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The Pentagong Show
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Monday, March 24, 2014

"The Gift" that lives on the Grift: Capitalism has devolved into Enforced Austerity.



 I'm crushing their hopes, I'm crushing their hopes.  


In Nabakov's last Russian-language novel, "The Gift", a story about an author's unsuccessful attempt to become a renowned author, Nabakov, a White Russian who despised the revolution, and most of humanity, to judge by his statements on the contemptible nature of everyone but the Aristocracy, he has nothing but snide derision for what he referred to as "Communist Austerity", meaning, of course, not the deprivation of the working classes of all the profits of their own labor, but to the restrictions imposed on the wealthy such that they couldn't extract and ship elsewhere all the monies flowing into their pockets while the rest of their countrymen suffered and died from easily treatable diseases, such as starvation and pneumonia. The austerity of Capitalism, as is now being imposed on all of humanity, even in the richest of nations and the most productive of economies, is calculated to never end, as it's based on the continuous and everlasting flow of the fruits of workers' labor to the least productive and most money-grubbing sector of the public, ie that sector which considers itself above the term "public", as that refers to such non-entities as you and me. They are the prime concentrators of "Private" wealth, the vast store of which is amalgamated into oh-so-public debt, in the form of Treasuries.

So as the likes of Paul Krugman chastise the public for the "Paradox of Thrift", exhorting them to spend all their, ridiculously monikored, disposable income, which they, of course, don't have, all the ramifications of what he warns against is apparent in the graph below, yet, which Mr. Conscience of a Gliberal, never mentions:


To whit, that as you can see from even the most cursory examination of the chart, it is quite irrelevant whether or not you or I keep or spend every nickel of what we make, because it amounts to such a tiny percentage of the wealth of the nation, which has been amassed over a generation or so into the hands of a very small coterie of plutocrats, whose tenacious grasp on it will never be loosened one iota.

The most remarkable thing about this intense funneling of the Nation's productivity into the accounts of the few elite, is the supposition, by the vast majority of baby-boomer-aged Americans, of its being simply happenstance. They were alive and working adults when Ronald Reagan cut taxes on the richest Americans and then increased War-readiness spending by an unprecedented degree using borrowed money. That is essentially the same thing as paying the rich an increased interest rate on their hoard while decreasing their liabilities, as it was, as it always is, the rich who are physically incapable of spending the vast sums that the Treasury was already shoveling into the semi-sized rigs they back up to the back door of the Fed (which, as Both Greedspan and Bernanke demonstrated, is the lapdog of the Plutocrats).

But because the finesse of finance, and the workings of money are seen as the nonintellectual, uninteresting province of small-minded drones and the mendacious bourgeois, liberals, many of whom I would try to engage in discussion for years during the Reagan,/Bush nexus, and even holding true to this day, never deign to involve their thought processes in even the most obvious of economic truisms, such that, as mentioned previously, someone as erudite on the subject as Paul Krugman, can actually rail on about the "Paradox of Thrift" without the slightest notion that when all the money is in the hands of such a few people, it has the same effect as the majority of people living thriftily and salting all their earnings away and not spending them. But that's exactly what handing it all over to the rich does: brings on an intractable deflationary depression, one that no amount of austerity, will cure, but will in fact, make permanent, as it was always meant to do, which is precisely why it was the required remedy for all the so-called Asian Tiger Economies in the first place. Keeping them paying off the debt assumed by Their plutocrats, leaving them unable to ever rise out of what the IMF and World Bank so liberally besotted them on, a la South America before that, as the US engaged in what's basically resource extraction, one country after another.

The only reason anyone cares anything about this now, is that it is the Western OECD nations who are the target of this austerity and are experiencing exactly the pain that heretofore we had been imposing on other economies in order to maintain our standard of living even as our energy supplies dwindled. It is simply Neo-Colonialism, much safer than the old way, as you can cover your tracks, and public rancor in the peripheral economies is aimed at those you put into power, allowing, as in Egypt, for example, you to simply wash your hands of them once they've served their purpose, and even to tsk-tsk at them disapprovingly for the dictatorial abuses for which they were chosen to be the ones in power in the first place.

It is for this reason that the events in the Crimea are so ludicrous, or at least the US reaction to them. It would seem that our current president has assumed that his predecessor succeeded in making the world "Safe for Hypocrisy", but contrarily, he failed utterly and simply made it far more manifest to everyone but his fellow country men who somehow believed his nonsensical blather. Because that the Russians bully their neighbors into submitting to their ascendant power is as true as that the US does. The only difference is that the US insists that it be considered as some kind of kindly benefactor that does everything for your own good, when in fact it operates the same as it does domestically, to ensure that the reigning elites not only maintain their ascendancy, but extend its tentacles, squid-like, into every economy on the globe, sucking the life out of every economy into theirs where they can then extract it at their leisure. Or, to put it more simply, by asking a question, What exactly about the term "Full Spectrum Domination' do you not understand?

It is only because the baby-boomers I mentioned earlier, (the vast majority of whom have neither ever heard of, know what it refers to, nor understand the significance of  the phrase, "The Washington Consensus"), never experienced the more totalitarian aspects of their own government that they still believe the Democracy Now, and Power to the People nonsense that the Federal government blandishes around the world, because they were born and raised in an economy in which the rich were being taxed at a rate commensurate with the amount of  largess they were receiving from the Mercantilism policies of the Central Government. That has now more than stopped, it has reversed, such that all the accumulated savings in the shape of infrastructure, libraries, and middle-class savings are being constantly sucked back into the vacuum of limitless power and EMH--inspired untrammeled greed.

So whereas the austerity Nabakov chafes under when it is imposed on the upper classes can be bribed and lobbied away or avoided via corruptible politicians, bureaucrats, and officials, that imposed by a hypocritical, lieing, deceitful minority onto the majority is intractable. Because, as it is denied even by those who mean well, such that they can exhort you to go out and spend because it's good for the economy, even though it is ruinous to you personally (but don't worry, here, have this credit card; go ahead, buy that car @ 0% interest for 6 years; don't worry, sign now for that house that the Fed has worked for more than 5 years so as to inflate its price beyond anything you can reasonably afford ...it's all good!), which, by the way, is in complete contradiction to their stated belief that each person, by caring only about themselves, is what makes Capitalism work, instead, all of a sudden you're
supposed to ignore what's good for your own circumstances and spend every penny you own , and lots more you don't, for the good of  the economy: Ask not what The Economy can do for you, but what You can do for The Economy.

Given these dynamics, the talk of recovery is exactly that: talk. Austerity only brings more austerity, only this time, a fact Nabakov would approve, it stays where it belongs: on the backs of the lower classes, or what he would refer to as the peasants.

















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