Hey Joe

77
Mon, Dec 23, 2013 - 1:04pm

This essay was inspired by a deceptively simple question: At what point will people decide they have had enough? By this, I mean at what point will a plurality of citizens look around them, examine their situation, and come to the realization that the present system is not working to their benefit and indeed, is likely working to their detriment? Does the frog really sit in the pot while the heat is slowly turned up, content until the moment where it is too late and he cooks to death? Or does the frog in fact realize at some point that heat is on, he is getting extremely uncomfortable, and that he better jump if he wants to live?

Here’s why I wonder about this.

Just six short years ago, the median net worth of middle class US households was $120,000. Today, it has fallen a whopping 45% to just $66,000 (https://www.nytimes.com/2013/09/19/business/americas-sinking-middle-class.html?_r=0). The number of working-age Americans stuck in part-time employment has more than doubled during the last six years from four million to nine million, and this number is about to take another major leap upwards as Obamacare mandates incentivize companies to cut previously full-time worker to below 30 hours per week, above which the government now requires companies to provide coverage. Speaking of Obamacare, its initial impact has been to raise premiums nationwide, amounting to a massive middle class tax-hike, while five and a half million people who used to have health coverage have now lost it. When the employer mandates really kick in next year, some estimate that based on numbers provided by the Department of Health and Human Services, between 50 to 90 million additional Americans may lose their current coverage (https://hotair.com/archives/2013/10/31/did-hhs-estimate-that-93-million-...). Hope and change!

So play along with me here. Pretend you are an average Joe. Joe has just seen his net worth nearly halved in the last six years. He just lost the health insurance that his employer used to provide, and because Joe has a spouse and kids he is suddenly looking at an additional 15% of his yearly salary to cover health insurance. Joe didn’t expect or plan for this. He starts doing the math and realizes that he already pays 1/3rd of what he earns in State, Federal, and various local taxes. Now Joe suddenly has all these additional health care costs, real inflation is making everyday items like gas and clothing more expensive, and at this point, he doesn’t honestly know how he is going to pay the bills… assuming Joe is able to keep his job. In the past, Joe managed to set aside about five grand per year because he foregoes expensive vacations and always buys used cars, yet he has seen the real purchasing power of the money he set aside ten years ago decline by 30% over that time… $1,500 of every $5,000 he managed to save has been confiscated via inflation and lower purchasing power. But the futility of saving doesn’t really matter much to him right now, because not only is he not going to be able to save anything this year, he may have to start cannibalizing what savings he does have. Joe starts to get scared because he just doesn’t know how he is going to make this work. He hasn’t done anything wrong, he is working harder than ever, yet he is drowning.

So how about it, Joe? Still think the system works to your net benefit? Just how long are you going to keep taking this? How much more CAN you take?

https://www.youtube.com/watch?v=v3DvRScC3tE

Joe may indeed be pissed. He might be mad as hell and isn’t particularly inclined to take it anymore. But here’s the problem: chances are that Joe doesn’t even know who he should be mad at for this. Depending on his previous voting history, he might blame one party or the other but he needs to understand that neither party is going to fix this thing under the present system. He might want to blame general groups like “welfare queens” or “greedy corporations” but he needs to understand that ultimately they both feed from the same trough- him and his labor, through the inherent wealth confiscation of fiat creation over time.

This is where, dear Turdite, you come in. Joe probably doesn’t quite understand the symbiosis between the Federal Reserve, big banks, and big government. He knows he is being screwed by the system in some way, but he doesn’t really comprehend that it is fiat money creation that is both causing his current difficulties AND is strengthening and enabling the Leviathan powers beyond his control to screw him at every turn. He doesn’t yet get it… but for the first time in his life, he might be ready to hear a few things and not dismiss them out of hand. Maybe, if you see him this Christmas, you can gently direct Joe to Mike Maloney’s series on money. Maybe you can buy him a copy of The Creature from Jekyll Island. Maybe you can just quietly talk about why these things are happening and how sound money acts as a check on both corporate AND governmental power, each of which is accrued at his expense. Who knows, maybe you can even sneak the word Liberty into the conversation.

Small things like this might just have a bigger impact than you can imagine. In his bestselling book The Tipping Point, author Malcolm Gladwell notes that social changes often take place with surprising ferocity, when an invisible but crucial point is reached that destabilizes the current paradigm. Everyone takes the status quo for granted… right up until the moment that a critical mass of people (nowhere near a majority, just a sizeable percentage) shift their behavior. Then a tipping point is reached and everything changes.

Gladwell notes three major factors that precipitate such tipping points. First, he describes the “Stickiness Factor”, referring to the power of a simple slogan or idea that distills the movement into a memorable and instantly comprehensible core. Additionally, he ascribes great importance to “The Power of Context”, outlining how such sweeping changes can take place only in an atmosphere fertile for change where people are receptive to new ideas or practices.

Finally and most crucially, he notes “The Power of the Few”. It doesn’t take many to precipitate a tipping point, but those involved have special skills that Gladwell breaks into three categories. Connectors are people who thrive on social information and interpersonal relations, and they have a unique capacity for making connections between large numbers of people with complementary skills. Connectors function as the social equivalent of a computer hub- they always know a guy who knows a guy, and are great at putting people together. Salesmen have the special knack for communicating a message and getting people to go along with them. Charismatic and persuasive, they are powerful negotiators and have an indefinable knack for influencing people to agree with them. Finally, Mavens are amazing repositories of information and knowledge. They possess a deep understanding of issues and facts, and are exceptionally skilled at solving problems.

It sure seems like we have a whole bunch of people who fit these descriptions perfectly, knocking around in the comments section at TFMR every day, doesn’t it?

Here's the deal: If the Great Keynesian Experiment really is in its death throes, if seventy years of malinvestment and easy money really are coming home to roost in a decrepit and dying system, then something is going to have to take its place. Maybe the motto “Prepare Accordingly” might not just be solely applicable to gold and silver investing. Maybe we should be out there trying to plant some memes and prepare some intellectual battlespace. Maybe we should do our best to talk to a few folks, if we have the opportunity. Maybe they’re ready to listen.

Hey, Joe.

. . .

Enjoy your holiday, my friends.

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ivars
Dec 23, 2013 - 3:01pm

@ancientmoney FDR

As i said may be it was a calculated move to disperse American displeasure with FED after 1929 as it was no secret the FED had created the boom and had informed the big bankers ( or they had decided) about the bust in advance, so in principle, it was possible for a populist congressmen to shut FED then and there as failed experiment. That option was discussed in all monetary policy related debates in Senate committees.

So yes may be FDR maneuvered nicely to both appease voters and retain the FED. I do not know.

As to constitutionality and all this kind of thing who cares. Laws are written by those at power, not vice versa. The USA constitution had one primary goal- to stop states from issuing their own money, hence the focus on congressional right. Otherwise, I have no doubt congress would have voted zillion times to expand monetary base to bribe their voters and USD would be long gone, as would gold standard.

I am skeptical to utopias and glorification of authority, that is an ideological act and rational only so far as ideology it supports has some rational meaning. It may or it may not.

Why not move back to state issued money? That would be unconstitutional but would be fair? Or community based money even..

H8Fiat
Dec 23, 2013 - 2:52pm

Contributing factor

I strongly believe the Rep Kanjorski started the fictious ball rolling by pushing to eliminate MTM accounting in 2009. This allows for TBTF to hide all the dirty laundry until the Fed can buy all the toxic crap and become the worlds largest "bad bank". The other point was to slap the wrist of the TBTF banks in all the robosigning where they were caught with no paper trail to know what was in / out of paper thrown all over the world as AAA investments. The endless circle jerk of bankers to politicians and back again.

A safer more democratic way out of this is to:

  • no lobbyists
  • politicians get the same social benefits as citizens
  • pay no more than 3 times poverty level
  • travel is coach and taxi
  • no bodyguards unless they pay themselves
  • tax returns public domain
  • staff limited to 2 people
  • write their own laws they submit

Just some ranting

ancientmoneyivars
Dec 23, 2013 - 2:36pm

@ivars re: FDR . . .

FDR, in my view, was a bit-player in the bankers taking control over the world, though an important one. He took the U.S. off the internal gold standard, and immediately thereafter, devalued the dollar against gold, reducing everyone's purchasing power.

Repeal of Glass-Steagall happened on Clinton's watch. This allowed for the unfettered growth of the derivatives fiasco we have today.

The Federal Reserve, as it operates, is unconstitutional. Only the Congress has the constitutional authority to issue money. Yet, the Federal Reserve, which is made up of private, TBTF banks, creates the debt-money, fractional reserve banking system today.

ancientmoney
Dec 23, 2013 - 2:29pm

Average Joe might get upset . . .

when they come calling for his 401-k, pension, or IRA. Collum's snippet on bail-ins (linked above):

"Let’s bring it to the U.S. and see how we're doing. The risk of confiscation is showing up in some not-so-subtle ways. The U.S. Consumer Financial Protection Bureau is weighing whether it should take on a role in helping Americans manage the $19.4 trillion they have put into retirement savings. Bureau director Richard Cordray is “interested in...what authority we have” but “didn’t provide additional details.” Little good will come of this. Beware of people from the government offering to help. Along comes Fed governor Donald Kohn declaring that a bail-in is needed to protect the system from too big to fail banks.209 You now have my attention, Don.

In 2006 I diversified my assets across a broader range of banks to dodge bank runs—I did see it coming—but that now provides much less protection. New bank account protection changed from $250K per account to $250K per Social Security number.210 Deposits in foreign branches of U.S. banks are no longer FDIC insured. We are all Cypriots now. A number of years ago the blogosphere was chattering about the role of a depositor at banks and owners of equities and mutual funds at brokerage houses. In the simplest of terms, equities are in the name of the brokerage. That turns us peasants into creditors and not very senior ones at that. (File under lessons learned from MF Global.)211

Steve Forbes warned that a Cyprus-style seizure of your money could happen here.212 I’ll take “Holy Shit!” for $1000, Alex. JPM has already limited cash withdrawals and wire transfers abroad for reasons that elude me now but probably will become clear later.213 This move seems to be at the behest of the Federal Reserve. Apparently, only the Fed is allowed to ship unimaginable sums to other countries."

My guess is that when the bail-ins come here, they'll be camouflaged well. Likely, a 70-80% crash in stock markets and 50% drop in bond values will cause investors to demand "something must be done!" That's when the government will agree to make anyone "whole" but they must invest only in USTs, and they cannot take out lump-sums (cash), but rather, life-annuity income only--and, not tied to inflation (or tied to current, fictitious CPI).

ivars
Dec 23, 2013 - 2:18pm

I disagree with blaming FDR about every wrong


Hat Tip! 1

As he took on banks quite forcefully, pushing them into backstage for about 20 years until FED negotiated its independence back. Some things like Glass Steagall worked till 1999. Banks only got the same level of power they had in 1929 in 2013..They had to work 80 years to claw back in the USA. May be it was a calculated move but it had some real consequences.

But FDR actions against banks may have caused WWII. Difficult balance.

You want really free markets You will get social Darwinism, nothing else. If that is what is preferable (in theory of course as in practice free markets must be enforced by state ruled by fittest as otherwise they will be taken down by unfittest) , then fascism has a good soil where to spread in the USA and I have no doubts it will spread with coming deglobalization.

In Germany, fascism politically was based on industrial capital and German middle class. Sounds like support for an ideal society? If only it was so simple.

Is it really so that from time to time civilization need to touch the extremes just to find out that utopias are more dangerous than unpleasant, compromising, dragging reality?

ancientmoney
Dec 23, 2013 - 2:11pm

David Collum sort of says the same as you, Pining, but. . .

it takes him many more words. Here's a few:

"Moscow is said to have the largest number of billionaires of any city in the world, but every one of them stole their wealth, which suggests finance and banking will be growth industries."

https://www.peakprosperity.com/blog/84101/2013-year-in-review

He touches on just about everything that's wrong with the financial world, even the Federal Reserve, the creation that has caused or allowed, directly or indirectly, most of the malfeasance in the world today.

It is the banking/government cabal (Wall Street/Treasury/Federal Reserve is a never-ending, revolving door of pin-striped A-holes) that runs the Congress, courts, presidency, CIA, FBI, NSA, DHS, etc.

The cabal knows that the people will one day see what Pining hopes they see. That alone answers why the DHS ordered 2 billion rounds of ammo.

AlienEyes
Dec 23, 2013 - 2:08pm

HO ! HO ! HO !

No matter what the government tells ya, Ho, Ho, Ho is NOT a reference to three prostitutes and Santa IS white.

Also, "I'm Dreaming of a White Christmas" is not racist.

.

Video unavailable

ps,

As always, another great post.

treefrog
Dec 23, 2013 - 2:03pm

the facts, ma'am, just the facts

True Facts About The Frog
H8Fiat
Dec 23, 2013 - 1:57pm

fat kids unite

happy holidays all

Dec 23, 2013 - 1:51pm

First

Haha! Furst!

But in all seriousness, thanks for that great post, Pining -- it reminds me, as usual, of something I have been meaning to do write about for a while.

While the current paradigm does seem to be edging closer to its end, my fear is that the equivalent of 'Continuity of Government' contingencies have been built out to ensure that the new boss will be much like the old bosses, in that it will be incrementally worse for the little guys. It is not so much JUST a preparation for the future that is needed, but as you correctly point out, a massive shift in the popular perception to allow a change of course. Given current inertia and direction, the train is not heading to anyplace the average person would really want to go, if only they were to (be able to) stick their heads out of the cattle wagon windows to see that. We had better figure out a way to reach that switch lever.

I also often feel like not just a boiling frog, but one that has been provided a variable feedback system to the boilers -- a ladder. They ratchet up a policy, drop a press release, hold a junket, 'expose a scandal', stage house-to-house searches with strike teams of heavily armed military units in a major metropolitan area while locking an entire city down -- just to see how the 'inmates' will react (if at all). How high will the frog try to climb before the endgame? Is there anything that can be applied to make him take a step back down, despite the otherwise undeniably rising heat?

It's definitely time to try to get outside the bounds of their game, to change the rules and move some markers. It the current environment, the lid is closed and frog soup is merely a matter of time.

In the end, we are NOT frogs. It's time to get to work sharpening that glass cutter -- or as a last resort, some type of blunt shattering instrument, and get to work on the walls of the jar.

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