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Guest Post: The Merger Of State And Commerce | Zero Hedge

Guest Post: The Merger Of State And Commerce | Zero Hedge.

Submitted by Stephen Merrill, editor of the Alaska Freedom News. He served in the Navy Judge Advocate General’s Corps and as a Navy Reserve Intelligence Officer

The Merger of State and Commerce

The Leviathan’s Thumb

Many observers of the US economy have come to the realization there are now few truly free markets left within 21st Century Western capitalism.

It seems all investments today are controlled to unfair advantage in some large way by the governments and financial firms operating the markets, especially the market in money itself.  The newly-invented powers of the central banks to buy anything, to fund any bailout, can reach into any area of the economy, either to grant large favors or to inflict great pain, typically with the cooperation of the too-big-to-jail banks that own the Federal Reserve and its policies.

The precious metals market is a good example of the Fed and its henchmen inflicting pain.  The Western paper gold market has been the long-used tool of Leviathan to bludgeon the world’s only true money.

In one of the Fed’s generous ways the second US housing bubble has been inflated from a river of counterfeit money and a wet-blanket of negative interest rates.  The QE Forever giveaway to the Fed’s banker friends through buying toxic mortgages at full price charges on.

A Swinging Pendulum

It is nothing at all new for a nation to defy the basic economic principle that allows for ever increasing wealth benefiting all layers of society.  In a word it is liberty.

The underlying concepts of capitalism were best set out by British author Adam Smith.  Smith postulated it is the magic of the invisible hand of a free market that best distributes economic resources and best energizes the people and industry and innovation.   Smith’s signature work The Wealth of Nations was written well over two hundred years ago.

The magic of Smith’s free market proved to be the model for the first sustained, rapid economic growth in global history, since at least the early Roman Empire.  It seems, whatever its academic merit in Ivy League halls, general economic liberty has clearly proven to be the best way to serve all society, given how humans themselves are created, as individuals each seeking a good life and secure family.

European medieval economics between the Romans and  the 18th Century Industrial Revolution showed how the vulture practices of monarchs and nobility eliminated even the hope for economic growth or of ever fostering a middle-class, while stifling innovation at every turn.  The private institutions empowered by law in that time were the lesser nobility and the Catholic Church.

With the Enlightenment period led by writers like Adam Smith, John Locke and Edmund Burke, the grip of elitism in commerce in Britain and France and beyond began to be replaced by private enterprise and capital quite completely.   Individual rewards for productivity and innovation and risk-taking became the driving force for economic decision-making, no longer centered on the whim of the lord or his knights as things have largely returned to in today’s fascist economy.   It was the belief in bottom-up capitalism in its rawest form.

The Europeans had suddenly become a juggernaut of innovation and growth after many centuries of stagnation.  The United States later in the cycle became the signal success of free-market capitalism.

In the wake of this revolution in society, the 19th Century saw the fastest economic growth in human history, all fueled by economic liberty.  For the first time a large prosperous middle-class of workers came into existence in many countries, no longer just the rulers lording over the peasants.

The same economic revolution is happening across most of Asia during our 20th and 21st Centuries.  Just one example, tiny city-state Singapore has proven once again the amazing achievements for all citizens from unbridled capitalism.  Singapore has risen from post-WWII devastation to the top of the world economic ladder without ever asking for or accepting foreign aid from any nation.  Singapore is the heir of Ancient Athens, the first free city, the founder of monetary silver.

Adam Smith’s Lassie Faire capitalism has become though the ancient, barbaric relic in our modern fiat money Western world economy, especially in America.  No living American has experienced an economic system that can be fairly described as general capitalism.

The US has now what is called a “mixed economy” involving many “public-private partnerships” and “professional self-regulation” and “social programs”.  These are modern phrases that explain the slow return to feudal ways.

Monopolies of political power or of markets yield huge profits for the few over generations without much having to change a thing.  Monopoly power is a distant mirror of feudal nobility.  It operates in both the public and the private sector and so often in direct combination with each other.  Power not only corrupts: power wins, power stagnates, power destroys.

The Money-Changers Above the Law

Then there are the market traders in a fiat, debt-fueled world.

Whenever free markets can be conned, fixed or disrupted there is a lot of money to be made in the process. There always has been short-term gain for those insiders who manage to fleece the public by harming the secure, uninterrupted flow of goods and services and finance and information.

Most economic transactions, at their base, rely on a large element of trust.  Deceit punishes trust to self-advantage.  Deceit harms the economic market itself, beyond the impact of the con-jobs in play.  A marketplace chocked with deceit is a fraud itself, the absence of the rule of law.  Only the law can fully deal with deceit in order to allow a free marketplace to even exist.

The more hidden processes used by modern bankers and traders to obtain unearned wealth is little different in its societal effects than robbing a convenience store is, or robbing hundreds of thousands of convenience stores actually, given the numbers typically involved in white collar crime at the highest levels.

The counterfeiting of the private-public central banks, that strangles the middle class to further enrich the wealthy, is daily theft on the grandest scale.  Counterfeiting by central banks now affects almost every investment decision.

In the end, it is little different than the peasants always giving a one-third share of their crops to the royal duke just because the King says so.

The Rule of the Cartels on Main Street

This collectivist syndrome in the United States is far from limited to the Congress-buying Wall Street cartel and the subject of finance.  The same general form of corruption permeates an increasing number of professions and businesses.  Even tattoo artists and legal process servers have earned their guild status by law in many states, hoping to, like others do, choke off low-price competition in their field.

The national health-care industry seems to have become almost a single cartel empowered by federal spending.  The Obamacare spending bonanza is designed to pay off every big healthcare interest in sight and the health-insurance industry to boot.

The provision of education in the United States has long been the fiefdom of rigged markets and systems.

The socialism model rules primary and secondary education almost alone.  Even 40-years of abject failure in effectively educating students has failed to dent the nationwide taxpayer spending spree for this state-imposed monopoly rule in the most crucial work there is for society.  Alaskans today pay over $18,000 per student for K-12 education.  Test scores are well below those of students from some third-world countries.

A mix of public and private institutions rule US higher education as a single-minded oligarchy.  This cartel is primarily empowered by federal spending in the form of student loans.  The younger generations are saddled now with a trillion dollar in debt to repay college tuition and fees that no longer deliver a good job.

The lawyer guild has controlled its market for professional services in every state in the union for generations.  Market-fixing remains one of the central goals of bar association rules:  ditto for the physician guild.

Part private business organization, part government institution, part professional guild, part bank regulator, entirely self-interested, the creature from Jekyll Island, the Federal Reserve, has become the go to mechanism for replacing free markets with aristocratic privilege.  He who issues the money controls the nation the phrase goes.

The Unifying Force

But the ultimate overarching rigged system in the US is the effective monopoly by two private political cartels sharing the same basic agenda, the Democratic Party and the Republican Party.  As a consequence of these two faces of modern fascism, the nation and its liberty has been for sale for more than two generations now.

This welfare-warfare party, one bent on ever expanding centralized power, has owned the Congress and most of the Presidents going back to WWI and the founding of the Federal Reserve.  The success in keeping the “two-party system” in place has had far more to do with the special privileges granted by law to Democratic and Republican candidates than to any good reason for a lack of meaningful political competition.

What is the fundamental error of governance made in all of this modern injustice?

It is the practice of the government surrendering open elections and free markets to officially anointed regulatory systems that then form an unchallengeable oligopoly within their bailiwick.

In the case of public regulation rather than a guild system, the regulated industry invariably become the effective master of the industry regulators, like Democrats and Republicans have for instance in US politics.  Within any regulated business, the temptation of well-heeled collegiality from industry always wins over government regulators eventually or, more often, the people that appoint the regulators.

With professional guilds in power its officials take over entirely for the government in controlling the business and its participants.  Professional guilds as a rule disconnect their own disciplinary code and market-rigging from the courts as much as possible, the place where everyone else is required to go for such matters.

Self-regulation for a profession invariably becomes mostly a program for less competition for guild members.  It freezes the present elite in their power and position, a never ending goal of humanity it seems.

In a wider sense, the officially anointed protector of the public safety, whether it is the state bureaucrat or a private guild official, over time becomes an enabler of reduced accountability for wrongdoing, a way to keep standards low for the industry or service by locking out competition and even the law, to the extent possible.

The US economy has regressed to feudal ways like these in such force that a variety of private guilds, cartels, unions and oligopolies exercise, officially or in practice, many of the powers of government itself, especially those powers assumed by but never granted by a constitution to the government.  It has all become a part of the “the law”.

The Revolution Looms Anew

Today’s economic model was best summed up by dictator Benito Mussolini in one short sentence: “Fascism … is the perfect merger of power between the corporations and the state”.

But tyranny also has its life-cycle within the balance between the past and the future.  Once the past becomes far too much of a millstone for the future generations to carry any longer, governments fall and debt and servitude recede.

Empires can fall largely without violence and allow a new, freer system to emerge, as most of the satellite states of the Soviet Union achieved.   Or the legacy of fallen empire becomes violent chaos followed by renewed oppression, like the French Revolution.

This bottom-up style revolution is happening to nations across our 21st Century.  The future lies in the balance.  The bell tolls for all Western nations, too.

So, in the United States, it seems, liberty will have its chance again before too long.

The New Normal Paradox: All The Job Gains With Half The Hiring? | Zero Hedge

The New Normal Paradox: All The Job Gains With Half The Hiring? | Zero Hedge.

While everyone obsesses over the monthly payrolls report, which on a trailing 12 month basis is once indicating the creation of roughly 2 million jobs each year, or roughly where it was before the crisis (red line chart below), one aspect that is largely ignored is the amount of hiring.

Why is hiring important?

Because that is the actual process by which those without a job end up with a job. And as we just learned today after the latest JOLTS release, which showed that there were over 4 million job openings (4,001 to be precisely) for the first time since 2008, a far more important number is the update on Hires which at 4.5 million barely changed from last month, but more importantly, is barely a fraction of where it should be based on the number of job gains reported by the BLS monthly. The chart below confirms this stunning discrepancy: a surge in jobs with barely half the pre-recession hiring?

 

How does one explain this discrepancy in which the US economy supposedly is growing at its historic peak pace while hiring is at half the peak pace? Simple: the gains in nonfarm payrolls are due a decline in layoffs and other separations, not an increase in hirings: i.e., normal labor demand driven growth.

Which means that anyone hoping for a brisk increase in wages, i.e. worker leverage, is in for a prolonged shock.

The chart above simply shows that the leverage is and continues to be with the employers – instead of letting people go (or workers quitting at their volition) at anything close to a traditional pace, employers have a huge bargaining chip – a job. Because if a worker does not want to perform a job, tough: there are about 3 people willing to fight for every job opening. It also means that those who lose their job will find it doubly more difficult time to reenter the workforce as there simply is not enough hiring.

Which means that wage deflation, at least among prevailing jobs, will continue leading to declining real disposable income, a declining in personal savings and the continued use of “student loans” (since credit card deleveraging continues) to fund everyday lifestyles, at least until such time as the hiring trend has normalized.

The really bad news: while such a normalization will eventually happen, according to our back of the envelope calculations, it will take place some time in… 2020.

Tar Heel Scandal and the Myth of the University » The Epoch Times

Tar Heel Scandal and the Myth of the University » The Epoch Times.

The great lie of American higher education is the idea of the university.

We all believe these places exist. Not just in the physical sense–there they are–but as coherent organizations that operate with something resembling identifiable cultures, values, systems, and ideas of themselves. Our whole system of rationing, financing, and credentialing higher education depends on this notion. Yet, it is largely a myth. The American university does not actually exist as we believe it does. For evidence of this, see the academic scandal consuming the University of North Carolina at Chapel Hill.

The Raleigh News & Observer has the most comprehensive coverage of the scandal, which first came to light in 2011, when a suspended UNC football player sued to have his eligibility restored. His court documents included a paper he had submitted for a Swahili class allegedly taught by the chairman of the UNC African and Afro-American Studies Department, Julius Nyang’oro. Fans of rival NC State quickly determined that the paper had been plagiarized.

That pulled string unraveled what appears to be a major credit mill fraud operation being run with total impunity inside one of America’s premiere public research universities. Multiple independent investigations suggest that hundreds of African and Afro-American Studies Department courses offered over more than a decade, many “taught” by Nyang’oro, simply did not exist. No syllabi were created, no lectures delivered, no grading standards imposed. Hundreds of additional courses grades were changed and hundreds more “independent study” grades awarded. A large and disproportionate number of students involved were male football and basketball players. As a result, UNC’s chancellor and football coach both lost their jobs, and Nyang’oro was indicted on felony charges last week.

This is, to say the least, awkward for UNC Chapel Hill. Like all universities, particularly those with prestige, it depends on the idea that it actually exists, in the sense that a UNC Chapel Hill degree means something that is common to all other UNC Chapel Hill degrees and distinct from all degrees awarded by other universities. The elaborate marketing schemes and high-stakes admissions tournaments run by elite universities suppose that admission means something other than the act of selection itself, that the experience of going to school in Chapel Hill is tangible, identifiable, and in some way real.

In fact, none of this is true. UNC Chapel Hill is not a coherent undergraduate institution. It’s a holding company that provides shared marketing, finance, and physical plant services for a group of autonomous departments, which are in turn holding companies for autonomous scholars who teach as they please. This is the only possible explanation for the years-long, wholly undetected operation of the African and Afro-American Studies Department credit fraud scam. Or, rather, it’s the only possible explanation other than a huge, organization-wide conspiracy in which the university administration, department, and football team colluded to hand out fake grades to hundreds of athletes.

The university, of course, vehemently denies that anything resembling the latter scenario is true. Despite damning emails between Nyang’oro and the athletic department, UNC is desperately selling the story that the entire credit fraud operation was the work of just two people–Nyang’oro and an assistant–and involved no athletic department wrongdoing of any kind. That’s because while academic misconduct gets you nothing more than a wrist-slap from your accreditor and year of sad/absurd “monitoring” in which the university administration randomly checks classes to make sure they actually exist, athletic misconduct can cost the university things it actually cares about, like money, bowl appearances, and athletic scholarships.

In other words, the only way for UNC administrators to avoid blame for gross academic misconduct is to admit that academic conduct was never their concern.

Meanwhile, the football team must be saved because the intense tribal loyalty generated by big-time sports is one of the chief mechanisms employed by universities to create the illusion that they exist. I’ve lived in Chapel Hill and experienced the closest thing to full-scale Dionysian revelry one is likely to find in modern America, on Franklin Street after the men’s basketball team won it all. It was thrilling. It felt like we were one people, all of us, conquerors. But it was also an illusion (I wasn’t a student at the time), a false consciousness manufactured by the university to conceal its non-existence as an academic institution.

The cynicism and dishonesty inherent to that seep into the cracks of university life, occasionally as outright criminality but far more often as mediocrity and simple indifference. If Julius Nyang’oro had simply bothered to show up in a room on campus from time to time, say something–anything–to some “student” athletes, and hand out a bunch of A-minuses, he never would have been caught. In the modern non-university, he wouldn’t even have been doing something wrong.

This article was first published on the New America Foundation website. Read the original. 

The New America Foundation is a nonprofit, nonpartisan public policy institute that invests in new thinkers, breakthrough research, and policy innovation to address the most important challenges facing the United States.

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