Pitchforks, Brainwashing And The Mathematics Of Persuasive Deceit

Submitted by Ben Tanosborn

Affluence Economics: Low-Inflation and “Fool” Employment

Numbers don’t lie, the saying goes, but the have-liars are doing their numbers on the gullible have-nots.  And although mathematics is an exact science, it can be used as a practical tool by inexact social scientists working for those trying to influence people at the civic or individual level, call it politics or more accurately, persuasive deceit.

That’s where we have been finding ourselves in the United States for more than three decades, sporting a government of the powerful affluent, whether ran by the apostles of Tweedledee, or the disciples of Tweedledum, lying to the citizenship in all aspects that matter, be it their security, human rights or economic health. 

We might think that Washington is as pitchfork-worthy today as France was in 1787, or Tsarist Russia in 1917; however, we are still likely a few leagues away from the igniting point that sparks a true revolution, where reality sets in and replaces the mirage created by economic-political brainwashing.  Not quite there yet, the number of people struggling to put food on the table, although increasing at an accelerating pace, still only represents about 20 percent of those privileged in not having to receive SNAP (Supplemental Nutrition Assistance Program) benefits… those contemptible, dignity-stripped food stamps.

In the US we live in two interconnected economic worlds; however, we are brainwashed into believing we are a single, if diverse, society, with one economy, one flag, and one common destiny.  But we are not; we are a 2-tier society of haves and have-nots with two distinct economies operating side by side.  Two economies that must be measured separately if we dare face the economic and social realities that separate us from being one people, one nation… rancor and anger dividing us even when saluting the very same flag.  Still blaming that odious One Percent of capitalists, Knights of Our Economy, when we should be blaming the culprits in all of this, the Nineteen Percent of troglodyte lackeys serving in their roles of squires, helping to keep our downtrodden hoi polloi in check… and we all know who the squires are; what many of those squires don’t seem to understand is the precariousness of being a squire, and how prone they are to join the ranks of the have-nots… as the 80-20 rule becomes 85-15, then 90-10.  Perhaps then our revolution will get to ignite, bringing a more benign form of capitalism to this nation, and not the predatory, in your face capitalism which enslaves us today.     

Just in time to celebrate Independence Day, our illusionist government came out with “great ‘job numbers’” to keep the fireworks flying high, exploding in spectacular multi-colored brightness, lifting our spirits of eternal hope for a “recuperated” economy following course to a Dow Industrials that would surpass the 17,000 mark on the day 288,000 jobs were said to be added by employers to their payrolls, 73,000 more than economists had predicted.  Five straight months with job creation exceeding 200,000; the unemployment rate dropping all the way to 6.1 percent, the lowest level in almost six years, and a radiant and jubilatory Wall Street which has restored the pre-recession lost value to the Squires’ 401k’s. 

But all of this hoopla is an exercise in farce-economics, stats in Affluence Economics that have little to do with the economic condition of the have-nots, where unemployment rates, jobs created and rate of inflation need to be extracted from other data applicable to them, stats that reflect Have-nots Economics, not Washington’s generic bullshit.

Jobs created and rate of unemployment need to have realistic basis, not the joke that it is today where stats for underemployed or chronically unemployed are not part of the picture.  According to OECD (Organization for Economic Co-operation and Development) we are now at Full Employment here in the US since the measured unemployment level is within the 4 to 6.4% range.  “Fool” employment, I feel, since US true unemployment rate (if properly measured) is probably in the 15 to 20% range.

But where have-nots are brutally-penalized most is in the measurement of inflation, as much of their revenue comes from fixed sources (retirement, social benefits, etc.) that use those inflation figures, nowadays 50 to 200 percent off the mark, since the basket of goods consumed by the poor is totally different from that of the affluent 20 percent.  A 25 percent increase in food prices may not be that meaningful to that remaining middle class, but it is critical to those at the poverty level, or even 10-20 percent higher.  Where the government has told us we have averaged a 1.9 annual rate of inflation in the past four years, for the have-nots the figure is probably closer to 6 percent (over 200 percent more).  Great savings for our illusionist government now able to invest more money in weapons for the Pentagon!          

We needn’t worry about terrorism coming to America from outside our borders; we are seeding terrorism right here, in our “land of opportunity” garden, an extremely bitter plant of discontent that will make terrorists of our neighbors and poison us all.

Happy Independence Day to the Haves, and a

Happy Dependence Day to the Have-nots!




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Pro-Russian Rebels Flee Slavyansk After “Massive Shelling”, Demand Putin’s Help To Avoid “Genocide”

Pro-Russian separatist forces have been forced to retreat from their stronghold in Slavyansk following “massive shelling” in the early morning from Ukraine’s ‘anti-terrorist’ forces. Armored vehicles entered the city and the rebels, according to RT, decided to move back to their headquarters in Kramatorsk to ‘prepare’ in advance for further offensives. Just days after the cease-fire was lifted, newly-appointed Defense Minister Valery Heletey commented the “order to free Slaviansk from the (separatist) fighters has been carried out,” but pro-Russian supporters are not done yet and exclaimed: “Pass on these words to Putin: the people of the Donbass believed him for some reason when he said he would help. But now they (government forces) are killing peaceful civilians and if that is not genocide I would like to know what is.”

 

 

As Reuters reports,

Government forces recaptured a flashpoint area of eastern Ukraine from pro-Russian rebels on Saturday, and Ukraine said its blue and yellow flag was flying again over what had been the separatist redoubt of Slaviansk.

 

A Reuters reporter saw a convoy of about 20 military transport vehicles and buses filled with armed rebels driving out of Kramatorsk where they had gone after apparently earlier fleeing Slaviansk 20 km (12 miles) to the north.

 

“Your order to free Slaviansk from the (separatist) fighters has been carried out,” newly-appointed Defense Minister Valery Heletey was quoted by the presidential website as telling Ukrainian President Petro Poroshenko.

 

 

 

 

“A significant number of militants have left Slaviansk … along the way, our battle groups are greeting them. They are suffering losses and surrendering,” he said in a statement on his Facebook page.

As RT reports, according to Channel One’s information “there was massive shelling” and then armored vehicles entered Slavyansk and street fighting began. That’s when the self-defense forces took the decision to leave the city, the channel said.

“Despite the massive shooting, the fighters stormed out of the city and headed for neighboring Kramatorsk. Part of their hardware was shot down in the process,” the channel said.

Prime Minister of the Donetsk People’s Republic, Aleksandr Boroday, explained…

“Our troops have consolidated at the reserve lines of defense, in an organized way and having kept their weaponry. We were prepared for this option, as we have to face tens of thousands of Kiev’s military men and hundreds of armored weaponry units – which means almost all the battle-ready Ukrainian army,” Boroday said.

 

 

“Taking into account the ‘scorched earth’ tactics employed by Kiev’s punitive forces, and the strategy of genocide toward the Donbass population, we declare that every hour of military action claims civilians’ lives,” Boroday said.

This followed impassioned pleas for help late last week…

Igor Strelkov, a Muscovite appointed as defense minister of the self-declared Donetsk People’s Republic, said without Moscow’s aid the region the rebels lay claim to, known as Novorossiya (New Russia), would fall to Kiev’s forces.

 

“Slaviansk will fall earlier than the rest,” he wrote on a rebel website.

 

 

“Pass on these words to (Russian President Vladimir) Putin: the people of the Donbass believed him for some reason when he said he would help. But now they (government forces) are killing peaceful civilians and if that is not genocide I would like to know what is.

 

“The (rebel) fighters are without shoes and don’t have anything to fight with.”

So far the only actions taken by Russia are to stop selling arms to Ukraine…

The Russian Foreign Ministry announced Saturday that Moscow is halting the process of delivering weapons, Ukrainian military forces’ equipment and funds from the territory of Crimea to Kiev authorities due to their military actions in the east, which have resulted in the “deaths of civilians, including children, and civilian infrastructure in Donetsk and Lugansk regions being destroyed.

 

“The decision will be valid until a full ceasefire in the east of Ukraine by the country’s military and until a peaceful solution is reached,” Russia’s Foreign Ministry said.

*  *  *

As the tensions shift from blood in the streets to energy-wars centred around Austria, Bulgaria, the South Stream, new ‘targeted’ sanctions, and a potential German-Russia alliance, one wonders just how long before Putin must act.




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Marc Faber Asks: Is “Big Government” Thwarting Economic Growth?

Submitted by Marc Faber of The Gloom, Doom, and Boom report,

Science fiction author Frank Herbert opined that,

“All governments suffer a recurring problem: Power attracts pathological personalities.”

Friedrich Hayek thought that,

“the more the state ‘plans’ the more difficult planning becomes for the individual,”

and John Stuart Mill wrote already in Principles of Political Economy (1848) that,

“In all the more advanced communities the great majority of things are worse done by the intervention of government, than the individuals most interested in the matter would do them, or cause them to be done, if left to themselves.”

Economist Richard Rahn, the eponymous creator of the Rahn Curve, makes the connection between the rate of economic growth and the size of government.

The Rahn Curve suggests there is an optimal level of government spending (as a share of GDP) that maximizes the rate of economic growth. As government begins to rise from zero percent of GDP, initially it spends to protect life, liberty and property; as this happens the economy surges. When government makes people safe, enforces contracts, protects liberty and enforces property rights great things begin to happen. As government continues increasing, it next spends on infrastructure. Such spending further accelerates economic growth. It is clear that a little government does a lot of good. At this point government’s share of GDP is between 10% and 20%. From its founding to circa 1930, total US government spending was around 10% on the Rahn Curve.

In general, I have great sympathy for the Rahn Curve, which essentially states that the larger the government becomes beyond a certain point (about 20% of GDP) the slower economic growth will be.

Under the influence of the neo-Keynesian interventionists and the professors at the Fed, the public has been brainwashed into believing that governments can revive economic growth. But as Ronald Reagan pointed out,

“Government is not a solution to our problem, government is the problem.”

Barry Goldwater warned that,

“The government that is big enough to give you all you want is big enough to take it all away.”




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For All The Bond Bears Banking On Inflation

It’s common sense – everyone knows that interest rates are going to rise (how can they fall any lower?) Inflation will come back (because the Fed said so), economic growth will flourish (because the Fed said so), and longer-term bond yields will surge in a bond-bull-destroying renaissance proving stock market speculators right all along. Except that isn’t what history shows us… When a central bank dominates the domestic bond market, all bets are off (whether economically rational or not). When a sovereign simply cannot afford higher interest rates, all bets are off (no matter what your economic textbook says).

 

Source: JPMorgan

 

Simply put – this is not your father’s bond market anymore.




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Ukraine: Government Reportedly Wins Battle for Sloviansk

The war in eastern Ukraine
continues, but it appears that the pro-western government forces
today won a significant battle in Sloviansk, which has been a major
stronghold for the Russian and pro-Russian separatist forces.

Reuters
reported
the latest on the situation several hours ago:

A Reuters reporter saw a convoy of about 20 military transport
vehicles and buses filled with armed rebels driving out of
Kramatorsk where they had gone after apparently fleeing Slaviansk
20 km (12 miles) to the north.

About 100-150 Ukrainian troops patrolled the center of Slaviansk
and some soldiers were bringing out weapons and ammunition from one
of the administration buildings the rebels had been using as a
headquarters.

The military
reportedly
carried out a bombing campaign throughout much of
the night.

“Due to the overwhelming numerical superiority of the enemy our
men were forced to abandon their positions,” acknowledged Alexander
Borodai, the self-proclaimed prime minister of the self-described
People’s Republic of Donetsk. Among the fighters for the “people’s
republic” are, apparently, Chechen mercenaries among other hired
guns.

BBC’s David Stern provides some analysis of the
situation:

Of the government’s victories so far, the retaking of Sloviansk
and raising of the Ukrainian flag over city hall is by far the most
significant. The city was not just a command center for the
insurgency – it was a symbol of the militants’ continuing ability
to thwart Kiev’s attempts to reassert control in the east.

Now, it appears that the insurgents may also be evacuating
Kramatorsk, another key city. But the question is whether this is a
turning point in the war, or merely a shifting of the
battlefield.

The president, who on Tuesday declared the end of
failed ceasefire,
has ordered the nation’s flag to be flown over the city of over
100,000 residents, which had been under rebel control since
mid-April. 

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Taliban Sets 400 ‘NATO-Supplying’ Oil Tankers Ablaze In Afghanistan

With the “Islamic State” grabbing all the headlines, it appears the Taliban have had enough. As Reuters reports, Taliban insurgents set fire on Saturday to about 400 oil tanker trucks supplying fuel for NATO forces in an attack just outside the Afghan capital Kabul, police said. It was unclear how the fire was started. Some Afghan media reported that insurgents had fired rockets at the tankers late on Friday. The attack precedes Monday’s preliminary announcement of Afghanistan’s presidential election winner – in which both sides have accused the other of mass fraud. The Taliban had vowed to disrupt the process.

 

 

 

And the aftermath…

 

 

As Reuters reports,

Television footage showed black smoke billowing above the site of the attack, with the charred wreckage of dozens of trucks scattered around a vast parking space.

 

The Taliban claimed responsibility for the attack, saying the trucks carried fuel intended for U.S.-led NATO forces.

 

It was unclear how the fire was started. Some Afghan media reported that insurgents had fired rockets at the tankers late on Friday. There were no immediate reports of casualties.

Stunning video of the blaze…

*  *  *

ahh, democracy! More boots on the ground needed back in Afghanistan?




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California Town Wants to Send Immigrants Back, But WSJ’s Jason Riley Makes the Case to Let Them In

Residents of Murrieta, California filled a high school gym on
Wednesday night to protest the arrival of 140 immigrants from Texas
facilities. On Tuesday protestors blocked a bus filled with
immigrants from entering a Border Patrol facility in Murrieta
(approx. 81 miles southeast of Los Angeles)—forcing officials to
re-route the detainees to Chula Vista where some were hospitalized
for scabies and fever. 

The current crisis on the border (an
estimated 100,000 children and young adults are expected to enter
the country this year
) illustrates the broken immigration
system in our country. While the Obama administration and Congress
have failed thus far to tackle any serious immigration reform, the
Wall Street Journal’s Jason L. Riley says we should
consider an open borders approach to dealing with
immigration. 

The WSJ columnist sat down with Nick Gillespie in 2008
to dispel some of the myths of immigration that he outlines in his
book, “Let
Them In: The Case for Open Borders.”
Original air date was
August 4, 2008 and the original writeup is below. 

The title of Jason L. Riley’s new book helps explain why it has
proven so controversial: Let Them In: The Case for Open
Borders.

Let Them In is as exhaustively researched as it is eminently
readable, Riley, a member of The Wall Street Journal’s editorial
board runs through all the anti-immigration arguments at play in
today’s heated political world—and finds them wanting.

Riley sat down earlier this summer with reason.tv’s Nick
Gillespie to discuss the leading myths about the causes and effects
of immigration.

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Productivity Can Return If The Central Banks Would Give It A Chance

Commodity-king Andy Lees (ex-UBS and current manager of ALM Macro) explains that today’s declining global productivity is and was always a consequence of government policy of taxing productivity in favor of social transfers. The gradual dumbing down of capitalism and move towards social democracy over the last 50 years relied on building a Ponzi scheme of financial innovation to keep the illusion alive. But, he offers hopefully, system dynamics of the natural environment (how land that was once lost to the desert by over taxing it can be returned to a productive use) offer hope that this ponzi trend can be broken.

As Andy Lees writes,

This video looks at the system dynamics of the natural environment, and how land that was once lost to the desert by over taxing it can be returned to a productive use.

 

 

To do so you need to put the land aside stopping all animals feeding on the land. Immediately you get back grasses which forms a perennial root system which allows microbial communities to live. The grasses stop the sunlight irradiating and sterilizing the land, and instead the root system allows rainfall to be absorbed into the land rather than washing it away. The system becomes accumulative rather than dis-accumulative system of less micro matter, less biomass, less water and less “biodiversity”, all of which sounds very familiar to today’s economy.

 

All systems work similarly. Unfortunately today’s economic equivalent is the declining global productivity resulting in factor mobilization and the consumption of the so-called Mises Reserve fund, or productive surplus generated in excess of the scarce resources needed to sustain a society’s capital and existing standard of living, that is being depleted. The economy is in this dis-accumulative phase which means the slowing productivity of recent years and declining productivity of last year will compound at an increasing pace unless the economy is allowed to restructure. Without productivity, the growth we have today is unsustainable , but the good thing is, it can be turned around.  Unfortunately a lot of today’s deserts highlight that societies are not willing to make the short term sacrifice for the long term gain.

As Andy concluded previously,

The positive is that the present mess is of our own making, and that it can be reversed if we so choose. Growth is not being constrained by a technology frontier, but rather by the systematic misallocation of the factors of production that has been central to government and social philosophy. By transferring capital from productive to unproductive uses, we are altering the time preference for money and thereby borrowing directly from the future. Given that the difficulty of scientific advancement gets harder and harder, and needs more energy and more computational power and thinking to get over that hurdle, there is a limited amount of time before the present system of factor mobilisation or horizontal expansion has consumed down our balance sheet to the point that advancement is no longer possible. Whilst I think and hope that is still a long way off, the closer we get to that level, the greater the rationing of capital away from present unproductive uses will have to be. Marginal policy change will have less and less impact.

 

The system has to change. The issue is whether government and ultimately society can survive during the change; whether the public can unite behind a leadership that can implement tough decisions and allocate capital productively, or whether further sacrifice will be needed first, and how that sacrifice may come.

* * *

What will it take for someone to choose short-term pain as the necessary solution to longer-term destruction?




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California Highway Patrol Investigating Police Beating Caught on Video, Like They Always Do

Happy Independence Day. Here is a cellphone video shot last
Tuesday showing one of California’s finest assaulting a woman
walking along a freeway meridian:

The California Highway Patrol is on it, because that’s standard
operating procedure.
Via NBC Los Angeles
:

“The California Highway Patrol (CHP) just became aware of the
video today and we are investigating the entire
incident,” according to the statement. “As a matter of policy,
every time there is a use of force by our officers, there is a
review conducted to determine whether the use of force was
appropriate.  That will be done in this case, however, since
there is an ongoing investigation, it would be premature to comment
on this specific video segment. After the investigation is
completed it will be reviewed at multiple levels within the
Department.”

The CHP did not immediately say what prompted the initial
encounter.

No arrests appear to have been made, naturally.

h/t BakedPenguin

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ISIS Head Makes First Video Appearance

A few days ago we reported that the blitz surge of the “cool”, social network-friendly faction of Al-Qaeda known as ISIS, which over the past week went so far as to declare the formation of its own sovereign state, the Islamic State on the territory of Iraq and Syria, has so irked not only the conventional enemies of extremist fundamentalist Islam but also none other than al-Qaeda itself, which as we explained before may be forced to go to war against ISIS in order to preserve its waning relevance, status and credibility.

At the center of this rapid and dramatic ascent by a group virtually nobody had heard of as recently as a month ago is a man called Aby Bakr al-Baghdadi, who unlike the leaders of al-Qaeda, has kept an extremely low profile despite his recent appointment as “caliph” by the jihadists.

Until now.

As BBC reports, Abu Bakr al-Baghdadi, the leader of Islamist militant group Isis, has called on Muslims to obey him, in his first video sermon. The video appears to have been filmed on Friday during a sermon at the al-Nouri Mosque in Mosul, northern Iraq. It surfaced on Saturday amid reports that he had been killed or wounded in an Iraqi air raid.

The release is notable because the reclusive militant leader has never appeared on video before, although there are photographs of him.

From BBC:

In the sermon, at Mosul’s most famous landmark, Baghdadi praised the establishment of the “Islamic state”, which was declared by Isis last Sunday.

 

“Appointing a leader is an obligation on Muslims, and one that has been neglected for decades,” he said.

 

He also said that he did not seek out the position of being the caliph, or leader, calling it a “burden”. “I am your leader, though I am not the best of you, so if you see that I am right, support me, and if you see that I am wrong, advise me,” he told worshippers.

In other words, his first video was merely an ideological and emotional appeal to Muslims everywhere to side with him. It remains to be seen if Baghdadi will transform into just another typical Muslim blaming the sorry economic state of his country on Bush, something al Qaeda and others have done before him.

For those curious to see Baghdadi’s complete video appearance, it is shown below in its entirety.

 

Baghdadi’s full speech, translated courtesy of Francois Gatete, is below.




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