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The Narrative of Fear and Insecurity

On March 4 1933 FDR in his inaugural address to the American people said,

“…the only thing we have to fear is…fear itself….”

And it’s true. It is fear more than anything else that prevents people from turning away from what has failed them and stays their hand from picking up the tools which would allow them to build what would work better.  And precisely because it is true, every politician, banker, judge and general has realised that if they wished to stop change from weakening their grip on power and wealth, then what they need above all else is …more fear.

As FDR went on to say, it is

“…nameless, unreasoning, unjustified terror which paralyzes….”

So if you want to control a people and contain their desire to replace the system which benefits you, with one that benefits them, then you need to feed them fear and the more of it and the more slippery and inscrutable it seems to them, the better.

A looming, shadowy foreign power lurking just beyond the borders is always good.  Russia, China, Communists in general, or if they are too far away, then any kind of socialist will do at a pinch.  In 1983 Margaret Thatcher famously branded British miners and their union as  ‘The enemy within.”  Terrorists are a wonderful new fear.  They are everywhere, much like Red’s used to be under every bed.

All these are good and have been used, still are used, to good effect. But there is a new fear, one closer to the fear FDR was talking about. And the currency of that fear is Debt.  Here is a very short history, in just a few sentences, of how debt became the currency of fear.

In the era of Clinton in the US and Blair/Brown in the UK there was a sea change in the ‘left’. I think Clinton, Blair and Brown had all decided that the traditional left dream of redistributing wealth from the richest to the less well off, was no longer politically viable. Reagan and Thatcher, they felt, really had shifted the political ground.  What to do? The answer, I think, was fed to them precisely by those whose wealth the left had traditionally been trying to ‘redistribute’. Why try to prise wealth from us, the wealthy, they whispered,  when instead we wealthy people will be delighted to give the poor debt instead? Instead of being at war with the wealthy and the managers of our wealth, why not work with us? Leave wealth with those who ‘have earned it’ they would say. Leave it with those who know how to manage it, how to make it grow and give a healthy return. Instead, give the poor debt.  Or to paraphrase the obvious, “Let them eat debt.”

And so Clinton and Blair and Brown re-launched the left, or murdered it, depending on your point of view, with their new idea. Leave wealth with the wealthy and give the poor debt.  Free the financial world from silly FDR-era restraints and irksome, stupid regulations and allow a rising tide of debt to float all boats.

And so long as  you could convince others, and believe yourself, as that arch fool Brown declared, that he had left behind boom and bust, then all was good. The rich were no longer assailed for being rich nor asked to give any of it up, to those less well off. In fact the new politics needed their wealth and was in fact tailor made for them to become much more wealthy. The poor would be given debt as a substitute for wealth. They would feel wealthier, and would indeed have more to spend. And as long as house prices grew faster than their debt payments, and the stock market made every GDP figure larger and more endlessly fabulous than the last, then the debt machine would churn on and on.  Debt was sugar without the calories. You could gorge without getting fat. What could go wrong? House prices were never going to go down again! Remember that?

And then it popped and fear bloomed.  And a lesson, I think, was learned .

People knew that in the good times Debt kept poor people quiet. Like any drug it could take away the fears and worries of being poor. For as long as their high lasted they would feel better, happier and politically calmer.  Debt drugged the poor into happy passivity. Why should they listen to those who argued for the old, hard, political struggles, when the politics of debt was so seductive and easy? People encouraged you to have debt. They fell over themselves to give you as much as you wanted. More in fact. Much more.  More than you needed. More than you could every really pay back. But who cared? This was true for the poor but also for the entire system of banks and traders and funds that made the system work.

The political lesson learned, was that when the bad times came, far from being useless or harmful, debt worked new wonders.  In the bad times debt created fear. Fear of losing your house, your job, your future.  Debt, in the last ten years has created a powerful, pervasive, global narrative of nameless fear.  Debt is a fear that is everywhere. Not just over there, a weapon pointing at you from afar, but right here at home. It could reach in to your house and take it from you. And there was no one who would prevent it. It was not a foreign invader but a new force of nature. This was the new narrative. It was just the way things were and are. You can yell about austerity but debt does’t care. You are in debt and your whole nation is in debt. And debt is a faceless, unknowable, uncontrollable, supranational, almost supernatural force which you cannot tame or defeat. So proclaimed the new debt-backed narrative of fear and insecurity.

The political lesson is that in the  good times, use debt to drug and pacify. In the bad, use it to create fear and insecurity. The same debt that floated their boats can be used to drown them. And it might just be that the fear and insecurity of the bad times can be maintained for longer than the drugged euphoria of the good times.  All you need to make it last and last and last some more… is more debt. It’s simple, if you need more fear, create more debt. Raise that debt ceiling. Expand your lending criteria. Embrace sub-prime. They are not your enemies! They are you allies. Through them you create the debt that creates the fear that creates the supine acceptance of the system that has enslaved them.

It’s perfect.


But not quite.


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27 Responses to The Narrative of Fear and Insecurity

  1. Per Kurowski September 5, 2017 at 10:47 pm #

    “It’s perfect… Almost… But not quite.”

    Indeed, because most of that debt that anticipated future demand, was also based on the irrational fear bank regulators had of what was perceived risky, and so most of it has gone to dangerous overpopulate perceived, decreed or concocted safe havens, like sovereigns, house mortgages and the AAArisktocracy.

    Had the allocation of bank credit not have been distorted in such a way, there would not have been, or be, such large debt bubbles that could pop.

    But its not over, the 0% risk weights assigned to sovereigns assumed to be fiscally disciplined, plus all sovereign debt purchased by central banks with QEs, tells us that on the contrary what we really must fear, is what we do not fear at all, what we believe utterly safe.

    Or, as Voltaire said “May God defend me from my friends, I can defend myself from my enemies”


    • Golem XIV September 6, 2017 at 2:36 pm #

      Hello Per Kurowski,
      I agree that the zero risk weighting of sovereigns is a thoroughly unsafe harbour.

  2. Deanna Johnston Clark September 6, 2017 at 1:55 pm #

    yes…the unholy, diabolical trinity of debt and marketing and peer pressure.
    In the depression it ruined farmers and keeps the party going now with homes and cars.

  3. George September 7, 2017 at 1:37 am #

    Give me the power to create money out of nothing and loan to you at interest and I will show you what power is. If you do not pay me back I will take the asset and if the asset is no good the Fed will by it at full price and make me whole; if it is good, as it usually is, I pick up some pretty nifty assets. If I screw up and make my balance sheet suggest me insolvent the Fed will give me free money to correct my position I and others in my Bank will get a bonus for it. How much more productive as a Bank can you be? I can even lend to Governments and when they don’t pay austerity is my game plan. This never works out for the debtor either so in comes the IMF to pay me off while they insist that the debtor nation sell off their infrastructure to pay the money back to IMF that was so nice to bail out the debtor nation. There are two requirements however: That the infrastructure such as water and sewer, ports,toll roads, electrical grids and anything else the IMF designates be sold, The second part is that it be sold to American investors waiting in the wings, you know guys like George Soros, a parasite for sure and others like him. Now, me being one of the original lenders and knowing these people as I do, gives me an opportunity to buy an equity position in the robbery! As time goes by the whole world is being sucked into the scam where the rich wind up with all the marbles and feudalism reigns again. The very thing that brought about the Revolutionary War. They you are fellow serfs.

  4. Kreditanstalt September 7, 2017 at 6:16 am #

    They murdered not ‘the left’ as much as they ended the notion of left-of-centre politics being about redistribution and nationalized ownership (of the means of production).

    And Blairism, Clinton-ism, etc., sold themselves to the social justice warriors…instead of ‘scientific socialism’, of public ownership and of state involvement in the economy we have been inundated with obsessing about ‘sexism’, ‘LGBTQQ…’, ‘women’s rights’, minimum wage increase advocates, environmentalism, race politics, and, as we have seen just recently, with historical revisionism, the airbrushing of history and cultural Marxism writ large.

    A government policy of “divide and conquer” it has been said – in place of any real seizure of the means of production, of class-based analysis and of redistribution of assets (“tax the rich”) – which would REALLY scare those in high places.

    While I, as a libertarian, heartily disagree with socialism of any sort I would have welcomed Bernie Sanders’ success and I do welcome Jeremy Corbyn’s. Anything to put some fear into the authorities.

  5. Postkey September 7, 2017 at 10:13 am #

    “A looming, shadowy foreign power lurking just beyond the borders is always good. ”

    Such as the Soviet Union?


    “Taken together, these four volumes constitute an extraordinary commentary on a basic weakness in the Soviet system.
    The Soviets are heavily dependent on Western technology and innovation not only in their civilian industries, but also in their military programs.
    An inevitable conclusion from the evidence in this book is that we have totally ignored a policy that would enable us to neutralize Soviet global ambitions while simultaneously reducing the defense budget and the tax load on American citizens.”



    • steviefinn September 7, 2017 at 9:27 pm #

      I recall a point in time – Nottinghamshire miners stating that they were returning to work in order to continue paying their mortgages.

      • Golem XIV September 7, 2017 at 9:31 pm #

        Those were times that are seared into my mind. We are not going back there.

        • steviefinn September 7, 2017 at 11:49 pm #

          My Dad summed it up with one word….” shackles “.

  6. johnm33 September 7, 2017 at 11:01 pm #

    Universal debt is the answer, but there has to be equal debt for all, at the same price. Creating money as debt for everyone at the same interest rates the bankers get would work for me, well just as long as we could all access the same amount. I wonder how society would evolve?
    http://www.oftwominds.com/blogaug17/world-domination8-17.html he forgot no. 6 find an enforcer who works for beans, and thinks he’s a player.
    Then of course there’s this http://www.huffingtonpost.co.uk/lee-carnihan/tax-and-spend_b_17452090.html?
    which would be redundant if we could all draw from the well.
    Glad to see you back

    • Kavy September 10, 2017 at 10:31 am #

      Good articles.

      • Kavy Kevin September 10, 2017 at 9:02 pm #

        As many have said before, the ruling elite can just borrow all the money they want at almost zero interest rates from banks that create the money out of nothing and then they can go and buy up everything for sale in the world. Then the ruling elite will pay back the bankers the interest owed out of the profits they make from selling the world’s resources and commodities, but the bankers are the ruling elite. In other words, they got it all for nothing,

        People born in resource countries may own almost nothing and be dead poor while all the profits from their country’s resources get sucked through Wall Street and the City of London. Now the elite own the whole world but not Russia and China, and that grieves them, about the profits they see lost, even though they have billions, or maybe even trillions.

  7. Kevin September 9, 2017 at 9:59 pm #

    It could be so different, we could have helped stem excessive population growth and developed new technologies long ago to reduce our dependence on fossil fuels as well as save the environment while the ruling elite could have made their fortunes out of new the industries. But nope, despite our intelligence we’re kind of really stupid. The pathological ruling elite even got their economists to say that greed was good because they were particularly greedy and short sighted.

    What horrible times we have lived through seeing the ruling establishment get it so wrong and now our civilisation is crumbling because? As Paul Craig Roberts says we gave our leading edge in technology away because it boosted short term profits to export our industries abroad and with it the good jobs, and so without the decent wages we maxed out on credit instead and this has hollowed out the wealth of our societies straight into the pockets of the elite, and this is the classic way that civilisations die.

    They say the frog in a pot that’s being slowly heated does not notice the temperature rising and so it gets boiled to death, so too most people don’t see how our civilisation is crumbling. It’s getting harder and harder but they just put up with it. For example, the trend for courier and delivery companies to do away with their own staff who they would have equipped with vans and uniforms and to use self employed people instead who use their own cars seems to be increasing. Gone are the pensions, the holiday and sick pay, the regular hours, and the reasonable wages.

  8. Just me September 10, 2017 at 2:20 pm #

    Part 1 of 4….”Negative Interest Rates and the War on Cash (1)”


    “ECB Tightens Noose Around Bank Accounts”


    “The Next Spanish Bank Teeters, at Worst Possible Time”


  9. VN Gelis September 21, 2017 at 10:18 am #

    How Greece Became a Guinea Pig for a Cashless Society


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