Author: admin

Authored by Steven Guinness,

Last month I posted an article that looked at the World Economic Forum as the institution behind ‘The Great Reset‘ agenda that was launched in June. One of the main themes of the article was the WEF’s ‘Strategic Intelligence platform’, which the organisation describe as ‘a dynamic system of contextual intelligence that enables users to trace relationships and interdependencies between issues, supporting more informed decision-making‘.

As I made reference to, Strategic Intelligence is the mechanism which brings all the interests that the WEF focus on together. This includes specific countries and industries, as well as global issues like Covid-19 and the Fourth Industrial Revolution.

When you look into Strategic Intelligence, one aspect to it that quickly becomes apparent is how each global issue and industry intertwines with one another. For instance, Covid-19 is a strand of ‘The Great Reset‘ and vice versa. What this does is create the impression that only a collectivised approach incorporating all ‘stakeholders‘ has the capacity to deal with crises on a global scale. The WEF is built upon the belief that nations and corporations must be interdependent and seek to remedy the world’s problems through the medium of global institutions.

So it is little surprise then that the WEF have devised through their Strategic Intelligence platform ‘The Great Reset‘. What this entails can be catagorised into two parts. First are the seven leading objectives for achieving the reset. In no particular order these are:

1. Shaping the Economic Recovery

2. Harnessing the Fourth Industrial Revolution

3. Strengthening Regional Development

4. Revitalizing Global Cooperation

5. Developing Sustainable Business Models

6. Restoring the Health of the Environment

7. Redesigning Social Contracts, Skills and Jobs

Next comes a mix of global issues and industries woven into ‘The Great Reset‘ agenda. At last count there were over fifty areas that make up the reset. These include:

Blockchain; Digital Identity; Internet Governance; Development Finance; Sustainable Development; Future of Health and Healthcare; Global Governance; Financial and Monetary Systems; Public Finance and Social Protection; Climate Change; Drones; 5G; The Ocean; Banking and Capital Markets; Aviation, Travel and Tourism; International Trade and Investment; Covid-19; Biodiversity; Cities and Urbanization; Leadership in the 4IR; Geo-economics; Global Health; International Security; Geopolitics; Future of Food; Air Pollution; 3D Printing; Batteries; Circular Economy; Future of Mobility; Human Rights; Gender Parity; Taxation; Future of Media, Entertainment and Culture; Digital Economy and New Value Creation; Fourth Industrial Revolution; Future of Economic Progress; Workforce and Employment; Agile Governance; Global Risks; Advanced Manufacturing and Production; Environment and Natural Resource Security; Plastics and the Environment; Corporate Governance; Forests; Justice and Law; Civic Participation; LGBTI Inclusion; Inclusive Design; Future of Computing; Artificial Intelligence and Robotics; Systemic Racism

As mentioned, all these subjects intermix throughout Strategic Intelligence. The distinction comes in the fact that the World Economic Forum have identified ‘The Great Reset‘ as the one issue that can bind all these other areas of concern together to try and bring about an economic and societal ‘new world order‘. So much so that when announcing the initiative in June, the WEF confirmed that the reset will be the theme of its annual Davos meeting in Switzerland come January 2021. In previous years the WEF have only published details of an upcoming theme a few weeks before the meeting takes place. This time, however, they have given over six months notice, which suggests the level of significance that the WEF have placed on ‘The Great Reset‘.

Having ascertained the seven main objectives and the plethora of industries and issues tied to them, let’s now get a sense of the motivations behind the reset from those who are calling for it.

The Founder and Executive Chairman of the institution, Klaus Schwab, and the IMF Managing Director, Kristalina Georgieva, are two of the most prominent voices.

Beginning with Schwab, in articles posted on the WEF website (Now is the time for a ‘great reset’ and COVID-19’s legacy: This is how to get the Great Reset right) and during several interviews that can be found on the WEF’s Youtube channel, Schwab summarises why he considers an economic, societal, geopolitical, environmental and technological reset to be essential.

From Schwab’s perspective, there are numerous reasons why a Great Reset should be pursued, but Covid-19 is the most urgent of them all. Not only has the virus demonstrated that existing systems are no longer fit for purpose, it has also ‘accelerated our transition into the age of the Fourth Industrial Revolution‘. For those unfamiliar with the Fourth Industrial Revolution, this was a concept that the World Economic Forum led with for their 2016 Davos meeting. Back in 2018 I published a brief overview of 4IR which can be found here.

With systems not suited to the 21st century, Schwab spoke of the urgency to ‘restore a functioning system of smart global cooperation structured to address the challenges of the next 50 years.’ To achieve this, all stakeholders of global society will have to be integrated into a ‘community of common interest, purpose and action‘. No one, it seems, is permitted to be left behind. We go as one, as a collective, whether an individual likes it or not. Every country will need to take part. Every industry must be transformed. This, according to Schwab, will signify a Great Reset of capitalism and a new era of prosperity.

But what if all stakeholders don’t band together behind the initiative? In Schwab’s view, to be dis-united ‘will lead to more polarisation, nationalism, racism, increased social unrest and conflicts‘. In short, a greater level of chaos and degradation of systems, leaving the world more fragile and less sustainable.

Schwab has insisted that to avoid this scenario, minor changes will not suffice. Instead, ‘entirely new foundations for our economic and social systems‘ must be built. Covid-19, therefore, is an ‘historical moment to shape the system for a post Corona era.’ It is an opportunity that Schwab says must not be missed.

Schwab went further a few weeks after the Great Reset was launched. As many are aware, using crisis as an opportunity to bring about major economic and societal change is a notorious strategy of global planners. And every so often some of those planners suggest as much.  According to Schwab, ‘acute crises favour introspection and foster the potential for transformation‘. The Prince of Wales, who fully endorses the Great Reset, said something similar in that ‘unprecedented shockwaves of crisis may make people more receptive to bigger visions of change‘.

This begs the question – does the same level of potential for change exist without the onset of crises? To a small extent, perhaps, but more likely is that until a population is faced with a threat or danger that they believe risks being detrimental to them personally, the motivation to act and call for reform is not as urgent. Minds need to be concentrated on the seeming disaster at hand before sufficient support can be gained for the policies that global planners seek.

And if minds can be concentrated, then as Schwab points out, ‘a new world could emerge, the contours of which it is incumbent on us to re-imagine and to re-draw‘.

Many of the policies that global figureheads desire are within the purview of the the Fourth Industrial Revolution, which Schwab and his ilk have been promoting as essential since the back end of 2015. Now a global crisis of sufficient magnitude has presented an opening to further the goals of the global elite. Did this happen by coincidence or by design? Truthfully, no one can say for sure. Whilst the World Economic Forum were part of a pandemic simulation exercise a few months before the world entered into a live pandemic, this is not incontrovertible evidence of what some are now referring to as a ‘plandemic‘.

When the Great Reset agenda was unveiled, one of the other leading proponents was IMF Managing Director Kristalina Georgieva. She declared it of ‘paramount importance‘ that a future return to economic growth must encompass a ‘greener, smarter and fairer world‘. There is no need to wait, said Georgieva. The world must act now.

One of the most important takeaways from Georgieva’s intervention was her admission that ‘the digital economy is the big winner of this crisis‘. We have seen this already through the exponential growth in central banks discussing the issuance of their own digital currencies and using Covid-19 as a reason to reinforce calls for a new global economic ‘architecture‘.

In a speech to Italy’s National Consultation in June (Italy, Europe and the Global Recovery in 2021), Georgieva said that Covid-19 ‘may have accelerated the digital transformation by two or three years‘. The unproven fear of cash being a transmitter of the virus, along with people relying on contactless payments and online transactions, have no doubt contributed to her outlook.

Georgieva’s focus is on ‘the economy of tomorrow‘, which is reason enough for her that the ‘economy of yesterday‘ should be consigned to history. Entirely new foundations are required, not a rework of the failed systems of old. If it sounds like Georgieva and Schwab are reading from the same script, I would suggest that they are.

Georgieva believes that 2021 is a make or break year for the Great Reset. Either the world chooses more cooperation or more fragmentation.  According to her, ‘this is the moment to decide that history will look back on this as the Great Reset, not the Great Reversal‘.

As you might have guessed, ‘the most important anchor of recovery‘ is for a Covid-19 vaccination, which Georgieva hopes will be available at scale by 2021.

The implication is that without a vaccine the world will be unable to return to any sense of normality, particularly in terms of open interaction with your fellow man. Only with a vaccine and supplementary treatments can there be a ‘fully fledged recovery‘.

To support the drive for a Great Reset, in July Klaus Schwab co-wrote a book with Thierry Malleret (who founded the Global Risk Network at the World Economic Forum) called ‘Covid-19: The Great Reset‘. In a follow up article I will be looking at some aspects to the book, and also will make an argument for why the idea of a ‘Great Reversal‘ might not be as detrimental to global planners as the likes of Kristalina Georgieva make out.

Health apps and fitness watches provide incredible insight into one’s health but can also give rise to excessive anxiety, according to a new study. 

Tariq Osman Andersen, an assistant professor at the University of Copenhagen’s Department of Computer Science, said fitness watches that measure sleep, heart rates, and physical activity could have drawbacks for the wearer. 

Andersen’s research team conducted a six-month study with 27 heart patients who used ‘Fitbit’ fitness watches. The team said some wearers experienced increased anxiety over misinterpret heart data:

“Our study shows that, overall, self-measurements are more problematic than beneficial when it comes to the patient experience. Patients begin to use the information from their Fitbits just as they would use a doctor. However, they don’t get help interpreting their watch data. This makes them unnecessarily anxious, or they may learn something that is far from reality,” he said. 

Published in the Journal of Medical Internet Research, the study determined the “pros and cons of using Fitbit watches:”

-More information calms, but also awakens doubt

Patients have a sense that they are becoming more in tune with their overall health, but they link the information to their heart disease, for which there is no safe basis. For example, if they see that they aren’t sleeping as much as they should be, they become uncomfortable and fear that this may exacerbate their illness. Similarly, they often link fast hearts rate with an increased risk of a heart attack.

“Conversely, the Fitbit watch can be calming, if data shows that you are sleeping well and have a low heart rate. The problem is that you cannot use data directly related to heart disease because the watch is designed for sports and wellness, as opposed to managing the disease,” explains Tariq Osman Andersen.

-Patients gain the courage to exercise, while simultaneously experiencing feelings of guilt

Another aspect of the Fitbit watch with both positive and negative aspects is exercise. On the one hand, patients were motivated to be active, but at the same time, the app revealed when patients did not attain the recommended 10,000 daily steps, which made many of them feel guilty. 

As for heart patients using smartwatches, the data is prone to misinterpretation by the wearer as a medical professional is not examining it and could produce unwanted anxiety. 

Sometimes, maybe too much technology is bad… 

Authored by Pepe Escobar via The Saker blog (originally posted at The Asia Times),

Beijing-Moscow is already on; Berlin-Beijing is a work in progress; the missing but not distant link is Berlin-Moscow..

We have seen how China is meticulously planning all its crucial geopolitical and geoeconomic moves all the way to 2030 and beyond.

What you are about to read next comes from a series of private, multilateral discussions among intel analysts, and may helpfully design the contours of the Big Picture.

In China, it’s clear the path ahead points to boosting internal demand, and shifting monetary policy towards the creation of credit to consolidate the building of world-class domestic industries.

In parallel, there’s a serious debate in Moscow that Russia should proceed along the same path. As an analyst puts it, “Russia should not import anything but technologies it needs until it can create them themselves and export only the oil and gas that is required to pay for imports that should be severely restricted. China still needs natural resources, which makes Russia and China unique allies. A nation should be as self-sufficient as possible.”

That happens to mirror the exact CCP strategy, as delineated by President Xi in his July 31 Central Committee meeting.

And that also goes right against a hefty neoliberal wing in the CCP – collaborationists? – who would dream of a party conversion into Western-style social democracy, on top of it subservient to the interests of Western capital.

Comparing China’s economic velocity now with the US is like comparing a Maserati Gran Turismo Sport (with a V8 Ferrari engine) with a Toyota Camry. China, proportionately, holds a larger reservoir of very well educated young generations; an accelerated rural-urban migration; increased poverty eradication; more savings; a cultural sense of deferred gratification; more – Confucianist – social discipline; and infinitely more respect for the rationally educated mind. The process of China increasingly trading with itself will be more than enough to keep the necessary sustainable development momentum going.

The hypersonic factor

Meanwhile, on the geopolitical front, the consensus in Moscow – from the Kremlin to the Foreign Ministry – is that the Trump administration is not “agreement-capable”, a diplomatic euphemism that refers to a de facto bunch of liars; and it’s also not “legal-capable”, an euphemism applied, for instance, to lobbying for snapback sanctions when Trump has already ditched the JCPOA.

President Putin has already said in the recent past that negotiating with Team Trump is like playing chess with a pigeon: the demented bird walks all over the chessboard, shits indiscriminately, knocks over pieces, declares victory, then runs away.

In contrast, serious lobbying at the highest levels of the Russian government is invested in consolidating the definitive Eurasian alliance, uniting Germany, Russia and China.

But that would only apply to Germany after Merkel. According to a US analyst, “the only thing holding back Germany is that they can expect to lose their car exports to the US and more, but I tell them that can happen right away because of the dollar-euro exchange rate, with the euro becoming more expensive.”

On the nuclear front, and reaching way beyond the current Belarus drama – as in there will be no Maidan in Minsk – Moscow has made it very clear, in no uncertain terms, that any missile attack from NATO will be interpreted as a nuclear attack.

The Russian defensive missile system – including the already tested S-500s, and soon the already designed S-600s – arguably may be 99% effective. That means Russia would still have to absorb some punishment. And this is why Russia has built an extensive network of nuclear bomb shelters in big cities to protect at least 40 million people.

Russian analysts interpret China’s defensive approach along the same lines. Beijing will want to develop – if they have not already done so – a defensive shield, and still retain the ability to strike back against a US attack with nuclear missiles.

The best Russian analysts, such as Andrei Martyanov, know that the three top weapons of a putative next war will be offensive and defensive missiles and submarines combined with cyber warfare capabilities.

The key weapon today – and the Chinese understand it very clearly – is nuclear submarines. Russians are observing how China is building their submarine fleet – carrying hypersonic missiles – faster than the US. Surface fleets are obsolete. A wolf pack of Chinese submarines can easily knock out a carrier task force. Those 11 US carrier task forces are in fact worthless.

So in the – horrifying – event of the seas becoming un-sailable in a war, with the US, Russia and China blocking all commercial traffic, that’s the key strategic reason pushing China to obtain as much of its natural resources overland from Russia.

Even if pipelines are bombed they can be fixed in no time. Thus the supreme importance for China of Power of Siberia – as well as the dizzying array of Gazprom projects.

The Hormuz factor

A closely guarded secret in Moscow is that right after German sanctions imposed in relation to Ukraine, a major global energy operator approached Russia with an offer to divert to China no less than 7 million barrels a day of oil plus natural gas. Whatever happens, the stunning proposal is still sitting on the table of Shmal Gannadiy, a top oil/gas advisor to President Putin.

In the event that would ever happen, it would secure for China all the natural resources they need from Russia. Under this hypothesis, the Russian rationale would be to bypass German sanctions by switching its oil exports to China, which from a Russian point of view is more advanced in consumer technology than Germany.

Of course this all changed with the imminent conclusion of Nord Stream 2 – despite Team Trump taking no prisoners to sanction everyone in sight.

Backdoor intel discussions made it very clear to German industrialists that if Germany would ever lose its Russian source of oil and natural gas, coupled with the Strait of Hormuz shut down by Iran in the event of an American attack, the German economy might simply collapse.

There have been serious cross-country intel discussions about the possibility of a US-sponsored October Surprise involving a false flag to be blamed on Iran. Team Trump’s “maximum pressure” on Iran has absolutely nothing to do with the JCPOA. What matters is that even indirectly, the Russia-China strategic partnership has made it very clear that Tehran will be protected as a strategic asset – and as a key node of Eurasia integration.

Cross-intel considerations center on a scenario assuming a – quite unlikely – collapse of the government in Tehran. The first thing Washington would do in this case is to pull the switch of the SWIFT clearing system. The target would be to crush the Russian economy. That’s why Russia and China are actively increasing the merger of the Russian Mir and the Chinese CHIPS payment systems, as well as bypassing the US dollar in bilateral trade.

It has already been gamed in Beijing that were that scenario ever to take place, China might lose its two key allies in one move, and then have to face Washington alone, still on a stage of not being able to assure for itself all the necessary natural resources. That would be a real existential threat. And that explains the rationale behind the increasing interconnection of the Russia-China strategic partnership plus the $400 billion, 25-year-long China-Iran deal.

Bismarck is back

Another possible secret deal already discussed at the highest intel levels is the possibility of a Bismarckian Reinsurance Treaty to be established between Germany and Russia. The inevitable consequence would be a de facto Berlin-Moscow-Beijing alliance spanning the Belt and Road Initiative (BRI), alongside the creation of a new – digital? – Eurasian currency for the whole Eurasian alliance, including important yet peripheral actors such as France and Italy.

Well, Beijing-Moscow is already on. Berlin-Beijing is a work in progress. The missing link is Berlin-Moscow.

That would represent not only the ultimate nightmare for Mackinder-drenched Anglo-American elites, but in fact the definitive passing of the geopolitical torch from maritime empires back to the Eurasian heartland.

It’s not a fiction anymore. It’s on the table.

Adding to it, let’s do some little time traveling and go back to the year 1348.

The Mongols of the Golden Horde are in Crimea, laying siege to Kaffa – a trading port in the Black Sea controlled by the Genoese.

Suddenly, the Mongol army is consumed by bubonic plague.

They start catapulting contaminated corpses over the walls of the Crimean city.

So imagine what happened when ships started sailing again from Kaffa to Genoa.

They transported the plague to Italy.

By 1360, the Black Death was literally all over the place – from Lisbon to Novgorod, from Sicily to Norway. As much as 60% of Europe’s population may have been killed – over 100 million people.

A case can be made that the Renaissance, because of the plague, was delayed by a whole century.

Covid-19 is of course far from a medieval plague. But it’s fair to ask.

What Renaissance could it be possibly delaying?

Well, it might well be actually advancing the Renaissance of Eurasia. It’s happening just as the Hegemon, the former “end of history”, is internally imploding, “distracted from distraction by distraction”, to quote T.S. Eliot. Behind the fog, in prime shadowplay pastures, the vital moves to reorganize the Eurasian land mass are already on.

In a bizarre exchange of what may or may not be fake news, today China’s Global Times claimed that the Chinese People’s Liberation Army “expelled a US warship that trespassed into China’s territorial waters in the Xisha Islands in the South China Sea on Thursday, near an ongoing Chinese military exercise zone that reportedly featured live-fire anti-ship ballistic missile launches.”

The USS Mustin, a US Navy guided missile destroyer, trespassed into the China’s territorial waters in the Xisha Islands on Thursday, and the PLA Southern Theater Command dispatched naval and air forces to track, identify and warn it leave, said Senior Colonel Li Huamin, a spokesperson for the PLA Southern Theater Command on early Friday.

The report went on to say that “the US ignored the rules of the international law, repeatedly stirred up troubles in the South China Sea, exercised navigational hegemony in the name of “freedom of navigation,” seriously undermined China’s sovereignty and security interests, and severely sabotaged the international navigation order in the South China Sea.”

The allegation sparked an immediate response from the US military which said that the Global Times claimed was “without evidence” or basically fake news. According to American Military News, the 7th Fleet confirmed the destroyer performed a freedom of navigation operation despite Chinese territorial claims to the island chain.

The press release comes after China’s Global Times state media outlet reported Chinese People’s Liberation Army claims, without evidence, that they expelled the U.S. warship.

The 7th Fleet stated, “On Aug. 27 (local date), USS Mustin (DDG 89) asserted navigational rights and freedoms in the vicinity of the Paracel Islands, consistent with international law. This freedom of navigation operation (“FONOP”) upheld the rights, freedoms, and lawful uses of the sea recognized in international law by challenging the unlawful restrictions on innocent passage imposed by China, Taiwan, and Vietnam and also by challenging China’s claim to straight baselines enclosing the Paracel Islands.

The 7th Fleet statement makes no references to challenges by Chinese forces in the area in which the FONOP occurred. Still, the Global Times quoted PLA Senior Colonel Li Huamin, who said the PLA Southern Theater Command dispatched naval and air forces to track, identify and warn the ship to leave but Li provided no evidence the U.S. warship acted in any way outside of its planned operations.

The US military also accused Li of making similar false comments in past U.S. FONOPs around the Paracel Islands.

In his statements Thursday, Li said, “The U.S. ignored the rules of the international law, repeatedly stirred up troubles in the South China Sea, exercised navigational hegemony in the name of ‘freedom of navigation,’ seriously undermined China’s sovereignty and security interests, and severely sabotaged the international navigation order in the South China Sea.” He added that “we urge the US to stop this kind of provocative action, to strictly manage maritime and aerial military operations and strictly restrain its frontline troops, so as to avoid accidents.”

Separately, the U.S. Department of Defense issued a statement Thursday, criticizing Chinese ballistic missile launches near the Paracel Islands.

“U.S. forces operate in the South China Sea on a daily basis, as they have for more than a century,” the 7th Fleet states. “They routinely operate in close coordination with like-minded allies and partners who share our commitment to uphold a free and open international order that promotes security and prosperity. All of our operations are designed to be conducted in accordance with international law and demonstrate that the United States will fly, sail, and operate wherever international law allows – regardless of the location of excessive maritime claims and regardless of current events.”

A new survey from ValuePenguin.com, commissioned by LendingTree, found 61 million Americans have stopped commuting to work due to the virus-induced recession. The reduction of motor vehicles on highways will result in deep economic scarring across the entire economy. 

The coronavirus has upended nearly every aspect of life in the United States, and Americans’ driving behavior and commutes are no exception. ValuePenguin surveyed drivers to see how their habits have changed. We found a large number of drivers are no longer commuting to the office, whether because they are working from home or have lost employment due to COVID-19. -ValuePenguin

The survey found three in 10 respondents with motor vehicles are no longer making the daily commute to work in a post-COVID-19 world: 

About three in 10 consumers with a motor vehicle said they no longer have a commute due to COVID-19, either because they’re working from home (19%) or they temporarily or permanently lost their jobs (10%).

On the other hand, 26% are back to their daily commute as of August, including essential workers (17%) and those whose employers reopened their offices (9%). (The remainder don’t have commutes either because they worked from home prior to the pandemic, or they were not working prior to the pandemic.) -ValuePenguin

Millions of motor vehicles are missing from America’s highways since March. About 38% of respondents said traffic in their respective metro areas remains subdued, and 36% said traffic was reduced but trending back to pre-pandemic levels. 

For more color on empty streets and highways, TomTom high-frequency traffic congestion data of New York City shows traffic levels remain subdued. 

The decline in travel has resulted in respondents making fewer trips to the gas pump. Almost a third said they’re driving every day, compared to 50% of drivers pre-pandemic. The number of respondents who fill up their tanks every week dropped by 26% in August versus before the pandemic.

While declining fuel consumption and oversupplied markets have subdued gasoline and diesel prices, a reduction in travel has resulted in a quarter of respondents to make cost-cutting changes to their auto insurance. 

About 14% switched to another provider that was offering better deals, 12% reduced the amount of coverage since they are driving less and 3% took one of their household’s vehicles off the policy because their family is using fewer cars. –ValuePenguin

The survey’s results of a reduction in commuting were echoed in a recent KPMG International report:

The effects of COVID-19 will be felt for years. The response to the virus has accelerated powerful behavioral changes that will continue to shape how Americans use automobiles. We believe the changes in commuting and e-commerce are here to stay and that the combined effect of reduced commuting and shopping journeys could be as much as 270 billion fewer vehicle miles traveled (VMT) each year in the US. -KPMG

The permanent loss of vehicles on highways will have a tremendous impact across the entire economy and is suggestive that a “V-shaped” recovery is not in the cards for this year or next.

Authored by Charles Hugh Smith via OfTwoMinds blog,

Class wars are the inevitable result of an economic system in which ‘anything goes if you’re rich enough and winners take most’.

The traditional class war has been waged between wage-earners (who sell their labor) and their employers (owners of capital and the means of production). These classes have been assigned various names (proletariat, bourgeoisie, capitalists, etc.) but these broad class definitions don’t describe all the class conflicts emerging in the modern U.S. economy.

Before we dig deeper, let’s stipulate that ownership of various forms of capital still defines class: the wealthy live off unearned income skimmed from capital and everyone else lives off earned income from selling their labor. (Those without either source of income become dependents of the State).

What you own or don’t own defines your class interests, but these have been fragmented into a multitude of sub-classes. Six years ago I took a stab at defining America’s Nine Classes: The New Class Hierarchy (April 29, 2014), to which I would now add a tenth class, gig economy precariat, who paradoxically may own one of the means of production such as the car needed to become an Uber driver, but the precariat doesn’t own the controlling means of production, which is the Uber platform.

As a consequence, all the profits flow to the owners of the platform. Since the gig economy is not traditional hourly employment, there is no employer-provided security at all.

My taxonomy of class in America:

1. The Deep State.

2. The Oligarchs.

3. New Nobility.

4. Upper Caste.

5. State Nomenklatura.

6. The Middle Class.

7. The Working Poor.

8. State Dependents.

9. Mobile Creatives.

To which we add a new category of the working poor who lack even the minimal security of the conventional Working Poor (such as Amazon fulfillment center workers):

10. Gig economy precariat.

For the purposes of today’s discussion, let’s focus on the conflicts between four classes:

1. The Central State, which includes the elected government, the permanent Deep State, the Federal Reserve and and the managers/technocrats who run the State Nomenklatura.

2. The owners of Capital and political influence (The Oligarchs and New Nobility).

3. The Upper Caste, the top 10% of the private sector.

4. The lower classes of wage-earners and state dependents.

It comes as no surprise that there is no class conflict between the State and the Oligarchs / New Nobility since ours is a state-corporate system in which the state enforces the privileges of the super-wealthy /corporations, as the political class depends on the owners of capital for campaign contributions. In return, the super-wealthy and corporations are awarded tax breaks and subsidies which lower their tax burdens below the rates paid by wage-earners.

The conflicts between the Central State and the Upper Caste which pays the majority of income taxes is sharpening. While Social Security taxes weigh heavily on lower-income workers, the bottom 50% pay almost no federal income taxes and those between 51% and 89% pay a modest percent of all income taxes.

Unlike the managers/technocrats of the State Nomenklatura who are guaranteed benefit and pensions (since the state can always print the money to pay them), the private-sector Upper Caste must rely on 401Ks and their own private wealth–all of which is exposed to the hazards of state actions (raising taxes, firing up inflation, etc.) and whatever market forces are still outside the control of the Federal Reserve.

The Upper Caste resents the heavy taxes they pay as the state fails to provide even the basics of security and infrastructure. From the point of view of the Upper Caste, the state provides substandard education for their children, potholed roadways, modest Social Security and no healthcare until retirement (Medicare).

Upper Caste entrepreneurs resent the heavy regulatory burdens and the privileges lavished on corporations and the super-wealthy.

The Upper Caste also resents the Oligarchs and New Nobility who pay a lower percentage of their income in taxes. The Financial Aristocracy can work the tax system to report income as capital gains (a much lower rate than earned income) and use a vast cornucopia of tax breaks and subsidies to reduce their tax burden.

The wage-earning lower classes resent the Upper Caste and the Oligarchs for obvious reasons, but they also resent the State dependents, many of whom live better than those working one of America’s tens of millions of low-paid, few-benefits jobs.

You might expect State dependents to love their servitude, but they have reasons to resent the State as well. Dependency breeds resentment, and this is exacerbated by loads of paperwork (imposed to weed out fraud and scammers) and the general inadequacy of many state benefits.

Meanwhile, the state managers/technocrats and politicos live in the same bubbles as the New Nobility. (The Oligarchs live in a much more rarified bubble, of course.) For these Protected Few, the system works great for me so it must work great for everyone else. Alas, it only works for the top slice of American society which vigorously maintains the bubble separating it from the coarse realities of the bottom 80%.

In summary, class wars are the inevitable result of an economic system in which anything goes if you’re rich enough and winners take most. While the working poor are recruited to fight and die in the Imperial Project, the super-wealthy focus on philanthro-capitalist foundations which are simply non-profit extensions of their for-profit power.

Social Mobility between classes has decayed, and people grasp this. Go ahead and do all the right things–borrow a fortune to get a college degree, build your resume with low-paying jobs working ridiculous hours, and so on, and eventually conclude you’re a precariat just like everyone else. Maybe a better paid precariat, or maybe a poorly paid precariat, but that narrow band is all the Financial Mobility you’re ever going to get.

The winners in this system are protected by the State, while the losers are stripmined by crushing taxes or humiliated by their abject dependence on the state. Even if they don’t understand the exact mechanisms of financial control–the Federal Reserve’s bag of tricks, for example–they understand the rich get richer and the state protects them from the lower classes.

The danger to the state is not who rebels but who opts out. Outright rebellion suits the state, as it can turn its monopoly on force on the citizenry. But when those keeping everything glued together have had enough and find a way to quit, the entire system starts unraveling in ways the state is powerless to stop.

If the Upper Caste starts opting out, the private sector loses its tax donkeys and managerial expertise. If what remains of the middle class opts out, what’s left of America’s civic glue disappears.

If the working poor opt out, the scut work required to provide the upper classes with their comforts will not get done. (Hey, Mr. State Bureaucrat and Mr. Financier, here’s a saw and a knife. Butcher your own meat.)

Those trapped in the lower reaches of America’s class system might decide to follow Johnny Paycheck and Take This Job And Shove It (2:31). Becoming a dependent of the State is looking better all the time.

State Nomenklatura managers/technocrats also have reasons to opt out. Their efforts to keep the whole thing glued together are not appreciated, for as I’ve noted here before, governing in an era of unraveling discord is no longer fun.

Conflicts within the upper reaches of the Deep State are also deepening as those seeking to extend the status quo regardless of cost are meeting resistance from camps who recognize the impossibility of maintaining the current trajectory of soaring inequality and the infinite demands of the Imperial Project.

There’s only so much inequality and unfairness an over-promised populace can bear, and America is well past that point.

To those who claim “people can’t afford to quit,” just watch. Those who’ve had enough will find a way to opt out. There’s plenty of woodwork to disappear into.

Here’s a chart of the Oligarchy and New Nobility’s skim of virtually all gains in the economy. 

Anything goes if you’re rich enough and winners take most.

*  *  *

My recent books:

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World ($13)
(Kindle $6.95, print $11.95) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 (Kindle), $12 (print), $13.08 ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).

*  *  *

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

One month after credit card giant Capital One Financial disappointed investors after reporting losses more than $1 billion for the second consecutive quarter (with 80% of revenue coming from net interest income, of which 60% comes from the card business, the top line was hit really hard), there was more bad news. According to Bloomberg, Capital One – which is perhaps most exposed to the financial state of the US middle class of all US financial companies – is cutting borrowing limits on credit cards, and reining in its exposure as the U.S. reduces support for millions of unemployed Americans.

“Capital One periodically reviews accounts based on a variety of factors and may make changes to existing credit lines,” the company told Bloomberg.

Capital One, which is third-largest US credit card lender after JPMorgan and Citigroup, has been at the forefront of offering cards to people with riskier profiles, which while boosting the company’s value during expansions, has made it especially sensitive to economic downturns. Its management of credit is watched closely as a harbinger of what’s to come at other major banks according to Bloomberg, and sure enough the latest numbers were woeful: shortly after it slashed its dividend from 40 cents to just 10 cents, the company added reserves of $2.7BN in Q2, on top of the $3.6BN it added in the first quarter, making reserves 6.7% of total loans outstanding (in theory,t This should be enough to weather net charge-offs around 350bps per year in the next two years).

And while the company’s 2008-2010 average was higher at around 450bps, peaking at over 500bps in 2010, the company has benefited from forbearance programs as customers are deferring auto payments but continue to pay down their credit cards, which also means less net interest income. Indeed, net interest income fell 9% QoQ (-5% YoY) as margins narrowed, making the company’s NIM contraction was the worst among large peers. Margins nosedived 100bps QoQ to 5.78% – the lowest in the past decade.

All of that prompted the company to take aggressive measures ahead of what appears to be an almost certain double dip should fiscal stimulus not be extended in the immediate future. As Bloomberg notes, suspense has been mounting in the credit card industry in recent weeks, as Congress and President Donald Trump’s administration deadlocked on extending $600 in additional weekly unemployment benefits. That assistance has helped millions of households keep up with debts as the pandemic sent unemployment soaring above 10%. As we showed recently, spending by unemployed people who claim ongoing unemployment assistance from regular state programs – which amounts to some 14.5 million people – has tumbled since the July 31 fiscal cliff.

That sharp drop in benefits raises the risk for banks that some cardholders won’t be able to make ends meet through the pandemic, maxing out credit limits as they spiral into bankruptcy.

To an extent, Capital One’s move was expected: card lenders have been warning for months that rapidly shifting outbreaks and shutdowns have left them in the dark on which customers have lost work or their jobs, making it difficult for executives to assess risks. “I don’t think we have a rigorous measure of how many of our current borrowers are unemployed,” Capital One Chief Executive Officer Richard Fairbank said last month.

“There are a lot of people that are in different degrees of unemployment right now.”

To protect itself from the coming crunch, Capital One is doing the opposite of what corporations did in the immediate aftermath of the covid shutdowns, when countless companies drew down on their available revolvers to maximize liquidity. Unfortunately, for millions of ordinary Americans who rely on their credit cards to make ends meet, their borrowing base just got slashed.

The reduction in borrowing capacity set off a swift outcry on social media. Some customers have complained in recent days their limits have been slashed by a third to two-thirds, eroding their ability to borrow in an emergency during a pandemic or potentially hurting their credit scores. A spokesman declined to specify how many people are affected.

In recent days, Capital One’s customers have flocked to platforms such as Twitter to complain after receiving emails with an “important update” on their account that turned out to slash their ability to borrow. Some were told their limits are being aligned with past spending patterns. Messages from Capital One explained users could still borrow “significantly above your highest balance over the last two years,” essentially allowing them to continue using cards as they have.

Capital One is hardly unique: card issuers, learning from past downturns, often trim or close inactive credit lines to avoid becoming a borrower’s lender of last resort. This year, they have also been offering lower limits on new accounts.

“We have been tightening credit at the margin as we have felt for some time that we are in late credit cycle,” Discover Financial Services Chief Executive Officer Roger Hochschild said in April. “But given the present environment, we are adopting a significantly more cautious view.”

But what is most paradoxical about this situation is that even as the Fed cut rates to all time lows, a boon to companies which have borrowed a record $1.4 trillion in the investment grade bond market, if hurting savers who once again receive no income on their savings accounts, credit card interest rates remain at all time highs, just around 17%.

Bizarrely, the fact that credit card rates remain stratospheric for millions of Americans even as corporate borrowing rates have never been lower, has not been address by either the Fed – which allegedly is so worried about inequality – nor US politicians. Meanwhile, the Fed continues to directly purchase bonds of some of the biggest companies in the world including Apple, Berkshire, cutting their cost of capital even lower.

Some have suggested that instead of the Fed buying AAA-rated corporate bonds from companies which can sell massively oversubscribed debt in the open market, a simple solution is to simply backstop Capital One’s credit card receivables. That way Capital One would not have to cut its limits, and it would also be able to cut rates assuring more people can end up affording to pay down their interest. Unfortunately, since the tens of millions of subprime Capital One credit card holders can’t afford to lobby Congress or have a direct line to the Marriner Eccles building, this will never happen.

Authored by Michael Klare via TomDispatch.com,

With Covid-19 incapacitating startling numbers of U.S. service members and modern weapons proving increasingly lethal, the American military is relying ever more frequently on intelligent robots to conduct hazardous combat operations. Such devices, known in the military as “autonomous weapons systems,” include robotic sentries, battlefield-surveillance drones, and autonomous submarines. So far, in other words, robotic devices are merely replacing standard weaponry on conventional battlefields.

Now, however, in a giant leap of faith, the Pentagon is seeking to take this process to an entirely new level — by replacing not just ordinary soldiers and their weapons, but potentially admirals and generals with robotic systems.

Admittedly, those systems are still in the development stage, but the Pentagon is now rushing their future deployment as a matter of national urgency. Every component of a modern general staff — including battle planning, intelligence-gathering, logistics, communications, and decision-making — is, according to the Pentagon’s latest plans, to be turned over to complex arrangements of sensors, computers, and software. All these will then be integrated into a “system of systems,” now dubbed the Joint All-Domain Command-and-Control, or JADC2 (since acronyms remain the essence of military life). Eventually, that amalgam of systems may indeed assume most of the functions currently performed by American generals and their senior staff officers.

The notion of using machines to make command-level decisions is not, of course, an entirely new one. It has, in truth, been a long time coming. During the Cold War, following the introduction of intercontinental ballistic missiles (ICBMs) with extremely short flight times, both military strategists and science-fiction writers began to imagine mechanical systems that would control such nuclear weaponry in the event of human incapacity.

In Stanley Kubrick’s satiric 1964 movie Dr. Strangelove, for example, the fictional Russian leader Dimitri Kissov reveals that the Soviet Union has installed a “doomsday machine” capable of obliterating all human life that would detonate automatically should the country come under attack by American nuclear forces. Efforts by crazed anti-Soviet U.S. Air Force officers to provoke a war with Moscow then succeed in triggering that machine and so bring about human annihilation. In reality, fearing that they might experience a surprise attack of just this sort, the Soviets later did install a semi-automatic retaliatory system they dubbed “Perimeter,” designed to launch Soviet ICBMs in the event that sensors detected nuclear explosions and all communications from Moscow had been silenced. Some analysts believe that an upgraded version of Perimeter is still in operation, leaving us in an all-too-real version of a Strangelovian world.

In yet another sci-fi version of such automated command systems, the 1983 film War Games, starring Matthew Broderick as a teenage hacker, portrayed a supercomputer called the War Operations Plan Response, or WOPR (pronounced “whopper”) installed at the North American Aerospace Command (NORAD) headquarters in Colorado. When the Broderick character hacks into it and starts playing what he believes is a game called “World War III,” the computer concludes an actual Soviet attack is underway and launches a nuclear retaliatory response. Although fictitious, the movie accurately depicts many aspects of the U.S. nuclear command-control-and-communications (NC3) system, which was then and still remains highly automated.

Such devices, both real and imagined, were relatively primitive by today’s standards, being capable solely of determining that a nuclear attack was under way and ordering a catastrophic response. Now, as a result of vast improvements in artificial intelligence (AI) and machine learning, machines can collect and assess massive amounts of sensor data, swiftly detect key trends and patterns, and potentially issue orders to combat units as to where to attack and when.

Time Compression and Human Fallibility

The substitution of intelligent machines for humans at senior command levels is becoming essential, U.S. strategists argue, because an exponential growth in sensor information combined with the increasing speed of warfare is making it nearly impossible for humans to keep track of crucial battlefield developments. If future scenarios prove accurate, battles that once unfolded over days or weeks could transpire in the space of hours, or even minutes, while battlefield information will be pouring in as multitudinous data points, overwhelming staff officers. Only advanced computers, it is claimed, could process so much information and make informed combat decisions within the necessary timeframe.

Such time compression and the expansion of sensor data may apply to any form of combat, but especially to the most terrifying of them all, nuclear war. When ICBMs were the principal means of such combat, decisionmakers had up to 30 minutes between the time a missile was launched and the moment of detonation in which to determine whether a potential attack was real or merely a false satellite reading (as did sometimes occur during the Cold War). Now, that may not sound like much time, but with the recent introduction of hypersonic missiles, such assessment times could shrink to as little as five minutes. Under such circumstances, it’s a lot to expect even the most alert decision-makers to reach an informed judgment on the nature of a potential attack. Hence the appeal (to some) of automated decision-making systems.

“Attack-time compression has placed America’s senior leadership in a situation where the existing NC3 system may not act rapidly enough,” military analysts Adam Lowther and Curtis McGiffin argued at War on the Rocks, a security-oriented website.

“Thus, it may be necessary to develop a system based on artificial intelligence, with predetermined response decisions, that detects, decides, and directs strategic forces with such speed that the attack-time compression challenge does not place the United States in an impossible position.”

This notion, that an artificial intelligence-powered device — in essence, a more intelligent version of the doomsday machine or the WOPR — should be empowered to assess enemy behavior and then, on the basis of “predetermined response options,” decide humanity’s fate, has naturally produced some unease in the community of military analysts (as it should for the rest of us as well). Nevertheless, American strategists continue to argue that battlefield assessment and decision-making — for both conventional and nuclear warfare — should increasingly be delegated to machines.

“AI-powered intelligence systems may provide the ability to integrate and sort through large troves of data from different sources and geographic locations to identify patterns and highlight useful information,” the Congressional Research Service noted in a November 2019 summary of Pentagon thinking.

“As the complexity of AI systems matures,” it added, “AI algorithms may also be capable of providing commanders with a menu of viable courses of action based on real-time analysis of the battlespace, in turn enabling faster adaptation to complex events.”

The key wording there is “a menu of viable courses of action based on real-time analysis of the battlespace.” This might leave the impression that human generals and admirals (not to speak of their commander-in-chief) will still be making the ultimate life-and-death decisions for both their own forces and the planet. Given such anticipated attack-time compression in future high-intensity combat with China and/or Russia, however, humans may no longer have the time or ability to analyze the battlespace themselves and so will come to rely on AI algorithms for such assessments. As a result, human commanders may simply find themselves endorsing decisions made by machines — and so, in the end, become superfluous.

Creating Robot Generals

Despite whatever misgivings they may have about their future job security, America’s top generals are moving swiftly to develop and deploy that JADC2 automated command mechanism. Overseen by the Air Force, it’s proving to be a computer-driven amalgam of devices for collecting real-time intelligence on enemy forces from vast numbers of sensor devices (satellites, ground radars, electronic listening posts, and so on), processing that data into actionable combat information, and providing precise attack instructions to every combat unit and weapons system engaged in a conflict — whether belonging to the Army, Navy, Air Force, Marine Corps, or the newly formed Space Force and Cyber Command.

What, exactly, the JADC2 will consist of is not widely known, partly because many of its component systems are still shrouded in secrecy and partly because much of the essential technology is still in the development stage. Delegated with responsibility for overseeing the project, the Air Force is working with Lockheed Martin and other large defense contractors to design and develop key elements of the system.

One such building block is its Advanced Battle Management System (ABMS), a data-collection and distribution system intended to provide fighter pilots with up-to-the-minute data on enemy positions and help guide their combat moves. Another key component is the Army’s Integrated Air and Missile Defense Battle Command System (IBCS), designed to connect radar systems to anti-aircraft and missile-defense launchers and provide them with precise firing instructions. Over time, the Air Force and its multiple contractors will seek to integrate ABMS and IBCS into a giant network of systems connecting every sensor, shooter, and commander in the country’s armed forces — a military “internet of things,” as some have put it.

To test this concept and provide an example of how it might operate in the future, the Army conducted a live-fire artillery exercise this August in Germany using components (or facsimiles) of the future JADC2 system. In the first stage of the test, satellite images of (presumed) Russian troop positions were sent to an Army ground terminal, where an AI software program called Prometheus combed through the data to select enemy targets. Next, another AI program called SHOT computed the optimal match of available Army weaponry to those intended targets and sent this information, along with precise firing coordinates, to the Army’s Advanced Field Artillery Tactical Data System (AFATDS) for immediate action, where human commanders could choose to implement it or not. In the exercise, those human commanders had the mental space to give the matter a moment’s thought; in a shooting war, they might just leave everything to the machines, as the system’s designers clearly intend them to do.

In the future, the Army is planning even more ambitious tests of this evolving technology under an initiative called Project Convergence. From what’s been said publicly about it, Convergence will undertake ever more complex exercises involving satellites, Air Force fighters equipped with the ABMS system, Army helicopters, drones, artillery pieces, and tactical vehicles. Eventually, all of this will form the underlying “architecture” of the JADC2, linking every military sensor system to every combat unit and weapons system — leaving the generals with little to do but sit by and watch.

Why Robot Generals Could Get It Wrong

Given the complexity of modern warfare and the challenge of time compression in future combat, the urge of American strategists to replace human commanders with robotic ones is certainly understandable. Robot generals and admirals might theoretically be able to process staggering amounts of information in brief periods of time, while keeping track of both friendly and enemy forces and devising optimal ways to counter enemy moves on a future battlefield. But there are many good reasons to doubt the reliability of robot decision-makers and the wisdom of using them in place of human officers.

To begin with, many of these technologies are still in their infancy, and almost all are prone to malfunctions that can neither be easily anticipated nor understood. And don’t forget that even advanced algorithms can be fooled, or “spoofed,” by skilled professionals.

In addition, unlike humans, AI-enabled decision-making systems will lack an ability to assess intent or context. Does a sudden enemy troop deployment, for example, indicate an imminent attack, a bluff, or just a normal rotation of forces? Human analysts can use their understanding of the current political moment and the actors involved to help guide their assessment of the situation. Machines lack that ability and may assume the worst, initiating military action that could have been avoided.

Such a problem will only be compounded by the “training” such decision-making algorithms will undergo as they are adapted to military situations. Just as facial recognition software has proved to be tainted by an over-reliance on images of white males in the training process — making them less adept at recognizing, say, African-American women — military decision-making algorithms are likely to be distorted by an over-reliance on the combat-oriented scenarios selected by American military professionals for training purposes. “Worst-case thinking” is a natural inclination of such officers — after all, who wants to be caught unprepared for a possible enemy surprise attack? — and such biases will undoubtedly become part of the “menus of viable courses of action” provided by decision-making robots.

Once integrated into decision-making algorithms, such biases could, in turn, prove exceedingly dangerous in any future encounters between U.S. and Russian troops in Europe or American and Chinese forces in Asia. A clash of this sort might, after all, arise at any time, thanks to some misunderstanding or local incident that rapidly gains momentum — a sudden clash between U.S. and Chinese warships off Taiwan, for example, or between American and Russian patrols in one of the Baltic states. Neither side may have intended to ignite a full-scale conflict and leaders on both sides might normally move to negotiate a cease-fire. But remember, these will no longer simply be human conflicts. In the wake of such an incident, the JADC2 could detect some enemy move that it determines poses an imminent risk to allied forces and so immediately launch an all-out attack by American planes, missiles, and artillery, escalating the conflict and foreclosing any chance of an early negotiated settlement.

Such prospects become truly frightening when what’s at stake is the onset of nuclear war. It’s hard to imagine any conflict among the major powers starting out as a nuclear war, but it’s far easier to envision a scenario in which the great powers — after having become embroiled in a conventional conflict — reach a point where one side or the other considers the use of atomic arms to stave off defeat. American military doctrine, in fact, has always held out the possibility of using so-called tactical nuclear weapons in response to a massive Soviet (now Russian) assault in Europe. Russian military doctrine, it is widely assumed, incorporates similar options. Under such circumstances, a future JADC2 could misinterpret enemy moves as signaling preparation for a nuclear launch and order a pre-emptive strike by U.S. nuclear forces, thereby igniting World War III.

War is a nasty, brutal activity and, given almost two decades of failed conflicts that have gone under the label of “the war on terror,” causing thousands of American casualties (both physical and mental), it’s easy to understand why robot enthusiasts are so eager to see another kind of mentality take over American war-making. As a start, they contend, especially in a pandemic world, that it’s only humane to replace human soldiers on the battlefield with robots and so diminish human casualties (at least among combatants). This claim does not, of course, address the argument that robot soldiers and drone aircraft lack the ability to distinguish between combatants and non-combatants on the battlefield and so cannot be trusted to comply with the laws of war or international humanitarian law — which, at least theoretically, protect civilians from unnecessary harm — and so should be banned.

Fraught as all of that may be on future battlefields, replacing generals and admirals with robots is another matter altogether. Not only do legal and moral arguments arise with a vengeance, as the survival of major civilian populations could be put at risk by computer-derived combat decisions, but there’s no guarantee that American GIs would suffer fewer casualties in the battles that ensued. Maybe it’s time, then, for Congress to ask some tough questions about the advisability of automating combat decision-making before this country pours billions of additional taxpayer dollars into an enterprise that could, in fact, lead to the end of the world as we know it.

Maybe it’s time as well for the leaders of China, Russia, and this country to limit or ban the deployment of hypersonic missiles and other weaponry that will compress life-and-death decisions for humanity into just a few minutes, thereby justifying the automation of such fateful judgments.