Theocracy Democracy - In Debt We Trust

By: Andrew_McKillop

In Debt We Trust
Kevin Phillips is rightly known for his serial books and articles which all focus what he calls “the scary intersection of oil, debt, and religion”. He could have added climate and global warming to the list, but did not. His key theme is that “the financialized economy” is a bunch of speculative froth that creates little or nothing real, a symbolic wealth play with its own high priests, that hinges on more than simple public tolerance. The party can't go on unless the people believe.

Believing in democracy has one basic common linkage with theocracy and theocratic states – and with the debt based economy – and that is “confidence”. Any kind of belief will in fact do, whether it is rational or ritual but the people have to confidently believe – not just believe.

Philips, who started his professional life as a political strategy adviser for Richard Nixon shares several  similar life-changing, and belief-changing experiences with David Stockman, the former Budget director of Ronald Reagan. Both are called right-wingers who shifted to the left. Both have a scarcely disguised contempt for today's political establishment and its total interdependence with late-stage crony capitalism. For Philips, what has happened in the US and other so-called “mature democracies”, with so-called “liberal capitalist” economies in the past 30 years is easy to see as a frenzied get-rich-quick New Religion. I call it millenarianism, with an economic or financial handle, but above all it concerns a cult that sprang up like mushrooms in a field or mildew on a pair of shoes overnight. The only positive aspect is that it can disappear as fast as it came.

Kevin Philips, speaking about the US, says the country “got religious” but the new religion is Bad Money, the title of one of his books. For sure and certain, Philips and Stockman agree the financial system or “industry” is a giant Ponzi scheme, but like power in any theocracy – whether its The Vatican, Saudi Arabia or Iran – the people have to go on believing.

When they stop, the trouble starts. Charles Ponzi discovered that printing stamps is not so different from printing money but when the people asked him for the stamps he had promised, and they didn't come, their belief fell off a cliff.

In Democracy We Trust
Bad money and corrupt government run together like hand in glove. You no longer have to be “left leaning” to state the obvious, although that helps. Philips, Stockman and other former high-placed US government employees like Paul Craig Roberts, called “left leaning”, hammer the message that the giant Ponzi scheme of national debt and money printing is only a meta crisis or the metastase of a deeper cancer inside the “body politic”. It is only possible because government was out to lunch on a meal ticket supplied by the crony capitalists. It can be remediated.

Democracy itself was the first victim of the process. For the so-called liberal democracies, that makes 30 years of No Government in any serious sense of the word, and this alone is a mega-crisis, hidden of course. Certainly for Milton Friedman if not Alan Greenspan, no government was a laudable goal “for society” in which the Free Market would magically replace all previous forms of governance. The contempt for democracy shown by the charlatan soothsayers of this degenerate new religion or millenarian cult, is clear. Reasons for their contempt are usually peddled as “aristocratic” or “regalien” which has nothing to with Ronald Reagan. Their appeal is to Humanity's natural aristocratic instincts and abilities. With the Free Market acting like a Good Fairy, chaperoning and guiding the masses, the tiresome rituals of elections, parliaments, laws and regulations would all be struck down.

They would disappear like mildew on a pair of shoes. Nirvana would be upon us.

When the charlatan soothsayers rode high, in the early 1980s there were repeated press conferences and summit shows of the two arch-est priests of the new religion. Britain's Margaret Thatcher and the USA's Ronald Reagan ran a double act of po-faced, popeyed ersatz sincerity tinged with hysteria as they thundered their bent gospel. Margaret Thatcher did it best. She repeatedly declared:  “There is no such thing as society”. In that case, do we need government? Or you, Mrs Thatcher?

Philips and other critics of the New Religion point out that something grave and somber happened to government, even the notion of government, starting in the 1980s. To be sure this can be analyzed and attributed to some form or type of “crisis of capitalism”. Continuing with that approach, it can be claimed that Western and  American financial capitalism hit a pivotal period in history, and capitalism – always ready for a gamble - ventured a multiple new play. Firstly, the economy was “financialized” as Old Stuff like mining and manufacturing were dumped. Then the debt handle was turned, very fast, to shower the capitalist casino with new gaming chips. Next, the housing and stock markets were “democratized” in the sense of making them a 24/7  circus show of delirious “price discovery” and “new value”. Behind the scenes, credit and its derivatives became a production-line industry. Only surprising to the arch priests and their agents and servants, this millenarian transformation sparked a vast and enduring firework show of dishonesty, theft, fumbling incompetence and what is politely called “quantitative negligence”. Numbers did not matter. Nothing mattered.

Reform or Revolution – or What?
It is all well and good for the bad crop of 1980s-vintage Sorcerors Apprentices of the Financial Ponzi, and arch priests of a new bent religion, to have tiptoed away to the grave. From which they can't answer or be held responsible. Thanks for nothing. We are left with your mess.

Democracy having been trashed along with society itself, the way back from the cliff isn't evident. Screaming that “society doesn't exist”, for too long, in fact produced a strange mutant society. Most European countries of today have dumped their youth in the gutter – they either run up 20-year debts to pay college fees, and struggle to find a job after, or they succumb to unemployment rates for the under-25 age group that can run as high as 30% - or even 50%.

Deindustrialization and outplacement is well-known, well-documented. We all know that Old Stuff doesn't count any longer – but what's that car you're driving or the clothes and shoes you wear? No problem. Run up the trade deficits and pay it with debt.

We all know the downsides of the Rosy Transformation – which didn't happen. The people have been cheated and like a wounded beast, they will react sooner or later. This again and however “doesn't matter”. If they don't rise up today – that is one more day won by and for the crony capitalists and their corrupt (and stupid) politicians in crony government. That's how they think. Fantastic but true!
Kevin Philips like several other authors trying to explain what happened and where we go next, looks at the Great Empires, how they rose and fell, but does not underline the central point. The Great Empires, as they are called, were outside the sphere of modernity. They were pre-modern events and processes. Their strategists did not have to deal with public opinion. It didn't exist.

 When you try to run the two things together – crony capitalism and the empire – things go strange very fast. We have an ongoing daily show of exactly this bizarre mix-and-mingle in the Ukraine crisis. One day, its fighting. The Cossacks have arrived. Some Tatars are going to fight for Russia, and some for Kiev. Some of its army may defect today, like it does most days, but maybe not today. The next day, we have the IMF and Gazprom, printing and demanding billions of paper credits from Rump Ukraine – presumably to keep the crony capitalist party going, but we can't be sure of that.

Supposedly, Putin wants “his” empire back, and the US “and its western alllies” want their debt-empire extended into Putin's rickety empire. The Cossacks have already said they expect serious counterparties and why not financial offsets, for their helping hand to Putin. Not at all impossible, the Ukraine War Show can simply collapse through lack of credits and any possibility of “discovering value” in the shape of true-grit capitalist war booty from pillage.

This is how empire gaming operates in the New World. It is a farce – somber of course.

As we know, this particular war game, in Ukraine, is a direct sequel to Kiev's Flash Mob uprising, the first major example of the Arab Spring process of mass street protests, in Europe. The common theme and driver of the Arab Flash Mob rebellion was a ruined economy – in several cases, like Tunisia's economy, hailed as “modernized and finance-friendly”.

Not people-friendly, that's for sure!

By Andrew McKillop

Contact: xtran9@gmail.com

Former chief policy analyst, Division A Policy, DG XVII Energy, European Commission. Andrew McKillop Biographic Highlights

Co-author 'The Doomsday Machine', Palgrave Macmillan USA, 2012

Andrew McKillop has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO.

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