What’s Wrong With the World - Part 1  (October 2015)

The world appears to be being pushed down a path dictated by media and a general unquestioning acceptance of things by the general public.  In “first-world” countries where the pain of a second global financial collapse isn’t significant yet, this apathy encourages governments, the deep-state and establishments behind the central banks to continue to plunder the very people that vote them into power.

In less fortunate countries like Brazil, Venezuela, Japan, Greece and so on, the slow economic decline that is occurring is harder to hide.  Governments are now under increasing pressure to explain themselves but still access to information and exposure of vital truths are carefully withheld.  Commercial control of media outlets (TV, newspaper, radio) can be used to manipulate the message that people see or placate the masses by not giving any message at all.  There is nothing that says “all is well” in the midst of a crisis like a complete lack of detailed news.

Political Sycophants and the Welfare State.

Politicians love to win elections.   They will do anything and say anything to win.  So much so that each new voting generation grows up thinking the best government is the one that offers the most kickbacks.  This change in expectation or demand by the electorate may have come about because of a number of factors, not the least of which is wealth disparity. 

As the elite populated by the wealthy top 4% of the world, get richer thanks to the increasingly oligarchical nature of modern politics, the ‘unwealthy’ get poorer.  Beset by rising costs, hidden taxes and a financial culture that encourages borrowing, people are beginning to hurt.  It’s not surprising therefore that the average person would expect more freebies from their government.

Unfortunately the free lunches offered by government usually cost a lot of money and the economy of most countries just can’t afford to put money into the purses of the wealthy and the poor at the same time.  The governments must therefore try to satisfy the oligarchy and the masses in order to have any chance at being elected.  Consequently they borrow money hand over fist and rack up debt that must ultimately be repaid by several generations of tax payers, if it can be repaid at all. 

In order for this debt cycle to work central banks and governments obsess over inflation, because inflation reduces the debt burden automatically. 

For example, if the inflation rate is at 4% then tax revenue will rise by (up to) 4% because people’s incomes will rise to compensate.  That rise in tax revenue represents a pay-rise for the government.  Anyone who has debt knows that a pay-rise makes paying off debt a lot easier.  Consider that anyone borrowing to buy a house thirty years ago would have paid about one twentieth of what they would pay for the same house today.  Over the period of the loan, the principal on the mortgage only goes down (with repayments) while salaries go up thanks to inflation.  By just paying the interest on the loan, the cost of paying off that mortgage after thirty years becomes insignificant.

Governments rely on this inflationary mechanism to reduce their principal debt burden.  However they do this at the expense of savers.  To make matters worse, instead of paying back the debt, governments often add to their “mortgages” every year.  So that after thirty years instead of having one mortgage they have thirty.  The end result is that they have enormous debt and still no savings or contingency should interest rates change or tax revenue decline.  Under such circumstances, as soon as there is a recession, high unemployment, financial crisis or economic depression the governments find themselves short of money to the point (like Greece and Japan) where the only way to pay back debt is to borrow more money.

The problem with the magic of inflation, missed by the easy credit culture, is that it takes money away from the saver.  If the inflation rate is 4% and interest in the bank is 5% a saver is really only making 1% a year on their savings.  If the government turns around and taxes that 5% gain at a tax rate of 25% then the saver loses an additional 1.25% to the government.  Their overall gain from their savings is a negative 0.25%.  Consider that today the return on saving is paltry, 1% to 2% at best, before bank fees.  If the official inflation figure is around 2%, then savers, like pensioners and the responsible middle class, are essentially being robbed by economic policy.  It now costs money to save.

Clearly this inflationary policy, inspired by government and central bank economists, has not worked.  Governments have not been able to balance their books for decades and to compensate for their incompetence and malinvestment they have become expert at hiding behind questionable GDP, salary and employment statistics.  The rules governing those statistics are fiddled on a yearly basis to make them look better – China’s reported figures are a classic case of using “official” statistics to mislead the people. 

China isn’t the only country to fiddle its books.  Consider the US government’s official 18 to 20 trillion dollar debt (around 110% of GDP) for example, when the total of all outstanding credit and dues is taken into account, the US total debt burden may be closer to 70 trillion (over 350% of GDP) according to a University of California-San-Diego study.  That debt doesn’t take into account the cost of future infrastructure maintenance which current levels of revenue can’t even hope to support.  Ironically, that level of debt makes Greece look responsible.

Similarly, the reported inflation rate, in most countries, is a few percentage points below the actual; according to ShadowStats.com.  If that is true then savers are getting screwed beyond all reckoning.  The consensus from a lot of people does seem to confirm that living prices are rising steeply where things like rent, cost of electricity and food are concerned.

The solution to this period of collapse doesn’t appear to be obvious.  Collapse has to be suffered before construction or growth can return but collapse is bad for a government’s election prospects.  Consequently the road back to fiscal responsibility appears to be permanently blocked by head-in-the-sand denial.  The only solution for most of the governments of the world is to keep doing more of the same and hope that no-one will notice the coming economic train-wreck before things magically recover. 

Historically when governments attempt to control the message (to avoid being noticed or questioned) they do nasty things, like launch witch hunts; for example, under the guise of an anti-terrorist campaign.  By rooting out the soothsayers and calling them criminals, governments can stifle dissention quite effectively.  Eventually of course revolution prevails once the current regime has made the social and economic situation so painful that people become hungry.

Television and Newspaper (Media) Control of Information.

To make matters worse, modern commercial media is ineffectual at revealing truth and keeping people informed.  The media at the best of times are armed with only a smattering of hastily gathered facts (often “officialised” by authorities within government) and only report on news they consider profitable; news that will garner the most interest and attract the most readers or viewers.  Truth is not always good for business. 

When PBS News Hour is sponsored by Company-M, it makes sense that PBS would avoid reporting on contentious Company-M issues.  How, in that case, are people ever going to be informed about what it is that Company-M is doing?  By sponsoring all media-news producers Company-M can effectively control its message and protect its reputation through positive advertising and suppression of negative truth.  Meanwhile it can continue to commit crimes or plunder.

To some extent the government can do the same thing by for example, making it illegal for a station to reveal a truth using the excuse of ITAR, terrorism, national security or emotional calm (riot aversion) for example.  These are superb tools used by governments around to world to stem the flow of information to the general public.

Democracy or Statism by Propaganda

The media companies aren’t limited to controlling information.  They are also very good at influencing people to a particular way of thinking.  For example: Political parties that won elections in the UK and Australia over the past fifteen years were relentlessly backed by headlines in newspapers owned by a particular media mogul.  Politicians have subsequently learned that to win elections they must get that media empire on side.  That gives such an empire a lot of power.  It even begs the question: Are elections today truly democratic or are they just an exercise in media managed propaganda?  Are people voting for governments or are they merely voting for corporate sponsors?

Perhaps it is time for people to turn the TV off when the news hour begins and start comparing truths from a wider range of independent internet sources.  People should perhaps, look at the second or third page of a Google search result for the alternative point of view and ignore the more highly ranked and least independent rhetoric of the commercial news providers at the top of the list.

It seems democracy is dead.  Today, truth is whatever the TV, newspapers, central banks and governments say it is or propagandise it to be.  Without truth people are unaware of the right choices.  They are lulled into complacency and make the mistake of exclusively entrusting their government, banks and industry with their future livelihoods.  By filtering truth and spinning questionable facts people can be controlled, effectively bringing death to democracy, just as surely as dictatorial oppression in the USSR brought death to freedom and destroyed prosperity. 

The art of propaganda practiced by the leaders of the human race has been perfected thanks to the misuse of human behavioural science.  By keeping everyone misinformed the mirage of democracy can be maintained while a country is dictated to.  Promising people that things will be better, buying satisfaction in the voting community in order to engender apathy and relying on that apathy to keep everyone’s head firmly buried in the sand is what keeps the system going.