and 1945?

Are you currently on active duty in the armed forces of one of the Allied nations, or a member of a partisan resistance movement within Nazi occupied territory?

Is the Nazi whom you want to punch currently engaged in combat operations against you?

If you answered “no” to any of these questions, then the answer is:

No, you dumbass.

This is more disgusting than anything I saw in 2016.

Anything election related, anyway.

Four residents of Chicago kidnapped and tortured a special-needs man, broadcasting it live on Facebook while ranting against President Trump.

This is worse than the gang that pulled the Trump supporter out of his car and beat him in the middle of the street. It’s worse than the abusive mother who pretended to kick out her own son because he voted Trump in the mock elections at his elementary school.

This is barbarism. I don’t care what side of the aisle you fall on. It is barbarism, pure and simple. Civilization cannot exist unless people like this are exiled, executed, or locked behind bars.

Happily, all four of the alleged kidnappers and torturers have been arrested by the police, and the victim has been treated for his wounds and is now with family. So at the very least, this story ends happily.

I cannot express how furious this makes me. To keep this post from turning into a barely coherent rant, I’ll forbear.

It’s also very tempting to analyze this from a political angle: to see it as either vindicating or condemning certain political views. I could go for a long while about how we as a country got to this point, and who is to blame for it. Such a post would rally the people who agree with me politically and alienate the people who don’t.

But the truth is that this is so much larger than just politics. Fascism thrives when society enables the worst elements of human nature, which exist on both the Left and the Right. We can see those elements here. The problem is not the other side, whether that’s blacks, whites, Progressives, Conservatives, Liberals, Republicans, or whatever. The problem is the cycle itself, which feeds the worst in all of us.

We really need to move beyond this madness. But unless we come together, this nation will never heal. I hope we can all come together in condemning this for what it is: a heinous act of barbarism.

Dear #ImWithHer and #NotMyPresident

I know we disagree on a lot of things. We live in troubled times, and many of you are scared for the future. I can see it in your eyes. I can hear it in your voices.

There’s a very real temptation now to glory in victory, or to swear vengeance and foment revolution. But that only perpetuates a cycle of hatred. The people who opposed President Bush were not all unpatriotic. The people who opposed President Obama were not all racists.

And so, I offer you this. I mean it sincerely.