Written by The Daily Bell
A new world, a new leadership ... After you read this column, go to YouTube and search "Hans Rosling and 200 countries". You'll see a Swedish professor describe the growth of global wealth and well-being over the past 200 years. He presents an animated time-lapse chart. It starts in 1810, when the nations of the world were clumped on the bottom left-hand side of the chart because they had low income and low life expectancy ... Now most countries are clumped toward the top end of the chart, thanks to the incredible reductions in global poverty and improvements in health.
This convergence is great news, but the change in the global social structure has created a psychological crisis in the US. Since World War II, we've built our national identity on our rank among the nations – at the front with everybody else trailing behind. But in this age of convergence, the world doesn't have much of a tail anymore. Some people interpret this loss of lead-dog status as a sign of national decline. – Times of India / David Brooks
Dominant Social Theme: It's the best of all worlds, but not enough people realize it.
Free-Market Analysis: Everybody's favorite “liberal” neocon David Brooks is back with another cheery analysis of The Way Western Economies Work. We have read this sort of thing before and on the surface it sounds very convincing. One can cherry-pick statistics to make it sound as if the Western world (and the larger globe) is progressing nicely.
This is not quite the case. We would argue that the world is in a bad way and getting worse. The EU is involved in a slow-motion collapse and the American economy – once the driver of the world – is not in much better shape. The BRIC countries are doing considerably better but both China and India and afflicted by ominous inflation that could soon dampen their dynamic economies.
What is going on is that a small Anglo-American elite has invented a financial template called the central bank that basically allows it to run the world, or to try to. The central bank, like the golden-goose before it, has proven so successful in the short-run that it has been replicated throughout the world, giving a handful of Western banking families power such as never has been granted even to the mightiest tyrants of old. The few countries that have not established such banks are constantly under attack.
So what is Brooks on about? He is a mainstream journalist at a time when mainstream journalism ubiquitously carries the messages that the Anglo-American elite wants publicized. He is, in fact, providing is a dominant social theme of sorts. The Anglo-American elite ceaselessly advocates the perspective that the current system offers the best of all worlds – and other sorts of systems offer “anarchy” and chaos is the meme of choice.
Unfortunately for those who seek a more centralized global order, the 21st century has revealed cracks in the faÃ§ade. Central banking itself, while useful in fomenting chaos, has left citizens the world-over disgruntled and frustrated with the current financial system. The consumerist society spawned by central banking isn't working very well either, with huge unemployment rates in Western countries and surging inflation in BRIC nations like China and India.
It turns out that printing money out of thin air can cause a tremendous surge of “prosperity” but eventually these surges prove to be ephemeral. It may even take generations for the distortions to become powerful enough to fracture an economy, but sooner or later they get there. Then the only thing to do is to let the economy collapse or to prop it up with yet more money-from-nothing. Soon there is confusion as to which enterprises are solvent. Lending slows to a trickle. Hayek referred to it more than fifty years ago as the Road to Serfdom. He wasn't far off the mark no was he?
What might be a terrible yet tolerably quick depression turns into an endless grinding slump. Japan has been in the grip of one for several decades. European countries are entering into the same sort of syndrome via “austerity.” Brooks doesn't see anything of this. A tried and true socialist, he claims that prosperity is on the rise worldwide; that living standards are constantly climbing and that economic growth has to be put into perspective to be fully appreciated. That may be, but it depends on where you look, as we have just pointed out.
Central banking has now got a foothold in developing countries in a way it had not before. It is not surprising then that India, China and certain countries in South America are surging. It will prove a false and destructive system here as well – it is inevitable. China is already suffering from terrible real-estate inflation, which has spread into food and energy. Not only that but the circulation of cheap money has given Chinese urban planners delusions of grandeur. The number of empty developments and even cities in China is mounting precipitously. It is an old story. The distortions will build until finally the economy can take no more. When it comes to China, the implosion should be monumental.
Gaze upon Japan, Argentina, the US and even Britain (if you can bear it) to see where China and India are headed. The savage stimulation provided by central banking under the guise of supporting hopelessly and unsustainable social promises of economic equality has so distorted the fiber and spirit of these countries that it will take decades before they recover – and if central banking remains the primary economic mechanism, they will have continual, serial catastrophes. The Southern European PIGS are suffering similarly. Central banking severs the relationship that many people have with the underlying marketplace. It destroys individual economic freedom. Its triumphs are not long-lasting; its misery its inevitable.
In the US, there is up to 30 percent unemployment; the PIGS are moving in a similar direction. Economic malaises tend to depress population growth so that as monetary stimulation continues, the population ages, aggravating the ongoing slump. And while central banks tend to create whole industries in a short period of time, these same industries can actually be wiped out once the bust comes. The US real estate and construction market is only one example. The human cost is terrible. People who have switched jobs to move into the “hot” sector suddenly find that they cannot go back to their old jobs; meanwhile, the new ones with their promises of easy wealth simply evaporate – just like the value of their savings does as the power elite's minions running the world's central banks crank up the printing presses.
To argue that such an artificial system produces either satisfaction or long-term progress more efficiently than the “real” economy could – an economy run on honest money (gold and silver) – is illogical on its face. Human beings cannot substitute their judgment for the market and expect a better outcome. Of course the elite knows this; but it relentlessly propagandizes everyone else with the message that central banking is a market-based occurrence. It is not. Central banking is price fixing of the rate and quantity of money (through the issuance of paper money) and the outcome will never be better in the long term than what the market itself is capable of providing. Today's system stifles real growth and promotes artificial prosperity. It's really that simple. What's not so simple is the end result of such systemic fraud and all of the civil chaos and human tragedy that lies in the wake of such a disastrous tack.
Absent central banking, economies take decades and even centuries to develop as the delicate framework of familial and tribal relationships are put in place. Central banking speeds up the processes to a generation or less but in doing so inevitably manufactures relationships that cannot stand the test of time. As stated above, the result is a ruined society: one with transient populations, a fractured culture, a degraded infrastructure, a high rate of crime and general, familial instability. This is not a merely hypothetical statement either. Here's a recent survey on Baby Boomer life happiness just released by Pew:
(CNN) – Eighty percent of baby boomers are pessimistic about the current direction of the United States, according to the Pew Research Center's Social & Demographic Trends study released Monday. Who can blame them, with retirement and pension funds shrinking and with the unemployment rate near 10%? The boomer generation consists of adults between the ages of 45 and 64, according to the The Pew Research Center, a nonpartisan think tank. "Most Americans are pretty glum three years into a Great Recession and a jobless recovery, but even in that context, the baby boomers stand out," said Paul Taylor, co-author of the study and vice president of the center. In contrast, the study found only 60% of millennials – individuals between the ages of 18 and 29 – had a bleak view of the way things are going today. And about 76% of respondents older than baby boomers, also called the "greatest generation," were dissatisfied with the status quo.
This does not surprise us, dear reader, nor you. US Baby Boomers in particular have been subject to a tremendous amount of elite mind control over the past 50 years. Generally, Western populations have suffered from elite promotional propaganda; yet European tribes may be more resilient simply because of the tribal culture and ancient customs. America is a “melting pot” and thus people are more receptive to a variety of social narratives, and more credulous as well.
In the later 20th century, Baby Boomers had numerous false narratives to contend with from “flower power” and the drug culture to the central banking economy itself and the regulatory democracy it supported. Today, much of the Baby Boomers' confidence in the narratives that they once trusted has been shattered. Interestingly, the same can increasingly be said of Baby Boomers' parents. Confidence in the system is leaking away as it should. Even an economic rebound is not likely to restore the trust that people once had in the system. Not only is the money system broken, the culture is as well – both in the US and in Europe.
Conclusion: The Anglo-American power-elite controls the mainstream media and one way that confidence is usually restored in the system is through the kind of “happy talk” that writers like Brooks provide. But in this case, the Internet has provided a counterweight that has proposed a variety of different perspectives. We would argue that a sizeable minority of Western citizens is well aware that the system they trusted – and the economy itself – was in some sense false and even fraudulent. Even if they cannot fully explain it, they know they have been misled. Return to a status-quo-ante is not likely to assuage distrust. As the 21st century unfolds, this will have increasingly severe and unpredictable consequences.
Source: The Daily Bell
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