Interdum stultus opportuna loquitur...

Sunday, September 28, 2008

GovRant: Maybe Even Before 2025?

Note - from June 24th 2009, this blog has migrated from Blogger to a self-hosted version. Click here to go straight there.

Without wanting to get too melodramatic - and making it clear that I fully expect the US Congress to fulfill its role as tycoon's whore - I have been preoccupied this weekend with the events of early November, 1989. You might not recall the 11th and 12th of November, but I do, and it made a real impression on me.

At the time, I was a private hired goon: some years earlier I had quit being a trained killer, had dithered aimlessly through my early 20's. Well, I say 'dithered', but the dithering was punctuated by (and exacerbated by) a motorcycle accident that helped me lose 5 stone in two months. Along with the weight went all the self-esteem that comes with being 20 years old and 110kg with horse-steroids seeping from an intramuscular injection site once a week. Having 19" arms and being able to bench 330 does wonders for one's sense of invulnerability.

Anyway - as I say... having regained a 70-odd percent range of motion in my left shoulder, I went back on the gear (Dianabol, Deca-durabolin and Spectriol) and within a few months was back up to 100-odd kg and benching 300 again. I was still carrying some self-esteem issues though.

With bugger-all idea of what I would do while the lawsuit was in progress (the accident wasn't my fault, so of course I sued the other party), I resumed dithering.

So anyway. It was 1989.

Since September of that year, I had been taking a passing interest in what was going on in eastern Europe. In August - unbeknownst to me - Hungary had dismantled its border with Austria, and in September, East Germans had started seeking asylum en masse. Honecker had resigned, and massive demonstrations had started, culminating in a massive one in Alexanderplatz which I had seen on the news, I think.

Anyway, it was something I kept an eye on from time to time. Don't get me wrong - I would not let it make me late for the gym. But it was clear that momentous things were happening.

It was the morning of November 11th  - about 10 a.m., maybe a little later - and in getting ready to go to the gym I happened to look at the telly. And bugger me if it didn't seem that East Germany had ceased to exist (more accurately, it was in its death throes).

Even then - at the age of 24 - it was clear to me that Communism/Socialism was unlikely to work. I had no understanding whatsoever of the theory, but it just struck me that the whole Eastern bloc was run by scowling arseholes. That's as deep as the analysis went in those days: the political world was divided into arseholes and not-arseholes. Arseholes didn't always scowl. As far as I could tell, there were about 20 not-arseholes on the planet; none of them was a politician.

Come to think of it, that's not a bad basis for a political theory - except that it must be added that 49 people out of every 50 are basically nice: the 50th should be killed.

I was utterly uninterested in domestic politics at the time: still am - except as a target for disgust, and a near-homicidal hatred of all politicians of whatever stripe. I've voted precisely once in my life: in a Victorian State election, for Jan Wade - a pointless vote for the incumbent in the Liberal safe seat of Kew. I voted only because the polling booth was near where Joanna and I were having breakfast, and because she had enrolled me to vote, the silly moo. I took steps to remove myself from the electoral rolls straight away thereafter. So don't tell me that voting is compulsory in Australia... people who don't vote are legion. The compulsory nature of voting is a scam designed to give an undeserved credibility to the final 'mandate' of the government.

Now why would your beloved GT be musing on events in East Germany in 1989 - a little under 19 years ago? Simple.

A lot of folks - mostly Americans, who think the entire world lives on sunshine emanating from the arsehole of their country - as I say, a lot of folks think that it was the arms race, or the posturing of that fake windbag Reagan, that put paid to East Germany (and later, the Soviet Union). That is naive bullshit - anybody who parrots that line should be dismissed as a critical thinker immediately. Ronny Ray-gun's massive deficit spending on armaments actually set in train the disaster that we see today in the States - not because of the spending per se, but because of the manner in which all press criticism of it was stifled.

That was when the US system moved to a genuinely Imperial presidency: Ronny Ray-gun was the President who began the system whereby all the press were behind a rope near a lectern in front of a set of doors leading to a corridor... the Prez sweeps up to the podium, answers only those questions he wants to, smiles, waves, turns and sweeps back out.

Folks ate that shit up. So much so that everybody started doing it - even little Johnny Howard (he upon whose tombstone I will smear IRAQ in my own shit) got into the act.

Anyway... it was absolutely not the arms race that did for the Soviets. 

So what was it?

It was a loss of faith by the population. People who had been force-fed a diet of bullshit for two generations finally decided that they had had it and were no longer prepared to be treated like livestock. So they jjust stopped complying, and relied on the assumption that since at least 80% of the (conscript) soldiery were just like them, the soldiery were likely to be just as pissed off.

And they were right.

You see, all political systems are systems based on lies. The promise of any system is that some set of careerist Party hacks can reallocate resources in such a way as to have growth which is greater and/or more evenly distributed than it otherwise would have been. That is really the sum total of the promise of those who want to be our policial overlords: add that they are almost invariably short men with persecution complexes (like little Sarko, the Runt-King of France... a 5-foot-5 Eastern European Reffo).

You can change the terminology - that politicians 'look after' infrastructure, that they build schools, that they administer national defence. But at the end of the day, all of those things would exist even if all the politicians were slaughtered in one long orgy of glorious humanity-advancing gore. The level of production of education, health and military services would change (and would likely become more efficient... monopoly production is always and everywhere of lower quality and efficiency than competitive provision).

So anyhow... politicians expand certain parts of the economy - education, health spending (but not health care necessarily), welfare and warfare - to a greater extent than the free market would provide. To do so, they extract money from their polity under threat of violence: at the end of the day, you either pay your taxes, or your face arrest, imprisonment, asset forfeiture... and if you resist, death at the hands of the armed goons that the government send to kidnap you. Either that, or you can flee (I recommend Central France).

For periods of varying length (depending on the success of the political classes' propaganda), people are prepared to accept the lie that what is being done with their money is an economic enhancement - while vast sums are quietly shovelled to the cronies of the political classes. There has never been a political system in which there were not cronies who got palaces as a result of beeing given stuff by the rulers.

But then the State goes too far: it starts getting sloppy, and stops feeling any obligation to hide its corruption. Payola to and from the cronies of the political class goes from being a hidden aspect of political life, to something that is not even hidden anymore. Think "The Court of the Sun King" - or the white House, circa 2008.

In the Soviet world, it took the form of ever-larger country dachas for Party apparatchiki. By the end, the Soviet hierarchy were living lives not dissimilar to those of Western oligarchs... while the great mass of people were going backwards at an accelerating rate. Without a private credit market to enable Soviet citizens to borrow, they did not have recourse to debt to fund the lifestyle which the parasite-infested economy would not furnish otherwise.

And that's the secret: up til now, Joe Schlub the 'Merkin has been able to borrow, to spend on credit in order to give his life the veneer of success. All the touts who blather about America being the richest country on the planet, are looking at expenditure per head. They are looking at snapshot asset valuations at the peak of a credit-induced, generation long asset bubble... during which a lot of the equity in those assets has been spent. And when they look at measures of net worth, they concentrate on average wealth per capita - whle for at least four generations the national wealth has been being funnelled upwards at the behest of the political class.

Now that it seems that there will be a much-reduced access to credit markets for individuals, and now that the wealth transfer to the politically-connected is becoming more and more naked, we  run the risk that Joe Schlub finally awakens to the fact that he has been played.      

As we saw in Eastern Europe in the late 1980s, an entire political system can be reduced to so much vapour in days. It is not too much to say that the United States - which I declared in 2000 was going to be three countries by 2025 - is literally a week away from being thrown completely off balance.

And it's not Paulson's Golem that will save it if it is to be saved. It is the continuing ignorance of its population: Russian peasants under the 8 Soviet leaders may not have had access to Google, but they had the common sense that one finds in those who live by the genuine sweat of their own brow. I'm not as stupid as Rousseau, in that I don't believe in a inherent nobility of the agrarian working classes - but I think that they are far more aware of their lot than American-Idol-watching, Dorito-eating mouth-breathers.

The peasantry usually knows when the system is being gamed well before the urban majority - not least because the reach of the government's goon squads is always weaker in the regions. I'm not saying that dirt farmers are Aristotle or Socrates, but a ten minute conversation with a cattle farmer will contain more sense - and less support for statism - than a two hour conversation with a schoolteacher or a functionary.