The Big Bribe

I have a thesis as to why things have gone so off the rails in the United States (and beyond), but it might not be what you think. Most of what we decry as insane and inexplicable policies are but symptoms of an underlying process. That process is the creation of money via fiat, the way in which the money propagates through the system and how it distorts the incentives of so many who are beholden to it.

Let’s start at the beginning. New money is created via debt issuance all the time. It’s why the US government is nearly $36 trillion in debt — it issues bonds and owes the bond buyers the interest and principle on it. “Issuing debt” is a fancy way of saying “borrowing money.” The US government borrows from its citizens, corporations, geopolitical allies (and even adversaries) to finance its operations.

If there is insufficient demand for its debt — if not enough people want to loan it money, it can raise rates, i.e., promise to pay more interest so as to entice more lenders, or just have the Federal Reserve buy the debt (either via its primary dealer banks or in some cases directly) and place the assets (bonds) on its balance sheet. US government debt (promise to pay) is an asset, and so the Fed can put that promise on its balance sheet.

The result of new money coming into the system via government borrowing is inflation. There is simply more money chasing the same amount of goods and services, so the prices for them rise. If while injecting more money into the economy the government were simultaneously injecting more goods and services, there wouldn’t be inflation, but unfortunately while you can always print more money out of thin air, you can’t print more energy, grass-fed steak or expert medical care.

But the inflation of the money supply and its concomitant debasement doesn’t happen all at once. Initially when there’s more money injected into the system, those who are closest to the new supply (banks through which it passes, their largest accounts, investors and asset holders) spend it and benefit from it before its inflationary effect has fully taken hold. This is known as the Cantillon Effect. Eventually inflation drives ordinary wages up too, but not enough to offset higher prices, and only after the Cantillonaire class has disproportionately benefited.

The unfairness of this arrangement is evident enough, but the second and third order effects are far more sinister. When the government can essentially borrow (print) money to finance whatever it wants, whether the Iraq War and its military contractors, “free” mRNA shots (Pfizer made nearly $100B off those contracts) or any other policy that benefits cronies and favored corporations, there are going to be a lot of resources and effort devoted to getting in good with the decision makers in the government.

Put differently, if I run a small business, I can only earn money if I offer my customers something they value enough to pay more for it than it cost me to produce. If I hire you, you’ll need to add value to the business and also hope it can continuing adding enough value to customers to pay your salary. We have to work for it.

But the government can simply print it, and in infinite supply. Are you better off starting a business (or working for one) that relies on adding value to its customers in a competitive environment or one that taps the infinite font of government money?

People respond to incentives, and as a result of the untethered money printing which began in earnest in 1971 when Richard Nixon took us off the gold standard (essentially a default caused in part by the cost of the Vietnam War), financial services experienced explosive growth, making up a larger share of the economy than at any time since the eve of the Great Depression. The best and brightest in large numbers eschewed value-creating careers in fields like engineering for jobs in finance. Why try to innovate and compete in the ruthless marketplace if you can join forces with the Cantillonaires, quickly become one and amass generational wealth via passive asset holding?

But it’s not just the bankers and the asset holders. In the scheme of things that theft off the top and upward redistribution is almost benign. Where things start to go seriously off the rails is that people cannot save in an inflating currency, and so they are forced to buy financial instruments like stocks and bonds. (Poor people can’t afford to do so, try to save in a debasing currency and usually stay poor and stuck.) But even middle and upper middle class people who get a small piece of the Cantillon pie, as their asset values rise on account of the increased money supply (to offset their lagging wages), have a new problem: most lack the time, skill or inclination to hold down a second job managing their investments.

As a result, they either lost money in the markets (selling when the market dropped, buying the top when everyone had already made money) or paying exorbitant fees to brokers who added little value except to take the stress of managing it out of their hands.

Eventually, investors figured out low-fee passive index funds outperform brokers, and so millions piled into them. As a result, companies like Black Rock, Vanguard and Fidelity absorbed money flows in the trillions of dollars, giving them outsized power. If they divested from a company its stock would tank, and its executives would miss their marks. If Blackrock and its ilk decided every company needed to be ESG or DEI compliant, the CEOs had little choice but to follow suit or they would be replaced. Consequently, you had a few elites, essentially dictating policy for the entire economy.

But back to that $36 trillion in debt, roughly a quarter of which was racked up during ill-conceived wars of choice in the Middle East. A country with that level of debt can’t honor its obligations over the medium and especially longer term. The elites know this — they know the promised social security, pensions, healthcare entitlements, etc. can never be delivered in the way they’re expected. Via inflation they might be delivered nominally, i.e., you might get the number you were promised, but no chance you’d ever get the purchasing power that number represented when the promise was made. When groceries cost a thousand dollars, a million dollar pension doesn’t go far.

What that means is the wealth people think is coming to them is not there. Even the wealth represented by the digital bits in your bank account isn’t there. Sure, if you took it out and spent it tomorrow, you could get 2024-level value for it, but even Bernie Madoff’s first clients to withdraw were able to get their money out. The problem is that collectively the digital bits do not remotely have the purchasing power they purport.

The elites need to do something about this, or there will be a French Revolution-style reckoning for them. They looted society’s collective wealth, and they need to assert control over the fallout. And they need to make sure the fallout is delayed. They need to keep people divided and fearful of demanding what they were promised.

The fear-mongering takes many forms (pandemics, climage change terrorism, white supremacy!), but foremost among them is to cast anyone who purports to reveal the unfair arrangement to the people as an enemy. “Populist” candidates must be smeared as “racist” or “fascist” and deemed unacceptable to large swaths of the population. Luckily for the oligarchs they had a few aces in the hole to enforce this perception. First, they had the megaphone of legacy media and also large centralized social media companies like Facebook and Twitter on which they could lean to suppress content that undermined their aims.

Second, via the centralized investment firms, they could dictate terms and initiatives to large publicly traded corporations and the officers of said corporations could reward compliant employees with promotions and power. Anyone who worked in those spheres therefore was selected for belief in the corporate-media dictated narratives.

Third, via their control of academia (donations from academia to the Blackrock-favored democratic party outpace donations to the disfavored one by a factor of 10), they could indoctrinate college students, reward the ones for whom it takes with jobs and social acceptance. Moreover, they also encouraged more people to go to college than ever before, creating an overproduction of elites, and a large indebted, indoctrinated wave of young people who didn’t have much to show for the debt they took on. That made them more desperate to stay in the good graces of the oligarchy, more compliant lest they lose the small income stream they were able to find in low-level managerial roles. Finally, as a reward for following the path, they were given status as educated people, those who had mastered the protocols of the elite.

Things like using the proper pronouns, avoiding the forbidden words for which a less savvy person would be cancelled and having the right beliefs (like climate change being an existential threat, more on that below) signaled moral and class superiority. Even if the electrician or plumber made more money than them, offered a service that provided real value to people, he did not know increasingly labyrinthine protocols for navigating elite discourse.

The more successful members of this class have all of these incentives plus a real paycheck, and they and those aspiring to join them formed a strong and influential bulwark against the rising discontent of working class people struggling with rising costs and feeling the disdain of elites who saw them as “deplorables” and “racists.”

The climate change agenda — promulgated religiously via academia and corporate media — was especially powerful because it instilled fear, a sense of dwindling resources and an incentive to consume less. That last part was especially crucial because if the digital bits in people’s accounts were going to fall far short of their purported purchasing power, getting an army of people to voluntarily reduce their power consumption (and angrily demand it of others) killed two birds with one stone. Not only would they have a ready-made excuse for the lack of promised power (purchasing power is the ability to wield energy, and “energy” and “power” are essentially synonymous), but they would also have a reason to bar those who did not voluntarily relinquish it from enjoying its full use.

Once the oligarchs had successfully indoctrinated a large swath of the population to be in debt, desperate to hang onto their trivially replaceable jobs, believe power consumption was not only wrong but an existential threat and anyone advocating otherwise was racist, fascist and morally inferior, they could sell them on ever-increasing top-down government control for the greater good. No matter how draconian the measures — covid lockdowns, forced injections, mask mandates for toddlers — the indoctrinated (and terrified) subject would not only go along but enforce those edicts on others.

Anyone refusing to go along would be accused of heresy, so to speak, and mobs of eager acolytes would be quick to call for his excommunication. If you think this is hyperbole, you are probably memory-holing the covid era wherein some of the most prominent celebrities and politicians eagerly advocated for those who declined pharmaceutical conglomerate chemicals to be barred from participating in society, put in camps and left to die should they need medical attention.

Of course, maintaining total control over the population is difficult, especially as economic conditions worsen, and those who are not totally beholden to the cantillonaire corporate class and who bypassed the university indoctrination complex gain awareness via uncensored niches of social media and ignorantly trusting their own eyes and ears. To that end, pushes for increased censorship were needed, as well as ever novel social wedge issues to divide the populace. On their face insane policies like letting biological males compete in women’s sports and encouraging minors to have sex changes served to further divide people and also served as a loyalty test of sorts. If you could advocate for Lia Thomas dominating collegiate women’s swimming, for example, you demonstrated your bona fides as a true comrade to the educated class.

Of course, suggesting something like this or advocating for sex changes among 12 year olds would have landed you in a straitjacket 15 years ago, but that was the point. If you were not willing to state a woman could have a penis and men could get pregnant you were not sufficiently loyal to the cause. Perhaps that’s a little too strong, but at a minimum you could not vociferously object to these absurd precepts and still expect to keep your job.

As such we now have a wide swath of educated, above-average IQ, ostensibly otherwise sensible Americans cheering on the fomenting of World War III in Ukraine, justifying ideological censorship contra the very First Amendment of the United States Constitution, unchecked illegal immigration irrespective of financial and social cost, among other insane policies of which virtually no one had been in favor when they identified as garden-variety liberals 10 years ago.

They have been bribed not to see what’s happening in front of their faces, not to remember how their rights were violated during covid, not to acknowledge the myriad lies to their faces like “the lab leak is a conspiracy theory,” “Trump colluded with Russia to steal the 2016 election,” that “Hunter Biden’s laptop was Russian disinformation” that they only needed to take the vaccine to avoid covid, that covid was a “pandemic of the unvaccinated” that Joe Biden was “sharp as a tack” and anyone saying otherwise was a conspiracy theorist.

I could go on for pages about the lies and hoaxes, but you get the point. The problem is via money printing, the oligarchy has essentially unlimited power to astroturf all manner of absurd agendas and incentivize tens of millions to go along via social and professional bribes. Of course the truth will come out eventually because it always does. Lies can carry the day so long as enough energy is pumped into the system to sustain them, but the truth is like gravity — when your plane runs out of fuel it will necessarily fall to the ground.

So this is where we find ourselves — a half awake populace of “conspiracy theorists,” “racists,” “anti-vaxxers,” “xenophobes” and “cranks” pointing out the unfathomable and mind-boggling destruction taking place in our cities, schools and once esteemed institutions, being dismissed, ignored and vilified by mobs of head-in-the-sand loyalists bribed not to see the blue whale in the room, the unsustainable, immoral and unholy assault upon the foundations of civilization itself, right in front of their faces.