“They have started to win in a number of cities and they have, in my view, not given the proper support to the police.“
That is the warning that Attorney General William Barr has for Americans, as he told Fox News’ Martha MacCallum in a recent interview that liberal billionaire George Soros has been bankrolling radical prosecutor candidates in cities across the country.
“There’s this recent development [where] George Soros has been coming in, in largely Democratic primaries where there has not been much voter turnout and putting in a lot of money to elect people who are not very supportive of law enforcement and don’t view the office as bringing to trial and prosecuting criminals but pursuing other social agendas,” Barr told Martha MacCallum.
Specifically, Barr warned that if the trend continues, it will lead to more violent crime, ading that the process of electing these prosecutors will likely cause law enforcement officers to consider whether the leadership in their municipality “has their back.”
“They can either stop policing or they can move to a jurisdiction more hospitable,” he said.
“We could find ourselves in a position that communities that are not supporting the police may not get the police protection they need.”
The Washington Post recently reported that while two Virginia prosecutorial candidates – funded by Soros’ Justice and Public Safety PAC – have never prosecuted a case in a state court, they beat candidates with more than 60 years of experience between them.
The Attorney General of Virginia stepped into the fray yesterday with an opinion on the validity of Second Amendment Sanctuaries that have sprung up across the state in response to draconian gun control legislation. He said that the Second Amendment Sanctuary resolutions have no legal force and that municipalities will have no choice but to enforce the unconstitutional laws, should the bill be turned into law in January.
But is this actually true? Or is it just a statement meant to discourage dissent? Digging into this, it seems that it’s certainly not as cut and dried as the AG would have us all believe.
This article will be filled with lots of quotes from pertinent legal documents. I’m not an attorney so I’m just laying out my findings. The emphasis throughout is mine.
You can draw your own conclusions.
The Official Statement
Let’s start out with what AG Mark Herring had to say.
The Virginia Constitution, the Code of Virginia, and established common law doctrines all bear on these questions.
First, the Constitution of Virginia provides that all local authority is subject to the control of the General Assembly. For example, Article V Il, Section 2 of the Constitution provides that “[t]he General Assembly shall provide by general law for the . powers . of counties, cities, towns, and regional governments.”[1]
Second, the Code of Virginia establishes the supremacy of state law over local ordinances and policies. Section 1-248 provides:
The Constitution and laws of the United States and of the Commonwealth shall be supreme. Any ordinance, resolution, bylaw, rule, regulation, or order of any governing body or any corporation, board, or number of persons shall not be inconsistent with the Constitution and laws of the United States or of the Commonwealth.[[2][3][4])
As the Virginia Supreme Court has explained, because local authority is subordinate to state law, “local ordinances must conform to and not be in conflict with the public policy of the State as embodied in its statutes.
Third, established common law doctrines specifically limit the authority of local governments. Virginia follows the Dillon Rule, which provides that local governments may exercise “only those powers expressly granted by the General Assembly, those necessarily or fairly implied therefrom, and those that are essential and indispensable. The Dillon Rule is one of strict construction: “[I]f there is a reasonable doubt whether legislative power exists, the doubt must be resolved against the local governing body. Thus, when a Virginia locality seeks to take any action, the Dillon Rule applies “to determine in the first instance, from express words or by implication, whether a power exists at all. If a locality cannot identify a reasonably specific source of delegated authority, “the inquiry is at an end” and the act in question is unauthorized.
These constitutional, statutory, and common law doctrines establish that these resolutions neither have the force of law nor authorize localities or local constitutional officials to refuse to follow or decline to enforce gun violence prevention measures enacted by the General Assembly.
l . By their own terms, these resolutions have no legal effect. Although the resolutions typically contain several “Whereas” clauses, the “be it resolved” clauses generally do not purport to take any concrete action. 15 Instead, the operative clauses: (a) “express[]” the “intent” of the locality’s Board of Supervisors “to uphold the Second Amendment rights of [the county’s] citizens,” (b) “express[]” the Board’s “intent that public funds of the [clounty not be used to restrict the Second Amendment rights of the [county’s] citizens,” and (c) “declare[]” the Board’s “intent to oppose” any “infringement” or “restrictions” of their residents’ Second Amendment rights using “such legal means [as] may be expedient, including without limitation, court action. These general statements do not direct or require any specific result, and any suggestion of potential future action is entirely speculative.
It also bears emphasis that neither local governments nor local constitutional officers have the authority to declare state statutes unconstitutional or decline to follow them on that basis. “All actions of the General Assembly are presumed to be constitutional. Furthermore, it has long “been the indisputable and clear function of the courts, federal and state, to pass upon the constitutionality of legislative acts. It follows from these well-established principles that all localities and local constitutional officers are required to comply with all laws enacted by the General Assembly unless and until those laws are repealed by the legislature or invalidated by the judiciary.
Nor may localities or local constitutional officers decline to enforce laws enacted by the General Assembly on the theory that requiring them to do so would “commandeer” local resources. Although the United States Supreme Court has held that “the Federal Government may not compel the States to implement . . . federal regulatory programs, that doctrine derives from the specific limitations on Congress’s legislative powers and the “residuary and inviolable sovereignty” retained by the states in our federal system. 25 In contrast, “the Constitution of Virginia is not a grant of legislative power to the General Assembly,„ 26 and, unlike Congress, [tlhe authority of the General Assembly shall extend to all subjects of legislation” not specifically “forbidden or restricted” by the State Constitution. 27 And neither the Federal Constitution nor Virginia law recognizes any “anti-commandeering” principle that allows localities or local constitutional officers to refuse to participate in the enforcement of state law.28
Conclusion
It is my opinion that these resolutions have no legal effect. It is my further opinion that localities and local constitutional officers cannot nullify state laws and must comply with gun violence prevention measures that the General Assembly may enact. (source)
You can read Herring’s entire opinion and get the citations here.
What is the Dillon Rule?
This is a rule of government embraced by 39 states.
Dillon’s Rule is derived from written decision by Judge John F. Dillon of Iowa in 1868. It is a cornerstone of American municipal law. It maintains that a political subdivision of a state is connected to the state as a child is connected to a parent. Dillon’s Rule is used in interpreting state law when there is a question of whether or not a local government has a certain power. Dillon’s Rule narrowly defines the power of local governments.
The first part of Dillon’s Rule states that local governments have only three types of powers:
-those granted in express words,
-those necessarily or fairly implied in or incident to the powers expressly granted, and
-those essential to the declared objects and purposes of the corporation, not simply convenient, but indispensable.
The second part of Dillon’s Rule states that if there is any reasonable doubt whether a power has been conferred on a local government, then the power has NOT been conferred. This is the rule of strict construction of local government powers. (source)
Virginia set a precedent with Dillon’s Rule back in 1896 and is considered one of the strictest states for the rule. It has been applied consistently ever since, taking power from local governments and centralizing it at a state level.
However…
It’s important to note that Dillon’s Rule is no more a law than Second Amendment Sanctuary resolutions. It’s a philosophy, albeit one that has consistently been applied in the Virginia Supreme Court for 125 years.
The Dillon Rule was adopted by the Virginia Supreme Court 120 years after Virginia declared its independence and created its first constitution. The rule is not a law passed by the General Assembly, and it was not based on a specific section in the 1869 state constitution that was in effect when the court ruled on the Winchester arson reward lawsuit.
The Virginia Supreme Court did not violate the separation of powers and somehow create a new law when adopting the Dillon Rule. Instead, when the court cited the Iowa justice’s rulings, it created the legal framework for interpreting the legality of many laws passed by state and local governments.
The framework has empowered the General Assembly and limited the authority of local governments. Judge Dillon’s legal philosophy was based on the assumption that local government was less competent and more corrupt than state government. However, that ignores the professionalization of local government since 1896. (source)
Dillon’s Rule can be federally preempted, too.
The American University Law Review published a paper regarding the Dillon Law in regard to sanctuary states and cities that were acting in defiance of federal immigration laws.
The issue of federal preemption of state law is a complex and prevalent topic in the immigration debate today,and the issue is relevant to Dillon’s Rule because it could be argued that preempts the outcome of a Dillon analysis in this context.
Furthermore, the issue of preemption is particularly tricky here because Dillon’s Rule deals with what the law does not say, rather than an express provision of state law in conflict with federal law. Under preemption principles, where state and federal law conflict, federal law governs. However, where there is no conflict, state law applies. (source)
The question here is whether federal law would conflict with state law enough to preempt Dillon’s rule.
Does the Dillon Rule override the power of County Sheriffs?
County sheriffs are often considered the last against unconstitutional legislation, with the authority to defy even federal law.
Historically, some sheriffs have not only enforced the laws; they have also decided which laws not to enforce. They view this as protecting the people from the intrusions of the federal government.
The “constitutional sheriff” movement is comprised of current and former members of law enforcement who believe that sheriffs are the ultimate authority in their jurisdiction—even above federal law enforcement…
…While it may seem like a fringe movement, it is prevalent enough to be taken seriously. In 2013, 500 sheriffs agreed not to enforce any gun laws created by the federal government. In Utah, almost all elected sheriffs signed an agreement to protect the Bill of Rights—and fight any federal officials who tried to limit them. [Robert Tsai / Politico] (source)
In 2013, Sheriff John D’Agostini of El Dorado County, California, famously kicked a federal agency out of his county.
“The U.S. Forest Service, after many attempts and given many opportunities, has failed to meet that standard.”
The sheriff has sent a letter to the US Forestry Service stating officers will no longer be able to enforce state law in his county.
“The U.S. Forest Service, after many attempts and given many opportunities, has failed to meet that standard.”
CBS 13 in Sacramento contacted a law professor to ask him if the sheriff’s actions are legal.
“Looks to me as though the sheriff can do this,” he said. “They don’t have state powers in the first place, but essentially the sheriff can deputize individuals to have authority in his or her jurisdiction.”
Fact: federal agencies do not have state powers. Due to the Constitution’s structure of dual sovereignty, the feds have no authority to enforce state laws. Furthermore, states cannot be compelled to enforce federal laws. (source)
So does that mean that Dillon’s Rule does or does not apply to county sheriffs? It’s complicated.
This Comment argues that Dillon’s Rule, a doctrine which limits the authority of cities, towns, and other localities to act unilaterally without authorization from the state legislature, creates a barrier to the enforcement of the 287(g) agreements currently in place between sheriffs’ offices and the federal government. Specifically, Dillon’s Rule precludes sheriffs from entering 287(g) agreements without authorization from the state legislature, rendering these agreements invalid in most cases. Accordingly, when an individual is detained or otherwise deprived of liberty or due process under an invalid 287(g) agreement, constitutional protections should apply. (source)
Wouldn’t depriving gun owners of their Second Amendment rights fall under the category of something constitutionally protected?
AG Herring’s statement contradicts a 2014 opinion.
Attorney General Herring’s current opinion seems politically biased since he has previously rendered more than one opinion at odds with this statement. House Majority Leader C. Todd Gilbert (R) said:
“Attorney General Herring’s opinion is interesting, as it directly contradicts his own statements and actions regarding the supremacy of state law over the preferences of the officials who must enforce them,” Gilbert states in a news release. “In 2014, Herring declined to defend Virginia law in state court, despite a statutory duty to do so.”
Gilbert adds that Herring told the Richmond Times-Dispatch: “…If I think the laws are adopted and constitutional, (then) I will defend them…”
“His opinion today notes that ‘it has long been the indisputable and clear function of the courts … to pass upon the constitutionality of legislative acts,’” Gilbert states. “This not only conflicts with his previous statement about his own conduct, but also the position of a number of Democratic commonwealth’s attorneys regarding (the) prosecution of marijuana possession.
“I look forward to the Attorney General following up with the Commonwealth’s Attorneys and Commonwealth’s Attorneys-elect in Arlington, Fairfax, Loudoun, Portsmouth, and Norfolk about the supremacy of state law over the policy preferences of local elected officials,” Gilbert adds. (source)
Gilbert also provided another example of inconsistency.
Todd Gilbert, R-Shenandoah, the current majority leader in the House of Delegates who will serve as minority leader in the next legislative session, issued a statement Friday afternoon drawing attention to what he sees as a contradiction between the sanctuaries opinion and Herring’s previous decision to not defend Virginia’s ban on same-sex marriages when Herring concluded the prohibition was unconstitutional, despite what Gilbert argues was a statutory requirement to do so. (source)
That certainly does seem inconsistent with a “rule of strict construction.”
Virginians are unlikely to back down over the AG’s opinion.
Virginians are outraged at the prospective new laws and many gun owners are openly defiant. Counties, cities, and municipalities across the state are decrying the unconstitutional new laws and they are getting organized.
This is a battle of wills that’s being watched closely around the country. Where Virginia goes, the nation will follow, whether that’s compliance or outright refusal.
Gun control advocates may have chosen the wrong state as a testing ground. The state government seems to have underestimated the unflinching resolve of rural residents. So far, despite the state government’s threats and posturing, Virginians seem unbowed and gun owners across the nation are supporting them.
Steven Mnuchin Explains Why $1.5 Trillion In $100 Bills Have Disappeared
Last week we reported that something strange was going on at the same time that central banks are injecting $100 billion each month in electronic money to crush volatility and ramp markets: a similar amount in physical currency and precious metals was literally disappearing.
The mystery, in a nutshell, was as follows: while banks are printing more bank notes than ever, these seem to be “disappearing off the face of the earth” and nobody knows where or why, or as the WSJ notes, “central banks don’t know where they have gone, or why, and are playing detective, trying to crack the same mystery.”
And while readers can read up much more on the topic of disappearing hard assets here, a few days after, Fox Business picked up on this thread, writing that almost $1.5 trillion of the world’s physical cash, with $100 dollar bills making up the vast majority, was reportedly unaccounted for.
So what happened to the money?
To get to the bottom of this mystery, this was the question FOX Business anchor Lou Dobbs asked the man who literally signs every single US dollar bill, Treasury Secretary Steven Mnuchin. The response” “Literally, a lot of these $100 bills are sitting in bank vaults all over the world,” Mnuchin said.
Mnuchin pointed to the negative interest rates causing people to turn to American dollars as a solid investment.
The dollar is the reserve currency of the world, and everybody wants to hold dollars,” Mnuchin said on “Lou Dobbs Tonight.” “And the reason why they want to hold dollars is because the U.S. is a safe place to have your money, to invest and to hold your assets.”
Mnuchin said it’s interesting that, in a increasingly digital world, “the demand for U.S. currency continues to go up.” adding that “there’s a lot of Benjamins all over the world.”
Actually, it’s not that interesting: the world’s growing appetite for physical assets such as paper dollars and gold, coupled with the continued interest in cryptocurrencies and other traditional currency alternatives, merely confirms that faith in artificially levitated markets is approaching a tipping point. Meanwhile the world’s “top 0.001%ers” continue to quietly cash out, literally, and put their Benjamins in secret vaults in the middle of somewhere, even as central banks do everything in their power to reduce the amount of physical currency in circulation and replace it with easily trackable digital alternatives.
As we reported back in August, there are now more $100 bills in circulation than $1 bills, according to data from the Federal Reserve, which found there are more $100s than any other denomination of U.S. currency. And as an indication of just how much demand there is for physical stores of value, consider this: the number of bills featuring a picture of Benjamin Franklin has about doubled since the start of the recession.
In 2018, the Federal Reserve Bank of Chicago illustrated a correlation between low interest rates and high currency demand, though it also noted outside factors could help explain swelling demand.
The bank estimated that 80% of all $100 bills last year were actually in circulation in foreign countries, and explained that residents in other countries, particularly those with unstable financial systems, often use the notes as a safe haven.
The section on missing dollar bills begins 7’30” into the Mnuchin interview.
It’s not just US dollar that are disappearing, however.
Few are as perplexed by the fate of the missing cash as the German central bank: according to the Bundesbank more than 150 billion euros are being hoarded in Germany. This has led the European Central Bank, and others, to ask the public for help.
“Everyone says that they are not hoarding cash but the money is clearly somewhere,” said Henk Esselink, head of the issue and circulation section in the ECB’s currency management division.
“People hide their money everywhere,” said Sven Bertelmann, head of the Bundesbank’s National Analysis Centre in Mainz, Germany. Sometimes bank notes are buried in the garden, where they start decomposing, or hidden in attics, where they are used by mice for building nests. “It happens again and again that people keep money in an envelope and then they shred it by mistake,” Bertelmann said. “We pick up the bank notes with tweezers and then start to put them together, like a jigsaw puzzle.”
Australia’s central bank says its best guess is that only around a quarter of the bank notes in circulation are used for everyday transactions. Up to 8% of cash is used in the shadow economy—tax avoidance or illegal payments—while as much as 10% could have been lost. That is $7.6 billion Australian dollars ($5.2 billion) missing at the beach or in couch cushions…Or simply lost in a “boating accident” to avoid the taxman until the rainy days arrive.
The biggest use of cash is as a store of wealth “in safes, under beds and at the back of cupboards, both here in Australia and elsewhere around the world,” Mr. Lowe, the RBA governor, said.
Swiss National Bank officials likewise found that hoarding of Swiss francs jumped around the year 2000, likely motivated by fear of the Y2K bug infecting computer systems, the bursting of the dot-com bubble, the September 11 terrorist attacks and introduction of the euro. The financial crisis that began in 2007 encouraged people to stash even more.
Meanwhile, with a financial crisis looming – and getting closer by the day – for some countries, such as New Zealand, making money disappear is becoming a national pastime. Around a third of New Zealand’s new bank notes headed overseas in 2017, up from 6% four years earlier. That happened around the time that tourism overtook dairy as the country’s main export money-spinner, leading officials to speculate on the role played by currency exchanges, especially in Asia.
The trail mostly ran cold after that. The bank could only identify the whereabouts of around 25% of New Zealand’s cash. The rest, of about 75%, has disappeared.
“Our sense is that we’re in the same boat as a lot of other central banks out there,” said Christian Hawkesby, assistant governor at the RBNZ. “We can’t fully explain why holdings of cash are rising and where they are going.”
Bloomberg Recommends Virtue Signaling Elites Atone For Private Jet Use With Carbon Credits
Are you a rich, virtue-signaling hypocrite experiencing ‘eco-guilt’ for bouncing all over world in a private jet while condemning others for their vastly smaller carbon footprint?
Fear not, BloombergNews has you covered.
To atone for your carbon sins – particularly if you just can’t bring yourself to fly commercial (private jets emit as much as 20x more carbon dioxide per passenger) – simply snap up some carbon credits! In addition to convincing yourself you’re not a hypocrite, you’ll be prepared for awkward interview questions in Aspen after igniting 400 gallons of jet fuel to shuttle your entourage to next year’s film festival.
Beware of scams, however, as only Carbon credits which truly benefit the planet should only be purchased from ‘well-established NGOs.’
If you have the money, the easiest way is to pay for carbon credits. To make sure you’re investing in a project that will truly benefit the planet, look for credits from groups that well-established nongovernmental organizations support. Gold Standard, which NGOs including the WWF created, has issued more than 100 million carbon credits from about 700 projects worldwide. For example, you can offset a ton of CO2 by donating $18 to a reforestation effort in East Timor or by giving $15 to a program that provides fuel-efficient stoves for women in North Darfur. –Bloomberg
More Q&A for the curious (Via Bloomberg)
How do I know how much I need to offset?
It depends on factors such as the amount of fuel burned and the altitude reached in flight. “People are put off by the fact they can go to different calculators and get different estimates of what that footprint of their flight would be,” Leugers says. “The reality is there are different levels of calibration.” One “finely calibrated” online calculator for commercial flights is from German nonprofit Atmosfair, she says. The unique details involved with a personal jet trip mean you’ll probably need to call in your own expert.
Can I use biofuel for my jet?
If you can find it. The 15 million liters (almost 4 million gallons) of aviation biofuel produced in 2018 accounted for less than 0.1% of total aviation fuel consumption, says the International Energy Agency. The IEA noted on its website in March that only five airports have regular biofuel distribution—Bergen, Norway; Brisbane, Australia; Los Angeles; Oslo; and Stockholm. Biofuels are also costlier. The aviation industry says this might eventually be resolved with ramped-up production of biofuels from cheap and plentiful feedstocks such as agricultural waste.
Can I just buy an electric private plane?
There are already small two- and four-seater electric planes in the air. Something comfier, in the 50-seat range, might be ready for short-haul flights by 2027, says Bertrand Piccard, co-founder of Solar Impulse, a solar-powered aircraft project. “Sixty-six years after the Wright Brothers, they put people on the moon,” he says. “That shows how fast innovation can go.”
A Funny Thing Happened As The Fed Cut Rates: Credit Card Rates Hit All Time Highs
Something “odd” happened as the Fed prematurely ended its rate hike cycle and cut rates 3 times starting this summer: while banks were quick to trim the interest they pay on deposits to match the Fed’s cuts (and in the case of some “retail banks” like Goldman, even cut ahead of the Fed) they pushed the rates they charge on credit cards to all time highs.
And while we are confident such stalwart defenders of Fed policy as supportive of US consumers (instead of, say, US banks) as Neel Kashkari will be quick to explain how it is that rate cuts have resulted in higher credit card interest rates, and why the Fed is doing nothing to reverse this latest handout from consumers to banks, here are some more charts from Deutsche Bank showing that after carrying the US economy for the past year (as we reported on Friday, consumption account for more than 100% of the GDP growth in Q3), this may soon be ending.
First, it’s not just credit card rates that are surging – so are auto loan interest rates, and while they have yet to hit all time highs, they have risen by a material 2% in 2018 and also are showing no signs of reversing.
Worse, while bank auto loan rates have yet to hit cycle highs, when it comes to rates charged by finance companies, they are back to levels seen when the Fed Funds rates was about 3% higher.
One explanation for the relentless creep higher in rates banks charge consumers is that delinquency rates are also rising, and sure enough, that’s exactly what’s going on, although one would think that the 75bps cut this year would find at least some pass through to end markets. Alas, that is not the case.
Meanwhile, despite the recent surge in car loan delinquencies which is also fast approaching record levels, finance companies are allowing increasingly broke US consumers to take out ever longer loans and leases in order to make the monthly payments smaller while tacking on mandatory payments to the tail end, which has risen to as much as five and a half years.
And as maturities get ever longer, so total loan sizes rise to new all time highs, allowing OEMs to keep hiking average prices to new records. After all, why comparison shop and look for deals when one can just charge it and worry about the price the next billing cycle, and the next, and the next… with compounding interest.
Shifting away from cars, and looking at the broader consumer loan category, something ominous is taking place here too: after hitting an all time low 3 years ago, the number of defaults has spike, even as the increasingly unreliable and seasonally adjusted unemployment rate remains near all time lows.
Finally, while the big banks – which carefully season and select their portfolios have barely seen their credit card delinquency rates increase, the same can not be said for most US commercial banks that are not among the 100 largest: it is here that the next American delinquency crisis will hit first, because as noted here previously, delinquency rates among America’s small and medium banks are effectively at all time highs.
And so it came to pass, that in the deep state’s frenzy of electoral desperation, the ‘impeachment’ card was played. The hammer has fallen. Nearly the entirety of the legacy media news cycle has been dedicated to the details, and not really pertinent details, but the sorts of details which presume the validity of the charges against Trump in the first place. Yes, they all beg the question. What’s forgotten here is that the use of this process along clearly partisan lines, and more – towards clearly partisan aims – is a very serious symptom of the larger undoing of any semblance of stability in the US government.
The fact that the impeachment is dead in the water, by Pelosi’s own admission, is evident in Trump’s being adamant that indeed it must be sent to the Senate – where he knows he’ll be exonerated. But even if it doesn’t go to the Senate, what we’re left with still appears as a loss for Democrats. Both places are his briar patch. This makes all of this a win-win for team Trump.
Only in a country that produces so much fake news at the official level, could there be a fake impeachment procedure made purely for media consumption, with no real or tangible possible victory in sight.
For in a constitutional republic like the United States, what makes an impeachment possible is when the representatives and the voters are in communion over the matter. This would normally be reflected in a mid-term election, like say for example the mid-term Senatorial race in 2018 where Democrats failed to take control. Control of the Senate would reflect a change of sentiment in the republic, which in turn and not coincidentally, would be what makes for a successful impeachment.
Don’t forget, this impeachment is fake
Nancy Pelosi is evidently extraordinarily cynical. Her politics appears to be ‘they deserve whatever they believe’. And her aim appears to be the one who makes them believe things so that they deserve what she gives them. For little else can explain the reasoning behind her claim that she will ‘send the impeachment to the Senate’ as soon as she ‘has assurances and knows how the Senate will conduct the impeachment’, except that it came from the same person who told the public regarding Obamacare that we have to ‘We have to pass the bill so that you can find out what is in it.”.
In both cases, reality is turned on its head – for rather we will know how the Senate intends to conduct its procedure as soon as it has the details, which substantively includes the impeachment documents themselves, in front of them, and likewise, legislators ought to know what’s in a major piece of legislation before they vote either way on it. Pelosi’s assault on reason, however, isn’t without an ever growing tide of resentment from within the progressive base of the party itself.
We have quickly entered into a new era which increasingly resembles the broken political processes which have struck many a country, but none in living memory a country like the US. Now elected officials push judges to prosecute their political opponents, constitutional crises are manufactured to pursue personal or political vendettas, death threats and rumors of coups coming from media and celebrities being fed talking points by big and important players from powerful institutions.
This ‘impeachment’ show really takes the cake, does it not? We will recall shortly after Trump was elected, narrator for hire Morgan Freeman made a shocking public service announcement. It was for all intents and purposes, a PSA notifying the public that a military coup to remove Trump would be legitimate and in order. Speaking about this PSA, and recounting what was said, would in any event read as an exaggeration, or some allegorical paraphrasing made to prove a point. Jogging our memories then, Freeman spoke to tens of millions of viewers on television and YouTube saying:
“We have been attacked. We are at war. Imagine this movie script: A former KGB spy, angry at the collapse of his motherland, plots a course for revenge – taking advantage of the chaos, he works his way up through the ranks of a post-soviet Russia and becomes … president.
He establishes an authoritarian regime, then he sets his sights on his sworn enemy – the United States. And like the KGB spy that he is, he secretly uses cyber warfare to attack democracies around the world. Using social media to spread propaganda and false information, he convinces people in democratic societies to distrust their media, their political processes, even their neighbors. And he wins.”
This really set the tone for the coming years, which have culminated in this manufactured ‘impeachment’ crisis, really befitting a banana republic.
It would be the height of dishonesty to approach this abuse of the impeachment procedure as if until this moment, the US’s own political culture and processes were in good shape. Now isn’t the time for the laundry list of eroded constitutional provisions, which go in a thousand and one unique directions. The US political system is surely broken, but as is the case with such large institutions several hundreds of years old, its meltdown appears to happen in slow motion to us mere mortals. And so what we are seeing today is the next phase of this break-down, and really ought to be understood as monumental in this sense. Once again revealed is the poor judgment of the Democratic Party and their agents, tools, warlords, and strategists, the same gang who sunk Hillary Clinton’s campaign on the rocks of hubris.
Nancy Pelosi also has poor judgment, and these short-sighted and self-interested moves on her part stand a strong chance of backfiring. Her role in this charade is duly noted. This isn’t said because of any disagreement over her aims, but rather that in purely objective terms it just so happens that her aims and her actions are out of synch – that is unless she wants to see Trump re-elected. Her aims are her aims, our intention is to connect these to their probable results, without moral judgments.
The real problem for the Democrats, the DNC, and any hopes for the White House in 2020, is that this all has the odor of a massive backfire, and something that Trump has been counting on happening. When one’s opponent knows what is probable, and when they have a track record for preparing very well for such, it is only a question of what Trump’s strategy is and how this falls into it, not whether there is one.
Imagine being a fly on the wall of the meeting with Pelosi where it was decided to go forward with impeachment in the House of Representatives, despite not having either sufficient traction in the Senate or any way to control the process that the Senate uses.
It probably went like this:
‘We’ll say we impeached him, because we did, and we’ll say he was impeached. We’ll declare victory, and go home. This will make him unelectable because of the stigma of impeachment. ‘
Informed citizens are aware that whatever their views towards Trump, nothing he has done reaches beyond the established precedent set by past presidents. Confused citizens on the other hand, are believing the manufactured talking points thrown their way, and the idea that a US president loosely reference a quid pro quo in trying to sort a corruption scandal in dealings with the president of a foreign country, is some crazy, new, never-before-done and highly-illegal thing. It is none of those things though.
Unfortunately, not needless to say, the entirety of the direct, physical evidence against Trump solely consists of the now infamous transcript of the phone call which he had with Ukrainian president Zelensky. The rest is hearsay, a conspiracy narrative, and entirely circumstantial. As this author has noted in numerous pieces, Biden’s entire candidacy rests precisely upon his need to be a candidate so that any normal investigation into the wrongdoings of himself or his son in Ukraine, suddenly become the targeted persecution of a political opponent of Trump.
Other than this, it is evident that Biden stands little chance – the same polling institutions which give him a double-digit lead were those which foretold a Clinton electoral victory. Neither their methods nor those paying and publishing them, have substantively changed. Biden’s candidacy, like the impeachment, is essentially fake. The real contenders for the party’s base are Sanders and Gabbard.
The Democratic Party Activist Base Despises Pelosi as much as Clinton
The Democratic Party has two bases, one controlled by the DNC and the Clintons, and one which consists of its energized rank-and-file activists who are clearer in their populism, anti-establishment and ant-corporate agenda. Candidates like Gabbard and Sanders are closest to them politically, though far from perfect fits. Their renegade status is confirmed by the difficulties they have with visibility – they are the new silent majority of the party. The DNC base, on the other hand, relies on Rachel Maddow, Wolf Blitzer, and the likes for their default talking points, where they have free and pervasive access to legacy media. In the context of increased censorship online, this is not insignificant.
Among the important reasons this ‘impeachment’ strategy will lose is that it will not energize the second and larger base. Even though this more progressive and populist base is also more motivated, they have faced – as has the so-called alt-light – an extraordinarily high degree of censorship on social media. Despite all the censorship, the Democrats’ silent majority are rather well-informed people, highly motivated, and tend to be vocal in their communities and places of work. Their ideas move organically and virally among the populace.
This silent majority has a very good memory, and they know very well who Nancy Pelosi is, and who she isn’t.
The silent majority remembers that after years of the public backlash against Bush’s war crimes, crimes against humanity, destruction of remaining civil liberties with the Patriot Act, torture, warrantless search – and the list goes on and on – Democrats managed to retake the lower house in 2006. If there was a legitimate reason for an impeachment, it would have been championed by Pelosi against Bush for going to war using false, falsified, manufactured evidence about WMD in Iraq. At the time, Pelosi squashed the hopes of her own electorate, reasoning that such moves would be divisive, that they would distract from the Democrats’ momentum to take the White House in ’08, that Bush had recently (?) won his last election, and so on. Of course these were real crimes, and the reasons not to prosecute may have as much to do with Pelosi’s own role in the war industry. Pelosi couldn’t really push against Bush over torture, etc. because she had been on an elite congressional committee – the House Intelligence Committee – during the Bush years in office which starting in 2003 was dedicated to making sure that torture could and would become normalized and entirely legal.
It seems Pelosi can’t even go anywhere with this impeachment on Trump today, and therefore doesn’t even really plan to submit it to the Senate for the next stage. The political stunt was pulled, a fireworks show consisting of one lonely rocket that sort of fizzled off out of sight.
Trump emerges unscathed, and more to the point, we are closer to the election and his base is even more energized. Pelosi spent the better part of three years inoculating the public against any significance being attached to any impeachment procedure. Pelosi cried wolf so many times, and Trump has made good on the opportunities handed to him to get his talking points in order and to condition his base to receive and process the scandals in such and such way. This wouldn’t have been possible without Pelosi’s help. Thanks in part to Pelosi and the DNC, Trump appears primed for re-election.
Trump energizes his base, and the DNC suppresses and disappoints theirs. That’s where the election will be won or lost.
Here’s Why The Reflation Trade Is Doomed And Will Die Some Time Around April
One of the big “hopes” heading into 2020 and the new decade, is that the reflation trade is once again coming back to life as the yield curve has steepened rather dramatically in recent months, commodity prices have quietly strengthened in the last few weeks, with US breakevens rising, cyclical stocks (modestly) outperforming, and China PMI rising to about 50.
Then again, not everyone is buying it. We noted on Friday that as part of Charlie McElligott’s near-term outlook, the quant is fading the reflationary groupthink, largely for tactical, if also several secular reasons.
Then there is the risk of too much reflation. As we noted in a recent article discussing Morgan Stanley‘s cross-asset take on markets in 2019 and its near-term outlook, the bank warned that it was not that long ago, in 2018, when markets viewed a rise in inflation as more problematic. In 2019, every asset has rallied. But in 2018, almost every asset declined, and markets began to worry that excess capacity in the global economy was being used up, or as the bank summarized, “Inflation is a risk to that we need to watch”, which we then paraphrased that “for all those hoping that reflation emerges in 2020 as a dominant theme, be careful what you wish for – you just may get it…”
Others are similarly skeptical: in a note sent out on Friday by Nomura’s “other” quant, Masanari Takada, writes there are three specific things investors should focus on before wading into the Reflation trade.
The first thing is the state of global geopolitical uncertainty, noting that “since the middle of this decade, increased global political uncertainty has put downward pressure on the economy and prices.” Takada thinks the present disinflationary tendency is an extension of this, “with political uncertainty playing a greater role than any concern over the economy itself.” From this angle, Nomura notes that while the first-stage trade deal between the US and China is good news for risk sentiment, there are a number of major political events coming up in 2020, including a prospective second-stage US-China trade deal and the US presidential election. As such, Takada concludes that “the question of whether the first-stage trade deal brings leads to reflationary conditions without a hitch cannot be considered in isolation from these future events.”
The second trigger for jumping into a reflation trade according to Nomura is a more pragmatic one: namely whether trend-chasing CTAs are joining in the reflation trade… which they aren’t. While most CTAs are backing out of disinflation trades (such as long positions in bond futures or short positions in commodities), they have yet to go any further. So unless CTAs start accumulating reflationary trade positions in earnest, “any rises in interest rates or gains in commodity prices that come along may turn out to be short-lived.”
Looking at the benchmark of reflationary inflection points, US Treasuries, CTAs have closed out the bulk of their long positions in major government bond futures markets. If nothing else, Takada thinks that trend-chasing investors no longer have any incentives to continue making disinflation trades that assume downtrending long-term interest rates. That said, CTAs have not yet taken to staking out short positions in bond futures.
Furthermore, currently, CTAs have “square” market-neutral positions in both COMEX copper futures and WTI crude oil futures (and although CTAs have fully liquidated their short positions, they have from that point switched into wait-and-see mode). Of these two CTA positions, the aggregate net position in COMEX copper futures in particular has historically been strongly correlated with global manufacturing momentum (as measured by manufacturing sector PMI readings for the US & China). Although the manufacturing economy does appear to have found a floor, Nomura thinks that CTAs’ present position in copper futures is premised on quicker economic growth than there is currently evidence for.
Last, but certainly not least, Nomura believes that investors thinking of wading into the reflation trade should check whether China is pursuing credit expansion (as we have shown recently, China has nearly given up on an endogenous credit boom). As we have noted repeatedly in previous years (recall the thesis that China’s credit impulse is all that matters for the world originated on this blog), peak periods for the reflation trade have historically tended to be preceded by the proactive expansion of credit by China’s policy authorities (and vice versa). One can think of the performance of long-term holdings in terms of the 24-month Sharpe ratio (risk-adjusted return) for the performance of value over growth (buying value and selling growth) in global equities (MSCI ACWI).
The data show that this Sharpe ratio has been linked to China’s “credit impulse” (change in new credit issued as a percentage of GDP). What becomes apparent here is that the policy response of China’s authorities since the GFC has had a substantial impact on the global credit cycle. It may be difficult to even speak coherently about reflationary conditions taking shape in 2020 without an active effort by China to expand credit. And what is most troubling, is that as the yellow line below demonstrates, China’s credit impulse has barely stirred above its post-crisis lows for two simple reasons: China has too much debt and its financial system is constantly on the edge, and facing a barrage of defaults as a result.
And since any sustainable global reflationary impulse – beyond the initial burst traditionally catalyzed by central banks – always comes from China, anyone hoping that the meager push higher in China’s credit impulse over the past year will be sufficient, will be greatly disappointed.
One final point.
As the following DoubleLine chart shows, the recent curve steepening – for many a proxy of the reflation trade and evidence that it is working – is nothing more than another Fed-created artifact, and the only reason the 3M10Y curve has steepened substantially in recent months is because of the Fed’s QE 4 “NOT QE” has sent the Fed’s balance sheet higher by nearly $400 billion.
And while the return of QE – sorry, never, ever call it QE, the injection of up to $1 trillion in liquidity in 5 months is just to “fix” the broken repo market, pinky swear, cause everything else is just peachy – has once again stirred reflationary animal spirits, there will come a time in early 2020, when the Fed will end this latest gargantuan balance sheet expansion (absent a market crash of course). In fact, according as Morgan Stanley’s Rate Strategists expect, “the Fed will expand its balance sheet through April/May. After that, markets may once again have to confront a world with limited trade progress and no further Fed support.”
In other words, without a Chinese pillar of support, without validation from CTAs, and with the Fed’s “NOT QE” set to end in April, the reflation trade is nothing more than another Fed-created headfake, and has at most another 4 months before financial gravity, and a record $255 trillion in global debt, unleash the deflation trade.
California State Controller Betty Yee admits to paying 49 million bills last year. Yet, she won’t produce a single transaction subject to our public records request for line-by-line state spending.
Out of the 50 states, California is the only one that refuses to produce its state checkbook to our auditors at OpenTheBooks.com. Even though it’s home to Silicon Valley, the state government isn’t letting tech drive transparency when it comes to its own records.
It shouldn’t take subpoenas and litigation to force open the books.
Last year, Yee paid 49 million bills for about $320 billion in payments. If you can make the payment, then you can track the payment. The state controller’s office – whose job it is to stop waste, fraud, corruption, and taxpayer abuse – may be in violation of transparency laws.
In 2013, then-California State Controller John Chang rejected our public records request for the state checkbook telling us: stop asking because the records can’t be located. Today, six-years later – Yee is still parroting the same answer.
So, how is the controller even doing her job without access to the records she helped create? We reached out to Yee for comment, and will update the piece if she responds.
She’s charged with tracking “every dollar spent by the state.” Her duties include paying the bills and all state accounting, bookkeeping, payroll, and auditing– including financial and compliance audits and attestations.
Our objective is to empower citizens, watchdogs, media, politicians, researchers, academics – everyone – with the ability to give oversight to the massive budget. Here are just three critical issues facing the Golden State:
Homeless populations: a 2014 state proposition taxed millionaires to provide funds for mental health services. Did San Francisco – home to 7,500 homeless people – receive its fair share? Last summer, we published an interactive map featuring 130,000 instances of human waste in the public way, which is in part connected to the state’s homeless problem.
Unsustainable public employee pay and pensions: five-years ago, we opened the books and have captured 2 million public employee salary and pension records annually in California. The data shows that lifeguards in Los Angeles County make up to $365,000 per year. There are 10,000 employees in University of California higher education earning more than $200,000.
Corruption: Controller Yee claims that she’s identified more than $4.35 billion in waste, abuse, and fiscal mismanagement of public funds since 2015 – about $1 billion per year. However, state government spent about $1.5 trillion during this period. Yee found only 34 pennies of waste for every $100 spent.
Just 34 pennies of every $100 spent by CA state government was identified as waste, fraud, abuse, or corruption by CA Controller Betty Yee since 2015. OPENTHEBOOKS.COM
It’s time to open the state checkbook.
Since 2005, the state has invested $1.1 billion in accounting software costs. Using this platform, a state agency, Financial Information System For California (FISCAL), promises to publish by September 2020 a full year of state checkbook on a rolling basis – minus approximately $100 billion in spending. When completed, 65-percent of what’s taxed and spent by the state will be online.
It’s a start. However, the FISCAL website will never contain the spending for ten major units of state government including colleges and universities, the California Public Employees’ Retirement System, the state legislature, California State Teachers’ Retirement System, and the office of legislative counsel.
Furthermore, another ten major business units are deferred for years to come. These substantial departments include corrections, rehabilitation, health and human services, the lottery, justice, motor vehicles, water resources, and transportation.
That’s totally unacceptable. We are based in Illinois, which, sadly, is famous for corruption. Our experience tells us that government can hide a lot of taxpayer abuse in $100 billion of non-transparent spending.
In 2012, our organization at OpenTheBooks.com sued then-Illinois Comptroller Judy Baar-Topinka (R) for the state checkbook. In 2018, we sued then-Wyoming State Auditor Cynthia Cloud (R).
Because of our litigation, today, the books in these states are open.
California spends an enormous sum of money. The state spends more than $320 billion per year with federal taxpayers funding $106 billion of it. If we can’t follow the money, then it’s tough to stop the schemes and other public swindles.
Every state across America can produce a complete checkbook of public expenditures. And taxpayers aren’t just dreamin’ to believe that California can produce a full record too.
“This Pattern Is Unusual”: Why Morgan Stanley Thinks 2019 Was One Of The Most Bizarre Years Ever
After a dismal 2018, when the worst December since the Great Depression capped a year for markets when not a single asset class managed to beat inflation, 2019 has been a mirror image, and showed that a lot can change with just one phone call and one Fed capitulation.
Indeed, as Morgan Stanley’s cross-asset strategist Andrew Sheets writes in his year-end review, “2019 will go down as one of the strongest years for global stocks in the last thirty” and adds that “as we head into the holidays, a time full of market retrospectives, we except this raw strength to dominate the narrative”, especially with Trump reminding his tens of millions of followers virtually every day that the S&P has hit all time highs at least 135 times since the 2016 election.
Yet classifying 2019 as simply “strong” is misleading, Sheets explains, noting the year’s gains mask a host of oddities, from the outperformance of defensive assets in a roaring market, to hedge funds getting clobbered and massively underperforming broader equity indexes, to a five-month period that saw no gains for stocks even as interest rates dropped, to an outsized number of 3-sigma moves.
The last point stands in contrast to the false conventional wisdom that 2019 was a “strong, calm, central bank supported year”; instead, 2019 contained quite a few surprises, suggesting underlying liquidity may be more temperamental than currently expected; worse, as Bank of America pointed out last week, “The World’s Most Liquid Stock Market Is Now As Illiquid As It Was In The 2008 Crisis.”
In short, 2019 was one of the most bizarre years ever.
In listing out the ways in which 2019 was a stranger year, Sheets first notes that 2019 was…
The Backwards Year.
The first oddity of 2019 is that both cautious and aggressive investors will likely claim victory. Bulls, because of huge gains in stocks, credit, and Emerging Market fixed income. Bears, because bonds also rallied sharply, and the “alpha”of much of 2019 was in strategies that work when the world is a difficult place. Consider:
Overall, 20yr+ US Treasuries nearly matched the performance of the S&P 500 for the 12 months leading up to December 12, 2019. Through August of this year, long-dated bonds were significantly outperforming stocks. Well into 2019, allocators could have been underweight equities, overweight duration, and outperformed.
In equities, US large caps outperformed small caps by ~7%, defensives outperformed cyclicals by ~1%, and in Europe, utilities, healthcare and “quality” stocks all outperformed in a market that climbed ~23% overall. In fixed income, US BBs outperformed lower-quality CCCs by ~655bp in excess return (i.e., duration-hedged), and ~740bp in total return. In securitized credit, senior CLO tranches outperformed more junior ones. In Emerging Markets, higher-rated sovereigns are generally tighter relative to recent history than their lower-rated counterparts.
This pattern is, as Morgan Stanley says, unusual. In the next chart, Morgan Stanley shows the annual performance of the S&P 500 against the average of four “bullish” strategies: Cyclical vs. defensive equities, small vs. large cap equities, high yield vs. investment grade (total return), and BBs vs. CCCs (excess return). What happened in 2019, is that despite one of the best returns in the S&P in history, bullish strategies underperformed…
… which whiplashed virtually all hedge funds, resulting in the biggest equity outflows on record, and the fewest hedge fund launches since the start of the Millennium.
Or, as Morgan Stanley politely puts it: “In the last 30 years, there are not many that look like 2019.”
2019 Was Also the Year Of Multiple Expansion
Consider this: in 2019, global corporate earnings were down (both abroad and in the US), yet the MSCI ACWI is up 24% and the S&P500 is up almost 30%. Why? Two words: multiple expansion.
Here are the facts: since January 1, 2019, the forward P/E multiple for global equities (MSCI ACWI) has risen ~24%. That’s despite worsening global PMIs, an outright decline in 2019 earnings, and increases in US-China tariff rates over the time period. For the S&P 500, the multiple also increased ~24%.
The narrative this year (with more than a little bit of hindsight) has been that these valuation gains were supported by how much yields declined, as the lack of investment alternatives pushed money into stocks. But history shows the risks to this logic. In exhibit 8, Morgan Stanley has plotted the annual change in global equity valuations against the annual change in US 10yr yields. There is little (if no) correlation.
Meanwhile, equity fund flow show that record amounts of money came out of stocks in 2019!
And while the second higher forward PE multiple expansion on record did miracles for stocks in 2019…
… next year will be payback time. As Sheets puts it, “multiple expansion matters because it raises the pressure for companies to deliver on estimates in 2020.”
Which brings us to what has become somewhat of a trademark for Morgan Stanley in recent years: the bank’s unrepentant bearishness. Because while the bank believes that outside the US, “a combination of better macro and micro trends will help earnings for stocks in Korea, Japan, Brazil, Spain and the UK meet or beat expectations, fundamental improvement that can support or even expand current valuations”, for US equities, however, the bank believes that its 0% EPS forecast for 2020 growth “will disappoint expectations, prevent further multiple expansion, and ultimately drive a modest contraction in the multiple, leaving the S&P 500 at ~3,000 by 4Q20.“
* * *
If that’s not enough, another way to look back at 2019, is that it was “a year in three acts”, or as Sheets puts it, there really were three distinct phases. Considering global equities:
1. Act I: A powerful rally from depressed valuations and sentiment, as the Federal Reserve made a dramatic reversal to its policy guidance (January 1 – April 30)
2. Act II: A volatile period of no gains for five months, as the market worried about a lack of trade progress and continued weakness in global data (May 1 – September 30)
3. Act III: A “year end” rally driven by hope that at least ‘phase one’ of the US-China trade deal could be completed, and balance sheet expansion from both the Fed and ECB
Charted, these acts look as follows:
Why are the three acts important?
Because as Morgan Stanley explains, it’s common to hear that equities and credit will be well supported as long as interest rates are low. But “Act II” demonstrates a clear, and very recent, threat to this notion, showing that markets can certainly stall given low rates if earnings growth disappoints and central banks offer little in the way of new policy.
In fact, one can argue that only the “troubles in the repo market” which started in September, and triggered a nearly $400 billion expansion in the Fed’s balance sheet, including the launch of QE4, permitted the recent surge in stocks. More on that later.
Going back to “Act II”, Morgan Stanley finds ominous similarities between this phase and its own 2020 forecast, in which it sees no S&P 500 earnings growth, no incremental progress on trade after phase one, and no incremental easing measures by G4 central banks (beyond what is already announced).
That sounds a lot like “Act II”, and we note that our forecasts for next year (-6.0% to our year-end S&P 500 target of 3000), credit spreads (+123bp to our year-end high yield target) and range-bound US Treasury yields have some broad similarities to this phase of 2019.
A slightly more optimistic take can be extracted from Act III, which helps quantify risks around trade…: With “Act III” driven in part by increased confidence about a US-China trade deal, Sheets thinks rolling back the performance of “Act III” is a reasonable way to think about levels if trade tensions re-emerge. While the recently announced “phase one” deal was a bit better than the bank’s (if not Goldman’s) expectations, it was a little worse than what the market was expecting, and still contains key unknowns. Importantly, the bank’s Public Policy team remains skeptical about further progress, noting a significantly higher degree of difficulty in the issues that remain.
…and central bank policy: Trade optimism was one driver of the market’s rally since October. Central bank easing was another. The ECB ramped up its bond purchases, but more importantly, the Fed began expanding its balance sheet again to address a perceived shortage in system reserves.
And here is the $64 trillion question: Morgan Stanley expects the Fed to expand its balance sheet through April/May. “After that, markets may once again have to confront a world with limited trade progress and no further Fed support.” As Sheets concludes, “given the importance that markets have assigned to both trade and Fed policy this year, “sell in May and go away” could be very relevant in the year ahead.
One final risk looking ahead, and as hinted by “Act III” is that “reflation” could become “inflation”, as commodity prices have quietly strengthened in the last few weeks, with US breakevens rising, cyclical stocks outperforming, and China PMI rising to about 50.
For now, investors remain skeptical of a sustained rise of G3 inflation, or would welcome it as it would be seen as a sign of better growth and returning normality. Our economic forecasts also have inflation rising in 2020, but central banks effectively embracing that rise with no change in policy. But as Sheets reminds us, “it is not that long ago, in 2018, when markets viewed a rise in inflation as more problematic. In 2019, every asset has rallied. But in 2018, almost every asset declined, and markets began to worry that excess capacity in the global economy was being used up. Inflation is a risk to that we need to watch.” In other words, for all those hoping that reflation emerges in 2020 as a dominant theme, be careful what you wish for – you just may get it…
We all slid out of the womb an itty bitty helpless information sponge into a world full of mentally ill giants who couldn’t wait to fill our tiny skulls with all of their inner demons. And now everything, understandably, is fucked.
That’s basically our whole entire situation in a nutshell. You can add on as many extra details as you like — plutocracy, corruption, mass media propaganda, billionaire wine cave fundraisers, whatever — but ultimately our plight is due to the fact that every single human showed up on this planet completely helpless and knowing nothing, forced to trust crazy giants to give them the grand introductory tour.
Why were those giants crazy? Well you see, they got here the same way you did: small, slippery and completely clueless, surrounded by enormous gibbering lunatics who were all in a mad rush to teach them how to be insane.
And those giants came into the world under the exact same circumstances, as did the giants who came before them, and the giants who came before them, and so on.
It’s a grand old tradition of ours, ultimately stretching all the way back to our own evolutionary birth in this world and the emergence of a massive cerebral cortex in a mammal who up until that point had been primarily concerned with sneaking in a snack and a quick shag in between mad sprints away from sharp-fanged predators. This newfound capacity for complex abstract thought burst onto this frantic, confusing scene and was quickly seized and manipulated by the cleverer primates.
And thus human madness was born.
The most powerful early humans were the cleverest humans, the ones who understood how to use this new capacity for language and abstract thought to their own advantage. They realized that by simply saying something is true in a sufficiently confident way, they could persuade the less clever humans to treat it as true.
Those clever humans used this newfound ability to place themselves in charge, and to make a bunch of rules to be passed down from generation to generation proclaiming that the less powerful humans must submit to the more powerful humans. Over the generations these rules became more and more numerous and complex, weaving in moralism, codes of filial piety, and insane, power-serving religions glorifying meekness, obedience and poverty.
These power-serving rule sets were picked up and used to justify highly traumatizing behavior in the service of the powerful, from wars to genocides to institutionalized torture and brutal executions of the disobedient, and just within domestic power structures the institutionalized normalization of spousal rape and physical abuse in households all around the world.
This eons-long tidal wave of deep trauma and power-serving rules structures passed from generation to generation to generation picking up more and more demented flotsam and jetsam as it went along, to ultimately come crashing down upon your crowning head as you emerged from your mother’s body.
That is your legacy. That is everyone’s legacy. Countless generations of cumulative madness, washed into the present moment on a current of eons of exploitation and senseless cruelty stretching all the way back to the dawn of our species on this planet.
This heritage of madness is funneled straight into our sponge-like brains from the moment we emerge from the womb and all the way through an extremely traumatic and confusing ordeal known as childhood, after which we are handed the keys to the world and told “You’re an adult now. You’re in charge. See if you can figure out how to run this place better than we did.”
And we’re just like:
We never stood a goddamn chance. None of us did. The deck was stacked against us long before we got here.
And now you get political commentators constantly railing on about “Gosh, if only we could get people to stop listening to their televisions and vote third party and read World Socialist Website and turn up to demonstrations and take back the power of the people from our oppressors, we could turn this thing around!” Not realizing that everyone else in their country went through the same traumatic, confusing ordeal that they went through at the beginning of their lives, the only difference being that most of them got a lot less lucky in sorting out reality from madness. And not realizing that they themselves are still quite mad.
This is ultimately the answer to every question about why things are fucked right now. Why does it seem like nothing changes no matter who wins the election? Why do the wars keep expanding instead of ending? Why is the news man always lying? Why are they locking up that white-haired fellow for publishing facts? Why are those nuclear superpowers hurtling closer toward direct confrontation? Why are the rainforests vanishing? Why are the whales dying? Why are the mass shootings increasing? Why is everyone so miserable?
Because every adult on this planet started off tiny, helpless, impressionable, and surrounded by gargantuan madmen, and it made it almost impossible to be sane. That’s why.
Notice I said “almost”. It is still possible to find one’s way into a relationship with reality that is guided by truth and untainted by madness, but you’ve got to start way, way, way back at the beginning and deeply re-examine even your most fundamental assumptions about what’s true and real. Because it turns out that while the mad giants gave us information that was very useful for interacting with other mad giants, it was almost entirely useless for learning how to navigate through life in a wise and truthful way.
And that’s what I’m pointing to here: it’s important to get clear on just how far back the crazy goes and how fundamentally interwoven it is with the situation in which we now find ourselves. If you begin with the assumption that our problem is simply due to humans not voting and mobilizing correctly in alignment with the correct ideology, you’ll miss the real obstacle entirely. You’ve got to zoom the camera out much, much further to see the full picture.
Can you become a deeply sane individual, untainted by your ancient heritage of madness? With a lot of work and uncompromising self-honesty you can.
Can all humans become deeply sane and untainted by their ancient heritage of madness? It would take a miracle. A whole lot of miracles. Billions, to be precise.
