Warning: Creating default object from empty value in /home3/tandem/public_html/golemXIV/wp-content/themes/canvas/functions/admin-hooks.php on line 160

The Next Crisis – Part two – A manifesto for the supremacy of the 1%

The present crisis is not yet over and yet we are already overdue for the next.

In Part One I suggested that not only are the 1% well aware of this but that while they have been telling us how we must ‘save’ the present system and assuring us that any radical break with the policies of the past will result in catastrophe, they have in fact been working hard to engineer very radical changes.  We have all seen the decline in living standards and are all acutely aware of the changes which directly effect us. But I wonder if  the true significance of the changes, when taken together, has largely gone unnoticed? Certainly the Over Class has not made clear their real intentions. Why would they?  I believe the 1% know that to protect their wealth and power next time will require radical political dismantling of what is left of our democracy.  Necessarily much of what follows is speculative. But the speculation is, I think, rooted in and extrapolated from what we can already see happening today.

Some things about the present system must be maintained, others expanded and some new ones added. Taken together the changes, I think, amount to the beginnings of a Manifesto for the 1%. So here are some of the things, I think, our global Over Class would like to achieve and how they intend to achieve them.

As I have been writing this article it has grown, each section getting longer. I’m afraid I sometimes find it difficult to know where the sweet point is between, on the one hand – being too dense, and on the other – over explaining. So here is a outline of the sections so that you can see where I’m going and skip the sections that seem obvious.


1) The Over Class must retain and consolidate their control over the global system of debt.

2) The power to regulate must be taken from nations and effectively controlled by corporations.

3) Professionalize governance. Democracy can be and must be neutered, and an effective way of doing this is to insist that amateur, elected officials MUST take the advice of professional (read corporate) advisors. Expand current law to enforce this.

4) The financial system badly needs un-encumbered ‘assets’ to feed the debt issuing system. A new way must be found to prise sovereign assets from public ownership. Such a new way is suggested.

5) In order to facilitate the political changes necessary, the public mind-set must be changed. National Treasures such as the NHS in Britain must be re-branded as evil State Monopolies.

6) Effective ways must be found to convince people that democratic rule is no longer sufficient to protect them.

7) An alternative to Democracy must be introduced and praised. That alternative must be the Rule of International Law as written and controlled by the lawyers of the 1%. People must be told that this is all that stands between them and an increasingly hostile and anarchic world. But that it can only keep them safe if it has absolute authority over democracy. People must voluntarily bow to it out of fear and its decisions must be as absolute and unquestionable.

In conclusion, I suggest that this amounts to a dystopian version of the old environmentalist idea of Spaceship Earth. A corporate version where we are just passengers who must pay our passage in a ship someone else owns. No longer inhabitants or citizens with the same inalienable right to be there and be heard as anyone else. 

And yet, dark as all this may seem, victory for the 1% depends on no one understanding what is happening. If we are already beginning to see the outlines of what the Over Class wants, then their victory is not assured. If our ignorance is their bliss, then our understanding is like sunlight on a vampire’s skin.

All is not lost, not by a bloody long way.


Towards a Manifesto for the supremacy of the 1%

1) Control of debt.

The 1%, through their ownership of the private banking system, must continue to issue and handle the majority of debt and have legal control over the payment of those debts. Power over the system of debt is critical to the 1% and one thing is paramount – there must be no democratic, nor public, control of it. That old saying, “give me control over a nation’s currency…” should now read, give me control over a nation’s debt. Debt trumps currency. Which in turn means the 1% must maintain custodial power over the money used to pay those debts.

At the moment, the largest custodial banks are those on Wall Street. Which means any dispute over what happens to that money gets settled in the Southern District Court of Manhattan. And that court has consistently interpreted international law in ways that have elevated the rights of private banks and bond holders over the rights of nations and entire peoples.  Two recent decisions in the US Supreme Court, which upheld the Southern District rulings regarding the Vulture funds Elliott Associates, NML Capital and others, forced the Wall Street custodial banks holding Argentina’s money, not only to freeze all payments but also to reveal all confidential information regarding Argentina’s assets. It is no exaggeration to say that these rulings favoured the Vulture Capitalists so decisively that it has changed the balance of power between private bond holders and entire peoples, in favour of the former. Even the UN wrote that the rulings were so sweeping that they,

…set legal precedents which could have profound consequences for the international financial system…

and which,

… will erode sovereign immunity.

Such is the power that the present arrangements give to the global 1% and their banks, that no group of emerging nations must be allowed to create rival custodial banks under a different court. Such would not only rival the mighty custodians of Wall Street but would stop the trend of enforcing US corporate law as de facto global law. If ever sovereign nations did not fund themselves by issuing debt, and if ever the 1% did not control where that debt and the ‘money’ to pay it was stored, and if ever the true sovereignty of nations was re-asserted against Vulture capitalism, then a great deal of the 1%’s power would evaporate. So none of that can be allowed to happen.

It is perhaps THE most important point of any for-profit, debt-based, currency or system (debt doesn’t HAVE to involve interest) that that debt must increase.  Not because it is a law of physics nor even that it benefits the 99% (largely it doesn’t) – it happens because it benefits the 1% to whom the interest is owed and more fundamentally because the entire value of the 1%’s debt-based, paper wealth depends upon there being a constant increase in debt. If debt didn’t increase then their wealth would become, first unstable, and then burn to ash. If that seems like I plucked this claim out of thin air I suggest that our present crisis and many others before it are the abundant proof. When the expansion of the global bubble of debt began to slow in 2007 it made the value of all the existing debt-based wealth first uncertain and then implode. Everything done since has been for the sole purpose of reflating the bubble of debt so that debt-based wealth could be said to have value. The 1% will never give up the power they currently enjoy to issue and control the inflation of debt, because their wealth would evaporate if they did.


2) Regulatory power.

One of the areas of power remaining to nations which act as an unwelcome hindrance to global corporate power is the power to regulate. This must be curbed and proposals are already on the table to do so. Such an effort is now enshrined in the multilateral trade agreements currently being agreed behind closed doors: the TPP, TTIP and the one which will remove finance from national control, TISA. These agreements all contain a new approach to regulation which we could summarize as “Our experts, Our data, Our regulations.” In a paper submited to the TTIP negotiations jointly by the US Chamber of Commerce and Businesseurope we find a proposal to adopt what they call “Regulatory Cooperation”. Which the paper says will,

“…put stakeholders [the corporations]  at the table with regulators to essentially co-write regulation.”  P. 4

The new philosophy, despite its coy claim to being about ‘cooperation’, puts corporations firmly in charge of setting the regulations for themselves and their products on the grounds that only they have the necessary experts, who have the necessary access to the data which is otherwise “confidential”. Or, to appropriate a phrase from the American revolution and use it for demanding more rights for corporations, “No Regulation without Consultation.”

The policy already being written in to the Trade Agreements and given specific teeth by their Investor State Dispute Settlement (ISDS) clauses, is not simply about who regulates what, it is the leading edge of a broad concern to remove any important decisions from democratic control.  The ISDS, in case you are not familiar with the jargon, is the clause first used in Bilateral Trade Agreements, now being incorporated into all Trade agreements, which gives corporations the right to take nations  to privately run arbitration at which they can sue the nations … and almost always win. And this, for me, is the key point. Disastrous as the Trade Agreements will be in and of themselves, they are a leading edge of this much more profound attack (see below) which I think we will see gathering pace in the next few years.


3) Neuter Democracy by Professionalizing Governance.

The Global   do not like democracy. In their less guarded comments this is beginning to show. Here is the EU Trade Commissioner, Karel De Gucht, quoted in a piece over at The Automatic Earth talking about the Scottish independence vote, 

 A Europe driven by self-determination of peoples … is ungovernable … ”

One of the main ways the 1% can most effectively neuter democratic power (in a way that they can claim it is not their intent at all) – and the regulatory attack contained in the Trade Agreements is just one example –  is to advocate professionalizing governance. This has the advantage of sounding good on the surface. Who wouldn’t want professionals giving advice? In practice it will mean that although anyone can still be elected (that can be left in place) there will be a new insistence that they MUST – not ‘can’, but MUST, take the advice of professionals – corporate professionals. And as noted above a good step towards this has already been proposed for trade regulations in the corporate submissions to the TTIP negotiations.

The 1% and their media outlets will argue that Amateurism is no longer good enough. After all would you want an amateur heart surgeon, or an amateur nuclear engineer? No of course not. So why would you want amateurs to make decisions in any other sphere of governance? Elected officials are amateur. The experts whose ‘advice’  they, till now, “could” take, they from now on MUST take. And luckily there is precedence for this. Already when it comes to government ‘regulation’ of financial enterprises they use, retain, rely upon (you chose the phrase you like the sound of) the big 4 accountancy firms to do it for them. KPMG, not the government, inspects the books and signs to say that everything is tickety-boo and all the corporate bosses and their political friends then have to do is smile for the cameras. And it worked ‘really well’ in 2008 – in the sense that ‘The Regulator’ said whatever the 1% needed them to say at the time, until it was too late for anyone to do anything about it. That is precisely the kind of ‘regulation’ the overclass need going forwards.  Thereby, “No regulation without consultation” gets expanded to “No laws without consultation”. And of course that ISDS system of arbitration could be easily expanded to other spheres of government and used to stop any laws or changes to laws taken without or against ‘professional’ advice.

If any of this is put in place then it has the wonderful effect of leaving the politicians effectively powerless, but still in place so as to be the focus of blame. The 1% will hold the real power but the politicians will always take the blame. Any time things go wrong it will be because they made a mistake or did not follow advice as well or as fully as they should. Nothing will ever be the fault of the advice or the advisors.

As long as the 1% make sure the politicians are well taken care of after office, then there will be plenty of takers for the jobs. How utterly empty would the pantomime of our democracy be then?

So far this has been about taking from us. What about giving to them? Let’s not forget they have needs too.


4) From bail-out-cash to assets-for-pledging.

We all know banks would have died if it were not for the Trillions (yes, it is now counted in trillions) in public cash we have pumped in to them since 2007, to replace the flow of cash their brilliant loans should have been bringing in but of course weren’t and never will.  And that flow of public cash in to the private banks continues. Despite yet more empty lies about the banks being fine and fixed, as I said above we are not fixing them we are feeding them. The latest feeding will be when the  ECB gives them another third of a trillion in TLTRO (Targeted Long Term Refunding Operation) which replaces the sad, plain old LTRO of the last few years which gave the banks a trillion or so and was supposed (both times) to be the definitive fix. Of course since the LTRO ‘fixed’ things two major european banks still had the ungrateful effrontery to collapse – Banco Espirto Santo in Portugal and Monte dei Paschi bank in Italy. Right now all the other European, ‘not-in-need-of-any-help-being-perfectly-fixed and fine-thank-you-according-to-several-official-and-therefore-absolutely-trustworthy-stress-tests’ banks are lining up to take another third of a trillion. This, we are told will not only fix them…again…not that they need it, but will also encourage them to lend in to the ‘real’ economy. Which, oddly, we were assured the previous half dozen fixes were also going to do. But necessary as this sort of direct cash bail out still is, there is another pressing need which the bail-outs do not address. And that is the on-going but now rather accute need for assets which can be pledged as collateral for loans.

The reason assets are in many ways more important than cash is that although cash keeps imminent death at bay, assets, pledgeable ones, are the key to profit.

Banks want assets. The kind they are looking for are physical assets which produce wealth – like factories, or frackable land, or electricity grids, or ports, or telecoms systems. Assets that, unlike money, cannot be so easily withdrawn, tapered or ‘tightened’. The kind of assets  a nation might have, funnily enough. The banks don’t want these assets in order to use them to produce wealth directly, but rather to use them as collateral for creating more credit and debt. To think of the value of an asset in terms of the wealth or profit it can produce by its productive nature, is to be so very last century. It’s akin to thinking the value of a stock or share is to hold it and watch it go up in price. The real value of the stock or share is in trading it up and down as fast as possible. Let some slow-poke sit and just watch it. Similarly the value of an asset is vastly greater when thought of as the means for expanding the system of credit and debt. In the real world of making stuff, an asset like an electricity grid or a factory only makes the profit it makes. But in the world of credit and debt the same asset can be pledged over and over to create more and more credit. I pledge it to you and get a loan. You pledge it to someone else and you  get a loan. The system has grown twice. Have a factory and you get the profit it makes from its widgets. Use the title to that factory as collateral to get a loan or extend a loan (if you are a bank) and you and the rest of us in the system can use the same asset over and over. You can create a loan based on its collateral value. Or you could hypothecate your claim on the asset to another bank who can re-hypothecate the same asset and so on. And everyone else can write derivatives based on its value going up or down. Till we are all rich in paper credit and debt.

Of course we all know that if the music should ever stop, it’s the factory itself and the slow old boring profit it makes from selling widgets that survives while the paper turns to ash. Which would make you think that the smart people would play the credit and debt game for a little while but then cash out and buy up the real stuff before the music stopped. And that is, of course what they all tell themselves they will do. The problem is that as soon as you get out of the endless creation of paper debt and credit and buy real stuff you are in effect leaving the fast lane and driving back in the slow lane. Those who stay in the fast lane a little longer will do better that quarter and make you look like a loser. No one in the financial world can survive long as a loser. So there is a terrible pressure to stay in the fast lane just a little longer. Which means they all do. No one wants to be the first to lose his nerve and get out too soon. This is the nature of bubble growth. It is always better to stay playing the bubble. It is the nature of a bubble that even the smart players, who know it is a bubble, will want to hold and trade bubble assets rather than the boring, low growth real ones it is all ultimately based on.  And that is why they always, without fail, get caught holding them in the end. And then demand we bail them out. Which is how assets beget debts which beget the crash which beget the demand for a bail out so it can all start afresh.

The question is how to get your hands on those assets for a good price? The old fashioned way would be to invest wisely and buy it. The new way is to try to buy them at fire sale prices from a debt burdened or defaulting sovereign who you are ‘advising’ on how to cut its debt or pay its bonds by selling state assets. Of course the obstinate problem is that sometimes people don’t want their governments to sell off their nation’s treasures and assets. As long a some tattered shreds of democracy remain, this can hinder the process of looting.

At the moment nations can still default and force bond holders to accept a ‘hair cut’ – meaning a loss on their loan. This is always portrayed by our loyal media as some sort of crime against nature and an evil plot by crooked politicians. Despite the fact that when you lend money (and buying a bond is just that) you do so knowing you are taking a risk which is precisely why you are paid interest on your loan. So the risk of a loss is known and agreed at the start. And let’s remember most of the money made on bonds is, in fact, from the buying and selling of the risk of default. The trade in CDS (Credit Default Swaps) wouldn’t exist without it.

Of course if a corporation should act unwisely, go bankrupt and force losses on their bond holders – pick your example – Chrysler, AIG, GM, the S&L’s there’s an endless number – this is seen as a perfectly normal, if unfortunate.  But it is clear that there is a push to put a stop to nations being afforded the same right.

At the moment the major victory, which I mentioned above, is by the latest Supreme Court rulings in the US in favour of the Vulture funds against Argentina making it harder for any government ( I am thinking or Ireland in particular) to put the good of its people above the good of the bond holders.  The rulings make it now very likely that more and more bond holders will refuse to engage in any sort of voluntary agreement to restructure sovereign debts. The problem is, this route, the Vulture route, can take a long time and requires specialist lawyers. Not every bond holder has that expertise. They, the majority, need another quicker, easier route to getting their hands on national assets.

Here is one way I think they could do it. If I am right, and if this is a viable way, then they will have thought of it already and should be busy working out the legal fine print and preparing the politicians to agree to it.

In a nut-shell, I think nations will be urged to issue a new kind of sovereign bond which would be the equivalent of a corporate Covered Bond or, as they are sometimes known, a Pfandbrief. Don’t be put off by the jargon it’s quite simple. Should the borrower default or go bankrupt, a normal bond gives you a claim on the general pool of the borrowers’ remaining assets. But all the other bond holders have the same claim.  So you must all wait for the auditors to sort out what assets there are to be shared out and who gets how much back. Then you all form an orderly line with those holding the most senior bonds at the front and those with more junior bonds at the back. If the pool of  assets runs out before you get to the front of the line, then you go away empty handed. I’m simplifying but that is the general way it works. Except for one group of bond holders – those who have Covered Bonds or Pfandbreif, because those bonds not only have general claim on the pool of assets but have a unique claim, written in when the bond was issued, on assets that were ring-fenced as the specified collateral for those bonds ONLY. Those bonds have their value ‘covered’ by a specified group of assets. 

Now at the moment when a company goes bankrupt what we mean by ‘assets’ is everything: Cash, investments and any and all physical assets,  which means buildings, land mines, oil fields, and equipment, from machinery to paper-clips. However, nations are not considered as companies (YET). The 1% has encouraged the talk of UK Plc but it is not YET a legal reality. Which means when a nation defaults it does so because it says it does not have the cash (from financial holdings and tax flow) to pay the bond which is due for repayment. Till a few months ago no one had the right to claim for themselves a nation’s assets in payment of a debt. Nor had they any legal authority to force a nation to sell assets to get cash to pay a debt.

But over the years this presumption has been eroded. The privatization programmes of Thatcher were a major step in governments claiming the power to dispose of the assets of the people, as that government of the day saw fit. The recent rulings in favour of the Vulture funds have been another important step in giving the corporations  new rights – under US law only so far – to seize sovereign assets wherever they could. Which, in effect, means. if they could get their hands on them without the use of an army – such as seizing assets held in a third party bank or another country which would comply with the order. Thus a private custodial bank might agree to give the contents of a  sovereign nation’s accounts to a Vulture fund. Or a country in which, for example, Argentina had moored a state ship might agree to impound that ship till the Vultures could swing by and pick it up.

BUT a Covered Bond would make life so very much simpler for the bond holders. If a nation was induced to issue a Covered Bond then it could be written in to the agreement at the start, which national assets – a train system or oil and gas fields – were the specified and pledged as collateral for this particular bond. The government in charge when the default happened could then say to its electorate, “We’re terribly sorry but its right here in the small print – you – via your government agreed to forfeit these assets if you failed to pay. This is international law which we must obey.” And THAT last phrase is the key which opens the door to the future the 1% want.  A future were International Law is held up as the new supreme, and completely non-democratic arbiter of right and wrong. International law would be the new god. And like god would be above the whims and breezes of merely popular wants and desires. People already see the law as somehow above democracy, forgetting that democratic governments wrote the laws and have the power to unwrite them if the people so direct them. This last point is the one will be overlayed and suppressed. I will come back to this.

But back to Covered Bonds. It would be a simple matter for a compliant government – an ably advised one of course – to issue such bonds in the people’s name. Will nations be stupid enough to go for  it? Well the ‘nation’ might well object but that’s precisely what politicians are for. Elected politicians would be willing to do it today – except for the fact they know they would be thrown out of office immediately. So what is needed is a major media campaign complete with paid-for experts and pundits all saying how the way forward for nations who are presently unable to access the bond markets is for them to issue Covered Bonds. Get experts from Germany to talk about the long history and success of the German Pfandbrief. Have them talk about how banks that have issued such bonds are considered among the safest. Link together in the popular mind the issuing of Covered Bonds with the general idea of safety and prosperity. Never mind the one doesn’t cause the other. Don’t mention what enormous rights they would be giving the corporations nor what a huge part of their sovereignty they would have signed away. Don’t let these things be mentioned. Then move on to suggest that issuing such covered bonds would lead to greater investment even for nations that are not having trouble issuing bonds. As soon as you have made this link between issuing these kind of bonds and ‘greater inward investment’ the job is almost done. It is this link to attracting greater inward investment which is being used to sell the Trade Agreements, Bilateral Investment Treaties and the Investor State Dispute Settlement mechanism, saying that it is only those nations who agree to them, who will benefit by attracting more investment. It isn’t true, (there have been several studies the first in 2002 by the World bank concluding it isn’t true)  but as long as we keep saying it is, who will argue? And people will eventually come to think it must be a good idea.

In the Covered Bond future a hideous inversion will take place. Once upon a time bonds were issued so that a nation could build up a wealth of essential infrastructure such as hospitals and roads, and to develop natural resources for the benefit of the entire nation. In the Covered Bond future those resources and national treasures would be pledged for nothing more than raising more debt and would, after another financial crisis and the deluge of new bail-out demands it would bring, undoubtedly hand over their ownership to the bond holders. And it would all happen without a Vulture having to stir from its perch and where any murmur of discontent would be met with righteous sermons about the sanctity of international law.


5) From National Treasures to State Monopolies.

Of course it will not be quite that straight forward to prize a nation’s assets and wealth from its people’s ownership.  Other ideas will have to be changed as well. National Assets must be re-named as State Monopolies. Instead of talking about, for example, how efficient a national health system is, or what good care it provides per capita expenditure it must be referred to, darkly, as a State Monopoly and all the talk must be about how bad monopolies are. No attention must be paid, no reference ever allowed to studies by the WHO or this one by the Commonwealth Fund that have consistently found,

The United States health care system is the most expensive in the world, but…the U.S. fails to achieve better health outcomes than the other countries, and … is last or near last on dimensions of access, efficiency, and equity.

No mention of such studies must be made. Instead all talk must simply concentrate on how restrictive state monopolies must be and how they must limit ‘choice’ and allow inefficient and greedy public workers to burden everyone else.  And wouldn’t you know it, the effort is already under way. Here is a paper from the Fraser Institute in Canada calling state education a State Monopoly. The Fraser Institute is resolutely free-market and is funded by the likes of ExxonMobil and the Koch brothers.

The paper doesn’t claim, because it hasn’t any evidence to support any such claim, that the State school system educates badly or that for-profit schools are a better way to educate a nation. Instead it simply says how bad monopolies are. How they restrict choice.

Canadians rightly complain about protected industries – whether it’s dairy products, telecoms, banking, or transport – and the consequences in the form of less choice, poorer service, and/or higher prices….

The paper then begins to talk about education as if it were a ‘protected’ industry. Allowing it to elide the harm done by monopolies in the market, with free education.

 When government is the sole supplier of services, the options for consumers are extremely limited.

Of course in the case of the NHS in the UK where the government is the sole supplier and it is, therefore, a State Monopoly the result has, for several generations, been a health care system that is cheaper and better than the US free-market version in almost every single way.  You may hate the conclusion on ideological grounds but, in fact, all the actual evidence is on my side.

But evidence has never been the concern of the global overclass, has it?. Fear and greed is more their currency. And so the assets of every nation are to be denigrated along with those who work in them, as inefficient and staffed by greedy, lazy state-worker parasites bent on restricting everyone’s ‘choice’. If enough people can be taught to hate the teachers who teach their children and the doctors and nurses who care for their parents and if a general culture of hate-thy-neighbor can be engendered, then the Over-class will be significantly closer to asset stripping your nation – with your help. You might imagine an Orwellian slogan of “Give up ownership/Get more Choice!” Believe it at your peril.

This is speculation, of course, but papers like the Fraser institute’s make it not so much ‘groundless speculation’ but more ‘extrapolation from what already is’. There already is a firm intent to privatize education in those countries where state education is good, and a huge desire to privatize all the state health systems that DO WORK and DO deliver fantastic services, like the NHS in the UK, because they would be priceless assets to strip. And every nation has natural resources which, like the common land of centuries ago, the over-class would like to enclose using exactly the same argument they used to clear the Highlands and enclose the Common Lands of England – “Oh they’ll be so much more valuable and productive when accumulated in our private hands than if we leave them distributed among the unworthy commoners.

It warmed for them a few hundred years ago. They are hoping it will work for them again. We must stop them and not only do I belive we can, so do they.

Which is why discrediting democracy itself, above all else, must be the urgent task of the Over Class.


At the risk of your ire I am pausing again here. I hope that the argument so far has provided sufficient to disagree with, comment upon, refine and improve so that you will forgive me for holding back the last few sections.  It seemed to me better to get this much published, and give people a chance to comment rather than deliver it as one enormous lump. Anyway the last part will be finished soon and will follow shortly. Promise. 

, , ,

67 Responses to The Next Crisis – Part two – A manifesto for the supremacy of the 1%

  1. kudzu September 22, 2014 at 11:09 am #

    This precisely explains what’s happening with Irish Water.

  2. The Dork of Cork September 22, 2014 at 12:45 pm #

    Again I am not a fan of state monopoly simply because they also functioned within the usury based system back in the days of nation states.
    Their function was therefore not to create wealth but to acheive a yield off a debt which was held by the real owners.

    The closure of rail lines such as the west cork line in 1960 is a case in point.
    It involved the destruction of wealth to maintain profits within the debt based vortice of centralizing force known to us as capitalism be it state (back then) or market today.

    Now that we have entered the market state – state monoplies need to be broken up , this current practice is indeed a form of Industrial sabotage designed to create unproductive low paid jobs.
    (think of all the young people involved in marketing now multiple former state companies)
    Their work is extractive of wealth as they commute to work and burn resources for no gain.
    The market state can then claim that unemployment is coming down – yet cannot explain the fall in wages / productivity when it fact it is very easy to explain.

    As for Irish water – it is a test case.
    If you sell the story of scarce water to the irish , you can sell anything.
    If you recall from the Irish economy blog a few years ago.
    A Dutch economist “floated” this idea of water scarcity on those pages.
    At the same time he advocated another drive towards overproduction with his calls to invest in a massive LNG facility .
    Meanwhile he called himself a environmentalist or perhaps a green economist or some such nonsense.
    You could not make it up if you tried.
    The corporatist nature of the Irish state goes back to Lemass or its beginning depending on your taste.
    Nothing new under the sun here.
    Whats different is the increased manic pace of doing nothing in particular that is important.
    The non human rat race for scarce money has become absurd. for most even if it is at a unconscious level.
    This is the true basis for the current banking crisis.
    People want to slow down yet are now unable to comprehend a world where life again orbits the village and market town.
    This creates a friction and thus reduces profits.
    The bank must then undertake the process of destroying the previous resident culture and turning us all into Americans via another massive capital dump / credit event.

    People in reality want this.

    But they cannot have it – the roads must be used by cars whose role it is to search for scarce money.

  3. The Dork of Cork September 22, 2014 at 2:07 pm #

    Watch the ding dong between these clowns on the Irish economy blog to understand the structure of the modern irish economy.
    Its quite eduacational but in a inverse fashion.

    John the Optimist (GDP fettish) vs Michael Hennigan (export and competitiveness fettish)

    “The National Competitiveness Council, a public quango, would be much more muted with claims on competitiveness claims.

    If you believe this: [Unit labour costs: “a 21% relative improvement forecast against the Eurozone average”] Prof Patrick Honohan would include among “superficial analysts.”

    The average hourly labour cost covering all sectors of the economy other than ‘Agriculture, forestry and fishing’ was €25.03 in the first quarter (Q1) of 2008 and €24.89 in Q2 2014 and there was no relative productivity miracle.

    “Ireland was the only country in the EU to experience a decrease in inflation between 2008 and 2012 but prices remain high by EU standards” – – CSO, Jan 2014

    In 2013 Irish prices for consumer goods and services were 18% above the European Union (EU) average and fifth highest in the EU28 – – Eurostat, June 2014″

    Dork :
    In the current structure of extremely concentrated capital ownership the only way the average or median person can increase their purchasing power is via increased wages.
    However this also increases prices of goods and services and if these goods and services become unaffordable well…………anybody can figure it out really.
    The production distribution and consumption system breaks down.
    In the past this absurdity was overcome via pointless economic expansion.
    Under the state capitalism of Ireland for example the state helped corporates to export surplus beef to Iraq or something via various state guarantees.
    But this GDP /export expansion can no longer continue in Ireland without the enforced starvation of millions (think of Ireland between the 1820s banking crisis and 1840s famine stage )

    The social credit position would indeed advocate a reduction of wages (say 25%) but would also give each person a equal share of the countries capital
    Problem solved.
    The type of goods produced would radically change of course.
    21% ~ of Irish oil consumption is currently jet kerosene alone.
    That would end pronto.
    Ryanair and other corporates dependent on fuel waste would find themselves out of businesss as the back and forth nature of the current Brownian motion economy would be no more.
    Who would work for a corporate which uses labour as a livestock anyhow.
    People would have a choice as they would already have access to purchasing power without labour.
    No need for corrupt unions either
    All of these non problems (created by the corporate state) would be solved very quickly

  4. Bastiat September 22, 2014 at 4:19 pm #

    All true, but how on earth are those evil corporations managing to effect on those horrible changes on free democracies. Clearly none of that would be possible without democratically elected “representatives”. Investors are right in their intention to extract as much wealth out of their investments as possible. I don’t blame them.
    Problem is not with capitalists being greedy, but with the State being corrupt.

    It’s unfair to take the fascist US healthcare system as representative of free market capitalism.

    • Phil (Mcr) September 23, 2014 at 8:11 pm #

      Did you see that bit at the end about discrediting democracy? Are you doing your bit for the 1%?

    • Charlie October 6, 2014 at 5:19 pm #

      Of course our governments are corrupt; they are part of the same elite and operate on a revolving door, basis with corporate interests. It’s a false dichotomy to consider the two as separate. It’s like a horse shoe debating whether the hammer or anvil is responsible for shaping it. They are to parts of a system which affects certain results.

      I concede that government is corrupt, now you say that “Investors are right in their intention to extract as much wealth out of their investments as possible. I don’t blame them.” Now why not? I do. You object to corruption but not greed. Which is the common cause of corruption. Greed is not good, It doesn’t matter how often we repeat the mantra. Life isn’t complicated its real simple.

      That kid in nursery who ate all the biscuits or would not share the toys-did not do it because he hoped that the overall provision of biscuits would increase, and thus his consumption would create a trickle down of wealth in biscuit crumbs and surplus GI Joes. He did it because he was a prick and he did not give a shit about everyone else.

      Greed is bad it always was and always will be. It is amazing how repeating the obviously stupid often enough can convince people of utter bullshit.

      You say…
      “Problem is not with capitalists being greedy, but with the State being corrupt.”

      No the problem is with both of those realities. Generally, however, both parties have both vices and work in both sectors through a lucrative revolving door arrangement. If you accept that one is corrupt to the advantage of the other then ergo you acknowledge a reciprocal relationship. It’s insane to blame the one and side with the other. It’s like vilifying the mugger who held a knife to your throat whilst applauding the initiative of his partner for rifling your pockets it makes no sense at all.

  5. El Sid September 22, 2014 at 6:38 pm #

    Glad you quoted the Fraser Institute’s wishfull thinking on privatised schools.

    I’ve lately heard noises on the results of Sweden’s experiments with for-profit “free” schools. From The Cardigan of 3 December 2013:

    “A few years later and Sweden’s star has dimmed. The 2012 Pisa results show Sweden’s exam results falling abruptly across all three measures of reading, maths and science – with the country recording the largest drop in maths performance over 10 years. Anna Ekström, head of Sweden’s National Education Agency, said in response: “The bleak picture has become bleaker with the Pisa review that was presented today.””

    And this from the FT:
    “Scandals in company-run schools have outraged parents further. Public anxiety about the state of Sweden’s schools has put its for-profit model – not just for schools but in other areas of government such as health and social care – at the top of the agenda in next month’s general election.”

  6. Jesse September 22, 2014 at 9:02 pm #

    Can you email a message to me please. I have lost your email address and I have something which I wish to ask you.

    Thank you for this.

    • Jesse September 22, 2014 at 9:04 pm #

      Never mind the email I have found what I wished to know.

      • Golem XIV September 22, 2014 at 10:48 pm #

        Sorry I was out and just got back.

        • charlie sheldon September 25, 2014 at 8:19 pm #

          Golem I enjoy your posts. I will betray my stupifying ignorance with the following question and comment, I fear, but here goes. It seems to me that since the 2008 debacle we have done nothing to fix anything because the QE injections, now $4 trillion for the US, have only maintained the fiction that the loan and mortgage disaster is under control. The fact is, the debts are bad, the money gone, and this piper still needs to be paid. Hence, and until this is seen, we remain on the precipice. True?

          Another small point – for good or ill I had an excellent education in American history and was struck then that most of my study was about banking crises and failures every seven to fifteen years from the dawn of the nation. After the Civil War there was one in 1877 (I think), 1893, 1907, maybe 1913, 1929. Then we strengthened the Federal Reserve I think and set up some walls to keep banking separate from trading and gambling, Glass Stegal, and after that we had no similar crises until the Savings and Loan debacle. True? Point being this struggle has gone on for at least two centuries and was once and only once properly controlled, after the Depression, but memory is so short…..

  7. desmond September 23, 2014 at 10:24 am #

    A visual can help see it clearly.


  8. Wirplit September 23, 2014 at 10:49 am #

    Excellent analysis and as usual fluently delivered.
    Perhaps more people are waking up to thinking about it after all the reality is clear enough to the many. Heard some remarkable statements on even “the everything is fine” BBC during the Scottish vote from ordinary voices rarely heard. A mood of involvement is perhaps growing that might cut through the consensual crap. Lets hope so.

  9. Salford Lad September 23, 2014 at 12:36 pm #

    The 1% seek to legitimise in law what they have been doing by fair means and foul for centuries.
    The US Foreign policy is an example of this.
    The challenge of US policy in every country it seeks to loot and plunder is to suppress local resistance and establish a client regime capable of policing the extractive structures of US Corporations installed in their economy. Ukraine is a text-book example of this procedure. Latin America, South East Asia, Middle East,Libya etc have all suffered these consequences of US Foreign policy.
    To accomplish this, the favoured method is to support local
    oligarchs and politicians who are corrupt and usually send their
    ill-gotten gains to be banked abroad..
    This is extraction of wealth from the periphery of the Empire and
    forwarded to the centre. Much as Rome conducted its affairs and
    similar to the Mafia methods of controlling their ‘Manor’.
    This has similarities to the Old British Empire principle of indirect rule
    by creating and supporting nominally independent regimes that
    bear all the social costs through extortionate taxation, while
    assuring that labour and natural resources are freely accessible to
    the Corporations.
    But then the US Empire is but the bastard child of the City of
    London Financial empire ,with history and extortion methods going
    back to those finely honed by the rapacious East India Company.

  10. Rwood September 23, 2014 at 4:52 pm #

    Way down here in the moil — waiting until creditors’ “associates” or “conspirators” are deemed eligible for prosecution of debt collection. Tell me if I’ve missed that being already done…

  11. Roger Conway September 23, 2014 at 5:48 pm #

    Thank you so much for this. The effects on U.S. education are already being felt. Your Orwellian imagining is precisely how it’s being sold in the impoverished inner cities. And the results in the U.S. are the same as or worse than the results in Sweden.

    The move to privatize hospitals is also gaining a lot of ground.

    • Roger G Lewis September 23, 2014 at 7:26 pm #

      Just on the sweden point. The election last sunday saw the Moderates ( thats the swedish conservative party) were voted out and the Social democrats Green and Red alliance ( the Greens and the Left Party ( yes they are called the Left Party) have formed the government here. The Moderates had two terms and followed a similar pattern to Thatchers first two terms. I was worried we would see a third agaionst the betting as with Kinnock and the infamous sheffield rally. The most worrying thing was the increase in vote for the Swedish Democrats ( they are Far Right Wing Nationalists, with the usual rag tag bunch of Neo Nazis, They got most of their increased votes from the moderates). The next 4 years will see if the new Left alliance ( and yes they are Left by ther european and certainly US standards) will be able to defeat the ,(what Harold Wilsin used to call the Gnomes of Zurich, ( Now I guess we call them the Overclass Banking establisment). Post the 1992 Banking Crisis here in Sweden the Banks were not given a no strings get out of jail free card but one wonders if The Swedes will be punished for rejecting the Neo Liberal creed. Already the Economist I saw had an article marvelling at how ungrateful we all were for turning our back on such a stirling economic record this past 8 years. A commenter pointed out that all the growth had gone to the very top of society whilst unemployment in the youth and general incomes for the more ordinary folk had stagnated and public services had also suffered.
      I was interested to see that the Scottish independance debate didn’t get past the keeping the pound stirling pantomime no real debate on monetary reform and the Positive money paper entitled a New currency for Scotland. Of course the money power is the key to tackling this and that involves mass conciousness raising and a concerted effort at the grass routes to engender the use of local currencies , alternative credit coops and so forth a boycott of the banks to send them to the wall and the governments that keep them in the driving seat.
      Roger the Swedes are a very well educated soicety, I emigrated here 4 years ago and comparing Sweden to America is just perverse there are no parallels Sweden is Utopia to the US Dystopia I am afraid one hopes we stay out of NATO, the Finns are more anti than us and both countries have pinned thier colours to a joint mast on that one so I think we will not and particularly not with the Green Red Alliance at the helm. If the international banking power can put the spanner in the works to preven Sweden providing a Chomskian ´´Danger of a good Example´´we will see.
      Meanwhile back to the Labours of Autumn, we had the first Frost last night and rain yesterday. A little rain must fall upon us all.


      I expalined my take on the Swedish Nationalist position in Sweden thus in a discussion on Linked in.

      Ranjit, the scots referendum has had a very interesting and beneficial effect of bringing many taboos of the neo liberal agenda into the public conscience. Last Sunday Sweden voted out their Neo Liberal ( Moderate ) party and we now have a SOcial Democratic alliance called the green and red alliance. The Swedish Democrats who are far right got over 10 % of the vote and are now Swedens 3rd largest party but neither the Moderates or the New Government will have any truck with their very RIght WIng ideas, it will be a suprise to some that that constituency exists here in Sweden, personally I think that it is an reaction to the neo liberal attack on organised labour and the employment standards and benefits which Swedes cherish, the immigration which has been substantial Sweden now has a population of 9millions with 10% growth coming from immigration since the 1990’s. The immigration side of neo liberal policies to undermine Labour have been seen all over the world and still continue a pace. In Sweden I think we will see Labour stregnthened and the rights of immigrants maintained to prevent exploitaton by the trans global corporates,these measure I think will see support for the Swedish Democrats recede many of its new found supporters were former moderate voters who will have misunderstood the neo liberal agenda of their party which has obviscated its true purposes in the usual way for the last 8 years ( similar to Thatcher in the UK 1979- 87). Sweden is about balance and long term decision making, Scotlands independence campaigners were asking for something similar. Westminster remains enthralled to the short term beggar my neighbor politics of the neo liberal Washington Consensus. This consensus is widely rejected by most voters the only consensus is between the Politicians and apparchicks and the fat cats who line their pockets. Austerity meanwhile is singularly not working for the rest of us. The Scots can see this plainly and have by achieving some degree of devolution avoided the worse of it in the UK, but sadly not al the big lie still went unaddressed and that is the monetary lie. http://www.positivemoney.org/wp-content/uploads/2014/02/A-Scottish-Currency-Positive-Money.pdf

      Scene from the Long Good Friday.


  12. Jesse September 23, 2014 at 6:18 pm #

    This is very much on point, and I thank you for it.

    Notice how the assumptions are slowly changing the basis of our discussions. The conversation about how we should be governed and regulated is moved to a face to face conversation between nationless corporations and the politicians: professional class managers on both sides of the table, with the people left outside the room and kept in the dark.

    This reminds me a bit of what Parenti had written some time ago and which I recently reprised.

    “The goal has been the ‘Third Worldization’ of the United States:

    •an increasingly underemployed, lower-wage work-force;
    •a small but growing moneyed class that pays almost no taxes;
    •the privatization or elimination of human services;
    •the elimination of public education for low-income people;
    •the easing of restrictions against child labor;
    •the exporting of industries and jobs to low-wage, free-trade countries;
    •the breaking of labor unions;
    •and the elimination of occupational safety and environmental controls and regulations.”

    Michael Parenti, Land of Idols, 1993

    Of course his list is too particular to the US, and is a subset to Golem’s which is more ‘global.’

    I imagine we can boil it down to maybe five or less major impulses.

    I don’t think that this is some grand conspiracy, but rather a fashionable mindset that is common to an emerging group of people, who in turn discuss those assumptions amongst themselves at their gatherings, as reinforcing biases and groupthink.

    I think we saw such a conversation in Mitt Romney’s now infamous 47% speech. It was jarring to those of us who are not in the loop, but I will wager that this is a commonplace, as it might have been in 19th century when a certain class talked about the native problem, and the white man’s burden. It is a set of tribal or class assumptions. In holding these views one identifies themselves as a member in good standing. And if one disagrees, one never talks badly about ‘insiders’ or their views.

    • Liviana December 6, 2014 at 1:01 am #

      One thing that this ‘over-class’ seems to forget is that we are living in the 21st century – ‘plebeians’ now feel on a par with what was once the aristocracy – there has been an evolution, a change in consciousness that they can’t turn back.

      When people like Mitt Romney and G.W. Bush can believe they are ‘superior’ beings, you know that too much money is no guarantee of superiority or nobility – quite the contrary. If the old aristocracy still had a modicum of self-respect and sense of honour, these new ‘would-be aristocrats’ are despicable creatures whose money and power grubbing antics makes one think of ravenous wolves, not of someone to look up to.

      ‘Let them eat cake’ didn’t work in France at the end of the 18th century and it won’t work now. But what is happening is happening because so many people still need to wake up and smell the rotting roses – to that end, discussions such as these are vital.

  13. The Dork of Cork September 23, 2014 at 6:47 pm #

    My comments on NC can be censored so out of honesty this is my response to your politically correct Bollox

    Many times I have made anti English comments and got no indignant and petulant response from Hobbits or deluded redcoats.
    I have used Rab C Nesbitt scketches which many people think is offensive to Western Scots. ( although in reality they are not)
    But always and I repeat ALWAYS – the trout rises to the Jewish fly.
    Strange that……
    If you don’t think most non beliveing Jews are grossly materialistic & non local in outlook (read Marx) then you don’t get out much boy.

    I once walked with some Isreali dude in the Pyrenees.
    The poor c$£t was so fucked from his input and output belief system of laws and codes without love for his neighbour that he found it hard to grasp what nature was really about.
    But it was nice to see him opening his mind to the babbling brook and seeing the other side of creation.
    But I imagine once he got home he went back to programme.
    Such is life.
    Get over your stiffling political correctness.
    We Irish are not so bright but we know a fool when we see him.

  14. Readers September 23, 2014 at 9:22 pm #

    The more you hear Adolf Hilter’s argument, the more evident what he called “the international bankers” are the root cause of the problem, that is community vs profit.

  15. The Dork of Cork September 23, 2014 at 10:04 pm #

    Gee thanks stranger – that really helped my case there.
    Tell me , what rock did you crawl out of ?

    Hitler did not close the banks operations and if you look closely at the basis of german war production it was perhaps the most corporate of all.
    Germany of 33 -45 was yet another capitalist experiment.
    Hitler talked the talk but never walked the walk.
    He just killed people and called it progress.

    • Readers September 24, 2014 at 12:20 am #

      Yes, he didn’t close banks but he abolished the interest on debt which essentially ended debt slavery.

      • The Dork of Cork September 24, 2014 at 12:55 am #

        No that is a false statement – there was no money scarcity but interest was paid.
        Why need all the vast living space anyhow ?
        That strikes me a bit strange for a social creditor- don’t you think ?
        I suspect to pay interest to the guys in Wall Street or closer to home.
        Strikes me as classic overproduction if you have vast farms without local demand (people must be exterminated to create living space so therefore you must export.)


  16. The Dork of Cork September 23, 2014 at 10:19 pm #


    This book follows capitalism to its logical conclusion .
    A monopoly has been established over song birds and wild flowers.

  17. The Dork of Cork September 23, 2014 at 10:29 pm #


    Asses in clover
    The God King travels through the Kingdom of Assinaria
    There professors of the dismal science discuss how far the standard of living must be lowered in order to raise it.
    And the impossibility of providing a income for all in a land of plenty when there is no demand for Labour…….

    This was published in 1933 I believe.

  18. The Dork of Cork September 23, 2014 at 10:51 pm #


    The Spacious Adventures of the Man in the Street
    A world where a sane credit system secures sufficiency and leisure for all is viewed through the unsympatethic eyes of a speculative oppurtunist.

    Classic stuff but sadly not available in your local Library .
    If I ask for books somehow related or affliated to social credit in a particular Cork Book store I get a look of pompous disdain that is typical of reactionary liberals with closed minds.

    What more can one say ????
    Its time to move on.
    I too was turned into a Gollum
    Its a false path.

  19. The Dork of Cork September 23, 2014 at 11:23 pm #

    Christ – its amazing how depression causes predictable responses from people.


    People are desperately trying to defend their lifeforce and humanity against these (evil beyond comprehension) Guild Navigators / scarcity merchants

  20. Phil (Mcr) September 23, 2014 at 11:53 pm #

    Labour’s shadow business secretary, Chuka Umuna, is on Twitter promising to take ‘party poltics’ out of infrastructure building… AKA the professionalisation David describes.

    • redracam September 26, 2014 at 2:14 am #

      Barak Obama promised to bring democracy to Libya.

    • harold wilson's pipe September 27, 2014 at 1:19 am #

      This is the Chuka Umunna who went on an anti-betting-shop crusade shortly before taking a £20K donation from the chairman of a gambling company. The donation is in his Register of Interests but is listed as ‘private’, Very ‘professional’ (assuming professional means getting paid for stuff).


      “Chuka Umunna, a rising star of the shadow Cabinet, faces embarrassment after it emerged he received a £20,000 gift from an emeritus gambling executive at the same time as campaigning against the proliferation of betting shops in his constituency.

      Mr Umunna, who is widely regarded as a future Labour leader, accepted the donation from Neil Goulden, the chairman emeritus of the Gala Coral Group, which owns more than 1,700 bookmakers.” [continues]

  21. The Dork of Cork September 24, 2014 at 12:30 am #

    If anybody can get access to this book it would be much appreciated.
    As I admit I have never read it.

    These are naughty books you see…….TO MUCH REALITY Showing the TITS AND ASS of the monetary & Mind system of control.


    • Roger G Lewis September 24, 2014 at 5:29 am #

      HI dork, found this review.


      Sounds like a great read. You might enjoy this more modern book. The Scheme for full employment

      http://en.wikipedia.org/wiki/The_Scheme_for_Full_Employment by Magnus Mills

      ´´The whole idea is simple yet so perfect: men drive to and from strategically placed warehouses in Univans—identical and serviceable vehicles—transporting replacement parts for…Univans. Gloriously self-perpetuating, the Scheme was designed to give an honest day’s wage for an honest day’s labor. That it produces nothing does not obtain. Our hero in Magnus Mills’ mesmerizing new work is a five-year veteran of the Scheme: he knows the best routes, the easiest managers, the quickest ways in and out. Inevitably, trouble begins to brew. A woman arrives on the scene. Some workers develop delivery sidelines. And most disturbing of all, not all participants are in agreement. There are “Flat-Dayers,” who believe the Scheme’s eight-hour day is sacrosanct and inviolable, and there are “Swervers,” who fancy being let off a little early now and again. Disagreement turns to argument, argument to debate, debate to outright schism. Soon the Flat-Dayers and Swervers have pushed the Scheme to the very brink of disaster…and readers to the edge of their chairs in delight.´´

      it is very good and encapsulates the pointlessness of consumerism, and things for things sake ( or the devil makes work for idle hands?)


      From the same era as Summer Time ends I highly recommend Ezra Pounds ABC of Economics, Of course he had Nazi sympathies and is automatically black balled as an anti semite. Pounds ABC is very big on Social credit, very positive on Major Douglas. These dangerous ideas must be kept taboo, we musn’t talk about money now must we?


  22. Phil (Mcr) September 24, 2014 at 2:22 am #

    This is a great polemic and in a most surprising place


  23. Mike September 24, 2014 at 3:25 pm #

    I don’t see that the 1% need to make radical changes at all. Their plan for gentle manoeuvring is well under way, with the help of many vested interests in the government and MSM…

    1) Promote the lies…
    To create prosperity we must debase the currency at 2% or more
    The Fed is heroically beavering for Main Street’s interest
    The recovery is sure (albeit slow) – look at these statistics
    America is a beacon of democracy, envied by the world

    2) Militarise the police

    3) Keep tabs on everybody. Keep tweaking the parameters of what makes someone a ‘terrorist’

    4) Stir up foreigh unrest on the other side of the world to…
    justify increasing the military budget
    make Americans feel good about being the world’s prefect
    discourage (un-American) protests against austerity elsewhwere

    Democracy has already been neutered, so there is no need to change the contribution and lobby system.
    There are no laws for the elite, especially as they will control the military, so they will be able to tell other nations exactly what to do.
    The IMF will tempt foreign governments with juicy loans, which will enrich local oligarchs, trickle back to the US and keep that nation in hock.

    There’s probably more, but you get my drift.

    Mission Accomplished!

    It all has the whiff of (um) nineteenth century France, where the very rich made rules to enrich themselves to the point where the very poor could barely move without incurring a tax or a toll.

    Sadly, all is lost.

    The people will be clamouring for salvation from one manufactured threat or another and politicians will promise it.

    Anyone pointing out that those politicians are the source of the problem will be ridiculed, bribed, blackmailed, shot or otherwise silenced. And the people will cheer!

    It will end. But not for a long time. And in catastrophe.



  24. Robert Lyons September 24, 2014 at 6:51 pm #

    So, would the Miliband/Balls proposal that any government budget would have to pass the sniff test by the Office of Budget Responsibility, be a step towards the “professionalization” previously referred to. In other words, the elected representatives would NOT have the ability to propose budgetary matters which were deemed unacceptable to a group of unelected technocrats, whose appointment and qualifications would be a matter of some interest to the City. Or would this be a matter of misinterpreting would you said and displaying an uncalled for paranoia and cynicism?

    • Pearl September 25, 2014 at 1:31 am #

      I stumbled upon the following link today while researching a lawsuit that was cited in law review article that interested me. (Lebron v. Nat’l R.R. Passenger Corp., 513 U.S. 374 (1995).

      Anyway, in my “google scholar” search for the Lebron case, the internet gods pulled up for me the little gem to which I will provide the link below.

      But first, let me preface this by saying that it is my understanding that “The Federalist Society” is sort of the Judicial Branches’ version of the Legislative Branches’ ALEC. The paper to which I am providing a link was put out by The Federalist Society back in 2012.

      The paper struck me as a quite tangible example of the topic at hand, and affirms what our humble blogger on this forum is predicting (narrating, actually) for us.


      (By the way, ALEC scares me–but at least I feel that there is beginning to be some mainstream awareness of ALEC. I don’t see as much awareness of The Federalist Society, and that causes me great concern. The Federalist Society and ALEC often create a Venn Diagram of sorts–one can often find legislators who happen also to be attorneys–who are in some way also linked with The Federalist Society.)

      First-time reader of this blog, btw. I’m hooked! 🙂

      • Golem XIV September 26, 2014 at 8:42 am #


        I hadn’t heard about ALEC. Started looking at the link. Thank you for hunting it out. The law is where so many of the deep changes are happening right now.

      • steviefinn September 26, 2014 at 10:28 am #


        I was vaguely familair with ALEC but prompted by your comment I found this Bill Moyers video & transcript which is an updated version from about 12 mths ago. Turns out that ALEC is unfortunately very smart & has been working away eroding state laws for the benefit of corporations since Reagan gave them a friendly pat on the back. They are considering a name change it seems due to the fact that more people are looking beneath the stone that they hide under:


    • Golem XIV September 25, 2014 at 12:24 pm #

      Hello Robert,

      I think the Milliband/Balls proposal for an Office of Budget Responsibility is exactly what you fear it is. Sounds good till you ask – well who decides and do I have democratic power over them or do they now have undemocractic power over me?

  25. Kavy September 25, 2014 at 7:14 pm #

    It wasn’t too long for me, Golem, although I read it on my windows 8 phone and as the text not would fit the screen I had to keep scrolling it along, which was hard work, but I couldn’t stop reading it.

    I’m not an academic, but I can understand some of this economics stuff and then I can simplify it down. I then write about it on the Guardian CIF website but not many people tick it with approval because, a, what I write gets gets too long, and b, they just don’t believe me when I tell them how bad it is.

    For instance, I read the book, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West, by Dr Paul Craig Roberts, who was once on the right, but he now thinks things have gone too far and now he say’s in his book, and in his interviews, that many the 1% should go on trail for treason. I often write about this on the Guardian CIF section, but when you say things like this people think you are on hard left, but this isn’t true.

    Most people on left are green, liberal, easy going, don’t care much for war, anti-racist, believe in a compassionate society, some are vegetarian or vegan (like me) and are not hard and wouldn’t harm anything. Many of the progressives I really like are Americans, like Greg Palast, Michael Hudson, Noam Chomsky, Norman Finklelstein, those on Democracy Now, etc., These are considerate people who are not left wing authoritarians in any way whatsoever, but the right has managed to portray these people as like this.

    Paul Craig Roberts, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West:



    • Golem XIV September 26, 2014 at 8:40 am #


      I’m glad it wan’t too long for you. I break things up partly so as to get them published but also because I sometimes think if an article is too long it will put people off.

      As for writing on CiF – I think it’s great you do. I started writing there in 2007 and wrote consistently till I started this blog. In fact it was people on CiF who first asked me to start it. So don’t feel discouraged.

      • Kavy September 27, 2014 at 9:01 pm #

        Thanks for the feedback, Golem,

    • Kavy September 27, 2014 at 9:03 pm #

      A superb find, Phil. I find it of much use.

  26. Phil (Mcr) September 28, 2014 at 12:10 am #

    Well, well. Non-violent ”extremists” are just as dangerous as ISIS.


  27. Phil (Mcr) September 28, 2014 at 5:43 pm #

    Well, Google are complete bastards aren’t they


  28. Mason September 28, 2014 at 10:10 pm #

    Golem IV,

    I found this to be a absolutely brilliant piece. Thank you for that!

    I only disagreed with one thing: the real enemy is not the 1%. The real enemy is the 0,01%. The real enemy is not the wealthy capitalists. The real enemy is the ultra-wealthy really well-connected-revolving-door-CRONY capitalists.

    I am neither a Republican nor Democrat, but one thing that always bothered me from the Occupy Wallstreet movement was the slogan about the 99% vs the 1%.

    If we are going to win the war against the Oligarchy, we are going to need the people in 1% that is not part of the 0,01%. We are going to need people like Doug Casey from Casey Research for example, who are as anti-establishment as it gets. But you are just lumping people like him in the same category as the 0,01%.

    If we are going to win the war against the Oligarchy, we are going to need ‘Occypy Wallstreet’, we are going to need ‘The Teaparty’ AND we are going to need the 1% that is not part of the 0,01%.

    To illustrate my point I am going to leave you with three links, all of which are from the Blog ‘Liberty Blitzrkrieg’:

    The difference between the 1% and the 0,01% is explained:

    Occupy Wallstret and The Tea Party are Upset About the Same Thing…One Picture:

    Michael Krieger discusses your present piece ‘The Next Crisis – Part Two – A manifesto for the supremacy of the 1%. He just loves your article. The only criticism he has is your use of the 1% instead of the 0,01%

    I hope you can give my constructive criticism a place, and again: I think your article was just brilliant! Thanks again.

    • Golem XIV September 29, 2014 at 8:21 am #

      Hello Mason,

      I agree with what you say about the 1% versus the 0,01%. I use the 1% because it has some currency but perhaps I shouldn’t. What I really mean and it’s why I use the term is The Global Over Class.

      I also strongly agree that we will need people in the 1% and see no reason to turn away any who want to help no matter what their income. As you say we will need a broad church if we want to win.

      So thank you for commenting and you have my word that there will always be a place here for intelligent and polite criticism.

      • Mason October 2, 2014 at 6:34 am #

        Hello Golem IV,

        Thank you for your response.
        Another way of talking about the Global Over Class is talking about the adherents of the New World Order (NWO). There is a lot of misformation on this subject to be found on the internet. However, the best and singlemost comprehensive explanation I have EVER seen about the New World Order comes from one of Edward Griffin’s lectures. His lecture is called “The Quigley Formula” and it is a review of professor Quigley’s book ‘Tragedy and Hope’. Professor Quigley was a Council on Foreign Relations member and historian, as well as mentor to CFR & Trilateral Commission member Bill Clinton. Professor Quigley was one of the ultimate insiders and his book is the conspiratorial view of history as taught by the conspirators themselves. This book was never supposed to see the light of day, but it did. Griffin’s lecture on ‘The Quigley Formula’ absolutely blew my mind when I saw it. In my book this is an absolute MUST SEE VIDEO.
        You can see it on: http://m.youtube.com/watch?v=ynVqPnMQ2sI.

        You can see Bill Clinton mention professor Quigley covertly but in a highly symbolic and meaningful setting when he accepts the nomination for president at the Democratic National Convention in 1992:
        [41 seconds]

        Ron Paul explains the significance and meaning of what happened there at that Convention in this short video (but you really have to see Griffin’s lecture):
        [1 minute, 47 seconds]

  29. Kris October 2, 2014 at 6:48 pm #

    “If debt didn’t increase then their wealth would become, first unstable, and then burn to ash.”

    This is also true of the income stream which “backs” equity.

    (sorry for the fonts, google messes up anything with mathjax in it.)

    The whole financial system is a charade. You could literally GIVE away money to a corporation, but it would NOT satiate ANY NEEDS. The only input signal required to financial entities is a steadily ramping up cash flow. What a pathologic psychopathic behavior engendered by one phrase “shareholder value”.

    • Kris October 2, 2014 at 7:27 pm #

      taking further this whole concept of Money-Not-As-Store-of-Value, but Money as future Growth, or future Return:

      If Y is money and money is nothing but the license to have far more money (as your post about debt being predicated on still more debt brings about), then ask any college undergrad who has taken math,

      y = y’ (“y prime”, ie. rate of change of y) the pet undergrad will parrot back to you that this is the fundamental equation for exponential growth, with solution y = e^t.

      In this context THINK OF THE CRIME done to the 99% by QE. The 99% is reduced, by fiat, to 0.1% growth rates in their savings accounts, while banks and the 1% continue 5% or higher growth rates.

      So the financial press repeatedly, and foolishly asks, “how long will QE last?”….answer: as soon as the 1% are made whole for their notional losses incurred in the last debt-ridden orgy. There IS an exact timing, the timing in the differential of 4% growth to restore/accrue the notional loss (which is never precisely released to the public since the crash of lat 2007).

      This is exactly what Thomas Piketty was writing about in his recently released book. There is a class of people who have high growth r>g, merely by virtue of being in the class. This class of people are very proud of their trappings. It dictates who they marry, who they socialize with, where they go to school etc etc etc.

      In reality it is just nonsense. the entirety of humanity is slave to this ponzi scheme of never ending growth, and we wonder why the environment and the climate si so messed up.


  30. pabelmont October 9, 2014 at 6:33 pm #

    So, my “NET” of all this is that it confirms an old idea of mine, namely, that the wealth-and-comfort of the 1% depends (as does capitalism itself, are these the same?) on PERPETUAL GROWTH OF DEBT.

    And this must happen against the back-drop of a finite world, finite resources, finite space, not to mention the increasingly insistent demand of the environment (climate change, Sixth Extinction, badly poisoned water and earth, etc.)

    Looks like crash to me and as usual the first losers will be the global 99%. The erasure of “democracy” by “oligarchy” (rule by the 1%) (but how do they know what to agree to on a detailed level?) will prevent the 99% from [1] realizing what’s happening and why until it’s way too late and [2] from reacting to prevent the worset from happening.

    Future generations (human and otherwise) will bear the burden. The 1% will cower in their walled communities (or small islands).


  1. The Next Crisis - Part two - A manifesto for th... - September 22, 2014

    […] The present crisis is not yet over and yet we are already overdue for the next. In Part One I suggested that not only are the 1% well aware of this but that while they have been telling us how we must ‘save’ the present system and assuring us that any radical break with the …  […]

  2. Why you shouldn't be optimistic about the economy. Or politics. Or the future generally - September 22, 2014

    […] The Next Crisis – Part Two – A Manifesto for the Supremacy of the 1% Outline. 1) The Over Class must retain and consolidate their control over the global system of debt. 2) The power to regulate must be taken from nations and effectively controlled by corporations. 3) Professionalize governance. Democracy can be and must be neutered, and an effective way of doing this is to insist that amateur, elected officials MUST take the advice of professional (read corporate) advisors. Expand current law to enforce this. 4) The financial system badly needs un-encumbered ‘assets’ to feed the debt issuing system. A new way must be found to prise sovereign assets from public ownership. Such a new way is suggested. 5) In order to facilitate the political changes necessary, the public mind-set must be changed. National Treasures such as the NHS in Britain must be re-branded as evil State Monopolies. 6) Effective ways must be found to convince people that democratic rule is no longer sufficient to protect them. 7) An alternative to Democracy must be introduced and praised. That alternative must be the Rule of International Law as written and controlled by the lawyers of the 1%. People must be told that this is all that stands between them and an increasingly hostile and anarchic world. But that it can only keep them safe if it has absolute authority over democracy. People must voluntarily bow to it out of fear and its decisions must be as absolute and unquestionable. In conclusion, I suggest that this amounts to a dystopian version of the old environmentalist idea of Spaceship Earth. A corporate version where we are just passengers who must pay our passage in a ship someone else owns. No longer inhabitants or citizens with the same inalienable right to be there and be heard as anyone else. And yet, dark as all this may seem, victory for the 1% depends on no one understanding what is happening. If we are already beginning to see the outlines of what the Over Class wants, then their victory is not assured. If our ignorance is their bliss, then our understanding is like sunlight on a vampire’s skin. All is not lost, not by a bloody long way. Click the link for more… Sign in or Register Now to reply […]

  3. The Next Crisis – Part two – A manifesto for the supremacy of the 1% | gold is money - September 23, 2014

    […] READ MORE […]

  4. Debt-Based Wealth of the Ubermenschen | Under Siege - September 24, 2014

    […] From Golem XIV: […]

  5. The Status Quo Playbook Beyond 2014: Corporate Regulations, Professional Politicians and the Strip Mining of Sovereign Assets | Liberty Blitzkrieg - September 26, 2014

    […] The Next Crisis – Part two – A manifesto for the supremacy of the 1% […]

  6. From Public Citizen: Top 10 Most Pernicious Investor-State Dispute Settlement Lawsuits | naked capitalism - October 6, 2014

    […] legal system, and they wouldn’t be bringing lawsuits in its so-called tribunals. (See this post by Golem XIV for a plausible first cut summary of the playbook that structures this effort; see item 7.) And if […]

  7. Trade Expert and TPP Whistleblower – “We Should Be Very Concerned about What’s Hidden in This Trade Deal” | Liberty Blitzkrieg - May 19, 2015

    […] – From David Malone’s excellent article published last year: The Next Crisis – Part two – A manifesto for the supremacy of the 1% […]

  8. Re-branding Dissent - Golem XIV - Thoughts - January 1, 2016

    […] part two  of the series, I offered a list of the various ways this could be done (a sort of manifesto for […]

  9. Re-Branding Dissent - The Quiet Destruction Of Democracy – ValuBit - January 2, 2016

    […] part two  of the series, I offered a list of the various ways this could be done (a sort of manifesto […]

  10. RISE OF THE FOURTH REICH: Re-Branding Dissent, The Quiet Destruction Of Democracy – By Golem XIV | RIELPOLITIK - January 2, 2016

    […] part two  of the series, I offered a list of the various ways this could be done (a sort of manifesto for […]

  11. German Government Smartphone Spyware Monitors Citizens’ Calls, Typing AND Sees Through Their Cameras | The Original Boggart Blog - February 23, 2016

    […] <h4>The Next Crisis – Part two – A manifesto for the supremacy of the 1%</h4><br /> […]

Leave a Reply